[House Report 111-16]
[From the U.S. Government Publishing Office]





   111th Congress                                     Report
   1st Session        HOUSE OF REPRESENTATIVES        111-16
_______________________________________________________________________


 MAKING SUPPLEMENTAL APPROPRIATIONS FOR JOB PRESERVATION AND CREATION, 
INFRASTRUCTURE INVESTMENT, ENERGY EFFICIENCY AND SCIENCE, ASSISTANCE TO 
   THE UNEMPLOYED, AND STATE AND LOCAL FISCAL STABILIZATION, FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2009, AND FOR OTHER PURPOSES

                               ----------                              

                           CONFERENCE REPORT

                              to accompany

                                 H.R. 1

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


               February 12, 2009.--Ordered to be printed




 MAKING SUPPLEMENTAL APPROPRIATIONS FOR JOB PRESERVATION AND CREATION, 
INFRASTRUCTURE INVESTMENT, ENERGY EFFICIENCY AND SCIENCE, ASSISTANCE TO 
   THE UNEMPLOYED, AND STATE AND LOCAL FISCAL STABILIZATION, FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2009, AND FOR OTHER PURPOSES


111th Congress                                                   Report
 1st Session            HOUSE OF REPRESENTATIVES                 111-16
_______________________________________________________________________



 MAKING SUPPLEMENTAL APPROPRIATIONS FOR JOB PRESERVATION AND CREATION, 
INFRASTRUCTURE INVESTMENT, ENERGY EFFICIENCY AND SCIENCE, ASSISTANCE TO 
   THE UNEMPLOYED, AND STATE AND LOCAL FISCAL STABILIZATION, FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2009, AND FOR OTHER PURPOSES

                               __________

                           CONFERENCE REPORT

                              to accompany

                                 H.R. 1

[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]


               February 12, 2009.--Ordered to be printed





111th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     111-16

======================================================================

 
 MAKING SUPPLEMENTAL APPROPRIATIONS FOR JOB PRESERVATION AND CREATION, 
INFRASTRUCTURE INVESTMENT, ENERGY EFFICIENCY AND SCIENCE, ASSISTANCE TO 
   THE UNEMPLOYED, AND STATE AND LOCAL FISCAL STABILIZATION, FOR THE 
     FISCAL YEAR ENDING SEPTEMBER 30, 2009, AND FOR OTHER PURPOSES

                                _______
                                

               February 12, 2009.--Ordered to be printed

                                _______
                                

  Mr. Obey, from the Committee of Conference, submitted the following

                           CONFERENCE REPORT

                         [To accompany H.R. 1]

      The committee of conference on the disagreeing votes of 
the two Houses on the amendment of the Senate to the bill (H.R. 
1) ``making supplemental appropriations for job preservation 
and creation, infrastructure investment, energy efficiency and 
science, assistance to the unemployed, and State and local 
fiscal stabilization, for the fiscal year ending September 30, 
2009, and for other purposes'', having met, after full and free 
conference, have agreed to recommend and do recommend to their 
respective Houses as follows:
      That the House recede from its disagreement to the 
amendment of the Senate, and agree to the same with an 
amendment, as follows:
      In lieu of the matter stricken and inserted by said 
amendment, insert:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``American Recovery and 
Reinvestment Act of 2009''.

SEC. 2. TABLE OF CONTENTS.

    The table of contents for this Act is as follows:

                  DIVISION A--APPROPRIATIONS PROVISIONS

TITLE I--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, 
          AND RELATED AGENCIES
TITLE II--COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES
TITLE III--DEPARTMENT OF DEFENSE
TITLE IV--ENERGY AND WATER DEVELOPMENT
TITLE V--FINANCIAL SERVICES AND GENERAL GOVERNMENT
TITLE VI--DEPARTMENT OF HOMELAND SECURITY
TITLE VII--INTERIOR, ENVIRONMENT, AND RELATED AGENCIES
TITLE VIII--DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND 
          EDUCATION, AND RELATED AGENCIES
TITLE IX--LEGISLATIVE BRANCH
TITLE X--MILITARY CONSTRUCTION AND VETERANS AFFAIRS AND RELATED AGENCIES
TITLE XI--STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS
TITLE XII--TRANSPORTATION, HOUSING AND URBAN DEVELOPMENT, AND RELATED 
          AGENCIES
TITLE XIII--HEALTH INFORMATION TECHNOLOGY
TITLE XIV--STATE FISCAL STABILIZATION FUND
TITLE XV--ACCOUNTABILITY AND TRANSPARENCY
TITLE XVI--GENERAL PROVISIONS--THIS ACT

 DIVISION B--TAX, UNEMPLOYMENT, HEALTH, STATE FISCAL RELIEF, AND OTHER 
                               PROVISIONS

TITLE I--TAX PROVISIONS
TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES
TITLE III--PREMIUM ASSISTANCE FOR COBRA BENEFITS
TITLE IV--MEDICARE AND MEDICAID HEALTH INFORMATION TECHNOLOGY; 
          MISCELLANEOUS MEDICARE PROVISIONS
TITLE V--STATE FISCAL RELIEF
TITLE VI--BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM
TITLE VII--LIMITS ON EXECUTIVE COMPENSATION

SEC. 3. PURPOSES AND PRINCIPLES.

    (a) Statement of Purposes.--The purposes of this Act 
include the following:
            (1) To preserve and create jobs and promote 
        economic recovery.
            (2) To assist those most impacted by the recession.
            (3) To provide investments needed to increase 
        economic efficiency by spurring technological advances 
        in science and health.
            (4) To invest in transportation, environmental 
        protection, and other infrastructure that will provide 
        long-term economic benefits.
            (5) To stabilize State and local government 
        budgets, in order to minimize and avoid reductions in 
        essential services and counterproductive State and 
        local tax increases.
    (b) General Principles Concerning Use of Funds.--The 
President and the heads of Federal departments and agencies 
shall manage and expend the funds made available in this Act so 
as to achieve the purposes specified in subsection (a), 
including commencing expenditures and activities as quickly as 
possible consistent with prudent management.

SEC. 4. REFERENCES.

     Except as expressly provided otherwise, any reference to 
``this Act'' contained in any division of this Act shall be 
treated as referring only to the provisions of that division.

SEC. 5. EMERGENCY DESIGNATIONS.

    (a) In General.--Each amount in this Act is designated as 
an emergency requirement and necessary to meet emergency needs 
pursuant to section 204(a) of S. Con. Res. 21 (110th Congress) 
and section 301(b)(2) of S. Con. Res. 70 (110th Congress), the 
concurrent resolutions on the budget for fiscal years 2008 and 
2009.
    (b) Pay-as-You-Go.--All applicable provisions in this Act 
are designated as an emergency for purposes of pay-as-you-go 
principles.

                 DIVISION A--APPROPRIATIONS PROVISIONS

    That the following sums are appropriated, out of any money 
in the Treasury not otherwise appropriated, for the fiscal year 
ending September 30, 2009, and for other purposes, namely:

TITLE I--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, 
                          AND RELATED AGENCIES

                       DEPARTMENT OF AGRICULTURE

        Agriculture Buildings and Facilities and Rental Payments

    For an additional amount for ``Agriculture Buildings and 
Facilities and Rental Payments'', $24,000,000, for necessary 
construction, repair, and improvement activities.

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'', $22,500,000, to remain available until September 30, 
2013, for oversight and audit of programs, grants, and 
activities funded by this Act and administered by the 
Department of Agriculture.

                     Agricultural Research Service

                        buildings and facilities

    For an additional amount for ``Buildings and Facilities'', 
$176,000,000, for work on deferred maintenance at Agricultural 
Research Service facilities: Provided, That priority in the use 
of such funds shall be given to critical deferred maintenance, 
to projects that can be completed, and to activities that can 
commence promptly following enactment of this Act.

                          Farm Service Agency

                         salaries and expenses

    For an additional amount for ``Farm Service Agency, 
Salaries and Expenses,'' $50,000,000, for the purpose of 
maintaining and modernizing the information technology system.

                 Natural Resources Conservation Service

               watershed and flood prevention operations

     For an additional amount for ``Watershed and Flood 
Prevention Operations'', $290,000,000, of which $145,000,000 is 
for necessary expenses to purchase and restore floodplain 
easements as authorized by section 403 of the Agricultural 
Credit Act of 1978 (16 U.S.C. 2203) (except that no more than 
$30,000,000 of the amount provided for the purchase of 
floodplain easements may be obligated for projects in any one 
State): Provided, That such funds shall be allocated to 
projects that can be fully funded and completed with the funds 
appropriated in this Act, and to activities that can commence 
promptly following enactment of this Act.

                    watershed rehabilitation program

    For an additional amount for ``Watershed Rehabilitation 
Program'', $50,000,000: Provided, That such funds shall be 
allocated to projects that can be fully funded and completed 
with the funds appropriated in this Act, and to activities that 
can commence promptly following enactment of this Act.

                         Rural Housing Service

              rural housing insurance fund program account

    For an additional amount for gross obligations for the 
principal amount of direct and guaranteed loans as authorized 
by title V of the Housing Act of 1949, to be available from 
funds in the rural housing insurance fund, as follows: 
$1,000,000,000 for section 502 direct loans; and 
$10,472,000,000 for section 502 unsubsidized guaranteed loans.
    For an additional amount for the cost of direct and 
guaranteed loans, including the cost of modifying loans, as 
defined in section 502 of the Congressional Budget Act of 1974, 
as follows: $67,000,000 for section 502 direct loans; and 
$133,000,000 for section 502 unsubsidized guaranteed loans.

               rural community facilities program account

    For an additional amount for the cost of direct loans and 
grants for rural community facilities programs as authorized by 
section 306 and described in section 381E(d)(1) of the 
Consolidated Farm and Rural Development Act, $130,000,000.

                  Rural Business--Cooperative Service

                     rural business program account

    For an additional amount for the cost of guaranteed loans 
and grants as authorized by sections 310B(a)(2)(A) and 310B(c) 
of the Consolidated Farm and Rural Development Act (7 U.S.C. 
1932), $150,000,000.

                        Rural Utilities Service

             rural water and waste disposal program account

    For an additional amount for the cost of direct loans and 
grants for the rural water, waste water, and waste disposal 
programs authorized by sections 306 and 310B and described in 
section 381E(d)(2) of the Consolidated Farm and Rural 
Development Act, $1,380,000,000.

         distance learning, telemedicine, and broadband program

    For an additional amount for the cost of broadband loans 
and loan guarantees, as authorized by the Rural Electrification 
Act of 1936 (7 U.S.C. 901 et seq.) and for grants (including 
for technical assistance), $2,500,000,000: Provided, That the 
cost of direct and guaranteed loans shall be as defined in 
section 502 of the Congressional Budget Act of 1974: Provided 
further, That, notwithstanding title VI of the Rural 
Electrification Act of 1936, this amount is available for 
grants, loans and loan guarantees for broadband infrastructure 
in any area of the United States: Provided further, That at 
least 75 percent of the area to be served by a project 
receiving funds from such grants, loans or loan guarantees 
shall be in a rural area without sufficient access to high 
speed broadband service to facilitate rural economic 
development, as determined by the Secretary of Agriculture: 
Provided further, That priority for awarding such funds shall 
be given to project applications for broadband systems that 
will deliver end users a choice of more than one service 
provider: Provided further, That priority for awarding funds 
made available under this paragraph shall be given to projects 
that provide service to the highest proportion of rural 
residents that do not have access to broadband service: 
Provided further, That priority shall be given for project 
applications from borrowers or former borrowers under title II 
of the Rural Electrification Act of 1936 and for project 
applications that include such borrowers or former borrowers: 
Provided further, That priority for awarding such funds shall 
be given to project applications that demonstrate that, if the 
application is approved, all project elements will be fully 
funded: Provided further, That priority for awarding such funds 
shall be given to project applications for activities that can 
be completed if the requested funds are provided: Provided 
further, That priority for awarding such funds shall be given 
to activities that can commence promptly following approval: 
Provided further, That no area of a project funded with amounts 
made available under this paragraph may receive funding to 
provide broadband service under the Broadband Technology 
Opportunities Program: Provided further, That the Secretary 
shall submit a report on planned spending and actual 
obligations describing the use of these funds not later than 90 
days after the date of enactment of this Act, and quarterly 
thereafter until all funds are obligated, to the Committees on 
Appropriations of the House of Representatives and the Senate.

                       Food and Nutrition Service

                        CHILD NUTRITION PROGRAMS

    For an additional amount for the Richard B. Russell 
National School Lunch Act (42 U.S.C. 1751 et seq.), except 
section 21, and the Child Nutrition Act of 1966 (42 U.S.C. 1771 
et seq.), except sections 17 and 21, $100,000,000, to carry out 
a grant program for National School Lunch Program equipment 
assistance: Provided, That such funds shall be provided to 
States administering a school lunch program in a manner 
proportional with each State's administrative expense 
allocation: Provided further, That the States shall provide 
competitive grants to school food authorities based upon the 
need for equipment assistance in participating schools with 
priority given to schools in which not less than 50 percent of 
the students are eligible for free or reduced price meals under 
the Richard B. Russell National School Lunch Act.

special supplemental nutrition program for women, infants, and children 
                                 (wic)

    For an additional amount for the special supplemental 
nutrition program as authorized by section 17 of the Child 
Nutrition Act of 1966 (42 U.S.C. 1786), $500,000,000, of which 
$400,000,000 shall be placed in reserve to be allocated as the 
Secretary deems necessary, notwithstanding section 17(i) of 
such Act, to support participation should cost or participation 
exceed budget estimates, and of which $100,000,000 shall be for 
the purposes specified in section 17(h)(10)(B)(ii): Provided, 
That up to one percent of the funding provided for the purposes 
specified in section 17(h)(10)(B)(ii) may be reserved by the 
Secretary for Federal administrative activities in support of 
those purposes.

                      commodity assistance program

    For an additional amount for the emergency food assistance 
program as authorized by section 27(a) of the Food and 
Nutrition Act of 2008 (7 U.S.C. 2036(a)) and section 204(a)(1) 
of the Emergency Food Assistance Act of 1983 (7 U.S.C. 
7508(a)(1)), $150,000,000: Provided, That of the funds made 
available, the Secretary may use up to $50,000,000 for costs 
associated with the distribution of commodities, of which up to 
$25,000,000 shall be made available in fiscal year 2009.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 101. Temporary Increase in Benefits Under the 
Supplemental Nutrition Assistance Program. (a) Maximum Benefit 
Increase.--
            (1) In general.--Beginning the first month that 
        begins not less than 25 days after the date of 
        enactment of this Act, the value of benefits determined 
        under section 8(a) of the Food and Nutrition Act of 
        2008 and consolidated block grants for Puerto Rico and 
        American Samoa determined under section 19(a) of such 
        Act shall be calculated using 113.6 percent of the June 
        2008 value of the thrifty food plan as specified under 
        section 3(o) of such Act.
            (2) Termination.--
                    (A) The authority provided by this 
                subsection shall terminate after September 30, 
                2009.
                    (B) Notwithstanding subparagraph (A), the 
                Secretary of Agriculture may not reduce the 
                value of the maximum allotments, minimum 
                allotments or consolidated block grants for 
                Puerto Rico and American Samoa below the level 
                in effect for fiscal year 2009 as a result of 
                paragraph (1).
    (b) Requirements for the Secretary.--In carrying out this 
section, the Secretary shall--
            (1) consider the benefit increases described in 
        subsection (a) to be a ``mass change'';
            (2) require a simple process for States to notify 
        households of the increase in benefits;
            (3) consider section 16(c)(3)(A) of the Food and 
        Nutrition Act of 2008 (7 U.S.C. 2025(c)(3)(A)) to apply 
        to any errors in the implementation of this section, 
        without regard to the 120-day limit described in that 
        section;
            (4) disregard the additional amount of benefits 
        that a household receives as a result of this section 
        in determining the amount of overissuances under 
        section 13 of the Food and Nutrition Act of 2008 (7 
        U.S.C. 2022); and
            (5) set the tolerance level for excluding small 
        errors for the purposes of section 16(c) of the Food 
        and Nutrition Act of 2008 (7 U.S.C. 2025(c)) at $50 
        through September 30, 2009.
    (c) Administrative Expenses.--
            (1) In general.--For the costs of State 
        administrative expenses associated with carrying out 
        this section and administering the supplemental 
        nutrition assistance program established under the Food 
        and Nutrition Act of 2008 (7 U.S.C. 2011 et seq.), the 
        Secretary shall make available $145,000,000 in fiscal 
        year 2009 and $150,000,000 in fiscal year 2010, of 
        which $4,500,000 is for necessary expenses of the Food 
        and Nutrition Service for management and oversight of 
        the program and for monitoring the integrity and 
        evaluating the effects of the payments made under this 
        section.
            (2) Timing for fiscal year 2009.--Not later than 60 
        days after the date of enactment of this Act, the 
        Secretary shall make available to States amounts for 
        fiscal year 2009 under paragraph (1).
            (3) Allocation of funds.--Except as provided for 
        management and oversight, funds described in paragraph 
        (1) shall be made available as grants to State agencies 
        for each fiscal year as follows:
                    (A) 75 percent of the amounts available for 
                each fiscal year shall be allocated to States 
                based on the share of each State of households 
                that participate in the supplemental nutrition 
                assistance program as reported to the 
                Department of Agriculture for the most recent 
                12-month period for which data are available, 
                adjusted by the Secretary (as of the date of 
                enactment) for participation in disaster 
                programs under section 5(h) of the Food and 
                Nutrition Act of 2008 (7 U.S.C. 2014(h)); and
                    (B) 25 percent of the amounts available for 
                each fiscal year shall be allocated to States 
                based on the increase in the number of 
                households that participate in the supplemental 
                nutrition assistance program as reported to the 
                Department of Agriculture over the most recent 
                12-month period for which data are available, 
                adjusted by the Secretary (as of the date of 
                enactment) for participation in disaster 
                programs under section 5(h) of the Food and 
                Nutrition Act of 2008 (7 U.S.C. 2014(h)).
    (d) Food Distribution Program on Indian Reservations.--For 
the costs relating to facility improvements and equipment 
upgrades associated with the Food Distribution Program on 
Indian Reservations, as established under section 4(b) of the 
Food and Nutrition Act of 2008 (7 U.S.C. 2013(b)), the 
Secretary shall make available $5,000,000: Provided, That 
administrative cost-sharing requirements are not applicable to 
funds provided in accordance with this provision.
    (e) Treatment of Jobless Workers.--
            (1) Remainder of fiscal year 2009 through fiscal 
        year 2010.--Beginning with the first month that begins 
        not less than 25 days after the date of enactment of 
        this Act and for each subsequent month through 
        September 30, 2010, eligibility for supplemental 
        nutrition assistance program benefits shall not be 
        limited under section 6(o)(2) of the Food and Nutrition 
        Act of 2008 unless an individual does not comply with 
        the requirements of a program offered by the State 
        agency that meets the standards of subparagraphs (B) or 
        (C) of that paragraph.
            (2) Fiscal year 2011 and thereafter.--Beginning on 
        October 1, 2010, for the purposes of section 6(o) of 
        the Food and Nutrition Act of 2008 (7 U.S.C. 2015(o)), 
        a State agency shall disregard any period during which 
        an individual received benefits under the supplemental 
        nutrition assistance program prior to October 1, 2010.
    (f)  Funding.--There are appropriated to the Secretary out 
of funds of the Treasury not otherwise appropriated such sums 
as are necessary to carry out this section.
    Sec. 102. Agricultural Disaster Assistance Transition.(a) 
Federal Crop Insurance Act.--Section 531(g) of the Federal Crop 
Insurance Act (7 U.S.C. 1531(g)) is amended by adding at the 
end the following:
            ``(7) 2008 transition assistance.--
                    ``(A) In general.--Eligible producers on a 
                farm described in subparagraph (A) of paragraph 
                (4) that failed to timely pay the appropriate 
                fee described in that subparagraph shall be 
                eligible for assistance under this section in 
                accordance with subparagraph (B) if the 
                eligible producers on the farm--
                            ``(i) pay the appropriate fee 
                        described in paragraph (4)(A) not later 
                        than 90 days after the date of 
                        enactment of this paragraph; and
                            ``(ii)(I) in the case of each 
                        insurable commodity of the eligible 
                        producers on the farm, excluding 
                        grazing land, agree to obtain a policy 
                        or plan of insurance under subtitle A 
                        (excluding a crop insurance pilot 
                        program under that subtitle) for the 
                        next insurance year for which crop 
                        insurance is available to the eligible 
                        producers on the farm at a level of 
                        coverage equal to 70 percent or more of 
                        the recorded or appraised average yield 
                        indemnified at 100 percent of the 
                        expected market price, or an equivalent 
                        coverage; and
                            ``(II) in the case of each 
                        noninsurable commodity of the eligible 
                        producers on the farm, agree to file 
                        the required paperwork, and pay the 
                        administrative fee by the applicable 
                        State filing deadline, for the 
                        noninsured crop assistance program for 
                        the next year for which a policy is 
                        available.
                    ``(B) Amount of assistance.--Eligible 
                producers on a farm that meet the requirements 
                of subparagraph (A) shall be eligible to 
                receive assistance under this section as if the 
                eligible producers on the farm--
                            ``(i) in the case of each insurable 
                        commodity of the eligible producers on 
                        the farm, had obtained a policy or plan 
                        of insurance for the 2008 crop year at 
                        a level of coverage not to exceed 70 
                        percent or more of the recorded or 
                        appraised average yield indemnified at 
                        100 percent of the expected market 
                        price, or an equivalent coverage; and
                            ``(ii) in the case of each 
                        noninsurable commodity of the eligible 
                        producers on the farm, had filed the 
                        required paperwork, and paid the 
                        administrative fee by the applicable 
                        State filing deadline, for the 
                        noninsured crop assistance program for 
                        the 2008 crop year, except that in 
                        determining the level of coverage, the 
                        Secretary shall use 70 percent of the 
                        applicable yield.
                    ``(C) Equitable relief.--Except as provided 
                in subparagraph (D), eligible producers on a 
                farm that met the requirements of paragraph (1) 
                before the deadline described in paragraph 
                (4)(A) and are eligible to receive, a disaster 
                assistance payment under this section for a 
                production loss during the 2008 crop year shall 
                be eligible to receive an amount equal to the 
                greater of--
                            ``(i) the amount that would have 
                        been calculated under subparagraph (B) 
                        if the eligible producers on the farm 
                        had paid the appropriate fee under that 
                        subparagraph; or
                            ``(ii) the amount that would have 
                        been calculated under subparagraph (A) 
                        of subsection (b)(3) if--
                                    ``(I) in clause (i) of that 
                                subparagraph, `120 percent' is 
                                substituted for `115 percent'; 
                                and
                                    ``(II) in clause (ii) of 
                                that subparagraph, `125 
                                percent' is substituted for 
                                `120 percent'.
                    ``(D) Limitation.--For amounts made 
                available under this paragraph, the Secretary 
                may make such adjustments as are necessary to 
                ensure that no producer receives a payment 
                under this paragraph for an amount in excess of 
                the assistance received by a similarly situated 
                producer that had purchased the same or higher 
                level of crop insurance prior to the date of 
                enactment of this paragraph.
                    ``(E) Authority of the secretary.--The 
                Secretary may provide such additional 
                assistance as the Secretary considers 
                appropriate to provide equitable treatment for 
                eligible producers on a farm that suffered 
                production losses in the 2008 crop year that 
                result in multiyear production losses, as 
                determined by the Secretary.
                    ``(F) Lack of access.--Notwithstanding any 
                other provision of this section, the Secretary 
                may provide assistance under this section to 
                eligible producers on a farm that--
                            ``(i) suffered a production loss 
                        due to a natural cause during the 2008 
                        crop year; and
                            ``(ii) as determined by the 
                        Secretary--
                                    ``(I)(aa) except as 
                                provided in item (bb), lack 
                                access to a policy or plan of 
                                insurance under subtitle A; or
                                    ``(bb) do not qualify for a 
                                written agreement because 1 or 
                                more farming practices, which 
                                the Secretary has determined 
                                are good farming practices, of 
                                the eligible producers on the 
                                farm differ significantly from 
                                the farming practices used by 
                                producers of the same crop in 
                                other regions of the United 
                                States; and
                                    ``(II) are not eligible for 
                                the noninsured crop disaster 
                                assistance program established 
                                by section 196 of the Federal 
                                Agriculture Improvement and 
                                Reform Act of 1996 (7 U.S.C. 
                                7333).''.
    (b) Trade Act of 1974.--Section 901(g) of the Trade Act of 
1974 (19 U.S.C. 2497(g)) is amended by adding at the end the 
following:
            ``(7) 2008 transition assistance.--
                    ``(A) In general.--Eligible producers on a 
                farm described in subparagraph (A) of paragraph 
                (4) that failed to timely pay the appropriate 
                fee described in that subparagraph shall be 
                eligible for assistance under this section in 
                accordance with subparagraph (B) if the 
                eligible producers on the farm--
                            ``(i) pay the appropriate fee 
                        described in paragraph (4)(A) not later 
                        than 90 days after the date of 
                        enactment of this paragraph; and
                            ``(ii)(I) in the case of each 
                        insurable commodity of the eligible 
                        producers on the farm, excluding 
                        grazing land, agree to obtain a policy 
                        or plan of insurance under the Federal 
                        Crop Insurance Act (7 U.S.C. 1501 et 
                        seq.) (excluding a crop insurance pilot 
                        program under that Act) for the next 
                        insurance year for which crop insurance 
                        is available to the eligible producers 
                        on the farm at a level of coverage 
                        equal to 70 percent or more of the 
                        recorded or appraised average yield 
                        indemnified at 100 percent of the 
                        expected market price, or an equivalent 
                        coverage; and
                            ``(II) in the case of each 
                        noninsurable commodity of the eligible 
                        producers on the farm, agree to file 
                        the required paperwork, and pay the 
                        administrative fee by the applicable 
                        State filing deadline, for the 
                        noninsured crop assistance program for 
                        the next year for which a policy is 
                        available.
                    ``(B) Amount of assistance.--Eligible 
                producers on a farm that meet the requirements 
                of subparagraph (A) shall be eligible to 
                receive assistance under this section as if the 
                eligible producers on the farm--
                            ``(i) in the case of each insurable 
                        commodity of the eligible producers on 
                        the farm, had obtained a policy or plan 
                        of insurance for the 2008 crop year at 
                        a level of coverage not to exceed 70 
                        percent or more of the recorded or 
                        appraised average yield indemnified at 
                        100 percent of the expected market 
                        price, or an equivalent coverage; and
                            ``(ii) in the case of each 
                        noninsurable commodity of the eligible 
                        producers on the farm, had filed the 
                        required paperwork, and paid the 
                        administrative fee by the applicable 
                        State filing deadline, for the 
                        noninsured crop assistance program for 
                        the 2008 crop year, except that in 
                        determining the level of coverage, the 
                        Secretary shall use 70 percent of the 
                        applicable yield.
                    ``(C) Equitable relief.--Except as provided 
                in subparagraph (D), eligible producers on a 
                farm that met the requirements of paragraph (1) 
                before the deadline described in paragraph 
                (4)(A) and are eligible to receive, a disaster 
                assistance payment under this section for a 
                production loss during the 2008 crop year shall 
                be eligible to receive an amount equal to the 
                greater of--
                            ``(i) the amount that would have 
                        been calculated under subparagraph (B) 
                        if the eligible producers on the farm 
                        had paid the appropriate fee under that 
                        subparagraph; or
                            ``(ii) the amount that would have 
                        been calculated under subparagraph (A) 
                        of subsection (b)(3) if--
                                    ``(I) in clause (i) of that 
                                subparagraph, `120 percent' is 
                                substituted for `115 percent'; 
                                and
                                    ``(II) in clause (ii) of 
                                that subparagraph, `125 
                                percent' is substituted for 
                                `120 percent'.
                    ``(D) Limitation.--For amounts made 
                available under this paragraph, the Secretary 
                may make such adjustments as are necessary to 
                ensure that no producer receives a payment 
                under this paragraph for an amount in excess of 
                the assistance received by a similarly situated 
                producer that had purchased the same or higher 
                level of crop insurance prior to the date of 
                enactment of this paragraph.
                    ``(E) Authority of the secretary.--The 
                Secretary may provide such additional 
                assistance as the Secretary considers 
                appropriate to provide equitable treatment for 
                eligible producers on a farm that suffered 
                production losses in the 2008 crop year that 
                result in multiyear production losses, as 
                determined by the Secretary.
                    ``(F) Lack of access.--Notwithstanding any 
                other provision of this section, the Secretary 
                may provide assistance under this section to 
                eligible producers on a farm that--
                            ``(i) suffered a production loss 
                        due to a natural cause during the 2008 
                        crop year; and
                            ``(ii) as determined by the 
                        Secretary--
                                    ``(I)(aa) except as 
                                provided in item (bb), lack 
                                access to a policy or plan of 
                                insurance under subtitle A; or
                                    ``(bb) do not qualify for a 
                                written agreement because 1 or 
                                more farming practices, which 
                                the Secretary has determined 
                                are good farming practices, of 
                                the eligible producers on the 
                                farm differ significantly from 
                                the farming practices used by 
                                producers of the same crop in 
                                other regions of the United 
                                States; and
                                    ``(II) are not eligible for 
                                the noninsured crop disaster 
                                assistance program established 
                                by section 196 of the Federal 
                                Agriculture Improvement and 
                                Reform Act of 1996 (7 U.S.C. 
                                7333).''.
    (c) Farm Operating Loans.--
            (1) In general.--For the principal amount of direct 
        farm operating loans under section 311 of the 
        Consolidated Farm and Rural Development Act (7 U.S.C. 
        1941), $173,367,000.
            (2) Direct farm operating loans.--For the cost of 
        direct farm operating loans, including the cost of 
        modifying loans, as defined in section 502 of the 
        Congressional Budget Act of 1974 (2 U.S.C. 661a), 
        $20,440,000.
    (d) 2008 Aquaculture Assistance.--
            (1) Definitions.--In this subsection:
                    (A) Eligible aquaculture producer.--The 
                term ``eligible aquaculture producer'' means an 
                aquaculture producer that during the 2008 
                calendar year, as determined by the Secretary--
                            (i) produced an aquaculture species 
                        for which feed costs represented a 
                        substantial percentage of the input 
                        costs of the aquaculture operation; and
                            (ii) experienced a substantial 
                        price increase of feed costs above the 
                        previous 5-year average.
                    (B) Secretary.--The term ``Secretary'' 
                means the Secretary of Agriculture.
            (2) Grant program.--
                    (A) In general.--Of the funds of the 
                Commodity Credit Corporation, the Secretary 
                shall use not more than $50,000,000, to remain 
                available until September 30, 2010, to carry 
                out a program of grants to States to assist 
                eligible aquaculture producers for losses 
                associated with high feed input costs during 
                the 2008 calendar year.
                    (B) Notification.--Not later than 60 days 
                after the date of enactment of this Act, the 
                Secretary shall notify the State department of 
                agriculture (or similar entity) in each State 
                of the availability of funds to assist eligible 
                aquaculture producers, including such terms as 
                determined by the Secretary to be necessary for 
                the equitable treatment of eligible aquaculture 
                producers.
                    (C) Provision of grants.--
                            (i) In general.--The Secretary 
                        shall make grants to States under this 
                        subsection on a pro rata basis based on 
                        the amount of aquaculture feed used in 
                        each State during the 2007 calendar 
                        year, as determined by the Secretary.
                            (ii) Timing.--Not later than 120 
                        days after the date of enactment of 
                        this Act, the Secretary shall make 
                        grants to States to provide assistance 
                        under this subsection.
                    (D) Requirements.--The Secretary shall make 
                grants under this subsection only to States 
                that demonstrate to the satisfaction of the 
                Secretary that the State will--
                            (i) use grant funds to assist 
                        eligible aquaculture producers;
                            (ii) provide assistance to eligible 
                        aquaculture producers not later than 60 
                        days after the date on which the State 
                        receives grant funds; and
                            (iii) not later than 30 days after 
                        the date on which the State provides 
                        assistance to eligible aquaculture 
                        producers, submit to the Secretary a 
                        report that describes--
                                    (I) the manner in which the 
                                State provided assistance;
                                    (II) the amounts of 
                                assistance provided per species 
                                of aquaculture; and
                                    (III) the process by which 
                                the State determined the levels 
                                of assistance to eligible 
                                aquaculture producers.
            (3) Reduction in payments.--An eligible aquaculture 
        producer that receives assistance under this subsection 
        shall not be eligible to receive any other assistance 
        under the supplemental agricultural disaster assistance 
        program established under section 531 of the Federal 
        Crop Insurance Act (7 U.S.C. 1531) and section 901 of 
        the Trade Act of 1974 (19 U.S.C. 2497) for any losses 
        in 2008 relating to the same species of aquaculture.
            (4) Report to congress.--Not later than 180 days 
        after the date of enactment of this Act, the Secretary 
        shall submit to the appropriate committees of Congress 
        a report that--
                    (A) describes in detail the manner in which 
                this subsection has been carried out; and
                    (B) includes the information reported to 
                the Secretary under paragraph (2)(D)(iii).
    Sec. 103. For fiscal years 2009 and 2010, in the case of 
each program established or amended by the Food, Conservation, 
and Energy Act of 2008 (Public Law 110-246), other than by 
title I of such Act, that is authorized or required to be 
carried out using funds of the Commodity Credit Corporation--
            (1) such funds shall be available for the purpose 
        of covering salaries and related administrative 
        expenses, including technical assistance, associated 
        with the implementation of the program, without regard 
        to the limitation on the total amount of allotments and 
        fund transfers contained in section 11 of the Commodity 
        Credit Corporation Charter Act (15 U.S.C. 714i); and
            (2) the use of such funds for such purpose shall 
        not be considered to be a fund transfer or allotment 
        for purposes of applying the limitation on the total 
        amount of allotments and fund transfers contained in 
        such section.
    Sec. 104. In addition to other available funds, of the 
funds made available to the Rural Development mission area in 
this title, not more than 3 percent of the funds can be used 
for administrative costs to carry out loan, loan guarantee and 
grant activities funded in this title, which shall be 
transferred to and merged with the appropriation for ``Rural 
Development, Salaries and Expenses'': Provided, That of this 
amount $1,750,000 shall be committed to agency projects 
associated with maintaining the compliance, safety, and 
soundness of the portfolio of loans guaranteed through the 
section 502 guaranteed loan program.
    Sec. 105. Of the amounts appropriated in this title to the 
``Rural Housing Service, Rural Community Facilities Program 
Account'', the ``Rural Business-Cooperative Service, Rural 
Business Program Account'', and the ``Rural Utilities Service, 
Rural Water and Waste Disposal Program Account'', at least 10 
percent shall be allocated for assistance in persistent poverty 
counties: Provided, That for the purposes of this section, the 
term ``persistent poverty counties'' means any county that has 
had 20 percent or more of its population living in poverty over 
the past 30 years, as measured by the 1980, 1990, and 2000 
decennial censuses.

       TITLE II--COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES

                         DEPARTMENT OF COMMERCE

                  Economic Development Administration

                economic development assistance programs

    For an additional amount for ``Economic Development 
Assistance Programs'', $150,000,000: Provided, That $50,000,000 
shall be for economic adjustment assistance as authorized by 
section 209 of the Public Works and Economic Development Act of 
1965, as amended (42 U.S.C. 3149): Provided further, That in 
allocating the funds provided in the previous proviso, the 
Secretary of Commerce shall give priority consideration to 
areas of the Nation that have experienced sudden and severe 
economic dislocation and job loss due to corporate 
restructuring: Provided further, That not to exceed 2 percent 
of the funds provided under this heading may be transferred to 
and merged with the appropriation for ``Salaries and Expenses'' 
for purposes of program administration and oversight: Provided 
further, That up to $50,000,000 of the funds provided under 
this heading may be transferred to federally authorized 
regional economic development commissions.

                          Bureau of the Census

                     periodic censuses and programs

    For an additional amount for ``Periodic Censuses and 
Programs'', $1,000,000,000.

       National Telecommunications and Information Administration

               broadband technology opportunities program

    For an amount for ``Broadband Technology Opportunities 
Program'', $4,700,000,000: Provided, That of the funds provided 
under this heading, not less than $4,350,000,000 shall be 
expended pursuant to division B of this Act, of which: not less 
than $200,000,000 shall be available for competitive grants for 
expanding public computer center capacity, including at 
community colleges and public libraries; not less than 
$250,000,000 shall be available for competitive grants for 
innovative programs to encourage sustainable adoption of 
broadband service; and $10,000,000 shall be transferred to 
``Department of Commerce, Office of Inspector General'' for the 
purposes of audits and oversight of funds provided under this 
heading and such funds shall remain available until expended: 
Provided further, That of the funds provided under this 
heading, up to $350,000,000 may be expended pursuant to Public 
Law 110-385 (47 U.S.C. 1301 note) and for the purposes of 
developing and maintaining a broadband inventory map pursuant 
to division B of this Act: Provided further, That of the funds 
provided under this heading, amounts deemed necessary and 
appropriate by the Secretary of Commerce, in consultation with 
the Federal Communications Commission (FCC), may be transferred 
to the FCC for the purposes of developing a national broadband 
plan or for carrying out any other FCC responsibilities 
pursuant to division B of this Act, and only if the Committees 
on Appropriations of the House and the Senate are notified not 
less than 15 days in advance of the transfer of such funds: 
Provided further, That not more than 3 percent of funds 
provided under this heading may be used for administrative 
costs, and this limitation shall apply to funds which may be 
transferred to the FCC.

                digital-to-analog converter box program

    For an amount for ``Digital-to-Analog Converter Box 
Program'', $650,000,000, for additional coupons and related 
activities under the program implemented under section 3005 of 
the Digital Television Transition and Public Safety Act of 
2005: Provided, That of the amounts provided under this 
heading, $90,000,000 may be for education and outreach, 
including grants to organizations for programs to educate 
vulnerable populations, including senior citizens, minority 
communities, people with disabilities, low-income individuals, 
and people living in rural areas, about the transition and to 
provide one-on-one assistance to vulnerable populations, 
including help with converter box installation: Provided 
further, That the amounts provided in the previous proviso may 
be transferred to the Federal Communications Commission (FCC) 
if deemed necessary and appropriate by the Secretary of 
Commerce in consultation with the FCC, and only if the 
Committees on Appropriations of the House and the Senate are 
notified not less than 5 days in advance of transfer of such 
funds.

             National Institute of Standards and Technology

             scientific and technical research and services

     For an additional amount for ``Scientific and Technical 
Research and Services'', $220,000,000.

                  construction of research facilities

    For an additional amount for ``Construction of Research 
Facilities'', $360,000,000, of which $180,000,000 shall be for 
a competitive construction grant program for research science 
buildings.

            National Oceanic and Atmospheric Administration

                  operations, research, and facilities

    For an additional amount for ``Operations, Research, and 
Facilities'', $230,000,000.

               procurement, acquisition and construction

    For an additional amount for ``Procurement, Acquisition and 
Construction'', $600,000,000.

                      Office of Inspector General

    For an additional amount for ``Office of Inspector 
General'', $6,000,000, to remain available until September 30, 
2013.

                         DEPARTMENT OF JUSTICE

                         General Administration

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'', $2,000,000, to remain available until September 30, 
2013.

               State and Local Law Enforcement Activities

                    Office on Violence Against Women

       violence against women prevention and prosecution programs

    For an additional amount for ``Violence Against Women 
Prevention and Prosecution Programs'', $225,000,000 for grants 
to combat violence against women, as authorized by part T of 
the Omnibus Crime Control and Safe Streets Act of 1968 (42 
U.S.C. 3796gg et seq.): Provided, That, $50,000,000 shall be 
for transitional housing assistance grants for victims of 
domestic violence, stalking or sexual assault as authorized by 
section 40299 of the Violent Crime Control and Law Enforcement 
Act of 1994 (Public Law 103-322).

                       Office of Justice Programs

               state and local law enforcement assistance

    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $2,000,000,000, for the Edward Byrne 
Memorial Justice Assistance Grant program as authorized by 
subpart 1 of part E of title I of the Omnibus Crime Control and 
Safe Streets Act of 1968 (``1968 Act''), (except that section 
1001(c), and the special rules for Puerto Rico under section 
505(g), of the 1968 Act, shall not apply for purposes of this 
Act).
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $225,000,000, for competitive grants 
to improve the functioning of the criminal justice system, to 
assist victims of crime (other than compensation), and youth 
mentoring grants.
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $40,000,000, for competitive grants 
to provide assistance and equipment to local law enforcement 
along the Southern border and in High-Intensity Drug 
Trafficking Areas to combat criminal narcotics activity 
stemming from the Southern border, of which $10,000,000 shall 
be transferred to ``Bureau of Alcohol, Tobacco, Firearms and 
Explosives, Salaries and Expenses'' for the ATF Project 
Gunrunner.
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $225,000,000, for assistance to 
Indian tribes, notwithstanding Public Law 108-199, division B, 
title I, section 112(a)(1) (118 Stat. 62), which shall be 
available for grants under section 20109 of subtitle A of title 
II of the Violent Crime Control and Law Enforcement Act of 1994 
(Public Law 103-322).
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $100,000,000, to be distributed by 
the Office for Victims of Crime in accordance with section 
1402(d)(4) of the Victims of Crime Act of 1984 (Public Law 98-
473).
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $125,000,000, for assistance to law 
enforcement in rural States and rural areas, to prevent and 
combat crime, especially drug-related crime.
    For an additional amount for ``State and Local Law 
Enforcement Assistance'', $50,000,000, for Internet Crimes 
Against Children (ICAC) initiatives.

                  Community Oriented Policing Services

    For an additional amount for ``Community Oriented Policing 
Services'', for grants under section 1701 of title I of the 
1968 Omnibus Crime Control and Safe Streets Act (42 U.S.C. 
3796dd) for hiring and rehiring of additional career law 
enforcement officers under part Q of such title, 
notwithstanding subsection (i) of such section, $1,000,000,000.

                         Salaries and Expenses

    For an additional amount, not elsewhere specified in this 
title, for management and administration and oversight of 
programs within the Office on Violence Against Women, the 
Office of Justice Programs, and the Community Oriented Policing 
Services Office, $10,000,000.

                                SCIENCE

             National Aeronautics and Space Administration

                                science

    For an additional amount for ``Science'', $400,000,000.

                              aeronautics

     For an additional amount for ``Aeronautics'', 
$150,000,000.

                              exploration

    For an additional amount for ``Exploration'', $400,000,000.

                          cross agency support

    For an additional amount for ``Cross Agency Support'', 
$50,000,000.

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'', $2,000,000, to remain available until September 30, 
2013.

                      National Science Foundation

                    research and related activities

     For an additional amount for ``Research and Related 
Activities'', $2,500,000,000: Provided, That $300,000,000 shall 
be available solely for the Major Research Instrumentation 
program and $200,000,000 shall be for activities authorized by 
title II of Public Law 100-570 for academic research facilities 
modernization.

                     education and human resources

     For an additional amount for ``Education and Human 
Resources'', $100,000,000.

          major research equipment and facilities construction

    For an additional amount for ``Major Research Equipment and 
Facilities Construction'', $400,000,000.

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'', $2,000,000, to remain available until September 30, 
2013.

                     GENERAL PROVISION--THIS TITLE

    Sec. 201. Sections 1701(g) and 1704(c) of the Omnibus Crime 
Control and Safe Streets Act of 1968 (42 U.S.C. 3796dd(g) and 
3796dd-3(c)) shall not apply with respect to funds appropriated 
in this or any other Act making appropriations for fiscal year 
2009 or 2010 for Community Oriented Policing Services 
authorized under part Q of such Act of 1968.

                    TITLE III--DEPARTMENT OF DEFENSE

                       OPERATION AND MAINTENANCE

                    Operation and Maintenance, Army

    For an additional amount for ``Operation and Maintenance, 
Army'', $1,474,525,000, to remain available for obligation 
until September 30, 2010, to improve, repair and modernize 
Department of Defense facilities, restore and modernize real 
property to include barracks, and invest in the energy 
efficiency of Department of Defense facilities.

                    Operation and Maintenance, Navy

    For an additional amount for ``Operation and Maintenance, 
Navy'', $657,051,000, to remain available for obligation until 
September 30, 2010, to improve, repair and modernize Department 
of Defense facilities, restore and modernize real property to 
include barracks, and invest in the energy efficiency of 
Department of Defense facilities.

                Operation and Maintenance, Marine Corps

    For an additional amount for ``Operation and Maintenance, 
Marine Corps'', $113,865,000, to remain available for 
obligation until September 30, 2010, to improve, repair and 
modernize Department of Defense facilities, restore and 
modernize real property to include barracks, and invest in the 
energy efficiency of Department of Defense facilities.

                  Operation and Maintenance, Air Force

    For an additional amount for ``Operation and Maintenance, 
Air Force'', $1,095,959,000, to remain available for obligation 
until September 30, 2010, to improve, repair and modernize 
Department of Defense facilities, restore and modernize real 
property to include barracks, and invest in the energy 
efficiency of Department of Defense facilities.

                Operation and Maintenance, Army Reserve

    For an additional amount for ``Operation and Maintenance, 
Army Reserve'', $98,269,000, to remain available for obligation 
until September 30, 2010, to improve, repair and modernize 
Department of Defense facilities, restore and modernize real 
property to include barracks, and invest in the energy 
efficiency of Department of Defense facilities.

                Operation and Maintenance, Navy Reserve

    For an additional amount for ``Operation and Maintenance, 
Navy Reserve'', $55,083,000, to remain available for obligation 
until September 30, 2010, to improve, repair and modernize 
Department of Defense facilities, restore and modernize real 
property to include barracks, and invest in the energy 
efficiency of Department of Defense facilities.

            Operation and Maintenance, Marine Corps Reserve

    For an additional amount for ``Operation and Maintenance, 
Marine Corps Reserve'', $39,909,000, to remain available for 
obligation until September 30, 2010, to improve, repair and 
modernize Department of Defense facilities, restore and 
modernize real property to include barracks, and invest in the 
energy efficiency of Department of Defense facilities.

              Operation and Maintenance, Air Force Reserve

    For an additional amount for ``Operation and Maintenance, 
Air Force Reserve'', $13,187,000, to remain available for 
obligation until September 30, 2010, to improve, repair and 
modernize Department of Defense facilities, restore and 
modernize real property to include barracks, and invest in the 
energy efficiency of Department of Defense facilities.

             Operation and Maintenance, Army National Guard

    For an additional amount for ``Operation and Maintenance, 
Army National Guard'', $266,304,000, to remain available for 
obligation until September 30, 2010, to improve, repair and 
modernize Department of Defense facilities, restore and 
modernize real property to include barracks, and invest in the 
energy efficiency of Department of Defense facilities.

             Operation and Maintenance, Air National Guard

    For an additional amount for ``Operation and Maintenance, 
Air National Guard'', $25,848,000, to remain available for 
obligation until September 30, 2010, to improve, repair and 
modernize Department of Defense facilities, restore and 
modernize real property to include barracks, and invest in the 
energy efficiency of Department of Defense facilities.

               RESEARCH, DEVELOPMENT, TEST AND EVALUATION

            Research, Development, Test and Evaluation, Army

    For an additional amount for ``Research, Development, Test 
and Evaluation, Army'', $75,000,000, to remain available for 
obligation until September 30, 2010.

            Research, Development, Test and Evaluation, Navy

    For an additional amount for ``Research, Development, Test 
and Evaluation, Navy'', $75,000,000, to remain available for 
obligation until September 30, 2010.

         Research, Development, Test and Evaluation, Air Force

    For an additional amount for ``Research, Development, Test 
and Evaluation, Air Force'', $75,000,000, to remain available 
for obligation until September 30, 2010.

        Research, Development, Test and Evaluation, Defense-Wide

    For an additional amount for ``Research, Development, Test 
and Evaluation, Defense-Wide'', $75,000,000, to remain 
available for obligation until September 30, 2010.

                  OTHER DEPARTMENT OF DEFENSE PROGRAMS

                         Defense Health Program

    For an additional amount for ``Defense Health Program'', 
$400,000,000 for operation and maintenance, to remain available 
for obligation until September 30, 2010, to improve, repair and 
modernize military medical facilities, and invest in the energy 
efficiency of military medical facilities.

                    Office of the Inspector General

    For an additional amount for ``Office of the Inspector 
General'', $15,000,000 for operation and maintenance, to remain 
available for obligation until September 30, 2011.

                 TITLE IV--ENERGY AND WATER DEVELOPMENT

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                             investigations

    For an additional amount for ``Investigations'', 
$25,000,000: Provided, That funds provided under this heading 
in this title shall only be used for programs, projects or 
activities that heretofore or hereafter receive funds provided 
in Acts making appropriations available for Energy and Water 
Development: Provided further, That funds provided under this 
heading in this title shall be used for programs, projects or 
activities or elements of programs, projects or activities that 
can be completed within the funds made available in that 
account and that will not require new budget authority to 
complete: Provided further, That for projects that are being 
completed with funds appropriated in this Act that would 
otherwise be expired for obligation, expired funds appropriated 
in this Act may be used to pay the cost of associated 
supervision, inspection, overhead, engineering and design on 
those projects and on subsequent claims, if any: Provided 
further, That the Secretary of the Army shall submit a 
quarterly report to the Committees on Appropriations of the 
House of Representatives and the Senate detailing the 
allocation, obligation and expenditures of these funds, 
beginning not later than 45 days after enactment of this Act: 
Provided further, That the Secretary shall have unlimited 
reprogramming authority for these funds provided under this 
heading.

                              construction

    For an additional amount for ``Construction'', 
$2,000,000,000: Provided, That not less than $200,000,000 of 
the funds provided shall be for water-related environmental 
infrastructure assistance: Provided further, That section 102 
of Public Law 109-103 (33 U.S.C. 2221) shall not apply to funds 
provided in this title: Provided further, That notwithstanding 
any other provision of law, funds provided in this paragraph 
shall not be cost shared with the Inland Waterways Trust Fund 
as authorized in Public Law 99-662: Provided further, That 
funds provided under this heading in this title shall only be 
used for programs, projects or activities that heretofore or 
hereafter receive funds provided in Acts making appropriations 
available for Energy and Water Development: Provided further, 
That funds provided under this heading in this title shall be 
used for programs, projects or activities or elements of 
programs, projects or activities that can be completed within 
the funds made available in that account and that will not 
require new budget authority to complete: Provided further, 
That the limitation concerning total project costs in section 
902 of the Water Resources Development Act of 1986, as amended 
(33 U.S.C. 2280), shall not apply during fiscal year 2009 to 
any project that received funds provided in this title: 
Provided further, That funds appropriated under this heading 
may be used by the Secretary of the Army, acting through the 
Chief of Engineers, to undertake work authorized to be carried 
out in accordance with section 14 of the Flood Control Act of 
1946 (33 U.S.C. 701r); section 205 of the Flood Control Act of 
1948 (33 U.S.C. 701s); section 206 of the Water Resources 
Development Act of 1996 (33 U.S.C. 2330); or section 1135 of 
the Water Resources Development Act of 1986 (33 U.S.C. 2309a), 
notwithstanding the program cost limitations set forth in those 
sections: Provided further, That for projects that are being 
completed with funds appropriated in this Act that would 
otherwise be expired for obligation, expired funds appropriated 
in this Act may be used to pay the cost of associated 
supervision, inspection, overhead, engineering and design on 
those projects and on subsequent claims, if any: Provided 
further, That the Secretary of the Army shall submit a 
quarterly report to the Committees on Appropriations of the 
House of Representatives and the Senate detailing the 
allocation, obligation and expenditures of these funds, 
beginning not later than 45 days after enactment of this Act: 
Provided further, That the Secretary shall have unlimited 
reprogramming authority for these funds provided under this 
heading.

                   mississippi river and tributaries

    For an additional amount for ``Mississippi River and 
Tributaries'', $375,000,000: Provided, That funds provided 
under this heading in this title shall only be used for 
programs, projects or activities that heretofore or hereafter 
receive funds provided in Acts making appropriations available 
for Energy and Water Development: Provided further, That funds 
provided under this heading in this title shall be used for 
programs, projects or activities or elements of programs, 
projects or activities that can be completed within the funds 
made available in that account and that will not require new 
budget authority to complete: Provided further, That the 
limitation concerning total project costs in section 902 of the 
Water Resources Development Act of 1986, as amended (33 U.S.C. 
2280), shall not apply during fiscal year 2009 to any project 
that received funds provided in this title: Provided further, 
That for projects that are being completed with funds 
appropriated in this Act that would otherwise be expired for 
obligation, expired funds appropriated in this Act may be used 
to pay the cost of associated supervision, inspection, overhead 
engineering, and design on those projects and on subsequent 
claims, if any: Provided further, That the Secretary of the 
Army shall submit a quarterly report to the Committees on 
Appropriations of the House of Representatives and the Senate 
detailing the allocation, obligation and expenditures of these 
funds, beginning not later than 45 days after enactment of this 
Act: Provided further, That the Secretary shall have unlimited 
reprogramming authority for these funds provided under this 
heading.

                       operation and maintenance

    For an additional amount for ``Operation and Maintenance'', 
$2,075,000,000: Provided, That funds provided under this 
heading in this title shall only be used for programs, projects 
or activities that heretofore or hereafter receive funds 
provided in Acts making appropriations available for Energy and 
Water Development: Provided further, That funds provided under 
this heading in this title shall be used for programs, projects 
or activities or elements of programs, projects or activities 
that can be completed within the funds made available in that 
account and that will not require new budget authority to 
complete: Provided further, That section 9006 of Public Law 
110-114 shall not apply to funds provided in this title: 
Provided further, That for projects that are being completed 
with funds appropriated in this Act that would otherwise be 
expired for obligation, expired funds appropriated in this Act 
may be used to pay the cost of associated supervision, 
inspection, overhead, engineering and design on those projects 
and on subsequent claims, if any: Provided further, That the 
Secretary of the Army shall submit a quarterly 
report to the Committees on Appropriations of the House of 
Representatives and the Senate detailing the allocation, 
obligation and expenditures of these funds, beginning not later 
than 45 days after enactment of this Act: Provided further, 
That the Secretary shall have unlimited reprogramming authority 
for these funds provided under this heading.

                           regulatory program

    For an additional amount for ``Regulatory Program'', 
$25,000,000.

            formerly utilized sites remedial action program

    For an additional amount for ``Formerly Utilized Sites 
Remedial Action Program'', $100,000,000: Provided, That funds 
provided under this heading in this title shall be used for 
programs, projects or activities or elements of programs, 
projects or activities that can be completed within the funds 
made available in that account and that will not require new 
budget authority to complete: Provided further, That for 
projects that are being completed with funds appropriated in 
this Act that would otherwise be expired for obligation, 
expired funds appropriated in this Act may be used to pay the 
cost of associated supervision, inspection, overhead, 
engineering and design on those projects and on subsequent 
claims, if any: Provided further, That the Secretary of the 
Army shall submit a quarterly 
report to the Committees on Appropriations of the House of 
Representatives and the Senate detailing the allocation, 
obligation and expenditures of these funds, beginning not later 
than 45 days after enactment of this Act: Provided further, 
That the Secretary shall have unlimited reprogramming authority 
for these funds provided under this heading.

                       DEPARTMENT OF THE INTERIOR

                         Bureau of Reclamation

                      water and related resources

    For an additional amount for ``Water and Related 
Resources'', $1,000,000,000: Provided, That of the amount 
appropriated under this heading, not less than $126,000,000 
shall be used for water reclamation and reuse projects 
authorized under title XVI of Public Law 102-575: Provided 
further, That funds provided in this Act shall be used for 
elements of projects, programs or activities that can be 
completed within these funding amounts and not create budgetary 
obligations in future fiscal years: Provided further, That 
$50,000,000 of the funds provided under this heading may be 
transferred to the Department of the Interior for programs, 
projects and activities authorized by the Central Utah Project 
Completion Act (titles II-V of Public Law 102-575): Provided 
further, That $50,000,000 of the funds provided under this 
heading may be used for programs, projects, and activities 
authorized by the California Bay-Delta Restoration Act (Public 
Law 108-361): Provided further, That not less than $60,000,000 
of the funds provided under this heading shall be used for 
rural water projects and shall be expended primarily on water 
intake and treatment facilities of such projects: Provided 
further, That not less than $10,000,000 of the funds provided 
under this heading shall be used for a bureau-wide inspection 
of canals program in urbanized areas: Provided further, That 
the costs of extraordinary maintenance and replacement 
activities carried out with funds provided in this Act shall be 
repaid pursuant to existing authority, except the length of 
repayment period shall be as determined by the Commissioner, 
but in no case shall the repayment period exceed 50 years and 
the repayment shall include interest, at a rate determined by 
the Secretary of the Treasury as of the beginning of the fiscal 
year in which the work is commenced, on the basis of average 
market yields on outstanding marketable obligations of the 
United States with the remaining periods of maturity comparable 
to the applicable reimbursement period of the project adjusted 
to the nearest one-eighth of 1 percent on the unamortized 
balance of any portion of the loan: Provided further, That for 
projects that are being completed with funds appropriated in 
this Act that would otherwise be expired for obligation, 
expired funds appropriated in this Act may be used to pay the 
cost of associated supervision, inspection, overhead, 
engineering and design on those projects and on subsequent 
claims, if any: Provided further, That the Secretary of the 
Interior shall submit a quarterly report to the Committees on 
Appropriations of the House of Representatives and the Senate 
detailing the allocation, obligation and expenditures of these 
funds, beginning not later than 45 days after enactment of this 
Act: Provided further, That the Secretary shall have unlimited 
reprogramming authority for these funds provided under this 
heading.

                          DEPARTMENT OF ENERGY

                            ENERGY PROGRAMS

                 Energy Efficiency and Renewable Energy

    For an additional amount for ``Energy Efficiency and 
Renewable Energy'', $16,800,000,000: Provided, That 
$3,200,000,000 shall be available for Energy Efficiency and 
Conservation Block Grants for implementation of programs 
authorized under subtitle E of title V of the Energy 
Independence and Security Act of 2007 (42 U.S.C. 17151 et 
seq.), of which $2,800,000,000 is available through the formula 
in subtitle E: Provided further, That the Secretary may use the 
most recent and accurate population data available to satisfy 
the requirements of section 543(b) of the Energy Independence 
and Security Act of 2007: Provided further, That the remaining 
$400,000,000 shall be awarded on a competitive basis: Provided 
further, That $5,000,000,000 shall be for the Weatherization 
Assistance Program under part A of title IV of the Energy 
Conservation and Production Act (42 U.S.C. 6861 et seq.): 
Provided further, That $3,100,000,000 shall be for the State 
Energy Program authorized under part D of title III of the 
Energy Policy and Conservation Act (42 U.S.C. 6321): Provided 
further, That $2,000,000,000 shall be available for grants for 
the manufacturing of advanced batteries and components and the 
Secretary shall provide facility funding awards under this 
section to manufacturers of advanced battery systems and 
vehicle batteries that are produced in the United States, 
including advanced lithium ion batteries, hybrid electrical 
systems, component manufacturers, and software designers: 
Provided further, That notwithstanding section 3304 of title 5, 
United States Code, and without regard to the provisions of 
sections 3309 through 3318 of such title 5, the Secretary of 
Energy, upon a determination that there is a severe shortage of 
candidates or a critical hiring need for particular positions, 
may from within the funds provided, recruit and directly 
appoint highly qualified individuals into the competitive 
service: Provided further, That such authority shall not apply 
to positions in the Excepted Service or the Senior Executive 
Service: Provided further, That any action authorized herein 
shall be consistent with the merit principles of section 2301 
of such title 5, and the Department shall comply with the 
public notice requirements of section 3327 of such title 5.

              Electricity Delivery and Energy Reliability

    For an additional amount for ``Electricity Delivery and 
Energy Reliability,'' $4,500,000,000: Provided, That funds 
shall be available for expenses necessary for electricity 
delivery and energy reliability activities to modernize the 
electric grid, to include demand responsive equipment, enhance 
security and reliability of the energy infrastructure, energy 
storage research, development, demonstration and deployment, 
and facilitate recovery from disruptions to the energy supply, 
and for implementation of programs authorized under title XIII 
of the Energy Independence and Security Act of 2007 (42 U.S.C. 
17381 et seq.): Provided further, That $100,000,000 shall be 
available for worker training activities: Provided further, 
That notwithstanding section 3304 of title 5, United States 
Code, and without regard to the provisions of sections 3309 
through 3318 of such title 5, the Secretary of Energy, upon a 
determination that there is a severe shortage of candidates or 
a critical hiring need for particular positions, may from 
within the funds provided, recruit and directly appoint highly 
qualified individuals into the competitive service: Provided 
further, That such authority shall not apply to positions in 
the Excepted Service or the Senior Executive Service: Provided 
further, That any action authorized herein shall be consistent 
with the merit principles of section 2301 of such title 5, and 
the Department shall comply with the public notice requirements 
of section 3327 of such title 5: Provided further, That for the 
purpose of facilitating the development of regional 
transmission plans, the Office of Electricity Delivery and 
Energy Reliability within the Department of Energy is provided 
$80,000,000 within the available funds to conduct a resource 
assessment and an analysis of future demand and transmission 
requirements after consultation with the Federal Energy 
Regulatory Commission: Provided further, That the Office of 
Electricity Delivery and Energy Reliability in coordination 
with the Federal Energy Regulatory Commission will provide 
technical assistance to the North American Electric Reliability 
Corporation, the regional reliability entities, the States, and 
other transmission owners and operators for the formation of 
interconnection-based transmission plans for the Eastern and 
Western Interconnections and ERCOT: Provided further, That such 
assistance may include modeling, support to regions and States 
for the development of coordinated State electricity policies, 
programs, laws, and regulations: Provided further, That 
$10,000,000 is provided to implement section 1305 of Public Law 
110-140: Provided further, That the Secretary of Energy may use 
or transfer amounts provided under this heading to carry out 
new authority for transmission improvements, if such authority 
is enacted in any subsequent Act, consistent with existing 
fiscal management practices and procedures.

                 Fossil Energy Research and Development

    For an additional amount for ``Fossil Energy Research and 
Development'', $3,400,000,000.

                   Non-Defense Environmental Cleanup

    For an additional amount for ``Non-Defense Environmental 
Cleanup'', $483,000,000.

      Uranium Enrichment Decontamination and Decommissioning Fund

    For an additional amount for ``Uranium Enrichment 
Decontamination and Decommissioning Fund'', $390,000,000, of 
which $70,000,000 shall be available in accordance with title 
X, subtitle A of the Energy Policy Act of 1992.

                                Science

    For an additional amount for ``Science'', $1,600,000,000.

               Advanced Research Projects Agency--Energy

    For the Advanced Research Projects Agency--Energy, 
$400,000,000, as authorized under section 5012 of the America 
COMPETES Act (42 U.S.C. 16538).

         Title 17--Innovative Technology Loan Guarantee Program

    For an additional amount for the cost of guaranteed loans 
authorized by section 1705 of the Energy Policy Act of 2005, 
$6,000,000,000, available until expended, to pay the costs of 
guarantees made under this section: Provided, That of the 
amount provided for title XVII, $25,000,000 shall be used for 
administrative expenses in carrying out the guaranteed loan 
program: Provided further, That of the amounts provided for 
title XVII, $10,000,000 shall be transferred to and available 
for administrative expenses for the Advanced Technology 
Vehicles Manufacturing Loan Program.

                    Office of the Inspector General

    For necessary expenses of the Office of the Inspector 
General in carrying out the provisions of the Inspector General 
Act of 1978, as amended, $15,000,000, to remain available until 
September 30, 2012.

               ENVIRONMENTAL AND OTHER DEFENSE ACTIVITIES

                     Defense Environmental Cleanup

    For an additional amount for ``Defense Environmental 
Cleanup,'' $5,127,000,000.

Construction, Rehabilitation, Operation, and Maintenance, Western Area 
                          Power Administration

    For carrying out the functions authorized by title III, 
section 302(a)(1)(E) of the Act of August 4, 1977 (42 U.S.C. 
7152), and other related activities including conservation and 
renewable resources programs as authorized, $10,000,000, to 
remain available until expended: Provided, That the 
Administrator shall establish such personnel staffing levels as 
he deems necessary to economically and efficiently complete the 
activities pursued under the authority granted by section 402 
of this Act: Provided further, That this appropriation is non-
reimbursable.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 401. Bonneville Power Administration Borrowing 
Authority.--For the purposes of providing funds to assist in 
financing the construction, acquisition, and replacement of the 
transmission system of the Bonneville Power Administration and 
to implement the authority of the Administrator of the 
Bonneville Power Administration under the Pacific Northwest 
Electric Power Planning and Conservation Act (16 U.S.C. 839 et 
seq.), an additional $3,250,000,000 in borrowing authority is 
made available under the Federal Columbia River Transmission 
System Act (16 U.S.C. 838 et seq.), to remain outstanding at 
any time.
    Sec. 402. Western Area Power Administration Borrowing 
Authority.--The Hoover Power Plant Act of 1984 (Public Law 98-
381) is amended by adding at the end the following:

                    ``TITLE III--BORROWING AUTHORITY

``SEC. 301. WESTERN AREA POWER ADMINISTRATION BORROWING AUTHORITY.

    ``(a) Definitions.--In this section:
            ``(1) Administrator.--The term `Administrator' 
        means the Administrator of the Western Area Power 
        Administration.
            ``(2) Secretary.--The term `Secretary' means the 
        Secretary of the Treasury.
    ``(b) Authority.--
            ``(1) In general.--Notwithstanding any other 
        provision of law, subject to paragraphs (2) through 
        (5)--
                    ``(A) the Western Area Power Administration 
                may borrow funds from the Treasury; and
                    ``(B) the Secretary shall, without further 
                appropriation and without fiscal year 
                limitation, loan to the Western Area Power 
                Administration, on such terms as may be fixed 
                by the Administrator and the Secretary, such 
                sums (not to exceed, in the aggregate 
                (including deferred interest), $3,250,000,000 
                in outstanding repayable balances at any one 
                time) as, in the judgment of the Administrator, 
                are from time to time required for the purpose 
                of--
                            ``(i) constructing, financing, 
                        facilitating, planning, operating, 
                        maintaining, or studying construction 
                        of new or upgraded electric power 
                        transmission lines and related 
                        facilities with at least one terminus 
                        within the area served by the Western 
                        Area Power Administration; and
                            ``(ii) delivering or facilitating 
                        the delivery of power generated by 
                        renewable energy resources constructed 
                        or reasonably expected to be 
                        constructed after the date of enactment 
                        of this section.
            ``(2) Interest.--The rate of interest to be charged 
        in connection with any loan made pursuant to this 
        subsection shall be fixed by the Secretary, taking into 
        consideration market yields on outstanding marketable 
        obligations of the United States of comparable 
        maturities as of the date of the loan.
            ``(3) Refinancing.--The Western Area Power 
        Administration may refinance loans taken pursuant to 
        this section within the Treasury.
            ``(4) Participation.--The Administrator may permit 
        other entities to participate in the financing, 
        construction and ownership projects financed under this 
        section.
            ``(5) Congressional review of disbursement.--
        Effective upon the date of enactment of this section, 
        the Administrator shall have the authority to have 
        utilized $1,750,000,000 at any one time. If the 
        Administrator seeks to borrow funds above 
        $1,750,000,000, the funds will be disbursed unless 
        there is enacted, within 90 calendar days of the first 
        such request, a joint resolution that rescinds the 
        remainder of the balance of the borrowing authority 
        provided in this section.
    ``(c) Transmission Line and Related Facility Projects.--
            ``(1) In general.--For repayment purposes, each 
        transmission line and related facility project in which 
        the Western Area Power Administration participates 
        pursuant to this section shall be treated as separate 
        and distinct from--
                    ``(A) each other such project; and
                    ``(B) all other Western Area Power 
                Administration power and transmission 
                facilities.
            ``(2) Proceeds.--The Western Area Power 
        Administration shall apply the proceeds from the use of 
        the transmission capacity from an individual project 
        under this section to the repayment of the principal 
        and interest of the loan from the Treasury attributable 
        to that project, after reserving such funds as the 
        Western Area Power Administration determines are 
        necessary--
                    ``(A) to pay for any ancillary services 
                that are provided; and
                    ``(B) to meet the costs of operating and 
                maintaining the new project from which the 
                revenues are derived.
            ``(3) Source of revenue.--Revenue from the use of 
        projects under this section shall be the only source of 
        revenue for--
                    ``(A) repayment of the associated loan for 
                the project; and
                    ``(B) payment of expenses for ancillary 
                services and operation and maintenance.
            ``(4) Limitation on authority.--Nothing in this 
        section confers on the Administrator any additional 
        authority or obligation to provide ancillary services 
        to users of transmission facilities developed under 
        this section.
            ``(5) Treatment of certain revenues.--Revenue from 
        ancillary services provided by existing Federal power 
        systems to users of transmission projects funded 
        pursuant to this section shall be treated as revenue to 
        the existing power system that provided the ancillary 
        services.
    ``(d) Certification.--
            ``(1) In general.--For each project in which the 
        Western Area Power Administration participates pursuant 
        to this section, the Administrator shall certify, prior 
        to committing funds for any such project, that--
                    ``(A) the project is in the public 
                interest;
                    ``(B) the project will not adversely impact 
                system reliability or operations, or other 
                statutory obligations; and
                    ``(C) it is reasonable to expect that the 
                proceeds from the project shall be adequate to 
                make repayment of the loan.
            ``(2) Forgiveness of balances.--
                    ``(A) In general.--If, at the end of the 
                useful life of a project, there is a remaining 
                balance owed to the Treasury under this 
                section, the balance shall be forgiven.
                    ``(B) Unconstructed projects.--Funds 
                expended to study projects that are considered 
                pursuant to this section but that are not 
                constructed shall be forgiven.
                    ``(C) Notification.--The Administrator 
                shall notify the Secretary of such amounts as 
                are to be forgiven under this paragraph.
    ``(e) Public Processes.--
            ``(1) Policies and practices.--Prior to requesting 
        any loans under this section, the Administrator shall 
        use a public process to develop practices and policies 
        that implement the authority granted by this section.
            ``(2) Requests for interest.--In the course of 
        selecting potential projects to be funded under this 
        section, the Administrator shall seek Requests For 
        Interest from entities interested in identifying 
        potential projects through one or more notices 
        published in the Federal Register.''
    Sec. 403. Set-aside for Management and Oversight. Up to 0.5 
percent of each amount appropriated in this title may be used 
for the expenses of management and oversight of the programs, 
grants, and activities funded by such appropriation, and may be 
transferred by the head of the Federal department or agency 
involved to any other appropriate account within the department 
or agency for that purpose: Provided, That the Secretary will 
provide a report to the Committees on Appropriations of the 
House of Representatives and the Senate 30 days prior to the 
transfer: Provided further, That funds set aside under this 
section shall remain available for obligation until September 
30, 2012.
    Sec. 404. Technical Corrections to the Energy Independence 
and Security Act of 2007. (a) Section 543(a) of the Energy 
Independence and Security Act of 2007 (42 U.S.C. 17153(a)) is 
amended--
            (1) by redesignating paragraphs (2) through (4) as 
        paragraphs (3) through (5), respectively; and
            (2) by striking paragraph (1) and inserting the 
        following:
            ``(1) 34 percent to eligible units of local 
        government--alternative 1, in accordance with 
        subsection (b);
            ``(2) 34 percent to eligible units of local 
        government--alternative 2, in accordance with 
        subsection (b);''.
    (b) Section 543(b) of the Energy Independence and Security 
Act of 2007 (42 U.S.C. 17153(b)) is amended by striking 
``subsection (a)(1)'' and inserting ``subsection (a)(1) or 
(2)''.
    (c) Section 548(a)(1) of the Energy Independence and 
Security Act of 2007 (42 U.S.C. 17158(a)(1)) is amending by 
striking ``; provided'' and all that follows through 
``541(3)(B)''.
    Sec. 405. Amendments to Title XIII of the Energy 
Independence and Security Act of 2007. Title XIII of the Energy 
Independence and Security Act of 2007 (42 U.S.C. 17381 and 
following) is amended as follows:
            (1) By amending subparagraph (A) of section 
        1304(b)(3) to read as follows:
                    ``(A) In general.--In carrying out the 
                initiative, the Secretary shall provide 
                financial support to smart grid demonstration 
                projects in urban, suburban, tribal, and rural 
                areas, including areas where electric system 
                assets are controlled by nonprofit entities and 
                areas where electric system assets are 
                controlled by investor-owned utilities.''.
            (2) By amending subparagraph (C) of section 
        1304(b)(3) to read as follows:
                    ``(C) Federal share of cost of technology 
                investments.--The Secretary shall provide to an 
                electric utility described in subparagraph (B) 
                or to other parties financial assistance for 
                use in paying an amount equal to not more than 
                50 percent of the cost of qualifying advanced 
                grid technology investments made by the 
                electric utility or other party to carry out a 
                demonstration project.''.
            (3) By inserting after section 1304(b)(3)(D) the 
        following new subparagraphs:
                    ``(E) Availability of data.--The Secretary 
                shall establish and maintain a smart grid 
                information clearinghouse in a timely manner 
                which will make data from smart grid 
                demonstration projects and other sources 
                available to the public. As a condition of 
                receiving financial assistance under this 
                subsection, a utility or other participant in a 
                smart grid demonstration project shall provide 
                such information as the Secretary may require 
                to become available through the smart grid 
                information clearinghouse in the form and 
                within the timeframes as directed by the 
                Secretary. The Secretary shall assure that 
                business proprietary information and individual 
                customer information is not included in the 
                information made available through the 
                clearinghouse.
                    ``(F) Open protocols and standards.--The 
                Secretary shall require as a condition of 
                receiving funding under this subsection that 
                demonstration projects utilize open protocols 
                and standards (including Internet-based 
                protocols and standards) if available and 
                appropriate.''.
            (4) By amending paragraph (2) of section 1304(c) to 
        read as follows:
            ``(2) to carry out subsection (b), such sums as may 
        be necessary.''.
            (5) By amending subsection (a) of section 1306 by 
        striking ``reimbursement of one-fifth (20 percent)'' 
        and inserting ``grants of up to one-half (50 
        percent)''.
            (6) By striking the last sentence of subsection 
        (b)(9) of section 1306.
            (7) By striking ``are eligible for'' in subsection 
        (c)(1) of section 1306 and inserting ``utilize''.
            (8) By amending subsection (e) of section 1306 to 
        read as follows:
    ``(e) Procedures and Rules.--(1) The Secretary shall, 
within 60 days after the enactment of the American Recovery and 
Reinvestment Act of 2009, by means of a notice of intent and 
subsequent solicitation of grant proposals--
            ``(A) establish procedures by which applicants can 
        obtain grants of not more than one-half of their 
        documented costs;
            ``(B) require as a condition of receiving funding 
        under this subsection that demonstration projects 
        utilize open protocols and standards (including 
        Internet-based protocols and standards) if available 
        and appropriate;
            ``(C) establish procedures to ensure that there is 
        no duplication or multiple payment for the same 
        investment or costs, that the grant goes to the party 
        making the actual expenditures for the qualifying Smart 
        Grid investments, and that the grants made have a 
        significant effect in encouraging and facilitating the 
        development of a smart grid;
            ``(D) establish procedures to ensure there will be 
        public records of grants made, recipients, and 
        qualifying Smart Grid investments which have received 
        grants; and
            ``(E) establish procedures to provide advance 
        payment of moneys up to the full amount of the grant 
        award.
    ``(2) The Secretary shall have discretion and exercise 
reasonable judgment to deny grants for investments that do not 
qualify.''.
    Sec. 406. Renewable Energy and Electric Power Transmission 
Loan Guarantee Program. (a) Amendment.--Title XVII of the 
Energy Policy Act of 2005 (42 U.S.C. 16511 et seq.) is amended 
by adding the following at the end:

``SEC. 1705. TEMPORARY PROGRAM FOR RAPID DEPLOYMENT OF RENEWABLE ENERGY 
                    AND ELECTRIC POWER TRANSMISSION PROJECTS.

    ``(a) In General.--Notwithstanding section 1703, the 
Secretary may make guarantees under this section only for the 
following categories of projects that commence construction not 
later than September 30, 2011:
            ``(1) Renewable energy systems, including 
        incremental hydropower, that generate electricity or 
        thermal energy, and facilities that manufacture related 
        components.
            ``(2) Electric power transmission systems, 
        including upgrading and reconductoring projects.
            ``(3) Leading edge biofuel projects that will use 
        technologies performing at the pilot or demonstration 
        scale that the Secretary determines are likely to 
        become commercial technologies and will produce 
        transportation fuels that substantially reduce life-
        cycle greenhouse gas emissions compared to other 
        transportation fuels.
    ``(b) Factors Relating to Electric Power Transmission 
Systems.--In determining to make guarantees to projects 
described in subsection (a)(2), the Secretary may consider the 
following factors:
            ``(1) The viability of the project without 
        guarantees.
            ``(2) The availability of other Federal and State 
        incentives.
            ``(3) The importance of the project in meeting 
        reliability needs.
            ``(4) The effect of the project in meeting a State 
        or region's environment (including climate change) and 
        energy goals.
    ``(c) Wage Rate Requirements.--The Secretary shall require 
that each recipient of support under this section provide 
reasonable assurance that all laborers and mechanics employed 
in the performance of the project for which the assistance is 
provided, including those employed by contractors or 
subcontractors, will be paid wages at rates not less than those 
prevailing on similar work in the locality as determined by the 
Secretary of Labor in accordance with subchapter IV of chapter 
31 of part A of subtitle II of title 40, United States Code 
(commonly referred to as the `Davis-Bacon Act').
    ``(d) Limitation.--Funding under this section for projects 
described in subsection (a)(3) shall not exceed $500,000,000.
    ``(e) Sunset.--The authority to enter into guarantees under 
this section shall expire on September 30, 2011.''.
    (b) Table of Contents Amendment.--The table of contents for 
the Energy Policy Act of 2005 is amended by inserting after the 
item relating to section 1704 the following new item:

``Sec. 1705. Temporary program for rapid deployment of renewable energy 
          and electric power transmission projects.''.

    Sec. 407. Weatherization Assistance Program Amendments. (a) 
Income Level.--Section 412(7) of the Energy Conservation and 
Production Act (42 U.S.C. 6862(7)) is amended by striking ``150 
percent'' both places it appears and inserting ``200 percent''.
    (b) Assistance Level Per Dwelling Unit.--Section 415(c)(1) 
of the Energy Conservation and Production Act (42 U.S.C. 
6865(c)(1)) is amended by striking ``$2,500'' and inserting 
``$6,500''.
    (c) Effective Use of Funds.--In providing funds made 
available by this Act for the Weatherization Assistance 
Program, the Secretary may encourage States to give priority to 
using such funds for the most cost-effective efficiency 
activities, which may include insulation of attics, if, in the 
Secretary's view, such use of funds would increase the 
effectiveness of the program.
    (d) Training and Technical Assistance.--Section 416 of the 
Energy Conservation and Production Act (42 U.S.C. 6866) is 
amended by striking ``10 percent'' and inserting ``up to 20 
percent''.
    (e) Assistance for Previously Weatherized Dwelling Units.--
Section 415(c)(2) of the Energy Conservation and Production Act 
(42 U.S.C. 6865(c)(2)) is amended by striking ``September 30, 
1979'' and inserting ``September 30, 1994''.
    Sec. 408. Technical Corrections to Public Utility 
Regulatory Policies Act of 1978. (a) Section 111(d) of the 
Public Utility Regulatory Policies Act of 1978 (16 U.S.C. 
2621(d)) is amended by redesignating paragraph (16) relating to 
consideration of smart grid investments (added by section 
1307(a) of Public Law 110-140) as paragraph (18) and by 
redesignating paragraph (17) relating to smart grid information 
(added by section 1308(a) of Public Law 110-140) as paragraph 
(19).
    (b) Subsections (b) and (d) of section 112 of the Public 
Utility Regulatory Policies Act of 1978 (16 U.S.C. 2622) are 
each amended by striking ``(17) through (18)'' in each place it 
appears and inserting ``(16) through (19)''.
    Sec. 409. Renewable Electricity Transmission Study. In 
completing the 2009 National Electric Transmission Congestion 
Study, the Secretary of Energy shall include--
            (1) an analysis of the significant potential 
        sources of renewable energy that are constrained in 
        accessing appropriate market areas by lack of adequate 
        transmission capacity;
            (2) an analysis of the reasons for failure to 
        develop the adequate transmission capacity;
            (3) recommendations for achieving adequate 
        transmission capacity;
            (4) an analysis of the extent to which legal 
        challenges filed at the State and Federal level are 
        delaying the construction of transmission necessary to 
        access renewable energy; and
            (5) an explanation of assumptions and projections 
        made in the Study, including--
                    (A) assumptions and projections relating to 
                energy efficiency improvements in each load 
                center;
                    (B) assumptions and projections regarding 
                the location and type of projected new 
                generation capacity; and
                    (C) assumptions and projections regarding 
                projected deployment of distributed generation 
                infrastructure.
    Sec. 410. Additional State Energy Grants. (a) In General.--
Amounts appropriated under the heading ``Department of Energy--
Energy Programs--Energy Efficiency and Renewable Energy'' in 
this title shall be available to the Secretary of Energy for 
making additional grants under part D of title III of the 
Energy Policy and Conservation Act (42 U.S.C. 6321 et seq.). 
The Secretary shall make grants under this section in excess of 
the base allocation established for a State under regulations 
issued pursuant to the authorization provided in section 365(f) 
of such Act only if the governor of the recipient State 
notifies the Secretary of Energy in writing that the governor 
has obtained necessary assurances that each of the following 
will occur:
            (1) The applicable State regulatory authority will 
        seek to implement, in appropriate proceedings for each 
        electric and gas utility, with respect to which the 
        State regulatory authority has ratemaking authority, a 
        general policy that ensures that utility financial 
        incentives are aligned with helping their customers use 
        energy more efficiently and that provide timely cost 
        recovery and a timely earnings opportunity for 
        utilities associated with cost-effective measurable and 
        verifiable efficiency savings, in a way that sustains 
        or enhances utility customers' incentives to use energy 
        more efficiently.
            (2) The State, or the applicable units of local 
        government that have authority to adopt building codes, 
        will implement the following:
                    (A) A building energy code (or codes) for 
                residential buildings that meets or exceeds the 
                most recently published International Energy 
                Conservation Code, or achieves equivalent or 
                greater energy savings.
                    (B) A building energy code (or codes) for 
                commercial buildings throughout the State that 
                meets or exceeds the ANSI/ASHRAE/IESNA Standard 
                90.1-2007, or achieves equivalent or greater 
                energy savings.
                    (C) A plan for the jurisdiction achieving 
                compliance with the building energy code or 
                codes described in subparagraphs (A) and (B) 
                within 8 years of the date of enactment of this 
                Act in at least 90 percent of new and renovated 
                residential and commercial building space. Such 
                plan shall include active training and 
                enforcement programs and measurement of the 
                rate of compliance each year.
            (3) The State will to the extent practicable 
        prioritize the grants toward funding energy efficiency 
        and renewable energy programs, including--
                    (A) the expansion of existing energy 
                efficiency programs approved by the State or 
                the appropriate regulatory authority, including 
                energy efficiency retrofits of buildings and 
                industrial facilities, that are funded--
                            (i) by the State; or
                            (ii) through rates under the 
                        oversight of the applicable regulatory 
                        authority, to the extent applicable;
                    (B) the expansion of existing programs, 
                approved by the State or the appropriate 
                regulatory authority, to support renewable 
                energy projects and deployment activities, 
                including programs operated by entities which 
                have the authority and capability to manage and 
                distribute grants, loans, performance 
                incentives, and other forms of financial 
                assistance; and
                    (C) cooperation and joint activities 
                between States to advance more efficient and 
                effective use of this funding to support the 
                priorities described in this paragraph.
    (b) State Match.--The State cost share requirement under 
the item relating to ``Department of Energy; Energy 
Conservation'' in title II of the Department of the Interior 
and Related Agencies Appropriations Act, 1985 (42 U.S.C. 6323a; 
98 Stat. 1861) shall not apply to assistance provided under 
this section.
    (c) Equipment and Materials for Energy Efficiency Measures 
and Renewable Energy Measures.--No limitation on the percentage 
of funding that may be used for the purchase and installation 
of equipment and materials for energy efficiency measures and 
renewable energy measures under grants provided under part D of 
title III of the Energy Policy and Conservation Act (42 U.S.C. 
6321 et seq.) shall apply to assistance provided under this 
section.

           TITLE V--FINANCIAL SERVICES AND GENERAL GOVERNMENT

                       DEPARTMENT OF THE TREASURY

           Treasury Inspector General for Tax Administration

                         SALARIES AND EXPENSES

    For an additional amount for necessary expenses of the 
Treasury Inspector General for Tax Administration in carrying 
out the Inspector General Act of 1978, $7,000,000, to remain 
available until September 30, 2013, for oversight and audits of 
the administration of the making work pay tax credit and 
economic recovery payments under the American Recovery and 
Reinvestment Act of 2009.

   Community Development Financial Institutions Fund Program Account

    For an additional amount for ``Community Development 
Financial Institutions Fund Program Account'', $100,000,000, to 
remain available until September 30, 2010, for qualified 
applicants under the fiscal year 2009 funding round of the 
Community Development Financial Institutions Program, of which 
up to $8,000,000 may be for financial assistance, technical 
assistance, training and outreach programs designed to benefit 
Native American, Native Hawaiian, and Alaskan Native 
communities and provided primarily through qualified community 
development lender organizations with experience and expertise 
in community development banking and lending in Indian country, 
Native American organizations, tribes and tribal organizations 
and other suitable providers and up to $2,000,000 may be used 
for administrative expenses: Provided, That for the purpose of 
the fiscal year 2009 funding round, the following statutory 
provisions are hereby waived: 12 U.S.C. 4707(e) and 12 U.S.C. 
4707(d): Provided further, That no awardee, together with its 
subsidiaries and affiliates, may be awarded more than 5 percent 
of the aggregate funds available during fiscal year 2009 from 
the Community Development Financial Institutions Program: 
Provided further, That no later than 60 days after the date of 
enactment of this Act, the Department of the Treasury shall 
submit to the Committees on Appropriations of the House of 
Representatives and the Senate a detailed expenditure plan for 
funds provided under this heading.

                        Internal Revenue Service

               HEALTH INSURANCE TAX CREDIT ADMINISTRATION

    For an additional amount to implement the health insurance 
tax credit under the TAA Health Coverage Improvement Act of 
2009, $80,000,000, to remain available until September 30, 
2010.

                    GENERAL SERVICES ADMINISTRATION

                        Real Property Activities

                         FEDERAL BUILDINGS FUND

                 LIMITATIONS ON AVAILABILITY OF REVENUE

                     (INCLUDING TRANSFER OF FUNDS)

    For an additional amount to be deposited in the Federal 
Buildings Fund, $5,550,000,000, to carry out the purposes of 
the Fund, of which not less than $750,000,000 shall be 
available for Federal buildings and United States courthouses, 
not less than $300,000,000 shall be available for border 
stations and land ports of entry, and not less than 
$4,500,000,000 shall be available for measures necessary to 
convert GSA facilities to High-Performance Green Buildings, as 
defined in section 401 of Public Law 110-140: Provided, That 
not to exceed $108,000,000 of the amounts provided under this 
heading may be expended for rental of space, related to leasing 
of temporary space in connection with projects funded under 
this heading: Provided further, That not to exceed $127,000,000 
of the amounts provided under this heading may be expended for 
building operations, for the administrative costs of completing 
projects funded under this heading: Provided further, That not 
to exceed $3,000,000 of the funds provided shall be for on-the-
job pre-apprenticeship and apprenticeship training programs 
registered with the Department of Labor, for the construction, 
repair, and alteration of Federal buildings: Provided further, 
That not less than $5,000,000,000 of the funds provided under 
this heading shall be obligated by September 30, 2010, and the 
remainder of the funds provided under this heading shall be 
obligated not later than September 30, 2011: Provided further, 
That the Administrator of General Services is authorized to 
initiate design, construction, repair, alteration, and other 
projects through existing authorities of the Administrator: 
Provided further, That the General Services Administration 
shall submit a detailed plan, by project, regarding the use of 
funds made available in this Act to the Committees on 
Appropriations of the House of Representatives and the Senate 
within 45 days of enactment of this Act, and shall provide 
notification to the Committees within 15 days prior to any 
changes regarding the use of these funds: Provided further, 
That, hereafter, the Administrator shall report to the 
Committees on the obligation of these funds on a quarterly 
basis beginning on June 30, 2009: Provided further, That of the 
amounts provided, $4,000,000 shall be transferred to and merged 
with ``Government-Wide Policy'', for the Office of Federal 
High-Performance Green Buildings as authorized in the Energy 
Independence and Security Act of 2007 (Public Law 110-140): 
Provided further, That amounts provided under this heading that 
are savings or cannot be used for the activity for which 
originally obligated may be deobligated and, notwithstanding 
any other provision of law, reobligated for the purposes 
identified in the plan required under this heading not less 
than 15 days after notification has been provided to the 
Committees on Appropriations of the House of Representatives 
and the Senate.

        Energy-Efficient Federal Motor Vehicle Fleet Procurement

    For capital expenditures and necessary expenses of 
acquiring motor vehicles with higher fuel economy, including: 
hybrid vehicles; electric vehicles; and commercially-available, 
plug-in hybrid vehicles, $300,000,000, to remain available 
until September 30, 2011: Provided, That none of these funds 
may be obligated until the Administrator of General Services 
submits to the Committees on Appropriations of the House of 
Representatives and the Senate, within 90 days after enactment 
of this Act, a plan for expenditure of the funds that details 
the current inventory of the Federal fleet owned by the General 
Services Administration, as well as other Federal agencies, and 
the strategy to expend these funds to replace a portion of the 
Federal fleet with the goal of substantially increasing energy 
efficiency over the current status, including increasing fuel 
efficiency and reducing emissions: Provided further, That, 
hereafter, the Administrator shall report to the Committees on 
the obligation of these funds on a quarterly basis beginning on 
September 30, 2009.

                      Office of Inspector General

    For an additional amount for the Office of the Inspector 
General, to remain available until September 30, 2013, for 
oversight and audit of programs, grants, and projects funded 
under this title, $7,000,000.

           RECOVERY ACT ACCOUNTABILITY AND TRANSPARENCY BOARD

    For necessary expenses of the Recovery Act Accountability 
and Transparency Board to carry out the provisions of title XV 
of this Act, $84,000,000, to remain available until September 
30, 2011.

                     SMALL BUSINESS ADMINISTRATION

                         Salaries and Expenses

    For an additional amount, to remain available until 
September 30, 2010, $69,000,000, of which $24,000,000 is for 
marketing, management, and technical assistance under section 
7(m) of the Small Business Act (15 U.S.C. 636(m)(4)) by 
intermediaries that make microloans under the microloan 
program, and of which $20,000,000 is for improving, 
streamlining, and automating information technology systems 
related to lender processes and lender oversight: Provided, 
That no later than 60 days after the date of enactment of this 
Act, the Small Business Administration shall submit to the 
Committees on Appropriations of the House of Representatives 
and the Senate a detailed expenditure plan for funds provided 
under the heading ``Small Business Administration'' in this 
Act.

                      Office of Inspector General

    For an additional amount for the Office of Inspector 
General in carrying out the provisions of the Inspector General 
Act of 1978, $10,000,000, to remain available until September 
30, 2013, for oversight and audit of programs, grants, and 
projects funded under this title.

                 Surety Bond Guarantees Revolving Fund

    For additional capital for the Surety Bond Guarantees 
Revolving Fund, authorized by the Small Business Investment Act 
of 1958, $15,000,000, to remain available until expended.

                     Business Loans Program Account

    For an additional amount for the cost of direct loans, 
$6,000,000, to remain available until September 30, 2010, and 
for an additional amount for the cost of guaranteed loans, 
$630,000,000, to remain available until September 30, 2010: 
Provided, That of the amount for the cost of guaranteed loans, 
$375,000,000 shall be for reimbursements, loan subsidies and 
loan modifications for loans to small business concerns 
authorized in section 501 of this title; and $255,000,000 shall 
be for loan subsidies and loan modifications for loans to small 
business concerns authorized in section 506 of this title: 
Provided further, That such costs, including the cost of 
modifying such loans, shall be as defined in section 502 of the 
Congressional Budget Act of 1974.

        Administrative Provisions--Small Business Administration

    Sec. 501. Fee Reductions. (a) Administrative Provisions--
Small Business Administration.--Until September 30, 2010, and 
to the extent that the cost of such elimination or reduction of 
fees is offset by appropriations, with respect to each loan 
guaranteed under section 7(a) of the Small Business Act (15 
U.S.C. 636(a)) and section 502 of this title, for which the 
application is approved on or after the date of enactment of 
this Act, the Administrator shall--
            (1) in lieu of the fee otherwise applicable under 
        section 7(a)(23)(A) of the Small Business Act (15 
        U.S.C. 636(a)(23)(A)), collect no fee or reduce fees to 
        the maximum extent possible; and
            (2) in lieu of the fee otherwise applicable under 
        section 7(a)(18)(A) of the Small Business Act (15 
        U.S.C. 636(a)(18)(A)), collect no fee or reduce fees to 
        the maximum extent possible.
    (b) Temporary Fee Elimination for the 504 Loan Program.--
            (1) In general.--Until September 30, 2010, and to 
        the extent the cost of such elimination in fees is 
        offset by appropriations, with respect to each project 
        or loan guaranteed by the Administrator pursuant to 
        title V of the Small Business Investment Act of 1958 
        (15 U.S.C. 695 et seq.) for which an application is 
        approved or pending approval on or after the date of 
        enactment of this Act--
                    (A) the Administrator shall, in lieu of the 
                fee otherwise applicable under section 
                503(d)(2) of the Small Business Investment Act 
                of 1958 (15 U.S.C. 697(d)(2)), collect no fee;
                    (B) a development company shall, in lieu of 
                the processing fee under section 120.971(a)(1) 
                of title 13, Code of Federal Regulations 
                (relating to fees paid by borrowers), or any 
                successor thereto, collect no fee.
            (2) Reimbursement for waived fees.--
                    (A) In general.--To the extent that the 
                cost of such payments is offset by 
                appropriations, the Administrator shall 
                reimburse each development company that does 
                not collect a processing fee pursuant to 
                paragraph (1)(B).
                    (B) Amount.--The payment to a development 
                company under subparagraph (A) shall be in an 
                amount equal to 1.5 percent of the net 
                debenture proceeds for which the development 
                company does not collect a processing fee 
                pursuant to paragraph (1)(B).
    (c) Application of Fee Eliminations.--
            (1) To the extent that amounts are made available 
        to the Administrator for the purpose of fee 
        eliminations or reductions under subsection (a), the 
        Administrator shall--
                    (A) first use any amounts provided to 
                eliminate or reduce fees paid by small business 
                borrowers under clauses (i) through (iii) of 
                paragraph (18)(A), to the maximum extent 
                possible; and
                    (B) then use any amounts provided to 
                eliminate or reduce fees under paragraph 
                (23)(A) paid by small business lenders with 
                assets less than $1,000,000,000 as of the date 
                of enactment; and
                    (C) then use any remaining amounts 
                appropriated under this title to reduce fees 
                paid by small business lenders other than those 
                with assets less than $1,000,000,000.
            (2) The Administrator shall eliminate fees under 
        subsections (a) and (b) until the amount provided for 
        such purposes, as applicable, under the heading 
        ``Business Loans Program Account'' under the heading 
        ``Small Business Administration'' under this Act are 
        expended.
    Sec. 502. Economic Stimulus Lending Program for Small 
Businesses. (a) Purpose.--The purpose of this section is to 
permit the Small Business Administration to guarantee up to 90 
percent of qualifying small business loans made by eligible 
lenders.
    (b) Definitions.--For purposes of this section:
            (1) The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) The term ``qualifying small business loan'' 
        means any loan to a small business concern pursuant to 
        section 7(a) of the Small Business Act (15 U.S.C. 636) 
        or title V of the Small Business Investment Act of 1958 
        (15 U.S.C. 695 and following) except for such loans 
        made under section 7(a)(31).
            (3) The term ``small business concern'' has the 
        same meaning as provided by section 3 of the Small 
        Business Act (15 U.S.C. 632).
    (c) Qualified Borrowers.--
            (1) Aliens unlawfully present in the united 
        states.--A loan guarantee may not be made under this 
        section for a loan made to a concern if an individual 
        who is an alien unlawfully present in the United 
        States--
                    (A) has an ownership interest in that 
                concern; or
                    (B) has an ownership interest in another 
                concern that itself has an ownership interest 
                in that concern.
            (2) Firms in violation of immigration laws.--No 
        loan guarantee may be made under this section for a 
        loan to any entity found, based on a determination by 
        the Secretary of Homeland Security or the Attorney 
        General to have engaged in a pattern or practice of 
        hiring, recruiting or referring for a fee, for 
        employment in the United States an alien knowing the 
        person is an unauthorized alien.
    (d) Criminal Background Checks.--Prior to the approval of 
any loan guarantee under this section, the Administrator may 
verify the applicant's criminal background, or lack thereof, 
through the best available means, including, if possible, use 
of the National Crime Information Center computer system at the 
Federal Bureau of Investigation.
    (e) Application of Other Law.--Nothing in this section 
shall be construed to exempt any activity of the Administrator 
under this section from the Federal Credit Reform Act of 1990 
(title V of the Congressional Budget and Impoundment Control 
Act of 1974; 2 U.S.C. 661 and following).
    (f) Sunset.--Loan guarantees may not be issued under this 
section after the date 12 months after the date of enactment of 
this Act.
    (g) Small Business Act Provisions.--The provisions of the 
Small Business Act applicable to loan guarantees under section 
7 of that Act and regulations promulgated thereunder as of the 
date of enactment of this Act shall apply to loan guarantees 
under this section except as otherwise provided in this 
section.
    (h) Authorization.--There are authorized to be appropriated 
such sums as may be necessary to carry out this section.
    Sec. 503. Establishment of SBA Secondary Market Guarantee 
Authority. (a) Purpose.--The purpose of this section is to 
provide the Administrator with the authority to establish the 
SBA Secondary Market Guarantee Authority within the SBA to 
provide a Federal guarantee for pools of first lien 504 loans 
that are to be sold to third-party investors.
    (b) Definitions.--For purposes of this section:
            (1) The term ``Administrator'' means the 
        Administrator of the Small Business Administration.
            (2) The term ``first lien position 504 loan'' means 
        the first mortgage position, non-federally guaranteed 
        loans made by private sector lenders made under title V 
        of the Small Business Investment Act.
    (c) Establishment of Authority.--
            (1) Organization.--
                    (A) The Administrator shall establish a 
                Secondary Market Guarantee Authority within the 
                Small Business Administration.
                    (B) The Administrator shall appoint a 
                Director of the Authority who shall report to 
                the Administrator.
                    (C) The Administrator is authorized to hire 
                such personnel as are necessary to operate the 
                Authority and may contract such operations of 
                the Authority as necessary to qualified third 
                party companies or individuals.
                    (D) The Administrator is authorized to 
                contract with private sector fiduciary and 
                custom dial agents as necessary to operate the 
                Authority.
            (2) Guarantee process.--
                    (A) The Administrator shall establish, by 
                rule, a process in which private sector 
                entities may apply to the Administration for a 
                Federal guarantee on pools of first lien 
                position 504 loans that are to be sold to 
                third-party investors.
                    (B) The Administrator is authorized to 
                contract with private sector fiduciary and 
                custom dial agents as necessary to operate the 
                Authority.
            (3) Responsibilities.--
                    (A) The Administrator shall establish, by 
                rule, a process in which private sector 
                entities may apply to the SBA for a Federal 
                guarantee on pools of first lien position 504 
                loans that are to be sold to third-party 
                investors.
                    (B) The rule under this section shall 
                provide for a process for the Administrator to 
                consider and make decisions regarding whether 
                to extend a Federal guarantee referred to in 
                clause (i). Such rule shall also provide that:
                            (i) The seller of the pools 
                        purchasing a guarantee under this 
                        section retains not less than 5 percent 
                        of the dollar amount of the pools to be 
                        sold to third-party investors.
                            (ii) The Administrator shall charge 
                        fees, upfront or annual, at a specified 
                        percentage of the loan amount that is 
                        at such a rate that the cost of the 
                        program under the Federal Credit Reform 
                        Act of 1990 (title V of the 
                        Congressional Budget and Impoundment 
                        Control Act of 1974; 2 U.S.C. 661) 
                        shall be equal to zero.
                            (iii) The Administrator may 
                        guarantee not more than $3,000,000,000 
                        of pools under this authority.
                    (C) The Administrator shall establish 
                documents, legal covenants, and other required 
                documentation to protect the interests of the 
                United States.
                    (D) The Administrator shall establish a 
                process to receive and disburse funds to 
                entities under the authority established in 
                this section.
    (d) Limitations.--
            (1) The Administrator shall ensure that entities 
        purchasing a guarantee under this section are using 
        such guarantee for the purpose of selling 504 first 
        lien position pools to third-party investors.
            (2) If the Administrator finds that any such 
        guarantee was used for a purpose other than that 
        specified in paragraph (1), the Administrator shall--
                    (A) prohibit the purchaser of the guarantee 
                or its affiliates (within the meaning of the 
                regulations under 13 CFR 121.103) from using 
                the authority of this section in the future; 
                and
                    (B) take any other actions the 
                Administrator, in consultation with the 
                Attorney General of the United States deems 
                appropriate.
    (e) Oversight.--The Administrator shall submit a report to 
Congress not later than the third business day of each month 
setting forth each of the following:
            (1) The aggregate amount of guarantees extended 
        under this section during the preceding month.
            (2) The aggregate amount of guarantees outstanding.
            (3) Defaults and payments on defaults made under 
        this section.
            (4) The identity of each purchaser of a guarantee 
        found by the Administrator to have misused guarantees 
        under this section.
            (5) Any other information the Administrator deems 
        necessary to fully inform Congress of undue risk to the 
        United States associated with the issuance of 
        guarantees under this section.
    (f) Duration of Program.--The authority of this section 
shall terminate on the date 2 years after the date of enactment 
of this section.
    (g) Funding.--Such sums as necessary are authorized to be 
appropriated to carry out the provisions of this section.
    (h) Budget Treatment.--Nothing in this section shall be 
construed to exempt any activity of the Administrator under 
this section from the Federal Credit Reform Act of 1990 (title 
V of the Congressional Budget and Impoundment Control Act of 
1974; 2 U.S.C. 661 and following).
    (i) Emergency Rulemaking Authority.--The Administrator 
shall issue regulations under this section within 15 days after 
the date of enactment of this section. The notice requirements 
of section 553(b) of title 5, United States Code shall not 
apply to the promulgation of such regulations.
    Sec. 504. Stimulus for Community Development Lending. (a) 
Low Interest Refinancing Under the Local Development Business 
Loan Program.--Section 502 of the Small Business Investment Act 
of 1958 (15 U.S.C. 696) is amended by adding at the end the 
following:
            ``(7) Permissible debt refinancing.--
                    ``(A) In general.--Any financing approved 
                under this title may include a limited amount 
                of debt refinancing.
                    ``(B) Expansions.--If the project involves 
                expansion of a small business concern, any 
                amount of existing indebtedness that does not 
                exceed 50 percent of the project cost of the 
                expansion may be refinanced and added to the 
                expansion cost, if--
                            ``(i) the proceeds of the 
                        indebtedness were used to acquire land, 
                        including a building situated thereon, 
                        to construct a building thereon, or to 
                        purchase equipment;
                            ``(ii) the existing indebtedness is 
                        collateralized by fixed assets;
                            ``(iii) the existing indebtedness 
                        was incurred for the benefit of the 
                        small business concern;
                            ``(iv) the financing under this 
                        title will be used only for refinancing 
                        existing indebtedness or costs relating 
                        to the project financed under this 
                        title;
                            ``(v) the financing under this 
                        title will provide a substantial 
                        benefit to the borrower when prepayment 
                        penalties, financing fees, and other 
                        financing costs are accounted for;
                            ``(vi) the borrower has been 
                        current on all payments due on the 
                        existing debt for not less than 1 year 
                        preceding the date of refinancing; and
                            ``(vii) the financing under section 
                        504 will provide better terms or rate 
                        of interest than the existing 
                        indebtedness at the time of 
                        refinancing.''.
    (b) Job Creation Goals.--Section 501(e)(1) and section 
501(e)(2) of the Small Business Investment Act (15 U.S.C. 695) 
are each amended by striking ``$50,000'' and inserting 
``$65,000''.
    Sec. 505. Increasing Small Business Investment. (a) 
Simplified Maximum Leverage Limits.--Section 303(b) of the 
Small Business Investment Act of 1958 (15 U.S.C. 683(b)) is 
amended as follows:
            (1) By striking so much of paragraph (2) as 
        precedes subparagraphs (C) and (D) and inserting the 
        following:
            ``(2) Maximum leverage.--
                    ``(A) In general.--The maximum amount of 
                outstanding leverage made available to any one 
                company licensed under section 301(c) of this 
                Act may not exceed the lesser of--
                            ``(i) 300 percent of such company's 
                        private capital; or
                            ``(ii) $150,000,000.
                    ``(B) Multiple licenses under common 
                control.--The maximum amount of outstanding 
                leverage made available to two or more 
                companies licensed under section 301(c) of this 
                Act that are commonly controlled (as determined 
                by the Administrator) and not under capital 
                impairment may not exceed $225,000,000.'';
            (2) By amending paragraph (2)(C) by inserting 
        ``(i)'' before ``In calculating'' and adding the 
        following at the end thereof:
                            ``(ii) The maximum amount of 
                        outstanding leverage made available 
                        to--
                                    ``(I) any 1 company 
                                described in clause (iii) may 
                                not exceed the lesser of 300 
                                percent of private capital of 
                                the company, or $175,000,000; 
                                and
                                    ``(II) 2 or more companies 
                                described in clause (iii) that 
                                are under common control (as 
                                determined by the 
                                Administrator) may not exceed 
                                $250,000,000.
                          ``(iii) A company described in this 
                        clause is a company licensed under 
                        section 301(c) in the first fiscal year 
                        after the date of enactment of this 
                        clause or any fiscal year thereafter 
                        that certifies in writing that not less 
                        than 50 percent of the dollar amount of 
                        investments of that company shall be 
                        made in companies that are located in a 
                        low-income geographic area (as that 
                        term is defined in section 351).''.
            (3) By striking paragraph (4).
    (b) Simplified Aggregate Investment Limitations.--Section 
306(a) of the Small Business Investment Act of 1958 (15 U.S.C. 
686(a)) is amended to read as follows:
    ``(a) Percentage Limitation on Private Capital.--If any 
small business investment company has obtained financing from 
the Administrator and such financing remains outstanding, the 
aggregate amount of securities acquired and for which 
commitments may be issued by such company under the provisions 
of this title for any single enterprise shall not, without the 
approval of the Administrator, exceed 10 percent of the sum 
of--
            ``(1) the private capital of such company; and
            ``(2) the total amount of leverage projected by the 
        company in the company's business plan that was 
        approved by the Administrator at the time of the grant 
        of the company's license.''.
    (c) Investments in Smaller Enterprises.--Section 303(d) of 
the Small Business Investment Act of 1958 (15 U.S.C. 683(d)) is 
amended to read as follows:
    ``(d) Investments in Smaller Enterprises.--The 
Administrator shall require each licensee, as a condition of 
approval of an application for leverage, to certify in writing 
that not less than 25 percent of the aggregate dollar amount of 
financings of that licensee shall be provided to smaller 
enterprises.''.
    Sec. 506. Business Stabilization Program. (a) In General.--
Subject to the availability of appropriations, the 
Administrator of the Small Business Administration shall carry 
out a program to provide loans on a deferred basis to viable 
(as such term is determined pursuant to regulation by the 
Administrator of the Small Business Administration) small 
business concerns that have a qualifying small business loan 
and are experiencing immediate financial hardship.
    (b) Eligible Borrower.--A small business concern as defined 
under section 3 of the Small Business Act (15 U.S.C. 632).
    (c) Qualifying Small Business Loan.--A loan made to a small 
business concern that meets the eligibility standards in 
section 7(a) of the Small Business Act (15 U.S.C. 636(a)) but 
shall not include loans guarantees (or loan guarantee 
commitments made) by the Administrator prior to the date of 
enactment of this Act.
    (d) Loan Size.--Loans guaranteed under this section may not 
exceed $35,000.
    (e) Purpose.--Loans guaranteed under this program shall be 
used to make periodic payment of principal and interest, either 
in full or in part, on an existing qualifying small business 
loan for a period of time not to exceed 6 months.
    (f) Loan Terms.--Loans made under this section shall:
            (1) carry a 100 percent guaranty; and
            (2) have interest fully subsidized for the period 
        of repayment.
    (g) Repayment.--Repayment for loans made under this section 
shall--
            (1) be amortized over a period of time not to 
        exceed 5 years; and
            (2) not begin until 12 months after the final 
        disbursement of funds is made.
    (h) Collateral.--The Administrator of the Small Business 
Administration may accept any available collateral, including 
subordinated liens, to secure loans made under this section.
    (i) Fees.--The Administrator of the Small Business 
Administration is prohibited from charging any processing fees, 
origination fees, application fees, points, brokerage fees, 
bonus points, prepayment penalties, and other fees that could 
be charged to a loan applicant for loans under this section.
    (j) Sunset.--The Administrator of the Small Business 
Administration shall not issue loan guarantees under this 
section after September 30, 2010.
    (k) Emergency Rulemaking Authority.--The Administrator of 
the Small Business Administration shall issue regulations under 
this section within 15 days after the date of enactment of this 
section. The notice requirements of section 553(b) of title 5, 
United States Code shall not apply to the promulgation of such 
regulations.

SEC. 507. GAO REPORT.

      (a) Report.--Not later than 60 days after the enactment 
of this Act, the Comptroller General of the United States shall 
report to the Congress on the actions of the Administrator in 
implementing the authorities established in the administrative 
provisions of this title.
      (b) Included Item.--The report under this section shall 
include a summary of the activity of the Administrator under 
this title and an analysis of whether he is accomplishing the 
purpose of increasing liquidity in the secondary market for 
Small Business Administration loans.

SEC. 508. SURETY BONDS.

      (a) Maximum Bond Amount.--Section 4119(a)(1) of the Small 
Business Investment Act of 1958 (15 U.S.C. 694b(a)(1)) is 
amended--
            (1) by inserting ``(A)'' after ``(1)'';
            (2) by striking ``$2,000,000'' and inserting 
        ``$5,000,000''; and
            (3) by adding at the end the following:
                    ``(B) The Administrator may guarantee a 
                surety under subparagraph (A) for a total work 
                order or contract amount that does not exceed 
                $10,000,000, if a contracting officer of a 
                Federal agency certifies that such a guarantee 
                is necessary.''.
      (b) Denial of Liability.--Section 411 of the Small 
Business Investment Act of 1958 (15 U.S.C. 694b) is amended--
            (1) by striking subsection (e) and inserting the 
        following:
      ``(e) Reimbursement of surety; conditions.--Pursuant to 
any such guarantee or agreement, the Administration shall 
reimburse the surety, as provided in subsection (c) of this 
section, except that the Administration shall be relieved of 
liability (in whole or in part within the discretion of the 
Administration) if--
            ``(1) the surety obtained such guarantee or 
        agreement, or applied for such reimbursement, by fraud 
        or material misrepresentation,
            ``(2) the total contract amount at the time of 
        execution of the bond or bonds exceeds $5,000,000,
            ``(3) the surety has breached a material term or 
        condition of such guarantee agreement, or
            ``(4) the surety has substantially violated the 
        regulations promulgated by the Administration pursuant 
        to subsection (d).''.
            (2) by adding at the end the following:
      ``(k) For bonds made or executed with the prior approval 
of the Administration, the Administration shall not deny 
liability to a surety based upon material information that was 
provided as part of the guaranty application.''.
      (c) Size Standards.--Section 410 of the Small Business 
Investment Act of 1958 (15 U.S.C. 694a) is amended by adding at 
the end the following:
            ``(9) Notwithstanding any other provision of law or 
        any rule, regulation, or order of the Administration, 
        for purposes of sections 410, 411, and 412 the term 
        `small business concern' means a business concern that 
        meets the size standard for the primary industry in 
        which such business concern, and the affiliates of such 
        business concern, is engaged, as determined by the 
        Administrator in accordance with the North American 
        Industry Classification System.''.
      (d) Study.--The Administrator of the Small Business 
Administration shall conduct a study of the current funding 
structure of the surety bond program carried out under part B 
(15 U.S.C. 694a et seq.) of title IV of the Small Business 
Investment Act of 1958. The study shall include--
            (1) an assessment of whether the program's current 
        funding framework and program fees are inhibiting the 
        program's growth; and
            (2) an assessment of whether surety companies and 
        small business concerns could benefit from an 
        alternative funding structure.
      (e) Report.--Not later than 180 days after the date of 
the enactment of this Act, the Administrator shall submit to 
Congress a report on the results of the study required under 
subsection (d).
      (f) Sunset.--The amendments made by this section shall 
remain in effect until September 30, 2010.

SEC. 509. ESTABLISHMENT OF SBA SECONDARY MARKET LENDING AUTHORITY.

      (a) Purpose.--The purpose of this section is to provide 
the Small Business Administration with the authority to 
establish a Secondary Market Lending Authority within the SBA 
to make loans to the systemically important SBA secondary 
market broker-dealers who operate the SBA secondary market.
      (b) Definitions.--For purposes of this section:
            (1) The term `` Administrator'' means the 
        Administrator of the SBA.
            (2) The term ``SBA'' means the Small Business 
        Administration.
            (3) The terms ``Secondary Market Lending 
        Authority'' and ``Authority'' mean the office 
        established under subsection (c).
            (4) The term ``SBA secondary market'' means the 
        market for the purchase and sale of loans originated, 
        underwritten, and closed under the Small Business Act.
            (5) The term ``Systemically Important Secondary 
        Market Broker-Dealers'' mean those entities designated 
        under subsection (c)(1) as vital to the continued 
        operation of the SBA secondary market by reason of 
        their purchase and sale of the government guaranteed 
        portion of loans, or pools of loans, originated, 
        underwritten, and closed under the Small Business Act.
      (c) Responsibilities, Authorities, Organization, and 
Limitations.--
            (1) Designation of systemically important sba 
        secondary market broker-dealers.--The Administrator 
        shall establish a process to designate, in consultation 
        with the Board of Governors of the Federal Reserve and 
        the Secretary of the Treasury, Systemically Important 
        Secondary Market Broker-Dealers.
            (2) Establishment of sba secondary market lending 
        authority.--
                    (A) Organization.--
                            (i) The Administrator shall 
                        establish within the SBA an office to 
                        provide loans to Systemically Important 
                        Secondary Market Broker-dealers to be 
                        used for the purpose of financing the 
                        inventory of the government guaranteed 
                        portion of loans, originated, 
                        underwritten, and closed under the 
                        Small Business Act or pools of such 
                        loans.
                            (ii) The Administrator shall 
                        appoint a Director of the Authority who 
                        shall report to the Administrator.
                            (iii) The Administrator is 
                        authorized to hire such personnel as 
                        are necessary to operate the Authority.
                            (iv) The Administrator may contract 
                        such Authority operations as he 
                        determines necessary to qualified 
                        third-party companies or individuals.
                            (v) The Administrator is authorized 
                        to contract with private sector 
                        fiduciary and custodial agents as 
                        necessary to operate the Authority.
                    (B) Loans.--
                            (i) The Administrator shall 
                        establish by rule a process under which 
                        Systemically Important SBA Secondary 
                        Market Broker-Dealers designated under 
                        paragraph (1) may apply to the 
                        Administrator for loans under this 
                        section.
                            (ii) The rule under clause (i) 
                        shall provide a process for the 
                        Administrator to consider and make 
                        decisions regarding whether or not to 
                        extend a loan applied for under this 
                        section. Such rule shall include 
                        provisions to assure each of the 
                        following:
                                    (I) That loans made under 
                                this section are for the sole 
                                purpose of financing the 
                                inventory of the government 
                                guaranteed portion of loans, 
                                originated, underwritten, and 
                                closed under the Small Business 
                                Act or pools of such loans.
                                    (II) That loans made under 
                                this section are fully 
                                collateralized to the 
                                satisfaction of the 
                                Administrator.
                                    (III) That there is no 
                                limit to the frequency in which 
                                a borrower may borrow under 
                                this section unless the 
                                Administrator determines that 
                                doing so would create an undue 
                                risk of loss to the agency or 
                                the United States.
                                    (IV) That there is no limit 
                                on the size of a loan, subject 
                                to the discretion of the 
                                Administrator.
                            (iii) Interest on loans under this 
                        section shall not exceed the Federal 
                        Funds target rate as established by the 
                        Federal Reserve Board of Governors plus 
                        25 basis points.
                            (iv) The rule under this section 
                        shall provide for such loan documents, 
                        legal covenants, collateral 
                        requirements and other required 
                        documentation as necessary to protect 
                        the interests of the agency, the United 
                        States, and the taxpayer.
                            (v) The Administrator shall 
                        establish custodial accounts to 
                        safeguard any collateral pledged to the 
                        SBA in connection with a loan under 
                        this section.
                            (vi) The Administrator shall 
                        establish a process to disburse and 
                        receive funds to and from borrowers 
                        under this section.
                    (C) Limitations on use of loan proceeds by 
                systemically important secondary market broker-
                dealers.--The Administrator shall ensure that 
                borrowers under this section are using funds 
                provided under this section only for the 
                purpose specified in subparagraph (B)(ii)(I). 
                If the Administrator finds that such funds were 
                used for any other purpose, the Administrator 
                shall--
                            (i) require immediate repayment of 
                        outstanding loans;
                            (ii) prohibit the borrower, its 
                        affiliates, or any future corporate 
                        manifestation of the borrower from 
                        using the Authority; and
                            (iii) take any other actions the 
                        Administrator, in consultation with the 
                        Attorney General of the United States, 
                        deems appropriate.
        (d) Report to Congress.--The Administrator shall submit 
a report to Congress not later than the third business day of 
each month containing a statement of each of the following:
            (1) The aggregate loan amounts extended during the 
        preceding month under this section.
            (2) The aggregate loan amounts repaid under this 
        section during the proceeding month.
            (3) The aggregate loan amount outstanding under 
        this section.
            (4) The aggregate value of assets held as 
        collateral under this section.
            (5) The amount of any defaults or delinquencies on 
        loans made under this section.
          (6) The identity of any borrower found by the 
        Administrator to misuse funds made available under this 
        section.
          (7) Any other information the Administrator deems 
        necessary to fully inform Congress of undue risk of 
        financial loss to the United States in connection with 
        loans made under this section.
      (e) Duration.--The authority of this section shall remain 
in effect for a period of 2 years after the date of enactment 
of this section.
      (f) Fees.--The Administrator shall charge fees, up front, 
annual or both, at a specified percentage of the loan amount 
that is at such a rate that the cost of the program under the 
Federal Credit Reform Act of 1990 (title V of the Congressional 
Budget and Impoundment Control Act of 1974; 2 U.S.C. 661) shall 
be equal to zero.
      (g) Budget Treatment.--Nothing in this section shall be 
construed to exempt any activity of the Administrator under 
this section from the Federal Credit Reform Act of 1990 (title 
V of the Congressional Budget and Impoundment Control Act of 
1974; 2 U.S.C. 661 and following).
      (h) Emergency Rulemaking Authority.--The Administrator 
shall promulgate regulations under this section within 30 days 
after the date of enactment of this section. In promulgating 
these regulations, the notice requirements of section 553(b) of 
title 5 of the United States Code shall not apply.

               TITLE VI--DEPARTMENT OF HOMELAND SECURITY

              Office of the Under Secretary for Management

    For an additional amount for the ``Office of the Under 
Secretary for Management'', $200,000,000 for planning, design, 
construction costs, site security, information technology 
infrastructure, fixtures, and related costs to consolidate the 
Department of Homeland Security headquarters: Provided, That no 
later than 60 days after the date of enactment of this Act, the 
Secretary of Homeland Security, in consultation with the 
Administrator of General Services, shall submit to the 
Committees on Appropriations of the Senate and the House of 
Representatives a plan for the expenditure of these funds.

                      office of inspector general

    For an additional amount for the ``Office of Inspector 
General'', $5,000,000, to remain available until September 30, 
2012, for oversight and audit of programs, grants, and projects 
funded under this title.

                   U.S. Customs and Border Protection

                         salaries and expenses

    For an additional amount for ``Salaries and Expenses'', 
$160,000,000, of which $100,000,000 shall be for the 
procurement and deployment of non-intrusive inspection systems; 
and of which $60,000,000 shall be for procurement and 
deployment of tactical communications equipment and radios: 
Provided, That no later than 45 days after the date of 
enactment of this Act, the Secretary of Homeland Security shall 
submit to the Committees on Appropriations of the Senate and 
the House of Representatives a plan for expenditure of these 
funds.

        border security fencing, infrastructure, and technology

    For an additional amount for ``Border Security Fencing, 
Infrastructure, and Technology'', $100,000,000 for expedited 
development and deployment of border security technology on the 
Southwest border: Provided, That no later than 45 days after 
the date of enactment of this Act, the Secretary of Homeland 
Security shall submit to the Committees on Appropriations of 
the Senate and the House of Representatives a plan for 
expenditure of these funds.

                              construction

    For an additional amount for ``Construction'', $420,000,000 
solely for planning, management, design, alteration, and 
construction of U.S. Customs and Border Protection owned land 
border ports of entry: Provided, That no later than 45 days 
after the date of enactment of this Act, the Secretary of 
Homeland Security shall submit to the Committees on 
Appropriations of the Senate and the House of Representatives a 
plan for expenditure of these funds.

                U.S. Immigration and Customs Enforcement

                        automation modernization

    For an additional amount for ``Automation Modernization'', 
$20,000,000 for the procurement and deployment of tactical 
communications equipment and radios: Provided, That no later 
than 45 days after the date of enactment of this Act, the 
Secretary of Homeland Security shall submit to the Committees 
on Appropriations of the Senate and the House of 
Representatives a plan for expenditure of these funds.

                 Transportation Security Administration

                           aviation security

    For an additional amount for ``Aviation Security'', 
$1,000,000,000 for procurement and installation of checked 
baggage explosives detection systems and checkpoint explosives 
detection equipment: Provided, That the Assistant Secretary of 
Homeland Security (Transportation Security Administration) 
shall prioritize the award of these funds to accelerate the 
installations at locations with completed design plans: 
Provided further, That no later than 45 days after the date of 
enactment of this Act, the Secretary of Homeland Security shall 
submit to the Committees on Appropriations of the Senate and 
the House of Representatives a plan for the expenditure of 
these funds.

                              Coast Guard

              acquisition, construction, and improvements

    For an additional amount for ``Acquisition, Construction, 
and Improvements'', $98,000,000 for shore facilities and aids 
to navigation facilities; for priority procurements due to 
materials and labor cost increases; and for costs to repair, 
renovate, assess, or improve vessels: Provided, That no later 
than 45 days after the date of enactment of this Act, the 
Secretary of Homeland Security shall submit to the Committees 
on Appropriations of the Senate and the House of 
Representatives a plan for the expenditure of these funds.

                         alteration of bridges

     For an additional amount for ``Alteration of Bridges'', 
$142,000,000 for alteration or removal of obstructive bridges, 
as authorized by section 6 of the Truman-Hobbs Act (33 U.S.C. 
516): Provided, That the Coast Guard shall award these funds to 
those bridges that are ready to proceed to construction: 
Provided further, That no later than 45 days after the date of 
enactment of this Act, the Secretary of Homeland Security shall 
submit to the Committees on Appropriations of the Senate and 
the House of Representatives a plan for the expenditure of 
these funds.

                  Federal Emergency Management Agency

                        state and local programs

    For an additional amount for grants, $300,000,000, to be 
allocated as follows:
            (1) $150,000,000 for Public Transportation Security 
        Assistance and Railroad Security Assistance under 
        sections 1406 and 1513 of the Implementing 
        Recommendations of the 9/11 Commission Act of 2007 
        (Public Law 110-53; 6 U.S.C. 1135 and 1163).
            (2) $150,000,000 for Port Security Grants in 
        accordance with 46 U.S.C. 70107, notwithstanding 46 
        U.S.C. 70107(c).

                     firefighter assistance grants

    For an additional amount for competitive grants, 
$210,000,000 for modifying, upgrading, or constructing non-
Federal fire stations: Provided, That up to 5 percent shall be 
for program administration: Provided further, That no grant 
shall exceed $15,000,000.

            disaster assistance direct loan program account

    Notwithstanding section 417(b) of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act, the amount of any 
such loan issued pursuant to this section for major disasters 
occurring in calendar year 2008 may exceed $5,000,000, and may 
be equal to not more than 50 percent of the annual operating 
budget of the local government in any case in which that local 
government has suffered a loss of 25 percent or more in tax 
revenues: Provided, That the cost of modifying such loans shall 
be as defined in section 502 of the Congressional Budget Act of 
1974 (2 U.S.C. 661a).

                       emergency food and shelter

    For an additional amount to carry out the emergency food 
and shelter program pursuant to title III of the McKinney-Vento 
Homeless Assistance Act (42 U.S.C. 11331 et seq.), 
$100,000,000: Provided, That total administrative costs shall 
not exceed 3.5 percent of the total amount made available under 
this heading.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 601.  Notwithstanding any other provision of law, the 
President shall establish an arbitration panel under the 
Federal Emergency Management Agency public assistance program 
to expedite the recovery efforts from Hurricanes Katrina and 
Rita within the Gulf Coast Region. The arbitration panel shall 
have sufficient authority regarding the award or denial of 
disputed public assistance applications for covered hurricane 
damage under section 403, 406, or 407 of the Robert T. Stafford 
Disaster Relief and Emergency Assistance Act (42 U.S.C. 5170b, 
5172, or 5173) for a project the total amount of which is more 
than $500,000.
    Sec. 602.  The Administrator of the Federal Emergency 
Management Agency may not prohibit or restrict the use of funds 
designated under the hazard mitigation grant program for damage 
caused by Hurricanes Katrina and Rita if the homeowner who is 
an applicant for assistance under such program commenced work 
otherwise eligible for hazard mitigation grant program 
assistance under section 404 of the Robert T. Stafford Disaster 
Relief and Emergency Assistance Act (42 U.S.C. 5170c) without 
approval in writing from the Administrator.
    Sec. 603. Subparagraph (E) of section 34(a)(1) of the 
Federal Fire Prevention and Control Act of 1974 (15 U.S.C. 
2229a(a)(1)(E)) shall not apply with respect to funds 
appropriated in this or any other Act making appropriations for 
fiscal year 2009 or 2010 for grants under such section 34.
    Sec. 604. (a) Requirement.--Except as provided in 
subsections (c) through (g), funds appropriated or otherwise 
available to the Department of Homeland Security may not be 
used for the procurement of an item described in subsection (b) 
if the item is not grown, reprocessed, reused, or produced in 
the United States.
    (b) Covered Items.--An item referred to in subsection (a) 
is any of the following, if the item is directly related to the 
national security interests of the United States:
            (1) An article or item of--
                    (A) clothing and the materials and 
                components thereof, other than sensors, 
                electronics, or other items added to, and not 
                normally associated with, clothing (and the 
                materials and components thereof);
                    (B) tents, tarpaulins, covers, textile 
                belts, bags, protective equipment (including 
                but not limited to body armor), sleep systems, 
                load carrying equipment (including but not 
                limited to fieldpacks), textile marine 
                equipment, parachutes, or bandages;
                    (C) cotton and other natural fiber 
                products, woven silk or woven silk blends, spun 
                silk yarn for cartridge cloth, synthetic fabric 
                or coated synthetic fabric (including all 
                textile fibers and yarns that are for use in 
                such fabrics), canvas products, or wool 
                (whether in the form of fiber or yarn or 
                contained in fabrics, materials, or 
                manufactured articles); or
                    (D) any item of individual equipment 
                manufactured from or containing such fibers, 
                yarns, fabrics, or materials.
    (c) Availability Exception.--Subsection (a) does not apply 
to the extent that the Secretary of Homeland Security 
determines that satisfactory quality and sufficient quantity of 
any such article or item described in subsection (b)(1) grown, 
reprocessed, reused, or produced in the United States cannot be 
procured as and when needed at United States market prices. 
This section is not applicable to covered items that are, or 
include, materials determined to be non-available in accordance 
with Federal Acquisition Regulation 25.104 Nonavailable 
Articles.
    (d) De Minimis Exception.--Notwithstanding subsection (a), 
the Secretary of Homeland Security may accept delivery of an 
item covered by subsection (b) that contains non-compliant 
fibers if the total value of non-compliant fibers contained in 
the end item does not exceed 10 percent of the total purchase 
price of the end item.
    (e) Exception for Certain Procurements Outside the United 
States.--Subsection (a) does not apply to the following:
            (1) Procurements by vessels in foreign waters.
            (2) Emergency procurements.
    (f) Exception for Small Purchases.--Subsection (a) does not 
apply to purchases for amounts not greater than the simplified 
acquisition threshold referred to in section 2304(g) of title 
10, United States Code.
    (g) Applicability to Contracts and Subcontracts for 
Procurement of Commercial Items.--This section is applicable to 
contracts and subcontracts for the procurement of commercial 
items not withstanding section 34 of the Office of Federal 
Procurement Policy Act (41 U.S.C. 430), with the exception of 
commercial items listed under subsections (b)(1)(C) and 
(b)(1)(D) above. For the purposes of this section, 
``commercial'' shall be as defined in the Federal Acquisition 
Regulation--Part 2.
    (h) Geographic Coverage.--In this section, the term 
``United States'' includes the possessions of the United 
States.
    (i) Notification Required Within 7 Days After Contract 
Award if Certain Exceptions Applied.--In the case of any 
contract for the procurement of an item described in subsection 
(b)(1), if the Secretary of Homeland Security applies an 
exception set forth in subsection (c) with respect to that 
contract, the Secretary shall, not later than 7 days after the 
award of the contract, post a notification that the exception 
has been applied on the Internet site maintained by the General 
Services Administration known as FedBizOps.gov (or any 
successor site).
    (j) Training During Fiscal Year 2009.--
            (1) In general.--The Secretary of Homeland Security 
        shall ensure that each member of the acquisition 
        workforce in the Department of Homeland Security who 
        participates personally and substantially in the 
        acquisition of textiles on a regular basis receives 
        training during fiscal year 2009 on the requirements of 
        this section and the regulations implementing this 
        section.
            (2) Inclusion of information in new training 
        programs.--The Secretary shall ensure that any training 
        program for the acquisition workforce developed or 
        implemented after the date of the enactment of this Act 
        includes comprehensive information on the requirements 
        described in paragraph (1).
    (k) Consistency With International Agreements.--This 
section shall be applied in a manner consistent with United 
States obligations under international agreements.
    (l) Effective Date.--This section applies with respect to 
contracts entered into by the Department of Homeland Security 
180 days after the date of the enactment of this Act.

         TITLE VII--INTERIOR, ENVIRONMENT, AND RELATED AGENCIES

                       DEPARTMENT OF THE INTERIOR

                       Bureau of Land Management

                   management of lands and resources

    For an additional amount for ``Management of Lands and 
Resources'', for activities on all Bureau of Land Management 
lands including maintenance, rehabilitation, and restoration of 
facilities, property, trails and lands and for remediation of 
abandoned mines and wells, $125,000,000.

                              construction

    For an additional amount for ``Construction'', for 
activities on all Bureau of Land Management lands including 
construction, reconstruction, decommissioning and repair of 
roads, bridges, trails, property, and facilities and for energy 
efficient retrofits of existing facilities, $180,000,000.

                        wildland fire management

    For an additional amount for ``Wildland Fire Management'', 
for hazardous fuels reduction, $15,000,000.

                United States Fish and Wildlife Service

                          resource management

    For an additional amount for ``Resource Management'', for 
deferred maintenance, construction, and capital improvement 
projects on national wildlife refuges and national fish 
hatcheries and for high priority habitat restoration projects, 
$165,000,000.

                              construction

    For an additional amount for ``Construction'', for 
construction, reconstruction, and repair of roads, bridges, 
property, and facilities and for energy efficient retrofits of 
existing facilities, $115,000,000.

                         National Park Service

                 operation of the national park system

    For an additional amount for ``Operation of the National 
Park System'', for deferred maintenance of facilities and 
trails and for other critical repair and rehabilitation 
projects, $146,000,000.

                       HISTORIC PRESERVATION FUND

    For an additional amount for ``Historic Preservation 
Fund'', for historic preservation projects at historically 
black colleges and universities as authorized by the Historic 
Preservation Fund Act of 1996 and the Omnibus Parks and Public 
Lands Act of 1996, $15,000,000: Provided, That any matching 
requirements otherwise required for such projects are waived.

                              construction

    For an additional amount for ``Construction'', for repair 
and restoration of roads; construction of facilities, including 
energy efficient retrofits of existing facilities; equipment 
replacement; preservation and repair of historical resources 
within the National Park System; cleanup of abandoned mine 
sites on park lands; and other critical infrastructure 
projects, $589,000,000.

                    United States Geological Survey

                 surveys, investigations, and research

    For an additional amount for ``Surveys, Investigations, and 
Research'', $140,000,000, for repair, construction and 
restoration of facilities; equipment replacement and upgrades 
including stream gages, and seismic and volcano monitoring 
systems; national map activities; and other critical deferred 
maintenance and improvement projects.

                        Bureau of Indian Affairs

                      operation of indian programs

    For an additional amount for ``Operation of Indian 
Programs'', for workforce training programs and the housing 
improvement program, $40,000,000.

                              construction

    For an additional amount for ``Construction'', for repair 
and restoration of roads; replacement school construction; 
school improvements and repairs; and detention center 
maintenance and repairs, $450,000,000: Provided, That section 
1606 of this Act shall not apply to tribal contracts entered 
into by the Bureau of Indian Affairs with this appropriation.

                 indian guaranteed loan program account

    For an additional amount for ``Indian Guaranteed Loan 
Program Account'', $10,000,000.

                      Office of Inspector General

                         salaries and expenses

    For an additional amount for ``Office of Inspector 
General'', $15,000,000, to remain available until September 30, 
2012.

                    ENVIRONMENTAL PROTECTION AGENCY

                      Office of Inspector General

    For an additional amount for ``Office of Inspector 
General'', $20,000,000, to remain available until September 30, 
2012.

                     Hazardous Substance Superfund

    For an additional amount for ``Hazardous Substance 
Superfund'', $600,000,000, which shall be for the Superfund 
Remedial program: Provided, That the Administrator of the 
Environmental Protection Agency (Administrator) may retain up 
to 3 percent of the funds appropriated herein for management 
and oversight purposes.

          Leaking Underground Storage Tank Trust Fund Program

    For an additional amount for ``Leaking Underground Storage 
Tank Trust Fund Program'', $200,000,000, which shall be for 
cleanup activities authorized by section 9003(h) of the Solid 
Waste Disposal Act: Provided, That none of these funds shall be 
subject to cost share requirements under section 9003(h)(7)(B) 
of such Act: Provided further, That the Administrator may 
retain up to 1.5 percent of the funds appropriated herein for 
management and oversight purposes.

                   State and Tribal Assistance Grants

                     (including transfers of funds)

    For an additional amount for ``State and Tribal Assistance 
Grants'', $6,400,000,000, which shall be allocated as follows:
            (1) $4,000,000,000 shall be for capitalization 
        grants for the Clean Water State Revolving Funds under 
        title VI of the Federal Water Pollution Control Act and 
        $2,000,000,000 shall be for capitalization grants under 
        section 1452 of the Safe Drinking Water Act: Provided, 
        That the Administrator may retain up to 1 percent of 
        the funds appropriated herein for management and 
        oversight purposes: Provided further, That funds 
        appropriated herein shall not be subject to the 
        matching or cost share requirements of sections 
        602(b)(2), 602(b)(3) or 202 of the Federal Water 
        Pollution Control Act nor the matching requirements of 
        section 1452(e) of the Safe Drinking Water Act: 
        Provided further, That the Administrator shall 
        reallocate funds appropriated herein for the Clean and 
        Drinking Water State Revolving Funds (Revolving Funds) 
        where projects are not under contract or construction 
        within 12 months of the date of enactment of this Act: 
        Provided further, That notwithstanding the priority 
        rankings they would otherwise receive under each 
        program, priority for funds appropriated herein shall 
        be given to projects on a State priority list that are 
        ready to proceed to construction within 12 months of 
        the date of enactment of this Act: Provided further, 
        That notwithstanding the requirements of section 603(d) 
        of the Federal Water Pollution Control Act or section 
        1452(f) of the Safe Drinking Water Act, for the funds 
        appropriated herein, each State shall use not less than 
        50 percent of the amount of its capitalization grants 
        to provide additional subsidization to eligible 
        recipients in the form of forgiveness of principal, 
        negative interest loans or grants or any combination of 
        these: Provided further, That, to the extent there are 
        sufficient eligible project applications, not less than 
        20 percent of the funds appropriated herein for the 
        Revolving Funds shall be for projects to address green 
        infrastructure, water or energy efficiency improvements 
        or other environmentally innovative activities: 
        Provided further, That notwithstanding the limitation 
        on amounts specified in section 518(c) of the Federal 
        Water Pollution Control Act, up to 1.5 percent of the 
        funds appropriated herein for the Clean Water State 
        Revolving Funds may be reserved by the Administrator 
        for tribal grants under section 518(c) of such Act: 
        Provided further, That up to 4 percent of the funds 
        appropriated herein for tribal set-asides under the 
        Revolving Funds may be transferred to the Indian Health 
        Service to support management and oversight of tribal 
        projects: Provided further, That none of the funds 
        appropriated herein shall be available for the purchase 
        of land or easements as authorized by section 603(c) of 
        the Federal Water Pollution Control Act or for 
        activities authorized by section 1452(k) of the Safe 
        Drinking Water Act: Provided further, That 
        notwithstanding section 603(d)(2) of the Federal Water 
        Pollution Control Act and section 1452(f)(2) of the 
        Safe Drinking Water Act, funds may be used to buy, 
        refinance or restructure the debt obligations of 
        eligible recipients only where such debt was incurred 
        on or after October 1, 2008;
            (2) $100,000,000 shall be to carry out Brownfields 
        projects authorized by section 104(k) of the 
        Comprehensive Environmental Response, Compensation, and 
        Liability Act of 1980: Provided, That the Administrator 
        may reserve up to 3.5 percent of the funds appropriated 
        herein for management and oversight purposes: Provided 
        further, That none of the funds appropriated herein 
        shall be subject to cost share requirements under 
        section 104(k)(9)(B)(iii) of such Act; and
            (3) $300,000,000 shall be for Diesel Emission 
        Reduction Act grants pursuant to title VII, subtitle G 
        of the Energy Policy Act of 2005: Provided, That the 
        Administrator may reserve up to 2 percent of the funds 
        appropriated herein for management and oversight 
        purposes: Provided further, That none of the funds 
        appropriated herein for Diesel Emission Reduction Act 
        grants shall be subject to the State Grant and Loan 
        Program Matching Incentive provisions of section 
        793(c)(3) of such Act.

       Administrative Provision, Environmental Protection Agency

                     (INCLUDING TRANSFERS OF FUNDS)

    Funds made available to the Environmental Protection Agency 
by this Act for management and oversight purposes shall remain 
available until September 30, 2011, and may be transferred to 
the ``Environmental Programs and Management'' account as 
needed.

                       DEPARTMENT OF AGRICULTURE

                             Forest Service

                  capital improvement and maintenance

    For an additional amount for ``Capital Improvement and 
Maintenance'', $650,000,000, for priority road, bridge and 
trail maintenance and decommissioning, including related 
watershed restoration and ecosystem enhancement projects; 
facilities improvement, maintenance and renovation; remediation 
of abandoned mine sites; and support costs necessary to carry 
out this work.

                        wildland fire management

    For an additional amount for ``Wildland Fire Management'', 
$500,000,000, of which $250,000,000 is for hazardous fuels 
reduction, forest health protection, rehabilitation and hazard 
mitigation activities on Federal lands and of which 
$250,000,000 is for State and private forestry activities 
including hazardous fuels reduction, forest health and 
ecosystem improvement activities on State and private lands 
using all authorities available to the Forest Service: 
Provided, That up to $50,000,000 of the total funding may be 
used to make wood-to-energy grants to promote increased 
utilization of biomass from Federal, State and private lands: 
Provided further, That funds provided for activities on State 
and private lands shall not be subject to matching or cost 
share requirements.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                         Indian Health Service

                         indian health services

    For an additional amount for ``Indian Health Services'', 
for health information technology activities, $85,000,000: 
Provided, That such funds may be used for both telehealth 
services development and related infrastructure requirements 
that are typically funded through the ``Indian Health 
Facilities'' account: Provided further, That notwithstanding 
any other provision of law, health information technology funds 
provided within this title shall be allocated at the discretion 
of the Director of the Indian Health Service.

                        indian health facilities

    For an additional amount for ``Indian Health Facilities'', 
for facilities construction projects, deferred maintenance and 
improvement projects, the backlog of sanitation projects and 
the purchase of equipment, $415,000,000, of which $227,000,000 
is provided within the health facilities construction activity 
for the completion of up to two facilities from the current 
priority list for which work has already been initiated: 
Provided, That for the purposes of this Act, spending caps 
included within the annual appropriation for ``Indian Health 
Facilities'' for the purchase of medical equipment shall not 
apply: Provided further, That section 1606 of this Act shall 
not apply to tribal contracts entered into by the Service with 
this appropriation.

                         OTHER RELATED AGENCIES

                        Smithsonian Institution

                           FACILITIES CAPITAL

    For an additional amount for ``Facilities Capital'', for 
repair and revitalization of existing facilities, $25,000,000.

           National Foundation on the Arts and the Humanities

                    National Endowment for the Arts

                       grants and administration

    For an additional amount for ``Grants and Administration'', 
$50,000,000, to be distributed in direct grants to fund arts 
projects and activities which preserve jobs in the non-profit 
arts sector threatened by declines in philanthropic and other 
support during the current economic downturn: Provided, That 40 
percent of such funds shall be distributed to State arts 
agencies and regional arts organizations in a manner similar to 
the agency's current practice and 60 percent of such funds 
shall be for competitively selected arts projects and 
activities according to sections 2 and 5(c) of the National 
Foundation on the Arts and Humanities Act of 1965 (20 U.S.C. 
951, 954(c)): Provided further, That matching requirements 
under section 5(e) of such Act shall be waived.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 701. (a) Within 30 days of enactment of this Act, each 
agency receiving funds under this title shall submit a general 
plan for the expenditure of such funds to the House and Senate 
Committees on Appropriations.
    (b) Within 90 days of enactment of this Act, each agency 
receiving funds under this title shall submit to the Committees 
a report containing detailed project level information 
associated with the general plan submitted pursuant to 
subsection (a).
    Sec. 702.  In carrying out the work for which funds in this 
title are being made available, the Secretary of the Interior 
and the Secretary of Agriculture shall utilize, where 
practicable, the Public Lands Corps, Youth Conservation Corps, 
Student Conservation Association, Job Corps and other related 
partnerships with Federal, State, local, tribal or non-profit 
groups that serve young adults.
    Sec. 703. Each agency receiving funds under this title may 
transfer up to 10 percent of the funds in any account to other 
appropriation accounts within the agency, if the head of the 
agency (1) determines that the transfer will enhance the 
efficiency or effectiveness of the use of the funds without 
changing the intended purpose; and (2) notifies the Committees 
on Appropriations of the House of Representatives and the 
Senate 10 days prior to the transfer.

   TITLE VIII--DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND 
                    EDUCATION, AND RELATED AGENCIES

                          DEPARTMENT OF LABOR

                 Employment and Training Administration

                    training and employment services

    For an additional amount for ``Training and Employment 
Services'' for activities under the Workforce Investment Act of 
1998 (``WIA''), $3,950,000,000, which shall be available for 
obligation on the date of enactment of this Act, as follows:
            (1) $500,000,000 for grants to the States for adult 
        employment and training activities, including 
        supportive services and needs-related payments 
        described in section 134(e)(2) and (3) of the WIA: 
        Provided, That a priority use of these funds shall be 
        services to individuals described in 134(d)(4)(E) of 
        the WIA;
            (2) $1,200,000,000 for grants to the States for 
        youth activities, including summer employment for 
        youth: Provided, That no portion of such funds shall be 
        reserved to carry out section 127(b)(1)(A) of the WIA: 
        Provided further, That for purposes of section 
        127(b)(1)(C)(iv) of the WIA, funds available for youth 
        activities shall be allotted as if the total amount 
        available for youth activities in the fiscal year does 
        not exceed $1,000,000,000: Provided further, That with 
        respect to the youth activities provided with such 
        funds, section 101(13)(A) of the WIA shall be applied 
        by substituting ``age 24'' for ``age 21'': Provided 
        further, That the work readiness performance indicator 
        described in section 136(b)(2)(A)(ii)(I) of the WIA 
        shall be the only measure of performance used to assess 
        the effectiveness of summer employment for youth 
        provided with such funds;
            (3) $1,250,000,000 for grants to the States for 
        dislocated worker employment and training activities;
            (4) $200,000,000 for the dislocated workers 
        assistance national reserve;
            (5) $50,000,000 for YouthBuild activities: 
        Provided, That for program years 2008 and 2009, the 
        YouthBuild program may serve an individual who has 
        dropped out of high school and re-enrolled in an 
        alternative school, if that re-enrollment is part of a 
        sequential service strategy; and
            (6) $750,000,000 for a program of competitive 
        grants for worker training and placement in high growth 
        and emerging industry sectors: Provided, That 
        $500,000,000 shall be for research, labor exchange and 
        job training projects that prepare workers for careers 
        in energy efficiency and renewable energy as described 
        in section 171(e)(1)(B) of the WIA: Provided further, 
        That in awarding grants from those funds not designated 
        in the preceding proviso, the Secretary of Labor shall 
        give priority to projects that prepare workers for 
        careers in the health care sector:
Provided, That funds made available in this paragraph shall 
remain available through June 30, 2010: Provided further, That 
a local board may award a contract to an institution of higher 
education or other eligible training provider if the local 
board determines that it would facilitate the training of 
multiple individuals in high-demand occupations, if such 
contract does not limit customer choice.

            community service employment for older americans

     For an additional amount for ``Community Service 
Employment for Older Americans'' to carry out title V of the 
Older Americans Act of 1965, $120,000,000, which shall be 
available for obligation on the date of enactment of this Act 
and shall remain available through June 30, 2010: Provided, 
That funds shall be allotted within 30 days of such enactment 
to current grantees in proportion to their allotment in program 
year 2008: Provided further, That funds made available under 
this heading in this Act may, in accordance with section 517(c) 
of the Older Americans Act of 1965, be recaptured and 
reobligated.

     state unemployment insurance and employment service operations

    For an additional amount for ``State Unemployment Insurance 
and Employment Service Operations'' for grants to States in 
accordance with section 6 of the Wagner-Peyser Act, 
$400,000,000, which may be expended from the Employment 
Security Administration Account in the Unemployment Trust Fund, 
and which shall be available for obligation on the date of 
enactment of this Act: Provided, That such funds shall remain 
available to the States through September 30, 2010: Provided 
further, That $250,000,000 of such funds shall be used by 
States for reemployment services for unemployment insurance 
claimants (including the integrated Employment Service and 
Unemployment Insurance information technology required to 
identify and serve the needs of such claimants): Provided 
further, That the Secretary of Labor shall establish planning 
and reporting procedures necessary to provide oversight of 
funds used for reemployment services.

                        Departmental Management

                         salaries and expenses

                     (including transfer of funds)

    For an additional amount for ``Departmental Management'', 
$80,000,000, for the enforcement of worker protection laws and 
regulations, oversight, and coordination activities related to 
the infrastructure and unemployment insurance investments in 
this Act: Provided, That the Secretary of Labor may transfer 
such sums as necessary to ``Employment and Standards 
Administration'', ``Employee Benefits Security 
Administration'', ``Occupational Safety and Health 
Administration'', and ``Employment and Training 
Administration--Program Administration'' for enforcement, 
oversight, and coordination activities: Provided further, That 
prior to obligating any funds proposed to be transferred from 
this account, the Secretary shall provide to the Committees on 
Appropriations of the House of Representatives and the Senate 
an operating plan describing the planned uses of each amount 
proposed to be transferred.

                          office of job corps

    For an additional amount for ``Office of Job Corps'', 
$250,000,000, for construction, rehabilitation and acquisition 
of Job Corps Centers, which shall be available upon the date of 
enactment of this Act and remain available for obligation 
through June 30, 2010: Provided, That section 1552(a) of title 
31, United States Code shall not apply if funds are used for a 
multi-year lease agreement that will result in construction 
activities that can commence within 120 days of enactment of 
this Act: Provided further, That notwithstanding section 
3324(a) of title 31, United States Code, the funds used for an 
agreement under the preceding proviso may be used for advance, 
progress, and other payments: Provided further, That the 
Secretary of Labor may transfer up to 15 percent of such funds 
to meet the operational needs of such centers, which may 
include training for careers in the energy efficiency, 
renewable energy, and environmental protection industries: 
Provided further, That the Secretary shall provide to the 
Committees on Appropriations of the House of Representatives 
and the Senate an operating plan describing the allocation of 
funds, and a report on the actual obligations, expenditures, 
and unobligated balances for each activity funded under this 
heading not later than September 30, 2009 and quarterly 
thereafter as long as funding provided under this heading is 
available for obligation or expenditure.

                      office of inspector general

    For an additional amount for the ``Office of Inspector 
General'', $6,000,000, which shall remain available through 
September 30, 2012, for salaries and expenses necessary for 
oversight and audit of programs, grants, and projects funded in 
this Act.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

              Health Resources and Services Administration

                     health resources and services

    For an additional amount for ``Health Resources and 
Services'', $2,500,000,000 which shall be used as follows:
            (1) $500,000,000 shall be for grants to health 
        centers authorized under section 330 of the Public 
        Health Service Act (``PHS Act'');
            (2) $1,500,000,000 shall be available for grants 
        for construction, renovation and equipment, and for the 
        acquisition of health information technology systems, 
        for health centers including health center controlled 
        networks receiving operating grants under section 330 
        of the PHS Act, notwithstanding the limitation in 
        section 330(e)(3); and
            (3) $500,000,000 to address health professions 
        workforce shortages, of which $75,000,000 for the 
        National Health Service Corps shall remain available 
        through September 30, 2011: Provided, That funds may be 
        used to provide scholarships, loan repayment, and 
        grants to training programs for equipment as authorized 
        in the PHS Act, and grants authorized in sections 330L, 
        747, 767 and 768 of the PHS Act: Provided further, That 
        20 percent of the funds allocated to the National 
        Health Service Corps shall be used for field 
        operations:
Provided, That up to 0.5 percent of funds provided in this 
paragraph may be used for administration of such funds: 
Provided further, That the Secretary shall provide to the 
Committees on Appropriations of the House of Representatives 
and the Senate an operating plan detailing activities to be 
supported and timelines for expenditure prior to making any 
Federal obligations of funds provided in this paragraph but not 
later than 90 days after the date of enactment of this Act: 
Provided further, That the Secretary shall provide to the 
Committees on Appropriations of the House of Representatives 
and the Senate a report on the actual obligations, 
expenditures, and unobligated balances for each activity funded 
in this paragraph not later than November 1, 2009 and every 6 
months thereafter as long as funding provided in this paragraph 
is available for obligation or expenditure.

                     National Institutes of Health

                 national center for research resources

    For an additional amount for ``National Center for Research 
Resources'', $1,300,000,000, of which $1,000,000,000 shall be 
for grants or contracts under section 481A of the Public Health 
Service Act to construct, renovate or repair existing non-
Federal research facilities: Provided, That sections 
481A(c)(1)(B)(ii), paragraphs (1), (3), and (4) of section 
481A(e), and section 481B of such Act shall not apply to the 
use of such funds: Provided further, That the references to 
``20 years'' in subsections (c)(1)(B)(i) and (f) of section 
481A of such Act are deemed to be references to ``10 years'' 
for purposes of using such funds: Provided further, That the 
National Center for Research Resources may also use 
$300,000,000 to provide, under the authority of section 301 and 
title IV of such Act, shared instrumentation and other capital 
research equipment to recipients of grants and contracts under 
section 481A of such Act and other appropriate entities: 
Provided further, That the Director of the Center shall provide 
to the Committees on Appropriations of the House of 
Representatives and the Senate an annual report indicating the 
number of institutions receiving awards of a grant or contract 
under section 481A of such Act, the proposed use of the 
funding, the average award size, a list of grant or contract 
recipients, and the amount of each award.

                         office of the director

                     (including transfer of funds)

    For an additional amount for ``Office of the Director'', 
$8,200,000,000: Provided, That $7,400,000,000 shall be 
transferred to the Institutes and Centers of the National 
Institutes of Health (``NIH'') and to the Common Fund 
established under section 402A(c)(1) of the Public Health 
Service Act in proportion to the appropriations otherwise made 
to such Institutes, Centers, and Common Fund for fiscal year 
2009: Provided further, That these funds shall be used to 
support additional scientific research and shall be merged with 
and be available for the same purposes as the appropriation or 
fund to which transferred: Provided further, That this transfer 
authority is in addition to any other transfer authority 
available to the NIH: Provided further, That none of these 
funds may be transferred to ``National Institutes of Health--
Buildings and Facilities'', the Center for Scientific Review, 
the Center for Information Technology, the Clinical Center, or 
the Global Fund for HIV/AIDS, Tuberculosis and Malaria: 
Provided further, That the funds provided in this Act to the 
NIH shall not be subject to the provisions of 15 U.S.C. 
638(f)(1) and 15 U.S.C. 638(n)(1): Provided further, That 
$400,000,000 may be used to carry out section 215 of division G 
of Public Law 110-161.

                        buildings and facilities

    For an additional amount for ``Buildings and Facilities'', 
$500,000,000, to fund high-priority repair, construction and 
improvement projects for National Institutes of Health 
facilities on the Bethesda, Maryland campus and other agency 
locations.

               Agency for Healthcare Research and Quality

                    healthcare research and quality

                     (including transfer of funds)

    For an additional amount for ``Healthcare Research and 
Quality'' to carry out titles III and IX of the Public Health 
Service Act, part A of title XI of the Social Security Act, and 
section 1013 of the Medicare Prescription Drug, Improvement, 
and Modernization Act of 2003, $700,000,000 for comparative 
effectiveness research: Provided, That of the amount 
appropriated in this paragraph, $400,000,000 shall be 
transferred to the Office of the Director of the National 
Institutes of Health (``Office of the Director'') to conduct or 
support comparative effectiveness research under section 301 
and title IV of the Public Health Service Act: Provided 
further, That funds transferred to the Office of the Director 
may be transferred to the Institutes and Centers of the 
National Institutes of Health and to the Common Fund 
established under section 402A(c)(1) of the Public Health 
Service Act: Provided further, That this transfer authority is 
in addition to any other transfer authority available to the 
National Institutes of Health: Provided further, That within 
the amount available in this paragraph for the Agency for 
Healthcare Research and Quality, not more than 1 percent shall 
be made available for additional full-time equivalents.
    In addition, $400,000,000 shall be available for 
comparative effectiveness research to be allocated at the 
discretion of the Secretary of Health and Human Services 
(``Secretary''): Provided, That the funding appropriated in 
this paragraph shall be used to accelerate the development and 
dissemination of research assessing the comparative 
effectiveness of health care treatments and strategies, through 
efforts that: (1) conduct, support, or synthesize research that 
compares the clinical outcomes, effectiveness, and 
appropriateness of items, services, and procedures that are 
used to prevent, diagnose, or treat diseases, disorders, and 
other health conditions; and (2) encourage the development and 
use of clinical registries, clinical data networks, and other 
forms of electronic health data that can be used to generate or 
obtain outcomes data: Provided further, That the Secretary 
shall enter into a contract with the Institute of Medicine, for 
which no more than $1,500,000 shall be made available from 
funds provided in this paragraph, to produce and submit a 
report to the Congress and the Secretary by not later than June 
30, 2009, that includes recommendations on the national 
priorities for comparative effectiveness research to be 
conducted or supported with the funds provided in this 
paragraph and that considers input from stakeholders: Provided 
further, That the Secretary shall consider any recommendations 
of the Federal Coordinating Council for Comparative 
Effectiveness Research established by section 804 of this Act 
and any recommendations included in the Institute of Medicine 
report pursuant to the preceding proviso in designating 
activities to receive funds provided in this paragraph and may 
make grants and contracts with appropriate entities, which may 
include agencies within the Department of Health and Human 
Services and other governmental agencies, as well as private 
sector entities, that have demonstrated experience and capacity 
to achieve the goals of comparative effectiveness research: 
Provided further, That the Secretary shall publish information 
on grants and contracts awarded with the funds provided under 
this heading within a reasonable time of the obligation of 
funds for such grants and contracts and shall disseminate 
research findings from such grants and contracts to clinicians, 
patients, and the general public, as appropriate: Provided 
further, That, to the extent feasible, the Secretary shall 
ensure that the recipients of the funds provided by this 
paragraph offer an opportunity for public comment on the 
research: Provided further, That research conducted with funds 
appropriated under this paragraph shall be consistent with 
Departmental policies relating to the inclusion of women and 
minorities in research: Provided further, That the Secretary 
shall provide the Committees on Appropriations of the House of 
Representatives and the Senate, the Committee on Energy and 
Commerce and the Committee on Ways and Means of the House of 
Representatives, and the Committee on Health, Education, Labor, 
and Pensions and the Committee on Finance of the Senate with an 
annual report on the research conducted or supported through 
the funds provided under this heading: Provided further, That 
the Secretary, jointly with the Directors of the Agency for 
Healthcare Research and Quality and the National Institutes of 
Health, shall provide the Committees on Appropriations of the 
House of Representatives and the Senate a fiscal year 2009 
operating plan for the funds appropriated under this heading 
prior to making any Federal obligations of such funds in fiscal 
year 2009, but not later than July 30, 2009, and a fiscal year 
2010 operating plan for such funds prior to making any Federal 
obligations of such funds in fiscal year 2010, but not later 
than November 1, 2009, that detail the type of research being 
conducted or supported, including the priority conditions 
addressed; and specify the allocation of resources within the 
Department of Health and Human Services: Provided further, That 
the Secretary, jointly with the Directors of the Agency for 
Healthcare Research and Quality and the National Institutes of 
Health, shall provide to the Committees on Appropriations of 
the House of Representatives and the Senate a report on the 
actual obligations, expenditures, and unobligated balances for 
each activity funded under this heading not later than November 
1, 2009, and every 6 months thereafter as long as funding 
provided under this heading is available for obligation or 
expenditure.

                Administration for Children and Families

   payments to states for the child care and development block grant

    For an additional amount for ``Payments to States for the 
Child Care and Development Block Grant'', $2,000,000,000, which 
shall be used to supplement, not supplant State general revenue 
funds for child care assistance for low-income families: 
Provided, That, in addition to the amounts required to be 
reserved by the States under section 658G of the Child Care and 
Development Block Grant Act of 1990, $255,186,000 shall be 
reserved by the States for activities authorized under section 
658G, of which $93,587,000 shall be for activities that improve 
the quality of infant and toddler care.

                children and families services programs

    For an additional amount for ``Children and Families 
Services Programs'', $3,150,000,000, which shall be used as 
follows:
            (1) $1,000,000,000 for carrying out activities 
        under the Head Start Act.
            (2) $1,100,000,000 for expansion of Early Head 
        Start programs, as described in section 645A of the 
        Head Start Act: Provided, That of the funds provided in 
        this paragraph, up to 10 percent shall be available for 
        the provision of training and technical assistance to 
        such programs consistent with section 645A(g)(2) of 
        such Act, and up to 3 percent shall be available for 
        monitoring the operation of such programs consistent 
        with section 641A of such Act.
            (3) $1,000,000,000 for carrying out activities 
        under sections 674 through 679 of the Community 
        Services Block Grant Act, of which no part shall be 
        subject to section 674(b)(3) of such Act: Provided, 
        That notwithstanding section 675C(a)(1) and 675C(b) of 
        such Act, 1 percent of the funds made available to each 
        State from this additional amount shall be used for 
        benefits enrollment coordination activities relating to 
        the identification and enrollment of eligible 
        individuals and families in Federal, State, and local 
        benefit programs: Provided further, That all funds 
        remaining available to a State from this additional 
        amount after application of the previous proviso shall 
        be distributed to eligible entities as defined in 
        section 673(1) of such Act: Provided further, That for 
        services furnished under such Act during fiscal years 
        2009 and 2010, States may apply the last sentence of 
        section 673(2) of such Act by substituting ``200 
        percent'' for ``125 percent''.
            (4) $50,000,000 for carrying out activities under 
        section 1110 of the Social Security Act.

                        Administration on Aging

                        aging services programs

    For an additional amount for ``Aging Services Programs'' 
under subparts 1 and 2 of part C, of title III, and under title 
VI, of the Older Americans Act of 1965, $100,000,000, of which 
$65,000,000 shall be for Congregate Nutrition Services, 
$32,000,000 shall be for Home-Delivered Nutrition Services and 
$3,000,000 shall be for Nutrition Services for Native 
Americans.

                        Office of the Secretary

  office of the national coordinator for health information technology

                     (including transfer of funds)

    For an additional amount for ``Office of the National 
Coordinator for Health Information Technology'', 
$2,000,000,000, to carry out title XIII of this Act, to remain 
available until expended: Provided, That of such amount, the 
Secretary of Health and Human Services shall transfer 
$20,000,000 to the Director of the National Institute of 
Standards and Technology in the Department of Commerce for 
continued work on advancing health care information enterprise 
integration through activities such as technical standards 
analysis and establishment of conformance testing 
infrastructure, so long as such activities are coordinated with 
the Office of the National Coordinator for Health Information 
Technology: Provided further, That $300,000,000 is to support 
regional or sub-national efforts toward health information 
exchange: Provided further, That 0.25 percent of the funds 
provided in this paragraph may be used for administration of 
such funds: Provided further, That funds available under this 
heading shall become available for obligation only upon 
submission of an annual operating plan by the Secretary to the 
Committees on Appropriations of the House of Representatives 
and the Senate: Provided further, That the fiscal year 2009 
operating plan shall be provided not later than 90 days after 
enactment of this Act and that subsequent annual operating 
plans shall be provided not later than November 1 of each year: 
Provided further, That these operating plans shall describe how 
expenditures are aligned with the specific objectives, 
milestones, and metrics of the Federal Health Information 
Technology Strategic Plan, including any subsequent updates to 
the Plan; the allocation of resources within the Department of 
Health and Human Services and other Federal agencies; and the 
identification of programs and activities that are supported: 
Provided further, That the Secretary shall provide to the 
Committees on Appropriations of the House of Representatives 
and the Senate a report on the actual obligations, 
expenditures, and unobligated balances for each major set of 
activities not later than November 1, 2009, and every 6 months 
thereafter as long as funding provided under this heading is 
available for obligation or expenditure.

                      office of inspector general

    For an additional amount for the ``Office of Inspector 
General'', $17,000,000 which shall remain available until 
September 30, 2012.

            public health and social services emergency fund

    For an additional amount for ``Public Health and Social 
Services Emergency Fund'' to improve information technology 
security at the Department of Health and Human Services, 
$50,000,000.

                      prevention and wellness fund

                     (including transfer of funds)

    For necessary expenses for a ``Prevention and Wellness 
Fund'' to be administered through the Department of Health and 
Human Services, Office of the Secretary, $1,000,000,000: 
Provided, That of the amount provided in this paragraph, 
$300,000,000 shall be transferred to the Centers for Disease 
Control and Prevention (``CDC'') as an additional amount to 
carry out the immunization program (``section 317 immunization 
program'') authorized by section 317(a), (j), and (k)(1) of the 
Public Health Service Act (``PHS Act''): Provided further, That 
of the amount provided in this paragraph, $650,000,000 shall be 
to carry out evidence-based clinical and community-based 
prevention and wellness strategies authorized by the PHS Act, 
as determined by the Secretary, that deliver specific, 
measurable health outcomes that address chronic disease rates: 
Provided further, That funds appropriated in the preceding 
proviso may be transferred to other appropriation accounts of 
the Department of Health and Human Services, as determined by 
the Secretary to be appropriate: Provided further, That of the 
amount appropriated in this paragraph, $50,000,000 shall be 
provided to States for an additional amount to carry out 
activities to implement healthcare-associated infections 
reduction strategies: Provided further, That not more than 0.5 
percent of funds made available in this paragraph may be used 
for management and oversight expenses in the office or division 
of the Department of Health and Human Services administering 
the funds: Provided further, That the Secretary shall, directly 
or through contracts with public or private entities, provide 
for annual evaluations of programs carried out with funds 
provided under this heading in order to determine the quality 
and effectiveness of the programs: Provided further, That the 
Secretary shall, not later than 1 year after the date of 
enactment of this Act, submit to the Committees on 
Appropriations of the House of Representatives and the Senate, 
the Committee on Energy and Commerce of the House of 
Representatives, and the Committee on Health, Education, Labor, 
and Pensions of the Senate, a report summarizing the annual 
evaluations of programs from the preceding proviso: Provided 
further, That the Secretary shall provide to the Committees on 
Appropriations of the House of Representatives and the Senate 
an operating plan for the Prevention and Wellness Fund prior to 
making any Federal obligations of funds provided in this 
paragraph (excluding funds to carry out the section 317 
immunization program), but not later than 90 days after the 
date of enactment of this Act, that indicates the prevention 
priorities to be addressed; provides measurable goals for each 
prevention priority; details the allocation of resources within 
the Department of Health and Human Services; and identifies 
which programs or activities are supported, including 
descriptions of any new programs or activities: Provided 
further, That the Secretary shall provide to the Committees on 
Appropriations of the House of Representatives and the Senate a 
report on the actual obligations, expenditures, and unobligated 
balances for each activity funded under this heading not later 
than November 1, 2009, and every 6 months thereafter as long as 
funding provided under this heading is available for obligation 
or expenditure.

                        DEPARTMENT OF EDUCATION

                    Education for the Disadvantaged

    For an additional amount for ``Education for the 
Disadvantaged'' to carry out title I of the Elementary and 
Secondary Education Act of 1965 (``ESEA''), $13,000,000,000: 
Provided, That $5,000,000,000 shall be available for targeted 
grants under section 1125 of the ESEA: Provided further, That 
$5,000,000,000 shall be available for education finance 
incentive grants under section 1125A of the ESEA: Provided 
further, That $3,000,000,000 shall be for school improvement 
grants under section 1003(g) of the ESEA: Provided further, 
That each local educational agency receiving funds available 
under this paragraph shall be required to file with the State 
educational agency, no later than December 1, 2009, a school-
by-school listing of per-pupil educational expenditures from 
State and local sources during the 2008-2009 academic year: 
Provided further, That each State educational agency shall 
report that information to the Secretary of Education by March 
31, 2010.

                               Impact Aid

    For an additional amount for ``Impact Aid'' to carry out 
section 8007 of title VIII of the Elementary and Secondary 
Education Act of 1965, $100,000,000, which shall be expended 
pursuant to the requirements of section 805.

                      School Improvement Programs

    For an additional amount for ``School Improvement 
Programs'' to carry out subpart 1, part D of title II of the 
Elementary and Secondary Education Act of 1965 (``ESEA''), and 
subtitle B of title VII of the McKinney-Vento Homeless 
Assistance Act, $720,000,000: Provided, That $650,000,000 shall 
be available for subpart 1, part D of title II of the ESEA: 
Provided further, That the Secretary shall allot $70,000,000 
for grants under McKinney-Vento to each State in proportion to 
the number of homeless students identified by the State during 
the 2007-2008 school year relative to the number of such 
children identified nationally during that school year: 
Provided further, That State educational agencies shall 
subgrant the McKinney-Vento funds to local educational agencies 
on a competitive basis or according to a formula based on the 
number of homeless students identified by the local educational 
agencies in the State: Provided further, That the Secretary 
shall distribute the McKinney-Vento funds to the States not 
later than 60 days after the date of the enactment of this Act: 
Provided further, That each State shall subgrant the McKinney-
Vento funds to local educational agencies not later than 120 
days after receiving its grant from the Secretary.

                       Innovation and Improvement

    For an additional amount for ``Innovation and Improvement'' 
to carry out subpart 1, part D of title V of the Elementary and 
Secondary Education Act of 1965 (``ESEA''), $200,000,000: 
Provided, That these funds shall be expended as directed in the 
fifth, sixth, and seventh provisos under the heading 
``Innovation and Improvement'' in the Department of Education 
Appropriations Act, 2008: Provided further, That a portion of 
these funds shall also be used for a rigorous national 
evaluation by the Institute of Education Sciences, utilizing 
randomized controlled methodology to the extent feasible, that 
assesses the impact of performance-based teacher and principal 
compensation systems supported by the funds provided in this 
Act on teacher and principal recruitment and retention in high-
need schools and subjects: Provided further, That the Secretary 
may reserve up to 1 percent of the amount made available under 
this heading for management and oversight of the activities 
supported with those funds.

                           Special Education

    For an additional amount for ``Special Education'' for 
carrying out parts B and C of the Individuals with Disabilities 
Education Act (``IDEA''), $12,200,000,000, of which 
$11,300,000,000 shall be available for section 611 of the IDEA: 
Provided, That if every State, as defined by section 602(31) of 
the IDEA, reaches its maximum allocation under section 
611(d)(3)(B)(iii) of the IDEA, and there are remaining funds, 
such funds shall be proportionally allocated to each State 
subject to the maximum amounts contained in section 611(a)(2) 
of the IDEA: Provided further, That by July 1, 2009, the 
Secretary of Education shall reserve the amount needed for 
grants under section 643(e) of the IDEA, with any remaining 
funds to be allocated in accordance with section 643(c) of the 
IDEA: Provided further, That the total amount for each of 
sections 611(b)(2) and 643(b)(1) of the IDEA, under this and 
all other Acts, for fiscal year 2009, whenever enacted, shall 
be equal to the amounts respectively available for these 
activities under these sections during fiscal year 2008 
increased by the amount of inflation as specified in section 
619(d)(2)(B) of the IDEA: Provided further, That $400,000,000 
shall be available for section 619 of the IDEA and $500,000,000 
shall be available for part C of the IDEA.

            Rehabilitation Services and Disability Research

    For an additional amount for ``Rehabilitation Services and 
Disability Research'' for providing grants to States to carry 
out the Vocational Rehabilitation Services program under part B 
of title I and parts B and C of chapter 1 and chapter 2 of 
title VII of the Rehabilitation Act of 1973, $680,000,000: 
Provided, That $540,000,000 shall be available for part B of 
title I of the Rehabilitation Act: Provided further, That funds 
provided herein shall not be considered in determining the 
amount required to be appropriated under section 100(b)(1) of 
the Rehabilitation Act of 1973 in any fiscal year: Provided 
further, That, notwithstanding section 7(14)(A), the Federal 
share of the costs of vocational rehabilitation services 
provided with the funds provided herein shall be 100 percent: 
Provided further, That $140,000,000 shall be available for 
parts B and C of chapter 1 and chapter 2 of title VII of the 
Rehabilitation Act: Provided further, That $18,200,000 shall be 
for State Grants, $87,500,000 shall be for independent living 
centers, and $34,300,000 shall be for services for older blind 
individuals.

                      Student Financial Assistance

    For an additional amount for ``Student Financial 
Assistance'' to carry out subpart 1 of part A and part C of 
title IV of the Higher Education Act of 1965 (``HEA''), 
$15,840,000,000, which shall remain available through September 
30, 2011: Provided, That $15,640,000,000 shall be available for 
subpart 1 of part A of title IV of the HEA: Provided further, 
That $200,000,000 shall be available for part C of title IV of 
the HEA.
    The maximum Pell Grant for which a student shall be 
eligible during award year 2009-2010 shall be $4,860.

                       Student Aid Administration

    For an additional amount for ``Student Aid Administration'' 
to carry out part D of title I, and subparts 1, 3, and 4 of 
part A, and parts B, C, D, and E of title IV of the Higher 
Education Act of 1965, $60,000,000.

                            Higher Education

    For an additional amount for ``Higher Education'' to carry 
out part A of title II of the Higher Education Act of 1965, 
$100,000,000.

                    Institute of Education Sciences

    For an additional amount for ``Institute of Education 
Sciences'' to carry out section 208 of the Educational 
Technical Assistance Act, $250,000,000, which may be used for 
Statewide data systems that include postsecondary and workforce 
information, of which up to $5,000,000 may be used for State 
data coordinators and for awards to public or private 
organizations or agencies to improve data coordination.

                        Departmental Management

                    office of the inspector general

    For an additional amount for the ``Office of the Inspector 
General'', $14,000,000, which shall remain available through 
September 30, 2012, for salaries and expenses necessary for 
oversight and audit of programs, grants, and projects funded in 
this Act.

                            RELATED AGENCIES

             Corporation for National and Community Service

                           OPERATING EXPENSES

                     (including transfer of funds)

    For an additional amount for ``Operating Expenses'' to 
carry out the Domestic Volunteer Service Act of 1973 (``1973 
Act'') and the National and Community Service Act of 1990 
(``1990 Act''), $160,000,000: Provided, That $89,000,000 of the 
funds made available in this paragraph shall be used to make 
additional awards to existing AmeriCorps grantees and may be 
used to provide adjustments to awards under subtitle C of title 
I of the 1990 Act made prior to September 30, 2010 for which 
the Chief Executive Officer of the Corporation for National and 
Community Service (``CEO'') determines that a waiver of the 
Federal share limitation is warranted under section 2521.70 of 
title 45 of the Code of Federal Regulations: Provided further, 
That of the amount made available in this paragraph, not less 
than $6,000,000 shall be transferred to ``Salaries and 
Expenses'' for necessary expenses relating to information 
technology upgrades, of which up to $800,000 may be used to 
administer the funds provided in this paragraph: Provided 
further, That of the amount provided in this paragraph, not 
less than $65,000,000 shall be for programs under title I, part 
A of the 1973 Act: Provided further, That funds provided in the 
previous proviso shall not be made available in connection with 
cost-share agreements authorized under section 192A(g)(10) of 
the 1990 Act: Provided further, That of the funds available 
under this heading, up to 20 percent of funds allocated to 
grants authorized under section 124(b) of title I, subtitle C 
of the 1990 Act may be used to administer, reimburse, or 
support any national service program under section 129(d)(2) of 
the 1990 Act: Provided further, That, except as provided herein 
and in addition to requirements identified herein, funds 
provided in this paragraph shall be subject to the terms and 
conditions under which funds were appropriated in fiscal year 
2008: Provided further, That the CEO shall provide the 
Committees on Appropriations of the House of Representatives 
and the Senate a fiscal year 2009 operating plan for the funds 
appropriated in this paragraph prior to making any Federal 
obligations of such funds in fiscal year 2009, but not later 
than 90 days after the date of enactment of this Act, and a 
fiscal year 2010 operating plan for such funds prior to making 
any Federal obligations of such funds in fiscal year 2010, but 
not later than November 1, 2009, that detail the allocation of 
resources and the increased number of members supported by the 
AmeriCorps programs: Provided further, That the CEO shall 
provide to the Committees on Appropriations of the House of 
Representatives and the Senate a report on the actual 
obligations, expenditures, and unobligated balances for each 
activity funded under this heading not later than November 1, 
2009, and every 6 months thereafter as long as funding provided 
under this heading is available for obligation or expenditure.

                      Office of Inspector General

    For an additional amount for the ``Office of Inspector 
General'', $1,000,000, which shall remain available until 
September 30, 2012.

                         National Service Trust

                     (including transfer of funds)

    For an additional amount for ``National Service Trust'' 
established under subtitle D of title I of the National and 
Community Service Act of 1990 (``1990 Act''), $40,000,000, 
which shall remain available until expended: Provided, That the 
Corporation for National and Community Service may transfer 
additional funds from the amount provided within ``Operating 
Expenses'' for grants made under subtitle C of title I of the 
1990 Act to this appropriation upon determination that such 
transfer is necessary to support the activities of national 
service participants and after notice is transmitted to the 
Committees on Appropriations of the House of Representatives 
and the Senate: Provided further, That the amount appropriated 
for or transferred to the National Service Trust may be 
invested under section 145(b) of the 1990 Act without regard to 
the requirement to apportion funds under 31 U.S.C. 1513(b).

                     Social Security Administration

                 LIMITATION ON ADMINISTRATIVE EXPENSES

                     (INCLUDING TRANSFER OF FUNDS)

    For an additional amount for ``Limitation on Administrative 
Expenses'', $1,000,000,000 shall be available as follows:
            (1) $500,000,000 shall remain available until 
        expended for necessary expenses of the replacement of 
        the National Computer Center and the information 
        technology costs associated with such Center: Provided, 
        That the Commissioner of Social Security shall notify 
        the Committees on Appropriations of the House of 
        Representatives and the Senate not later than 10 days 
        prior to each public notice soliciting bids related to 
        site selection and construction and prior to the lease 
        or purchase of such site: Provided further, That the 
        construction plan and site selection for such center 
        shall be subject to review and approval by the Office 
        of Management and Budget: Provided further, That such 
        center shall continue to be a government-operated 
        facility; and
            (2) $500,000,000 for processing disability and 
        retirement workloads, including information technology 
        acquisitions and research in support of such 
        activities: Provided, That up to $40,000,000 may be 
        used by the Commissioner of Social Security for health 
        information technology research and activities to 
        facilitate the adoption of electronic medical records 
        in disability claims, including the transfer of funds 
        to ``Supplemental Security Income Program'' to carry 
        out activities under section 1110 of the Social 
        Security Act.

                      Office of Inspector General

    For an additional amount for the ``Office of Inspector 
General'', $2,000,000, which shall remain available through 
September 30, 2012, for salaries and expenses necessary for 
oversight and audit of programs, projects, and activities 
funded in this Act.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 801. (a) Up to 1 percent of the funds made available 
to the Department of Labor in this title may be used for the 
administration, management, and oversight of the programs, 
grants, and activities funded by such appropriation, including 
the evaluation of the use of such funds.
    (b) Funds designated for these purposes may be available 
for obligation through September 30, 2010.
    (c) Not later than 30 days after enactment of this Act, the 
Secretary of Labor shall provide an operating plan describing 
the proposed use of funds for the purposes described in 
subsection (a).
    Sec. 802.  Report on the Impact of Past and Future Minimum 
Wage Increases.  (a) In General.--Section 8104 of the U.S. 
Troop Readiness, Veterans' Care, Katrina Recovery, and Iraq 
Accountability Appropriations Act, 2007 (Public Law 110-28; 121 
Stat. 189) is amended to read as follows:

``SEC. 8104. REPORT ON THE IMPACT OF PAST AND FUTURE MINIMUM WAGE 
                    INCREASES.

    ``(a) Study.--Beginning on the date that is 60 days after 
the date of enactment of this Act, and every year thereafter 
until the minimum wage in the respective territory is $7.25 per 
hour, the Government Accountability Office shall conduct a 
study to--
            ``(1) assess the impact of the minimum wage 
        increases that occurred in American Samoa and the 
        Commonwealth of the Northern Mariana Islands in 2007 
        and 2008, as required under Public Law 110-28, on the 
        rates of employment and the living standards of 
        workers, with full consideration of the other factors 
        that impact rates of employment and the living 
        standards of workers such as inflation in the cost of 
        food, energy, and other commodities; and
            ``(2) estimate the impact of any further wage 
        increases on rates of employment and the living 
        standards of workers in American Samoa and the 
        Commonwealth of the Northern Mariana Islands, with full 
        consideration of the other factors that may impact the 
        rates of employment and the living standards of 
        workers, including assessing how the profitability of 
        major private sector firms may be impacted by wage 
        increases in comparison to other factors such as energy 
        costs and the value of tax benefits.
    ``(b) Report.--No earlier than March 15, 2010, and not 
later than April 15, 2010, the Government Accountability Office 
shall transmit its first report to Congress concerning the 
findings of the study required under subsection (a). The 
Government Accountability Office shall transmit any subsequent 
reports to Congress concerning the findings of a study required 
by subsection (a) between March 15 and April 15 of each year.
    ``(c) Economic Information.--To provide sufficient economic 
data for the conduct of the study under subsection (a) the 
Bureau of the Census of the Department of Commerce shall 
include and separately report on American Samoa, the 
Commonwealth of the Northern Mariana Islands, Guam, and the 
Virgin Islands in its County Business Patterns data with the 
same regularity and to the same extent as each Bureau collects 
and reports such data for the 50 States. In the event that the 
inclusion of American Samoa, the Commonwealth of the Northern 
Mariana Islands, Guam, and the Virgin Islands in such surveys 
and data compilations requires time to structure and implement, 
the Bureau of the Census shall in the interim annually report 
the best available data that can feasibly be secured with 
respect to such territories. Such interim report shall describe 
the steps the Bureau will take to improve future data 
collection in the territories to achieve comparability with the 
data collected in the United States. The Bureau of the Census, 
together with the Department of the Interior, shall coordinate 
their efforts to achieve such improvements.''.
    (b) Effective Date.--The amendment made by this section 
shall take effect on the date of enactment of this Act.
    Sec. 803.  Eligible Employees in the Recreational Marine 
Industry.--Section 2(3)(F) of the Longshore and Harbor Workers' 
Compensation Act (33 U.S.C. 902(3)(F)) is amended--
            (1) by striking ``, repair or dismantle''; and
            (2) by striking the semicolon and inserting ``, or 
        individuals employed to repair any recreational vessel, 
        or to dismantle any part of a recreational vessel in 
        connection with the repair of such vessel;''.
    Sec. 804. Federal Coordinating Council for Comparative 
Effectiveness Research. (a) Establishment.--There is hereby 
established a Federal Coordinating Council for Comparative 
Effectiveness Research (in this section referred to as the 
``Council'').
    (b) Purpose.--The Council shall foster optimum coordination 
of comparative effectiveness and related health services 
research conducted or supported by relevant Federal departments 
and agencies, with the goal of reducing duplicative efforts and 
encouraging coordinated and complementary use of resources.
    (c) Duties.--The Council shall--
            (1) assist the offices and agencies of the Federal 
        Government, including the Departments of Health and 
        Human Services, Veterans Affairs, and Defense, and 
        other Federal departments or agencies, to coordinate 
        the conduct or support of comparative effectiveness and 
        related health services research; and
            (2) advise the President and Congress on--
                    (A) strategies with respect to the 
                infrastructure needs of comparative 
                effectiveness research within the Federal 
                Government; and
                    (B) organizational expenditures for 
                comparative effectiveness research by relevant 
                Federal departments and agencies.
    (d) Membership.--
            (1) Number and appointment.--The Council shall be 
        composed of not more than 15 members, all of whom are 
        senior Federal officers or employees with 
        responsibility for health-related programs, appointed 
        by the President, acting through the Secretary of 
        Health and Human Services (in this section referred to 
        as the ``Secretary''). Members shall first be appointed 
        to the Council not later than 30 days after the date of 
        the enactment of this Act.
            (2) Members.--
                    (A) In general.--The members of the Council 
                shall include one senior officer or employee 
                from each of the following agencies:
                            (i) The Agency for Healthcare 
                        Research and Quality.
                            (ii) The Centers for Medicare and 
                        Medicaid Services.
                            (iii) The National Institutes of 
                        Health.
                            (iv) The Office of the National 
                        Coordinator for Health Information 
                        Technology.
                            (v) The Food and Drug 
                        Administration.
                            (vi) The Veterans Health 
                        Administration within the Department of 
                        Veterans Affairs.
                            (vii) The office within the 
                        Department of Defense responsible for 
                        management of the Department of Defense 
                        Military Health Care System.
                    (B) Qualifications.--At least half of the 
                members of the Council shall be physicians or 
                other experts with clinical expertise.
            (3) Chairman; vice chairman.--The Secretary shall 
        serve as Chairman of the Council and shall designate a 
        member to serve as Vice Chairman.
    (e) Reports.--
            (1) Initial report.--Not later than June 30, 2009, 
        the Council shall submit to the President and the 
        Congress a report containing information describing 
        current Federal activities on comparative effectiveness 
        research and recommendations for such research 
        conducted or supported from funds made available for 
        allotment by the Secretary for comparative 
        effectiveness research in this Act.
            (2) Annual report.--The Council shall submit to the 
        President and Congress an annual report regarding its 
        activities and recommendations concerning the 
        infrastructure needs, organizational expenditures and 
        opportunities for better coordination of comparative 
        effectiveness research by relevant Federal departments 
        and agencies.
    (f) Staffing; Support.--From funds made available for 
allotment by the Secretary for comparative effectiveness 
research in this Act, the Secretary shall make available not 
more than 1 percent to the Council for staff and administrative 
support.
    (g) Rules of Construction.--
            (1) Coverage.--Nothing in this section shall be 
        construed to permit the Council to mandate coverage, 
        reimbursement, or other policies for any public or 
        private payer.
            (2) Reports and recommendations.--None of the 
        reports submitted under this section or recommendations 
        made by the Council shall be construed as mandates or 
        clinical guidelines for payment, coverage, or 
        treatment.
    Sec. 805. Grants for Impact Aid Construction. (a) 
Reservation for Management and Oversight.--From the funds 
appropriated to carry out this section, the Secretary may 
reserve up to 1 percent for management and oversight of the 
activities carried out with those funds.
    (b) Construction Payments.--
            (1) Formula grants.--
                    (A) In general.--From 40 percent of the 
                amount not reserved under subsection (a), the 
                Secretary shall make payments in accordance 
                with section 8007(a) of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 
                7707(a)), except that the amount of such 
                payments shall be determined in accordance with 
                subparagraph (B).
                    (B) Amount of payments.--The Secretary 
                shall make a payment to each local educational 
                agency eligible for a payment under section 
                8007(a) of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 7707(a)) in an 
                amount that bears the same relationship to the 
                funds made available under subparagraph (A) as 
                the number of children determined under 
                subparagraphs (B), (C), and (D)(i) of section 
                8003(a)(1) of the Elementary and Secondary 
                Education Act of 1965 (20 U.S.C. 7703(a)(1)(B), 
                (C), and (D)(i)) who were in average daily 
                attendance in the local educational agency for 
                the most recent year for which such information 
                is available bears to the number of such 
                children in all the local educational agencies 
                eligible for a payment under section 8007(a) of 
                the Elementary and Secondary Education Act of 
                1965 (20 U.S.C. 7707(a)).
            (2) Competitive grants.--From 60 percent of the 
        amount not reserved under subsection (a), the 
        Secretary--
                    (A) shall award emergency grants in 
                accordance with section 8007(b) of the 
                Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7707(b)) to eligible local 
                educational agencies to enable the agencies to 
                carry out emergency repairs of school 
                facilities; and
                    (B) may award modernization grants in 
                accordance with section 8007(b) of the 
                Elementary and Secondary Education Act of 1965 
                (20 U.S.C. 7707(b)) to eligible local 
                educational agencies to enable the agencies to 
                carry out the modernization of school 
                facilities.
            (3) Provisions not to apply.--Paragraphs (2), (3), 
        (4), (5)(A)(i), and (5)(A)(vi) of section 8007(b) of 
        the Elementary and Secondary Education Act of 1965 (20 
        U.S.C. 7707(b)(2), (3), (4), (5)(A)(i), and (5)(A)(vi)) 
        shall not apply to grants made under paragraph (2).
            (4) Eligibility.--A local educational agency is 
        eligible to receive a grant under paragraph (2) if the 
        local educational agency--
                    (A) was eligible to receive a payment under 
                section 8002 or 8003 of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 7702 
                and 7703) for fiscal year 2008; and
                    (B) has--
                            (i) a total taxable assessed value 
                        of real property that may be taxed for 
                        school purposes of less than 
                        $100,000,000; or
                            (ii) an assessed value of real 
                        property per student that may be taxed 
                        for school purposes that is less than 
                        the average of the assessed value of 
                        real property per student that may be 
                        taxed for school purposes in the State 
                        in which the local educational agency 
                        is located.
            (5) Criteria for grants.--In awarding grants under 
        paragraph (2), the Secretary shall consider the 
        following criteria:
                    (A) Whether the facility poses a health or 
                safety threat to students and school personnel, 
                including noncompliance with building codes and 
                inaccessibility for persons with disabilities, 
                or whether the existing building capacity meets 
                the needs of the current enrollment and 
                supports the provision of comprehensive 
                educational services to meet current standards 
                in the State in which the local educational 
                agency is located.
                    (B) The extent to which the new design and 
                proposed construction utilize energy efficient 
                and recyclable materials.
                    (C) The extent to which the new design and 
                proposed construction utilizes non-traditional 
                or alternative building methods to expedite 
                construction and project completion and 
                maximize cost efficiency.
                    (D) The feasibility of project completion 
                within 24 months from award.
                    (E) The availability of other resources for 
                the proposed project.
    Sec. 806. Mandatory Pell Grants.-- Section 401(b)(9)(A) of 
the Higher Education Act of 1965 (20 U.S.C. 1070a(b)(9)(A)) is 
amended--
            (1) in clause (ii), by striking ``$2,090,000,000'' 
        and inserting ``$2,733,000,000''; and
            (2) in clause (iii), by striking ``$3,030,000,000'' 
        and inserting ``$3,861,000,000''.
    Sec. 807. (a) In General.--Notwithstanding any other 
provision of law, and in order to begin expenditures and 
activities under this Act as quickly as possible consistent 
with prudent management, the Secretary of Education may--
            (1) award fiscal year 2009 funds to States and 
        local educational agencies on the basis of eligibility 
        determinations made for the award of fiscal year 2008 
        funds; and
            (2) require States to make prompt allocations to 
        local educational agencies.
    (b) Interest Not To Accrue.--Notwithstanding sections 3335 
and 6503 of title 31, United States Code, or any other 
provision of law, the United States shall not be liable to any 
State or other entity for any interest or fee with respect to 
any funds under this Act that are allocated by the Secretary of 
Education to the State or other entity within 30 days of the 
date on which they are available for obligation.

                      TITLE IX--LEGISLATIVE BRANCH

                    GOVERNMENT ACCOUNTABILITY OFFICE

                         Salaries and Expenses

    For an additional amount for ``Salaries and Expenses'' of 
the Government Accountability Office, $25,000,000, to remain 
available until September 30, 2010.

                     GENERAL PROVISIONS--THIS TITLE

    Sec. 901.  Government Accountability Office Reviews and 
Reports.  (a) Reviews and Reports.--
            (1) In general.--The Comptroller General shall 
        conduct bimonthly reviews and prepare reports on such 
        reviews on the use by selected States and localities of 
        funds made available in this Act. Such reports, along 
        with any audits conducted by the Comptroller General of 
        such funds, shall be posted on the Internet and linked 
        to the website established under this Act by the 
        Recovery Accountability and Transparency Board.
            (2) Redactions.--Any portion of a report or audit 
        under this subsection may be redacted when made 
        publicly available, if that portion would disclose 
        information that is not subject to disclosure under 
        section 552 of title 5, United States Code (commonly 
        known as the Freedom of Information Act).
    (b) Examination of Records.--The Comptroller General may 
examine any records related to obligations and use by any 
Federal, State, or local government agency of funds made 
available in this Act.
    Sec. 902.  Access of Government Accountability Office. (a) 
Access.--Each contract awarded using funds made available in 
this Act shall provide that the Comptroller General and his 
representatives are authorized--
            (1) to examine any records of the contractor or any 
        of its subcontractors, or any State or local agency 
        administering such contract, that directly pertain to, 
        and involve transactions relating to, the contract or 
        subcontract; and
            (2) to interview any officer or employee of the 
        contractor or any of its subcontractors, or of any 
        State or local government agency administering the 
        contract, regarding such transactions.
    (b) Relationship to Existing Authority.--Nothing in this 
section shall be interpreted to limit or restrict in any way 
any existing authority of the Comptroller General.

          TITLE X--MILITARY CONSTRUCTION AND VETERANS AFFAIRS

                         DEPARTMENT OF DEFENSE

                      Military Construction, Army

     For an additional amount for ``Military Construction, 
Army'', $180,000,000, to remain available until September 30, 
2013: Provided, That notwithstanding any other provision of 
law, such funds may be obligated and expended to carry out 
planning and design and military construction projects in the 
United States not otherwise authorized by law: Provided 
further, That of the amount provided under this heading, 
$80,000,000 shall be for child development centers, and 
$100,000,000 shall be for warrior transition complexes: 
Provided further, That not later than 30 days after the date of 
enactment of this Act, the Secretary of Defense shall submit to 
the Committees on Appropriations of both Houses of Congress an 
expenditure plan for funds provided under this heading.

              Military Construction, Navy and Marine Corps

     For an additional amount for ``Military Construction, Navy 
and Marine Corps'', $280,000,000, to remain available until 
September 30, 2013: Provided, That notwithstanding any other 
provision of law, such funds may be obligated and expended to 
carry out planning and design and military construction 
projects in the United States not otherwise authorized by law: 
Provided further, That of the amount provided under this 
heading, $100,000,000 shall be for troop housing, $80,000,000 
shall be for child development centers, and $100,000,000 shall 
be for energy conservation and alternative energy projects: 
Provided further, That not later than 30 days after the date of 
enactment of this Act, the Secretary of Defense shall submit to 
the Committees on Appropriations of both Houses of Congress an 
expenditure plan for funds provided under this heading.

                    Military Construction, Air Force

     For an additional amount for ``Military Construction, Air 
Force'', $180,000,000, to remain available until September 30, 
2013: Provided, That notwithstanding any other provision of 
law, such funds may be obligated and expended to carry out 
planning and design and military construction projects in the 
United States not otherwise authorized by law: Provided 
further, That of the amount provided under this heading, 
$100,000,000 shall be for troop housing and $80,000,000 shall 
be for child development centers: Provided further, That not 
later than 30 days after the date of enactment of this Act, the 
Secretary of Defense shall submit to the Committees on 
Appropriations of both Houses of Congress an expenditure plan 
for funds provided under this heading.

                  Military Construction, Defense-Wide

    For an additional amount for ``Military Construction, 
Defense-Wide'', $1,450,000,000, to remain available until 
September 30, 2013: Provided, That notwithstanding any other 
provision of law, such funds may be obligated and expended to 
carry out planning and design and military construction 
projects in the United States not otherwise authorized by law: 
Provided further, That of the amount provided under this 
heading, $1,330,000,000 shall be for the construction of 
hospitals and $120,000,000 shall be for the Energy Conservation 
Investment Program: Provided further, That not later than 30 
days after the date of enactment of this Act, the Secretary of 
Defense shall submit to the Committees on Appropriations of 
both Houses of Congress an expenditure plan for funds provided 
under this heading.

               Military Construction, Army National Guard

    For an additional amount for ``Military Construction, Army 
National Guard'', $50,000,000, to remain available until 
September 30, 2013: Provided, That notwithstanding any other 
provision of law, such funds may be obligated and expended to 
carry out planning and design and military construction 
projects in the United States not otherwise authorized by law: 
Provided further, That not later than 30 days after the date of 
enactment of this Act, the Secretary of Defense, in 
consultation with the Director of the Army National Guard, 
shall submit to the Committees on Appropriations of both Houses 
of Congress an expenditure plan for funds provided under this 
heading.

               Military Construction, Air National Guard

    For an additional amount for ``Military Construction, Air 
National Guard'', $50,000,000, to remain available until 
September 30, 2013: Provided, That notwithstanding any other 
provision of law, such funds may be obligated and expended to 
carry out planning and design and military construction 
projects in the United States not otherwise authorized by law: 
Provided further, That not later than 30 days after the date of 
enactment of this Act, the Secretary of Defense, in 
consultation with the Director of the Air National Guard, shall 
submit to the Committees on Appropriations of both Houses of 
Congress an expenditure plan for funds provided under this 
heading.

                   Family Housing Construction, Army

    For an additional amount for ``Family Housing Construction, 
Army'', $34,507,000, to remain available until September 30, 
2013: Provided, That notwithstanding any other provision of 
law, such funds may be obligated and expended to carry out 
planning and design and military construction projects in the 
United States not otherwise authorized by law: Provided 
further, That within 30 days of enactment of this Act, the 
Secretary of Defense shall submit to the Committees on 
Appropriations of both Houses of Congress an expenditure plan 
for funds provided under this heading.

             Family Housing Operation and Maintenance, Army

    For an additional amount for ``Family Housing Operation and 
Maintenance, Army'', $3,932,000: Provided, That notwithstanding 
any other provision of law, such funds may be obligated and 
expended for maintenance and repair and minor construction 
projects in the United States not otherwise authorized by law.

                 Family Housing Construction, Air Force

    For an additional amount for ``Family Housing Construction, 
Air Force'', $80,100,000, to remain available until September 
30, 2013: Provided, That notwithstanding any other provision of 
law, such funds may be obligated and expended to carry out 
planning and design and military construction projects in the 
United States not otherwise authorized by law: Provided 
further, That within 30 days of enactment of this Act, the 
Secretary of Defense shall submit to the Committees on 
Appropriations of both Houses of Congress an expenditure plan 
for funds provided under this heading.

          Family Housing Operation and Maintenance, Air Force

    For an additional amount for ``Family Housing Operation and 
Maintenance, Air Force'', $16,461,000: Provided, That 
notwithstanding any other provision of law, such funds may be 
obligated and expended for maintenance and repair and minor 
construction projects in the United States not otherwise 
authorized by law.

                       Homeowners Assistance Fund

    For an additional amount for ``Homeowners Assistance 
Fund'', established by section 1013 of the Demonstration Cities 
and Metropolitan Development Act of 1966, as amended (42 U.S.C. 
3374), $555,000,000, to remain available until expended: 
Provided, That the Secretary of Defense shall submit quarterly 
reports to the Committees on Appropriations of both Houses of 
Congress on the expenditure of funds made available under this 
heading in this or any other Act.

                        Administrative Provision

    Sec. 1001. (a) Temporary Expansion of Homeowners Assistance 
Program to Respond to Mortgage Foreclosure and Credit Crisis.-- 
Section 1013 of the Demonstration Cities and Metropolitan 
Development Act of 1966 (42 U.S.C. 3374) is amended--
            (1) in subsection (a)--
                    (A) by redesignating paragraphs (1), (2), 
                and (3) as clauses (i), (ii), and (iii), 
                respectively, and indenting such subparagraphs, 
                as so redesignated, 6 ems from the left margin;
                    (B) by striking ``Notwithstanding any other 
                provision of law'' and inserting the following:
            ``(1) Acquisition of property at or near military 
        installations that have been ordered to be closed.--
        Notwithstanding any other provision of law'';
                    (C) by striking ``if he determines'' and 
                inserting ``if--
                    ``(A) the Secretary determines--'';
                    (D) in clause (iii), as redesignated by 
                subparagraph (A), by striking the period at the 
                end and inserting ``; or''; and
                    (E) by adding at the end the following:
                    ``(B) the Secretary determines--
                            ``(i) that the conditions in 
                        clauses (i) and (ii) of subparagraph 
                        (A) have been met;
                            ``(ii) that the closing or 
                        realignment of the base or installation 
                        resulted from a realignment or closure 
                        carried out under the 2005 round of 
                        defense base closure and realignment 
                        under the Defense Base Closure and 
                        Realignment Act of 1990 (part XXIX of 
                        Public Law 101-510; 10 U.S.C. 2687 
                        note);
                            ``(iii) that the property was 
                        purchased by the owner before July 1, 
                        2006;
                            ``(iv) that the property was sold 
                        by the owner between July 1, 2006, and 
                        September 30, 2012, or an earlier end 
                        date designated by the Secretary;
                            ``(v) that the property is the 
                        primary residence of the owner; and
                            ``(vi) that the owner has not 
                        previously received benefit payments 
                        authorized under this subsection.
            ``(2) Homeowner assistance for wounded members of 
        the armed forces, department of defense and united 
        states coast guard civilian employees, and their 
        spouses.--Notwithstanding any other provision of law, 
        the Secretary of Defense is authorized to acquire title 
        to, hold, manage, and dispose of, or, in lieu thereof, 
        to reimburse for certain losses upon private sale of, 
        or foreclosure against, any property improved with a 
        one- or two-family dwelling which was at the time of 
        the relevant wound, injury, or illness, the primary 
        residence of--
                    ``(A) any member of the Armed Forces in 
                medical transition who--
                            ``(i) incurred a wound, injury, or 
                        illness in the line of duty during a 
                        deployment in support of the Armed 
                        Forces;
                            ``(ii) is disabled to a degree of 
                        30 percent or more as a result of such 
                        wound, injury, or illness, as 
                        determined by the Secretary of Defense; 
                        and
                            ``(iii) is reassigned in 
                        furtherance of medical treatment or 
                        rehabilitation, or due to medical 
                        retirement in connection with such 
                        disability;
                    ``(B) any civilian employee of the 
                Department of Defense or the United States 
                Coast Guard who--
                            ``(i) was wounded, injured, or 
                        became ill in the performance of his or 
                        her duties during a forward deployment 
                        occurring on or after September 11, 
                        2001, in support of the Armed Forces; 
                        and
                            ``(ii) is reassigned in furtherance 
                        of medical treatment, rehabilitation, 
                        or due to medical retirement resulting 
                        from the sustained disability; or
                    ``(C) the spouse of a member of the Armed 
                Forces or a civilian employee of the Department 
                of Defense or the United States Coast Guard 
                if--
                            ``(i) the member or employee was 
                        killed in the line of duty or in the 
                        performance of his or her duties during 
                        a deployment on or after September 11, 
                        2001, in support of the Armed Forces or 
                        died from a wound, injury, or illness 
                        incurred in the line of duty during 
                        such a deployment; and
                            ``(ii) the spouse relocates from 
                        such residence within 2 years after the 
                        death of such member or employee.
            ``(3) Temporary homeowner assistance for members of 
        the armed forces permanently reassigned during 
        specified mortgage crisis.--Notwithstanding any other 
        provision of law, the Secretary of Defense is 
        authorized to acquire title to, hold, manage, and 
        dispose of, or, in lieu thereof, to reimburse for 
        certain losses upon private sale of, or foreclosure 
        against, any property improved with a one- or two-
        family dwelling situated at or near a military base or 
        installation, if the Secretary determines--
                    ``(A) that the owner is a member of the 
                Armed Forces serving on permanent assignment;
                    ``(B) that the owner is permanently 
                reassigned by order of the United States 
                Government to a duty station or home port 
                outside a 50-mile radius of the base or 
                installation;
                    ``(C) that the reassignment was ordered 
                between February 1, 2006, and September 30, 
                2012, or an earlier end date designated by the 
                Secretary;
                    ``(D) that the property was purchased by 
                the owner before July 1, 2006;
                    ``(E) that the property was sold by the 
                owner between July 1, 2006, and September 30, 
                2012, or an earlier end date designated by the 
                Secretary;
                    ``(F) that the property is the primary 
                residence of the owner; and
                    ``(G) that the owner has not previously 
                received benefit payments authorized under this 
                subsection.'';
            (2) in subsection (b), by striking ``this section'' 
        each place it appears and inserting ``subsection 
        (a)(1)'';
            (3) in subsection (c)--
                    (A) by striking ``Such persons'' and 
                inserting the following:
            ``(1) Homeowner assistance related to closed 
        military installations.--
                    ``(A) In general.--Such persons'';
                    (B) by striking ``set forth above shall 
                elect either (1) to receive'' and inserting the 
                following: ``set forth in subsection (a)(1) 
                shall elect either--
                            ``(i) to receive'';
                    (C) by striking ``difference between (A) 95 
                per centum'' and all that follows through ``(B) 
                the fair market value'' and inserting the 
                following: ``difference between--
                                    ``(I) 95 per centum of the 
                                fair market value of their 
                                property (as such value is 
                                determined by the Secretary of 
                                Defense) prior to public 
                                announcement of intention to 
                                close all or part of the 
                                military base or installation; 
                                and
                                    ``(II) the fair market 
                                value'';
                    (D) by striking ``time of the sale, or (2) 
                to receive'' and inserting the following: 
                ``time of the sale; or
                            ``(ii) to receive'';
                    (E) by striking ``outstanding mortgages. 
                The Secretary may also pay a person who elects 
                to receive a cash payment under clause (1) of 
                the preceding sentence an amount'' and 
                inserting ``outstanding mortgages.
                    ``(B) Reimbursement of expenses.--The 
                Secretary may also pay a person who elects to 
                receive a cash payment under subparagraph (A) 
                an amount''; and
                    (F) by striking ``best interest of the 
                Federal Government. Cash payment'' and 
                inserting the following: ``best interest of the 
                United States.
            ``(2) Homeowner assistance for wounded individuals 
        and their spouses.--
                    ``(A) In general.--Persons eligible under 
                the criteria set forth in subsection (a)(2) may 
                elect either--
                            ``(i) to receive a cash payment as 
                        compensation for losses which may be or 
                        have been sustained in a private sale, 
                        in an amount not to exceed the 
                        difference between--
                                    ``(I) 95 per centum of 
                                prior fair market value of 
                                their property (as such value 
                                is determined by the Secretary 
                                of Defense); and
                                    ``(II) the fair market 
                                value of such property (as such 
                                value is determined by the 
                                Secretary of Defense) at the 
                                time of sale; or
                            ``(ii) to receive, as purchase 
                        price for their property an amount not 
                        to exceed 90 per centum of prior fair 
                        market value as such value is 
                        determined by the Secretary of Defense, 
                        or the amount of the outstanding 
                        mortgages.
                    ``(B) Determination of benefits.--The 
                Secretary may also pay a person who elects to 
                receive a cash payment under subparagraph (A) 
                an amount that the Secretary determines 
                appropriate to reimburse the person for the 
                costs incurred by the person in the sale of the 
                property if the Secretary determines that such 
                payment will benefit the person and is in the 
                best interest of the United States.
            ``(3) Homeowner assistance for permanently 
        reassigned individuals.--
                    ``(A) In general.--Persons eligible under 
                the criteria set forth in subsection (a)(3) may 
                elect either--
                            ``(i) to receive a cash payment as 
                        compensation for losses which may be or 
                        have been sustained in a private sale, 
                        in an amount not to exceed the 
                        difference between--
                                    ``(I) 95 per centum of 
                                prior fair market value of 
                                their property (as such value 
                                is determined by the Secretary 
                                of Defense); and
                                    ``(II) the fair market 
                                value of such property (as such 
                                value is determined by the 
                                Secretary of Defense) at the 
                                time of sale; or
                            ``(ii) to receive, as purchase 
                        price for their property an amount not 
                        to exceed 90 per centum of prior fair 
                        market value as such value is 
                        determined by the Secretary of Defense, 
                        or the amount of the outstanding 
                        mortgages.
                    ``(B) Determination of benefits.--The 
                Secretary may also pay a person who elects to 
                receive a cash payment under subparagraph (A) 
                an amount that the Secretary determines 
                appropriate to reimburse the person for the 
                costs incurred by the person in the sale of the 
                property if the Secretary determines that such 
                payment will benefit the person and is in the 
                best interest of the United States.
            ``(4) Compensation and limitations related to 
        foreclosures and encumbrances.--Cash payment'';
            (4) by striking subsection (g);
            (5) in subsection (l), by striking ``(a)(2)'' and 
        inserting ``(a)(1)(A)(ii)'';
            (6) in subsection (m), by striking ``this section'' 
        and inserting ``subsection (a)(1)'';
            (7) in subsection (n)--
                    (A) in paragraph (1), by striking ``this 
                section'' and inserting ``subsection (a)(1)''; 
                and
                    (B) in paragraph (2), by striking ``this 
                section'' and inserting ``subsection (a)(1)'';
            (8) in subsection (o)--
                    (A) in paragraph (1), by striking ``this 
                section'' and inserting ``subsection (a)(1)'';
                    (B) in paragraph (2), by striking ``this 
                section'' and inserting ``subsection (a)(1)''; 
                and
                    (C) by striking paragraph (4); and
            (9) by adding at the end the following new 
        subsection:
    ``(p) Definitions.--In this section:
            ``(1) the term `Armed Forces' has the meaning given 
        the term `armed forces' in section 101(a) of title 10, 
        United States Code;
            ``(2) the term `civilian employee' has the meaning 
        given the term `employee' in section 2105(a) of title 
        5, United States Code;
            ``(3) the term `medical transition', in the case of 
        a member of the Armed Forces, means a member who--
                    ``(A) is in Medical Holdover status;
                    ``(B) is in Active Duty Medical Extension 
                status;
                    ``(C) is in Medical Hold status;
                    ``(D) is in a status pending an evaluation 
                by a medical evaluation board;
                    ``(E) has a complex medical need requiring 
                six or more months of medical treatment; or
                    ``(F) is assigned or attached to an Army 
                Warrior Transition Unit, an Air Force Patient 
                Squadron, a Navy Patient Multidisciplinary Care 
                Team, or a Marine Patient Affairs Team/Wounded 
                Warrior Regiment; and
            ``(4) the term `nonappropriated fund 
        instrumentality employee' means a civilian employee 
        who--
                    ``(A) is a citizen of the United States; 
                and
                    ``(B) is paid from nonappropriated funds of 
                Army and Air Force Exchange Service, Navy 
                Resale and Services Support Office, Marine 
                Corps exchanges, or any other instrumentality 
                of the United States under the jurisdiction of 
                the Armed Forces which is conducted for the 
                comfort, pleasure, contentment, or physical or 
                mental improvement of members of the Armed 
                Forces.''.
    (b) Clerical Amendment.--Such section is further amended in 
the section heading by inserting ``and certain property owned 
by members of the Armed Forces, Department of Defense and 
United States Coast Guard civilian employees, and surviving 
spouses'' after ``ordered to be closed''.
    (c) Authority To Use Appropriated Funds.--Notwithstanding 
subsection (i) of such section, amounts appropriated or 
otherwise made available by this title under the heading 
``Homeowners Assistance Fund'' may be used for the Homeowners 
Assistance Fund established under such section.

                     DEPARTMENT OF VETERANS AFFAIRS

                     Veterans Health Administration

                           medical facilities

     For an additional amount for ``Medical Facilities'' for 
non-recurring maintenance, including energy projects, 
$1,000,000,000, to remain available until September 30, 2010: 
Provided, That not later than 30 days after the date of 
enactment of this Act, the Secretary of Veterans Affairs shall 
submit to the Committees on Appropriations of both Houses of 
Congress an expenditure plan for funds provided under this 
heading.

                    National Cemetery Administration

    For an additional amount for ``National Cemetery 
Administration'' for monument and memorial repairs, including 
energy projects, $50,000,000, to remain available until 
September 30, 2010: Provided, That not later than 30 days after 
the date of enactment of this Act, the Secretary of Veterans 
Affairs shall submit to the Committees on Appropriations of 
both Houses of Congress an expenditure plan for funds provided 
under this heading.

                      Departmental Administration

                       general operating expenses

    For an additional amount for ``General Operating 
Expenses'', $150,000,000, to remain available until September 
30, 2010, for additional expenses related to hiring and 
training temporary surge claims processors.

                     information technology systems

    For an additional amount for ``Information Technology 
Systems'', $50,000,000, to remain available until September 30, 
2010, for the Veterans Benefits Administration: Provided, That 
not later than 30 days after the enactment of this Act, the 
Secretary of Veterans Affairs shall submit to the Committees on 
Appropriations of both Houses of Congress an expenditure plan 
for funds provided under this heading.

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'', $1,000,000, to remain available until September 30, 
2011, for oversight and audit of programs, grants and projects 
funded under this title.

       grants for construction of state extended care facilities

    For an additional amount for ``Grants for Construction of 
State Extended Care Facilities'', $150,000,000, to remain 
available until September 30, 2010, for grants to assist States 
to acquire or construct State nursing home and domiciliary 
facilities and to remodel, modify, or alter existing hospital, 
nursing home, and domiciliary facilities in State homes, for 
furnishing care to veterans as authorized by sections 8131 
through 8137 of title 38, United States Code.

                        Administrative Provision

    Sec. 1002.  Payments to Eligible Persons Who Served in the 
United States Armed Forces in the Far East During World War II. 
 (a) Findings.--Congress makes the following findings:
            (1) The Philippine islands became a United States 
        possession in 1898 when they were ceded from Spain 
        following the Spanish-American War.
            (2) During World War II, Filipinos served in a 
        variety of units, some of which came under the direct 
        control of the United States Armed Forces.
            (3) The regular Philippine Scouts, the new 
        Philippine Scouts, the Guerrilla Services, and more 
        than 100,000 members of the Philippine Commonwealth 
        Army were called into the service of the United States 
        Armed Forces of the Far East on July 26, 1941, by an 
        executive order of President Franklin D. Roosevelt.
            (4) Even after hostilities had ceased, wartime 
        service of the new Philippine Scouts continued as a 
        matter of law until the end of 1946, and the force 
        gradually disbanded and was disestablished in 1950.
            (5) Filipino veterans who were granted benefits 
        prior to the enactment of the so-called Rescissions 
        Acts of 1946 (Public Laws 79-301 and 79-391) currently 
        receive full benefits under laws administered by the 
        Secretary of Veterans Affairs, but under section 107 of 
        title 38, United States Code, the service of certain 
        other Filipino veterans is deemed not to be active 
        service for purposes of such laws.
            (6) These other Filipino veterans only receive 
        certain benefits under title 38, United States Code, 
        and, depending on where they legally reside, are paid 
        such benefit amounts at reduced rates.
            (7) The benefits such veterans receive include 
        service-connected compensation benefits paid under 
        chapter 11 of title 38, United States Code, dependency 
        indemnity compensation survivor benefits paid under 
        chapter 13 of title 38, United States Code, and burial 
        benefits under chapters 23 and 24 of title 38, United 
        States Code, and such benefits are paid to 
        beneficiaries at the rate of $0.50 per dollar 
        authorized, unless they lawfully reside in the United 
        States.
            (8) Dependents' educational assistance under 
        chapter 35 of title 38, United States Code, is also 
        payable for the dependents of such veterans at the rate 
        of $0.50 per dollar authorized, regardless of the 
        veterans' residency.
    (b) Compensation Fund.--
            (1) In general.--There is in the general fund of 
        the Treasury a fund to be known as the ``Filipino 
        Veterans Equity Compensation Fund'' (in this section 
        referred to as the ``compensation fund'').
            (2) Availability of funds.--Subject to the 
        availability of appropriations for such purpose, 
        amounts in the fund shall be available to the Secretary 
        of Veterans Affairs without fiscal year limitation to 
        make payments to eligible persons in accordance with 
        this section.
    (c) Payments.--
            (1) In general.--The Secretary may make a payment 
        from the compensation fund to an eligible person who, 
        during the one-year period beginning on the date of the 
        enactment of this Act, submits to the Secretary a claim 
        for benefits under this section. The application for 
        the claim shall contain such information and evidence 
        as the Secretary may require.
            (2) Payment to surviving spouse.--If an eligible 
        person who has filed a claim for benefits under this 
        section dies before payment is made under this section, 
        the payment under this section shall be made instead to 
        the surviving spouse, if any, of the eligible person.
    (d) Eligible Persons.--An eligible person is any person 
who--
            (1) served--
                    (A) before July 1, 1946, in the organized 
                military forces of the Government of the 
                Commonwealth of the Philippines, while such 
                forces were in the service of the Armed Forces 
                of the United States pursuant to the military 
                order of the President dated July 26, 1941, 
                including among such military forces organized 
                guerrilla forces under commanders appointed, 
                designated, or subsequently recognized by the 
                Commander in Chief, Southwest Pacific Area, or 
                other competent authority in the Army of the 
                United States; or
                    (B) in the Philippine Scouts under section 
                14 of the Armed Forces Voluntary Recruitment 
                Act of 1945 (59 Stat. 538); and
            (2) was discharged or released from service 
        described in paragraph (1) under conditions other than 
        dishonorable.
    (e) Payment Amounts.--Each payment under this section shall 
be--
            (1) in the case of an eligible person who is not a 
        citizen of the United States, in the amount of $9,000; 
        and
            (2) in the case of an eligible person who is a 
        citizen of the United States, in the amount of $15,000.
    (f) Limitation.--The Secretary may not make more than one 
payment under this section for each eligible person described 
in subsection (d).
    (g) Clarification of Treatment of Payments Under Certain 
Laws.--Amounts paid to a person under this section--
            (1) shall be treated for purposes of the internal 
        revenue laws of the United States as damages for human 
        suffering; and
            (2) shall not be included in income or resources 
        for purposes of determining--
                    (A) eligibility of an individual to receive 
                benefits described in section 3803(c)(2)(C) of 
                title 31, United States Code, or the amount of 
                such benefits;
                    (B) eligibility of an individual to receive 
                benefits under title VIII of the Social 
                Security Act, or the amount of such benefits; 
                or
                    (C) eligibility of an individual for, or 
                the amount of benefits under, any other Federal 
                or federally assisted program.
    (h) Release.--
            (1) In general.--Except as provided in paragraph 
        (2), the acceptance by an eligible person or surviving 
        spouse, as applicable, of a payment under this section 
        shall be final, and shall constitute a complete release 
        of any claim against the United States by reason of any 
        service described in subsection (d).
            (2) Payment of prior eligibility status.--Nothing 
        in this section shall prohibit a person from receiving 
        any benefit (including health care, survivor, or burial 
        benefits) which the person would have been eligible to 
        receive based on laws in effect as of the day before 
        the date of the enactment of this Act.
    (i) Recognition of Service.--The service of a person as 
described in subsection (d) is hereby recognized as active 
military service in the Armed Forces for purposes of, and to 
the extent provided in, this section.
    (j) Administration.--
            (1) The Secretary shall promptly issue application 
        forms and instructions to ensure the prompt and 
        efficient administration of the provisions of this 
        section.
            (2) The Secretary shall administer the provisions 
        of this section in a manner consistent with applicable 
        provisions of title 38, United States Code, and other 
        provisions of law, and shall apply the definitions in 
        section 101 of such title in the administration of such 
        provisions, except to the extent otherwise provided in 
        this section.
    (k) Reports.--The Secretary shall include, in documents 
submitted to Congress by the Secretary in support of the 
President's budget for each fiscal year, detailed information 
on the operation of the compensation fund, including the number 
of applicants, the number of eligible persons receiving 
benefits, the amounts paid out of the compensation fund, and 
the administration of the compensation fund for the most recent 
fiscal year for which such data is available.
    (l) Authorization of Appropriation.--There is authorized to 
be appropriated to the compensation fund $198,000,000, to 
remain available until expended, to make payments under this 
section.

       TITLE XI--STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS

                          DEPARTMENT OF STATE

                   Administration of Foreign Affairs

                    diplomatic and consular programs

    For an additional amount for ``Diplomatic and Consular 
Programs'' for urgent domestic facilities requirements for 
passport and training functions, $90,000,000: Provided, That 
the Secretary of State shall submit to the Committees on 
Appropriations within 90 days of enactment of this Act a 
detailed spending plan for funds appropriated under this 
heading: Provided further, That with respect to the funds made 
available for passport agencies, such plan shall be developed 
in consultation with the Department of Homeland Security and 
the General Services Administration and shall coordinate and 
co-locate, to the extent feasible, passport agencies with other 
Federal facilities.

                        capital investment fund

                     (INCLUDING TRANSFER OF FUNDS)

    For an additional amount for ``Capital Investment Fund'', 
$290,000,000, for information technology security and upgrades 
to support mission-critical operations, of which up to 
$38,000,000 shall be transferred to, and merged with, funds 
made available under the heading ``Capital Investment Fund'' of 
the United States Agency for International Development: 
Provided, That the Secretary of State and the Administrator of 
the United States Agency for International Development shall 
coordinate information technology systems, where appropriate, 
to increase efficiencies and eliminate redundancies, to include 
co-location of backup information management facilities, and 
shall submit to the Committees on Appropriations within 90 days 
of enactment of this Act a detailed spending plan for funds 
appropriated under this heading.

                      office of inspector general

    For an additional amount for ``Office of Inspector 
General'' for oversight requirements, $2,000,000.

                       International Commissions

 INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO

                              CONSTRUCTION

                     (INCLUDING TRANSFER OF FUNDS)

    For an additional amount for ``Construction'' for the water 
quantity program to meet immediate repair and rehabilitation 
requirements, $220,000,000: Provided, That up to $2,000,000 may 
be transferred to, and merged with, funds available under the 
heading ``International Boundary and Water Commission, United 
States and Mexico--Salaries and Expenses'': Provided further, 
That the Secretary of State shall submit to the Committees on 
Appropriations within 90 days of enactment of this Act a 
detailed spending plan for funds appropriated under this 
heading.

   TITLE XII--TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND 
                            RELATED AGENCIES

                      DEPARTMENT OF TRANSPORTATION

                        Office of the Secretary

SUPPLEMENTAL DISCRETIONARY GRANTS FOR A NATIONAL SURFACE TRANSPORTATION 
                                 SYSTEM

    For an additional amount for capital investments in surface 
transportation infrastructure, $1,500,000,000, to remain 
available through September 30, 2011: Provided, That the 
Secretary of Transportation shall distribute funds provided 
under this heading as discretionary grants to be awarded to 
State and local governments or transit agencies on a 
competitive basis for projects that will have a significant 
impact on the Nation, a metropolitan area, or a region: 
Provided further, That projects eligible for funding provided 
under this heading shall include, but not be limited to, 
highway or bridge projects eligible under title 23, United 
States Code, including interstate rehabilitation, improvements 
to the rural collector road system, the reconstruction of 
overpasses and interchanges, bridge replacements, seismic 
retrofit projects for bridges, and road realignments; public 
transportation projects eligible under chapter 53 of title 49, 
United States Code, including investments in projects 
participating in the New Starts or Small Starts programs that 
will expedite the completion of those projects and their entry 
into revenue service; passenger and freight rail transportation 
projects; and port infrastructure investments, including 
projects that connect ports to other modes of transportation 
and improve the efficiency of freight movement: Provided 
further, That of the amount made available under this 
paragraph, the Secretary may use an amount not to exceed 
$200,000,000 for the purpose of paying the subsidy and 
administrative costs of projects eligible for federal credit 
assistance under chapter 6 of title 23, United States Code, if 
the Secretary finds that such use of the funds would advance 
the purposes of this paragraph: Provided further, That in 
distributing funds provided under this heading, the Secretary 
shall take such measures so as to ensure an equitable 
geographic distribution of funds and an appropriate balance in 
addressing the needs of urban and rural communities: Provided 
further, That a grant funded under this heading shall be not 
less than $20,000,000 and not greater than $300,000,000: 
Provided further, That the Secretary may waive the minimum 
grant size cited in the preceding proviso for the purpose of 
funding significant projects in smaller cities, regions, or 
States: Provided further, That not more than 20 percent of the 
funds made available under this paragraph may be awarded to 
projects in a single State: Provided further, That the Federal 
share of the costs for which an expenditure is made under this 
heading may be up to 100 percent: Provided further, That the 
Secretary shall give priority to projects that require a 
contribution of Federal funds in order to complete an overall 
financing package, and to projects that are expected to be 
completed within 3 years of enactment of this Act: Provided 
further, That the Secretary shall publish criteria on which to 
base the competition for any grants awarded under this heading 
not later than 90 days after enactment of this Act: Provided 
further, That the Secretary shall require applications for 
funding provided under this heading to be submitted not later 
than 180 days after the publication of such criteria, and 
announce all projects selected to be funded from such funds not 
later than 1 year after enactment of this Act: Provided 
further, That projects conducted using funds provided under 
this heading must comply with the requirements of subchapter IV 
of chapter 31 of title 40, United States Code: Provided 
further, That the Secretary may retain up to $1,500,000 of the 
funds provided under this heading, and may transfer portions of 
those funds to the Administrators of the Federal Highway 
Administration, the Federal Transit Administration, the Federal 
Railroad Administration and the Maritime Administration, to 
fund the award and oversight of grants made under this heading.

                    Federal Aviation Administration

           supplemental funding for facilities and equipment

    For an additional amount for necessary investments in 
Federal Aviation Administration infrastructure, $200,000,000, 
to remain available through September 30, 2010: Provided, That 
funding provided under this heading shall be used to make 
improvements to power systems, air route traffic control 
centers, air traffic control towers, terminal radar approach 
control facilities, and navigation and landing equipment: 
Provided further, That priority be given to such projects or 
activities that will be completed within 2 years of enactment 
of this Act: Provided further, That amounts made available 
under this heading may be provided through grants in addition 
to the other instruments authorized under section 106(l)(6) of 
title 49, United States Code: Provided further, That the 
Federal share of the costs for which an expenditure is made 
under this heading shall be 100 percent: Provided further, That 
amounts provided under this heading may be used for expenses 
the agency incurs in administering this program: Provided 
further, That not more than 60 days after enactment of this 
Act, the Administrator shall establish a process for applying, 
reviewing and awarding grants and cooperative and other 
transaction agreements, including the form and content of an 
application, and requirements for the maintenance of records 
that are necessary to facilitate an effective audit of the use 
of the funding provided: Provided further, That section 50101 
of title 49, United States Code, shall apply to funds provided 
under this heading.

                       GRANTS-IN-AID FOR AIRPORTS

    For an additional amount for ``Grants-In-Aid for 
Airports'', to enable the Secretary of Transportation to make 
grants for discretionary projects as authorized by subchapter 1 
of chapter 471 and subchapter 1 of chapter 475 of title 49, 
United States Code, and for the procurement, installation and 
commissioning of runway incursion prevention devices and 
systems at airports of such title, $1,100,000,000, to remain 
available through September 30, 2010: Provided, That such funds 
shall not be subject to apportionment formulas, special 
apportionment categories, or minimum percentages under chapter 
471: Provided further, That the Secretary shall distribute 
funds provided under this heading as discretionary grants to 
airports, with priority given to those projects that 
demonstrate to his satisfaction their ability to be completed 
within 2 years of enactment of this Act, and serve to 
supplement and not supplant planned expenditures from airport-
generated revenues or from other State and local sources on 
such activities: Provided further, That the Secretary shall 
award grants totaling not less than 50 percent of the funds 
made available under this heading within 120 days of enactment 
of this Act, and award grants for the remaining amounts not 
later than 1 year after enactment of this Act: Provided 
further, That the Federal share payable of the costs for which 
a grant is made under this heading shall be 100 percent: 
Provided further, That the amount made available under this 
heading shall not be subject to any limitation on obligations 
for the Grants-in-Aid for Airports program set forth in any 
Act: Provided further, That the Administrator of the Federal 
Aviation Administration may retain up to 0.2 percent of the 
funds provided under this heading to fund the award and 
oversight by the Administrator of grants made under this 
heading.

                     Federal Highway Administration

                   HIGHWAY INFRASTRUCTURE INVESTMENT

    For an additional amount for restoration, repair, 
construction and other activities eligible under paragraph (b) 
of section 133 of title 23, United States Code, and for 
passenger and freight rail transportation and port 
infrastructure projects eligible for assistance under 
subsection 601(a)(8) of such title, $27,500,000,000, to remain 
available through September 30, 2010: Provided, That, after 
making the set-asides required under this heading, 50 percent 
of the funds made available under this heading shall be 
apportioned to States using the formula set forth in section 
104(b)(3) of title 23, United States Code, and the remaining 
funds shall be apportioned to States in the same ratio as the 
obligation limitation for fiscal year 2008 was distributed 
among the States in accordance with the formula specified in 
section 120(a)(6) of division K of Public Law 110-161: Provided 
further, That funds made available under this heading shall be 
apportioned not later than 21 days after the date of enactment 
of this Act: Provided further, That in selecting projects to be 
carried out with funds apportioned under this heading, priority 
shall be given to projects that are projected for completion 
within a 3-year time frame, and are located in economically 
distressed areas as defined by section 301 of the Public Works 
and Economic Development Act of 1965, as amended (42 U.S.C. 
3161): Provided further, That 120 days following the date of 
such apportionment, the Secretary of Transportation shall 
withdraw from each State an amount equal to 50 percent of the 
funds awarded to that State (excluding funds suballocated 
within the State) less the amount of funding obligated 
(excluding funds suballocated within the State), and the 
Secretary shall redistribute such amounts to other States that 
have had no funds withdrawn under this proviso in the manner 
described in section 120(c) of division K of Public Law 110-
161: Provided further, That 1 year following the date of such 
apportionment, the Secretary shall withdraw from each recipient 
of funds apportioned under this heading any unobligated funds, 
and the Secretary shall redistribute such amounts to States 
that have had no funds withdrawn under this proviso (excluding 
funds suballocated within the State) in the manner described in 
section 120(c) of division K of Public Law 110-161: Provided 
further, That at the request of a State, the Secretary of 
Transportation may provide an extension of such 1-year period 
only to the extent that he feels satisfied that the State has 
encountered extreme conditions that create an unworkable 
bidding environment or other extenuating circumstances: 
Provided further, That before granting such an extension, the 
Secretary shall send a letter to the House and Senate 
Committees on Appropriations that provides a thorough 
justification for the extension: Provided further, That 3 
percent of the funds apportioned to a State under this heading 
shall be set aside for the purposes described in subsection 
133(d)(2) of title 23, United States Code (without regard to 
the comparison to fiscal year 2005): Provided further, That 30 
percent of the funds apportioned to a State under this heading 
shall be suballocated within the State in the manner and for 
the purposes described in the first sentence of subsection 
133(d)(3)(A), in subsection 133(d)(3)(B), and in subsection 
133(d)(3)(D): Provided further, That such suballocation shall 
be conducted in every State: Provided further, That funds 
suballocated within a State to urbanized areas and other areas 
shall not be subject to the redistribution of amounts required 
120 days following the date of apportionment of funds provided 
under this heading: Provided further, That of the funds 
provided under this heading, $105,000,000 shall be for the 
Puerto Rico highway program authorized under section 165 of 
title 23, United States Code, and $45,000,000 shall be for the 
territorial highway program authorized under section 215 of 
title 23, United States Code: Provided further, That of the 
funds provided under this heading, $60,000,000 shall be for 
capital expenditures eligible under section 147 of title 23, 
United States Code (without regard to subsection(d)): Provided 
further, That the Secretary of Transportation shall distribute 
such $60,000,000 as competitive discretionary grants to States, 
with priority given to those projects that demonstrate to his 
satisfaction their ability to be completed within 2 years of 
enactment of this Act: Provided further, That of the funds 
provided under this heading, $550,000,000 shall be for 
investments in transportation at Indian reservations and 
Federal lands: Provided further, That of the funds identified 
in the preceding proviso, $310,000,000 shall be for the Indian 
Reservation Roads program, $170,000,000 shall be for the Park 
Roads and Parkways program, $60,000,000 shall be for the Forest 
Highway Program, and $10,000,000 shall be for the Refuge Roads 
program: Provided further, That for investments at Indian 
reservations and Federal lands, priority shall be given to 
capital investments, and to projects and activities that can be 
completed within 2 years of enactment of this Act: Provided 
further, That 1 year following the enactment of this Act, to 
ensure the prompt use of the $550,000,000 provided for 
investments at Indian reservations and Federal lands, the 
Secretary shall have the authority to redistribute unobligated 
funds within the respective program for which the funds were 
appropriated: Provided further, That up to 4 percent of the 
funding provided for Indian Reservation Roads may be used by 
the Secretary of the Interior for program management and 
oversight and project-related administrative expenses: Provided 
further, That section 134(f)(3)(C)(ii)(II) of title 23, United 
States Code, shall not apply to funds provided under this 
heading: Provided further, That of the funds made available 
under this heading, $20,000,000 shall be for highway surface 
transportation and technology training under section 140(b) of 
title 23, United States Code, and $20,000,000 shall be for 
disadvantaged business enterprises bonding assistance under 
section 332(e) of title 49, United States Code: Provided 
further, That funds made available under this heading shall be 
administered as if apportioned under chapter 1 of title 23, 
United States Code, except for funds made available for 
investments in transportation at Indian reservations and 
Federal lands, and for the territorial highway program, which 
shall be administered in accordance with chapter 2 of title 23, 
United States Code, and except for funds made available for 
disadvantaged business enterprises bonding assistance, which 
shall be administered in accordance with chapter 3 of title 49, 
United States Code: Provided further, That the Federal share 
payable on account of any project or activity carried out with 
funds made available under this heading shall be, at the option 
of the recipient, up to 100 percent of the total cost thereof: 
Provided further, That funds made available by this Act shall 
not be obligated for the purposes authorized under section 
115(b) of title 23, United States Code: Provided further, That 
funding provided under this heading shall be in addition to any 
and all funds provided for fiscal years 2009 and 2010 in any 
other Act for ``Federal-aid Highways'' and shall not affect the 
distribution of funds provided for ``Federal-aid Highways'' in 
any other Act: Provided further, That the amount made available 
under this heading shall not be subject to any limitation on 
obligations for Federal-aid highways or highway safety 
construction programs set forth in any Act: Provided further, 
That section 1101(b) of Public Law 109-59 shall apply to funds 
apportioned under this heading: Provided further, That the 
Administrator of the Federal Highway Administration may retain 
up to $40,000,000 of the funds provided under this heading to 
fund the oversight by the Administrator of projects and 
activities carried out with funds made available to the Federal 
Highway Administration in this Act and such funds shall be 
available through September 30, 2012.

                    Federal Railroad Administration

    CAPITAL ASSISTANCE FOR HIGH SPEED RAIL CORRIDORS AND INTERCITY 
                         PASSENGER RAIL SERVICE

    For an additional amount for section 501 of Public Law 110-
432 and discretionary grants to States to pay for the cost of 
projects described in paragraphs (2)(A) and (2)(B) of section 
24401 of title 49, United States Code, subsection (b) of 
section 24105 of such title, $8,000,000,000, to remain 
available through September 30, 2012: Provided, That the 
Secretary of Transportation shall give priority to projects 
that support the development of intercity high speed rail 
service: Provided further, That within 60 days of the enactment 
of this Act, the Secretary shall submit to the House and Senate 
Committees on Appropriations a strategic plan that describes 
how the Secretary will use the funding provided under this 
heading to improve and deploy high speed passenger rail 
systems: Provided further, That within 120 days of enactment of 
this Act, the Secretary shall issue interim guidance to 
applicants covering grant terms, conditions, and procedures 
until final regulations are issued: Provided further, That such 
interim guidance shall provide separate instructions for the 
high speed rail corridor program, capital assistance for 
intercity passenger rail service grants, and congestion grants: 
Provided further, That the Secretary shall waive the 
requirement that a project conducted using funds provided under 
this heading be in a State rail plan developed under chapter 
227 of title 49, United States Code: Provided further, That the 
Federal share payable of the costs for which a grant is made 
under this heading shall be, at the option of the recipient, up 
to 100 percent: Provided further, That projects conducted using 
funds provided under this heading must comply with the 
requirements of subchapter IV of chapter 31 of title 40, United 
States Code: Provided further, That section 24405 of title 49, 
United States Code, shall apply to funds provided under this 
heading: Provided further, That the Administrator of the 
Federal Railroad Administration may retain up to one-quarter of 
1 percent of the funds provided under this heading to fund the 
award and oversight by the Administrator of grants made under 
this heading, and funds retained for said purposes shall remain 
available through September 30, 2014.

     CAPITAL GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

    For an additional amount for the National Railroad 
Passenger Corporation (Amtrak) to enable the Secretary of 
Transportation to make capital grants to Amtrak as authorized 
by section 101(c) of the Passenger Rail Investment and 
Improvement Act of 2008 (Public Law 110-432), $1,300,000,000, 
to remain available through September 30, 2010, of which 
$450,000,000 shall be used for capital security grants: 
Provided, That priority for the use of non-security funds shall 
be given to projects for the repair, rehabilitation, or upgrade 
of railroad assets or infrastructure, and for capital projects 
that expand passenger rail capacity including the 
rehabilitation of rolling stock: Provided further, That none of 
the funds under this heading shall be used to subsidize the 
operating losses of Amtrak: Provided further, That funds 
provided under this heading shall be awarded not later than 30 
days after the date of enactment of this Act: Provided further, 
That the Secretary shall take measures to ensure that projects 
funded under this heading shall be completed within 2 years of 
enactment of this Act, and shall serve to supplement and not 
supplant planned expenditures for such activities from other 
Federal, State, local and corporate sources: Provided further, 
That the Secretary shall certify to the House and Senate 
Committees on Appropriations in writing compliance with the 
preceding proviso: Provided further, That not more than 60 
percent of the funds provided for non-security activities under 
this heading may be used for capital projects along the 
Northeast Corridor: Provided further, That of the funding 
provided under this heading, $5,000,000 shall be made available 
for the Amtrak Office of Inspector General and made available 
through September 30, 2013.

                     Federal Transit Administration

                       TRANSIT CAPITAL ASSISTANCE

    For an additional amount for transit capital assistance 
grants authorized under section 5302(a)(1) of title 49, United 
States Code, $6,900,000,000, to remain available through 
September 30, 2010: Provided, That the Secretary of 
Transportation shall provide 80 percent of the funds 
appropriated under this heading for grants under section 5307 
of title 49, United States Code, and apportion such funds in 
accordance with section 5336 of such title (other than 
subsections (i)(1) and (j)): Provided further, That the 
Secretary shall apportion 10 percent of the funds appropriated 
under this heading in accordance with section 5340 of such 
title: Provided further, That the Secretary shall provide 10 
percent of the funds appropriated under this heading for grants 
under section 5311 of title 49, United States Code, and 
apportion such funds in accordance with such section: Provided 
further, That funds apportioned under this heading shall be 
apportioned not later than 21 days after the date of enactment 
of this Act: Provided further, That 180 days following the date 
of such apportionment, the Secretary shall withdraw from each 
urbanized area or State an amount equal to 50 percent of the 
funds apportioned to such urbanized areas or States less the 
amount of funding obligated, and the Secretary shall 
redistribute such amounts to other urbanized areas or States 
that have had no funds withdrawn under this proviso utilizing 
whatever method he deems appropriate to ensure that all funds 
redistributed under this proviso shall be utilized promptly: 
Provided further, That 1 year following the date of such 
apportionment, the Secretary shall withdraw from each urbanized 
area or State any unobligated funds, and the Secretary shall 
redistribute such amounts to other urbanized areas or States 
that have had no funds withdrawn under this proviso utilizing 
whatever method he deems appropriate to ensure that all funds 
redistributed under this proviso shall be utilized promptly: 
Provided further, That at the request of an urbanized area or 
State, the Secretary of Transportation may provide an extension 
of such 1-year period if he feels satisfied that the urbanized 
area or State has encountered an unworkable bidding environment 
or other extenuating circumstances: Provided further, That 
before granting such an extension, the Secretary shall send a 
letter to the House and Senate Committees on Appropriations 
that provides a thorough justification for the extension: 
Provided further, That of the funds provided for section 5311 
of title 49, United States Code, 2.5 percent shall be made 
available for section 5311(c)(1): Provided further, That of the 
funding provided under this heading, $100,000,000 shall be 
distributed as discretionary grants to public transit agencies 
for capital investments that will assist in reducing the energy 
consumption or greenhouse gas emissions of their public 
transportation systems: Provided further, That for such grants 
on energy-related investments, priority shall be given to 
projects based on the total energy savings that are projected 
to result from the investment, and projected energy savings as 
a percentage of the total energy usage of the public transit 
agency: Provided further, That applicable chapter 53 
requirements shall apply to funding provided under this 
heading, except that the Federal share of the costs for which 
any grant is made under this heading shall be, at the option of 
the recipient, up to 100 percent: Provided further, That the 
amount made available under this heading shall not be subject 
to any limitation on obligations for transit programs set forth 
in any Act: Provided further, That section 1101(b) of Public 
Law 109-59 shall apply to funds appropriated under this 
heading: Provided further, That the funds appropriated under 
this heading shall not be commingled with any prior year funds: 
Provided further, That notwithstanding any other provision of 
law, three-quarters of 1 percent of the funds provided for 
grants under section 5307 and section 5340, and one-half of 1 
percent of the funds provided for grants under section 5311, 
shall be available for administrative expenses and program 
management oversight, and such funds shall be available through 
September 30, 2012.

                fixed guideway infrastructure investment

    For an amount for capital expenditures authorized under 
section 5309(b)(2) of title 49, United States Code, 
$750,000,000, to remain available through September 30, 2010: 
Provided, That the Secretary of Transportation shall apportion 
funds under this heading pursuant to the formula set forth in 
section 5337 of title 49, United States Code: Provided further, 
That the funds appropriated under this heading shall not be 
commingled with any prior year funds: Provided further, That 
funds made available under this heading shall be apportioned 
not later than 21 days after the date of enactment of this Act: 
Provided further, That 180 days following the date of such 
apportionment, the Secretary shall withdraw from each urbanized 
area an amount equal to 50 percent of the funds apportioned to 
such urbanized area less the amount of funding obligated, and 
the Secretary shall redistribute such amounts to other 
urbanized areas that have had no funds withdrawn under this 
proviso utilizing whatever method he or she deems appropriate 
to ensure that all funds redistributed under this proviso shall 
be utilized promptly: Provided further, That 1 year following 
the date of such apportionment, the Secretary shall withdraw 
from each urbanized area any unobligated funds, and the 
Secretary shall redistribute such amounts to other urbanized 
areas that have had no funds withdrawn under this proviso 
utilizing whatever method he or she deems appropriate to ensure 
that all funds redistributed under this proviso shall be 
utilized promptly: Provided further, That at the request of an 
urbanized area, the Secretary of Transportation may provide an 
extension of such 1-year period if he or she feels satisfied 
that the urbanized area has encountered an unworkable bidding 
environment or other extenuating circumstances: Provided 
further, That before granting such an extension, the Secretary 
shall send a letter to the House and Senate Committees on 
Appropriations that provides a thorough justification for the 
extension: Provided further, That applicable chapter 53 
requirements shall apply except that the Federal share of the 
costs for which a grant is made under this heading shall be, at 
the option of the recipient, up to 100 percent: Provided 
further, That the provisions of section 1101(b) of Public Law 
109-59 shall apply to funds made available under this heading: 
Provided further, That notwithstanding any other provision of 
law, up to 1 percent of the funds under this heading shall be 
available for administrative expenses and program management 
oversight and shall remain available for obligation until 
September 30, 2012.

                       CAPITAL INVESTMENT GRANTS

     For an additional amount for ``Capital Investment 
Grants'', as authorized under section 5338(c)(4) of title 49, 
United States Code, and allocated under section 5309(m)(2)(A) 
of such title, to enable the Secretary of Transportation to 
make discretionary grants as authorized by section 5309(d) and 
(e) of such title, $750,000,000, to remain available through 
September 30, 2010: Provided, That such amount shall be 
allocated without regard to the limitation under section 
5309(m)(2)(A)(i): Provided further, That in selecting projects 
to be funded, priority shall be given to projects that are 
currently in construction or are able to obligate funds within 
150 days of enactment of this Act: Provided further, That the 
provisions of section 1101(b) of Public Law 109-59 shall apply 
to funds made available under this heading: Provided further, 
That funds appropriated under this heading shall not be 
commingled with any prior year funds: Provided further, That 
applicable chapter 53 requirements shall apply, except that 
notwithstanding any other provision of law, up to 1 percent of 
the funds provided under this heading shall be available for 
administrative expenses and program management oversight, and 
shall remain available through September 30, 2012.

                        Maritime Administration

         SUPPLEMENTAL GRANTS FOR ASSISTANCE TO SMALL SHIPYARDS

    To make grants to qualified shipyards as authorized under 
section 3508 of Public Law 110-417 or section 54101 of title 
46, United States Code, $100,000,000, to remain available 
through September 30, 2010: Provided, That the Secretary of 
Transportation shall institute measures to ensure that funds 
provided under this heading shall be obligated within 180 days 
of the date of their distribution: Provided further, That the 
Maritime Administrator may retain and transfer to ``Maritime 
Administration, Operations and Training'' up to 2 percent of 
the funds provided under this heading to fund the award and 
oversight by the Administrator of grants made under this 
heading.

                      Office of Inspector General

                         SALARIES AND EXPENSES

    For an additional amount for necessary expenses of the 
Office of Inspector General to carry out the provisions of the 
Inspector General Act of 1978, as amended, $20,000,000, to 
remain available through September 30, 2013: Provided, That the 
funding made available under this heading shall be used for 
conducting audits and investigations of projects and activities 
carried out with funds made available in this Act to the 
Department of Transportation: Provided further, That the 
Inspector General shall have all necessary authority, in 
carrying out the duties specified in the Inspector General Act, 
as amended (5 U.S.C. App. 3), to investigate allegations of 
fraud, including false statements to the Government (18 U.S.C. 
1001), by any person or entity that is subject to regulation by 
the Department.

            GENERAL PROVISION--DEPARTMENT OF TRANSPORTATION

    Sec. 1201. (a) Maintenance of Effort.--Not later than 30 
days after the date of enactment of this Act, for each amount 
that is distributed to a State or agency thereof from an 
appropriation in this Act for a covered program, the Governor 
of the State shall certify to the Secretary of Transportation 
that the State will maintain its effort with regard to State 
funding for the types of projects that are funded by the 
appropriation. As part of this certification, the Governor 
shall submit to the Secretary of Transportation a statement 
identifying the amount of funds the State planned to expend 
from State sources as of the date of enactment of this Act 
during the period beginning on the date of enactment of this 
Act through September 30, 2010, for the types of projects that 
are funded by the appropriation.
    (b) Failure To Maintain Effort.--If a State is unable to 
maintain the level of effort certified pursuant to subsection 
(a), the State will be prohibited by the Secretary of 
Transportation from receiving additional limitation pursuant to 
the redistribution of the limitation on obligations for 
Federal-aid highway and highway safety construction programs 
that occurs after August 1 for fiscal year 2011.
    (c) Periodic Reports.--
            (1) In general.--Notwithstanding any other 
        provision of law, each grant recipient shall submit to 
        the covered agency from which they received funding 
        periodic reports on the use of the funds appropriated 
        in this Act for covered programs. Such reports shall be 
        collected and compiled by the covered agency and 
        transmitted to Congress. Covered agencies may develop 
        such reports on behalf of grant recipients to ensure 
        the accuracy and consistency of such reports.
            (2) Contents of reports.--For amounts received 
        under each covered program by a grant recipient under 
        this Act, the grant recipient shall include in the 
        periodic reports information tracking--
                    (A) the amount of Federal funds 
                appropriated, allocated, obligated, and 
                outlayed under the appropriation;
                    (B) the number of projects that have been 
                put out to bid under the appropriation and the 
                amount of Federal funds associated with such 
                projects;
                    (C) the number of projects for which 
                contracts have been awarded under the 
                appropriation and the amount of Federal funds 
                associated with such contracts;
                    (D) the number of projects for which work 
                has begun under such contracts and the amount 
                of Federal funds associated with such 
                contracts;
                    (E) the number of projects for which work 
                has been completed under such contracts and the 
                amount of Federal funds associated with such 
                contracts;
                    (F) the number of direct, on-project jobs 
                created or sustained by the Federal funds 
                provided for projects under the appropriation 
                and, to the extent possible, the estimated 
                indirect jobs created or sustained in the 
                associated supplying industries, including the 
                number of job-years created and the total 
                increase in employment since the date of 
                enactment of this Act; and
                    (G) for each covered program report 
                information tracking the actual aggregate 
                expenditures by each grant recipient from State 
                sources for projects eligible for funding under 
                the program during the period beginning on the 
                date of enactment of this Act through September 
                30, 2010, as compared to the level of such 
                expenditures that were planned to occur during 
                such period as of the date of enactment of this 
                Act.
            (3) Timing of reports.--Each grant recipient shall 
        submit the first of the periodic reports required under 
        this subsection not later than 90 days after the date 
        of enactment of this Act and shall submit updated 
        reports not later than 180 days, 1 year, 2 years, and 3 
        years after such date of enactment.
    (d) Definitions.--In this section, the following 
definitions apply:
            (1) Covered agency.--The term ``covered agency'' 
        means the Office of the Secretary of Transportation, 
        the Federal Aviation Administration, the Federal 
        Highway Administration, the Federal Railroad 
        Administration, the Federal Transit Administration and 
        the Maritime Administration of the Department of 
        Transportation.
            (2) Covered program.--The term ``covered program'' 
        means funds appropriated in this Act for ``Supplemental 
        Discretionary Grants for a National Surface 
        Transportation System'' to the Office of the Secretary 
        of Transportation, for ``Supplemental Funding for 
        Facilities and Equipment'' and ``Grants-in-Aid for 
        Airports'' to the Federal Aviation Administration; for 
        ``Highway Infrastructure Investment'' to the Federal 
        Highway Administration; for ``Capital Assistance for 
        High Speed Rail Corridors and Intercity Passenger Rail 
        Service'' and ``Capital Grants to the National Railroad 
        Passenger Corporation'' to the Federal Railroad 
        Administration; for ``Transit Capital Assistance'', 
        ``Fixed Guideway Infrastructure Investment'', and 
        ``Capital Investment Grants'' to the Federal Transit 
        Administration; and ``Supplemental Grants for 
        Assistance to Small Shipyards'' to the Maritime 
        Administration.
            (3) Grant recipient.--The term ``grant recipient'' 
        means a State or other recipient of assistance provided 
        under a covered program in this Act. Such term does not 
        include a Federal department or agency.
    (e) Notwithstanding any other provision of law, sections 
3501-3521 of title 44, United States Code, shall not apply to 
the provisions of this section.

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                       Public and Indian Housing

                      PUBLIC HOUSING CAPITAL FUND

    For an additional amount for the ``Public Housing Capital 
Fund'' to carry out capital and management activities for 
public housing agencies, as authorized under section 9 of the 
United States Housing Act of 1937 (42 U.S.C. 1437g) (the 
``Act''), $4,000,000,000, to remain available until September 
30, 2011: Provided, That the Secretary of Housing and Urban 
Development shall distribute $3,000,000,000 of this amount by 
the same formula used for amounts made available in fiscal year 
2008, except that the Secretary may determine not to allocate 
funding to public housing agencies currently designated as 
troubled or to public housing agencies that elect not to accept 
such funding: Provided further, That the Secretary shall 
obligate funds allocated by formula within 30 days of enactment 
of this Act: Provided further, That the Secretary shall make 
available $1,000,000,000 by competition for priority 
investments, including investments that leverage private sector 
funding or financing for renovations and energy conservation 
retrofit investments: Provided further, That the Secretary 
shall obligate competitive funding by September 30, 2009: 
Provided further, That public housing authorities shall give 
priority to capital projects that can award contracts based on 
bids within 120 days from the date the funds are made available 
to the public housing authorities: Provided further, That 
public housing agencies shall give priority consideration to 
the rehabilitation of vacant rental units: Provided further, 
That public housing agencies shall prioritize capital projects 
that are already underway or included in the 5-year capital 
fund plans required by the Act (42 U.S.C. 1437c-1(a)): Provided 
further, That notwithstanding any other provision of law, (1) 
funding provided under this heading may not be used for 
operating or rental assistance activities, and (2) any 
restriction of funding to replacement housing uses shall be 
inapplicable: Provided further, That notwithstanding any other 
provision of law, the Secretary shall institute measures to 
ensure that funds provided under this heading shall serve to 
supplement and not supplant expenditures from other Federal, 
State, or local sources or funds independently generated by the 
grantee: Provided further, That notwithstanding section 9(j), 
public housing agencies shall obligate 100 percent of the funds 
within 1 year of the date on which funds become available to 
the agency for obligation, shall expend at least 60 percent of 
funds within 2 years of the date on which funds become 
available to the agency for obligation, and shall expend 100 
percent of the funds within 3 years of such date: Provided 
further, That if a public housing agency fails to comply with 
the 1-year obligation requirement, the Secretary shall 
recapture all remaining unobligated funds awarded to the public 
housing agency and reallocate such funds to agencies that are 
in compliance with those requirements: Provided further, That 
if a public housing agency fails to comply with either the 2-
year or the 3-year expenditure requirement, the Secretary shall 
recapture the balance of the funds awarded to the public 
housing agency and reallocate such funds to agencies that are 
in compliance with those requirements: Provided further, That 
in administering funds appropriated or otherwise made available 
under this heading, the Secretary may waive or specify 
alternative requirements for any provision of any statute or 
regulation in connection with the obligation by the Secretary 
or the use of these funds (except for requirements related to 
fair housing, nondiscrimination, labor standards, and the 
environment), upon a finding that such a waiver is necessary to 
expedite or facilitate the use of such funds: Provided further, 
That, in addition to waivers authorized under the previous 
proviso, the Secretary may direct that requirements relating to 
the procurement of goods and services arising under state and 
local laws and regulations shall not apply to amounts made 
available under this heading: Provided further, That of the 
funds made available under this heading, up to .5 percent shall 
be available for staffing, training, technical assistance, 
technology, monitoring, travel, enforcement, research and 
evaluation activities: Provided further, That funds set aside 
in the previous proviso shall remain available until September 
30, 2012: Provided further, That any funds made available under 
this heading used by the Secretary for personnel expenses 
related to administering funding under this heading shall be 
transferred to ``Personnel Compensation and Benefits, Office of 
Public and Indian Housing'' and shall retain the terms and 
conditions of this account, including reprogramming provisions, 
except that the period of availability set forth in the 
previous proviso shall govern such transferred funds: Provided 
further, That any funds made available under this heading used 
by the Secretary for training or other administrative expenses 
shall be transferred to ``Administration, Operations, and 
Management'', for non-personnel expenses of the Department of 
Housing and Urban Development: Provided further, That any funds 
made available under this heading used by the Secretary for 
technology shall be transferred to ``Working Capital Fund''.

                  Native American Housing Block Grants

    For an additional amount for ``Native American Housing 
Block Grants'', as authorized under title I of the Native 
American Housing Assistance and Self-Determination Act of 1996 
(``NAHASDA'') (25 U.S.C. 4111 et seq.), $510,000,000 to remain 
available until September 30, 2011: Provided, That $255,000,000 
of the amount provided under this heading shall be distributed 
according to the same funding formula used in fiscal year 2008: 
Provided further, That the Secretary shall obligate funds 
allocated by formula within 30 days of enactment of this Act: 
Provided further, That the amounts distributed through the 
formula shall be used for new construction, acquisition, 
rehabilitation including energy efficiency and conservation, 
and infrastructure development: Provided further, That in 
selecting projects to be funded, recipients shall give priority 
to projects for which contracts can be awarded within 180 days 
from the date that funds are available to the recipients: 
Provided further, that the Secretary may obligate $255,000,000 
of the amount provided under this heading for competitive 
grants to eligible entities that apply for funds authorized 
under NAHASDA: Provided further, That the Secretary shall 
obligate competitive funding by September 30, 2009: Provided 
further, That in awarding competitive funds, the Secretary 
shall give priority to projects that will spur construction and 
rehabilitation and will create employment opportunities for 
low-income and unemployed persons: Provided further, That 
recipients of funds under this heading shall obligate 100 
percent of such funds within 1 year of the date funds are made 
available to a recipient, expend at least 50 percent of such 
funds within 2 years of the date on which funds become 
available to such recipients for obligation and expend 100 
percent of such funds within 3 years of such date: Provided 
further, That if a recipient fails to comply with the 2-year 
expenditure requirement, the Secretary shall recapture all 
remaining funds awarded to the recipient and reallocate such 
funds through the funding formula to recipients that are in 
compliance with these requirements: Provided further, That if a 
recipient fails to comply with the 3-year expenditure 
requirement, the Secretary shall recapture the balance of the 
funds originally awarded to the recipient: Provided further, 
That notwithstanding any other provision of law, the Secretary 
may set aside up to 2 percent of funds made available under 
this paragraph for a housing entity eligible to receive funding 
under title VIII of NAHASDA (25 U.S.C. 4221 et seq.): Provided 
further, That in administering funds appropriated or otherwise 
made available under this heading, the Secretary may waive or 
specify alternative requirements for any provision of any 
statute or regulation in connection with the obligation by the 
Secretary or the use of these funds (except for requirements 
related to fair housing, nondiscrimination, labor standards, 
and the environment), upon a finding that such a waiver is 
necessary to expedite or facilitate the use of such funds: 
Provided further, That of the funds made available under this 
heading, up to .5 percent shall be available for staffing, 
training, technical assistance, technology, monitoring, travel, 
enforcement, research and evaluation activities: Provided 
further, That funds set aside in the previous proviso shall 
remain available until September 30, 2012: Provided further, 
That any funds made available under this heading used by the 
Secretary for personnel expenses related to administering 
funding under this heading shall be transferred to ``Personnel 
Compensation and Benefits, Office of Public and Indian 
Housing'' and shall retain the terms and conditions of this 
account, including reprogramming provisions, except that the 
period of availability set forth in the previous proviso shall 
govern such transferred funds: Provided further, That any funds 
made available under this heading used by the Secretary for 
training or other administrative expenses shall be transferred 
to ``Administration, Operations, and Management'', for non-
personnel expenses of the Department of Housing and Urban 
Development: Provided further, That any funds made available 
under this heading used by the Secretary for technology shall 
be transferred to ``Working Capital Fund''.

                   Community Planning and Development

                       COMMUNITY DEVELOPMENT FUND

    For an additional amount for ``Community Development Fund'' 
$1,000,000,000, to remain available until September 30, 2010 to 
carry out the community development block grant program under 
title I of the Housing and Community Development Act of 1974 
(42 U.S.C. 5301 et seq.): Provided, That the amount 
appropriated in this paragraph shall be distributed pursuant to 
42 U.S.C. 5306 to grantees that received funding in fiscal year 
2008: Provided further, That in administering the funds 
appropriated in this paragraph, the Secretary of Housing and 
Urban Development shall establish requirements to expedite the 
use of the funds: Provided further, That in selecting projects 
to be funded, recipients shall give priority to projects that 
can award contracts based on bids within 120 days from the date 
the funds are made available to the recipients: Provided 
further, That in administering funds appropriated or otherwise 
made available under this heading, the Secretary may waive or 
specify alternative requirements for any provision of any 
statute or regulation in connection with the obligation by the 
Secretary or the use by the recipient of these funds (except 
for requirements related to fair housing, nondiscrimination, 
labor standards, and the environment), upon a finding that such 
waiver is necessary to expedite or facilitate the timely use of 
such funds and would not be inconsistent with the overall 
purpose of the statute.
    For the provision of emergency assistance for the 
redevelopment of abandoned and foreclosed homes, as authorized 
under division B, title III of the Housing and Economic 
Recovery Act of 2008 (``the Act'') (Public Law 110-289) (42 
U.S.C. 5301 note), $2,000,000,000, to remain available until 
September 30, 2010: Provided, That grantees shall expend at 
least 50 percent of allocated funds within 2 years of the date 
funds become available to the grantee for obligation, and 100 
percent of such funds within 3 years of such date: Provided 
further, That unless otherwise noted herein, the provisions of 
the Act govern the use of the additional funds made available 
under this heading: Provided further, That notwithstanding the 
provisions of sections 2301(b) and (c)(1) and section 2302 of 
the Act, funding under this paragraph shall be allocated by 
competitions for which eligible entities shall be States, units 
of general local government, and nonprofit entities or 
consortia of nonprofit entities, which may submit proposals in 
partnership with for profit entities: Provided further, That in 
selecting grantees, the Secretary of Housing and Urban 
Development shall ensure that the grantees are in areas with 
the greatest number and percentage of foreclosures and can 
expend funding within the period allowed under this heading: 
Provided further, That additional award criteria for such 
competitions shall include demonstrated grantee capacity to 
execute projects, leveraging potential, concentration of 
investment to achieve neighborhood stabilization, and any 
additional factors determined by the Secretary of Housing and 
Urban Development: Provided further, That the Secretary may 
establish a minimum grant size: Provided further, That the 
Secretary shall publish criteria on which to base competition 
for any grants awarded under this heading not later than 75 
days after the enactment of this Act and applications shall be 
due to HUD not later than 150 days after the enactment of this 
Act: Provided further, That the Secretary shall obligate all 
funding within 1 year of enactment of this Act: Provided 
further, That section 2301(d)(4) of the Act is repealed: 
Provided further, That section 2301(c)(3)(C) of the Act is 
amended to read ``establish and operate land banks for homes 
and residential properties that have been foreclosed upon'': 
Provided further, That funding used for section 2301(c)(3)(E) 
of the Act shall be available only for the redevelopment of 
demolished or vacant properties as housing: Provided further, 
That no amounts made available from a grant under this heading 
may be used to demolish any public housing (as such term is 
defined in section 3 of the United States Housing Act of 1937 
(42 U.S.C. 1437a)): Provided further, That a grantee may not 
use more than 10 percent of its grant under this heading for 
demolition activities under section 2301(c)(3)(C) and (D) 
unless the Secretary determines that such use represents an 
appropriate response to local market conditions: Provided 
further, That the recipient of any grant or loan from amounts 
made available under this heading or, after the date of 
enactment under division B, title III of the Housing and 
Economic Recovery Act of 2008, may not refuse to lease a 
dwelling unit in housing with such loan or grant to a 
participant under section 8 of the United States Housing Act of 
1937 (42 U.S.C. 1437f) because of the status of the prospective 
tenant as such a participant: Provided further, That in 
addition to the eligible uses in section 2301, the Secretary 
may also use up to 10 percent of the funds provided under this 
heading for grantees for the provision of capacity building of 
and support for local communities receiving funding under 
section 2301 of the Act or under this heading: Provided 
further, That in administering funds appropriated or otherwise 
made available under this section, the Secretary may waive or 
specify alternative requirements for any provision of any 
statute or regulation in connection with the obligation by the 
Secretary or the use of funds except for requirements related 
to fair housing, nondiscrimination, labor standards and the 
environment, upon a finding that such a waiver is necessary to 
expedite or facilitate the use of such funds: Provided further, 
That in the case of any acquisition of a foreclosed upon 
dwelling or residential real property acquired after the date 
of enactment with any amounts made available under this heading 
or under division B, title III of the Housing and Economic 
Recovery Act of 2008 (Public Law 110-289), the initial 
successor in interest in such property pursuant to the 
foreclosure shall assume such interest subject to: (1) the 
provision by such successor in interest of a notice to vacate 
to any bona fide tenant at least 90 days before the effective 
date of such notice; and (2) the rights of any bona fide 
tenant, as of the date of such notice of foreclosure: (A) under 
any bona fide lease entered into before the notice of 
foreclosure to occupy the premises until the end of the 
remaining term of the lease, except that a successor in 
interest may terminate a lease effective on the date of sale of 
the unit to a purchaser who will occupy the unit as a primary 
residence, subject to the receipt by the tenant of the 90-day 
notice under this paragraph; or (B) without a lease or with a 
lease terminable at will under State law, subject to the 
receipt by the tenant of the 90-day notice under this 
paragraph, except that nothing in this paragraph shall affect 
the requirements for termination of any Federal- or State-
subsidized tenancy or of any State or local law that provides 
longer time periods or other additional protections for 
tenants: Provided further, That, for purposes of this 
paragraph, a lease or tenancy shall be considered bona fide 
only if: (1) the mortgagor under the contract is not the 
tenant; (2) the lease or tenancy was the result of an arms-
length transaction; and (3) the lease or tenancy requires the 
receipt of rent that is not substantially less than fair market 
rent for the property: Provided further, That the recipient of 
any grant or loan from amounts made available under this 
heading or, after the date of enactment, under division B, 
title III of the Housing and Economic Recovery Act of 2008 
(Public Law 110-289) may not refuse to lease a dwelling unit in 
housing assisted with such loan or grant to a holder of a 
voucher or certificate of eligibility under section 8 of the 
United States Housing Act of 1937 (42 U.S.C. 1437f) because of 
the status of the prospective tenant as such a holder: Provided 
further, That in the case of any qualified foreclosed housing 
for which funds made available under this heading or, after the 
date of enactment, under division B, title III of the Housing 
and Economic Recovery Act of 2008 (Public Law 110-289) are used 
and in which a recipient of assistance under section 8(o) of 
the U.S. Housing Act of 1937 resides at the time of 
foreclosure, the initial successor in interest shall be subject 
to the lease and to the housing assistance payments contract 
for the occupied unit: Provided further, That vacating the 
property prior to sale shall not constitute good cause for 
termination of the tenancy unless the property is unmarketable 
while occupied or unless the owner or subsequent purchaser 
desires the unit for personal or family use: Provided further, 
That if a public housing agency is unable to make payments 
under the contract to the immediate successor in interest after 
foreclosures, due to (1) an action or inaction by the successor 
in interest, including the rejection of payments or the failure 
of the successor to maintain the unit in compliance with 
section 8(o)(8) of the United States Housing Act of 1937 (42 
U.S.C.1437f) or (2) an inability to identify the successor, the 
agency may use funds that would have been used to pay the 
rental amount on behalf of the family--(i) to pay for utilities 
that are the responsibility of the owner under the lease or 
applicable law, after taking reasonable steps to notify the 
owner that it intends to make payments to a utility provider in 
lieu of payments to the owner, except prior notification shall 
not be required in any case in which the unit will be or has 
been rendered uninhabitable due to the termination or threat of 
termination of service, in which case the public housing agency 
shall notify the owner within a reasonable time after making 
such payment; or (ii) for the family's reasonable moving costs, 
including security deposit costs: Provided further, That this 
paragraph shall not preempt any Federal, State or local law 
that provides more protections for tenants: Provided further, 
That of the funds made available under this heading, up to 1 
percent shall be available for staffing, training, technical 
assistance, technology, monitoring, travel, enforcement, 
research and evaluation activities: Provided further, That 
funds set aside in the previous proviso shall remain available 
until September 30, 2012: Provided further, That any funds made 
available under this heading used by the Secretary for 
personnel expenses related to administering funding under this 
heading shall be transferred to ``Personnel Compensation and 
Benefits, Community Planning and Development'' and shall retain 
the terms and conditions of this account, including 
reprogramming provisions, except that the period of 
availability set forth in the previous proviso shall govern 
such transferred funds: Provided further, That any funds made 
available under this heading used by the Secretary for training 
or other administrative expenses shall be transferred to 
``Administration, Operations, and Management'', for non-
personnel expenses of the Department of Housing and Urban 
Development: Provided further, That any funds made available 
under this heading used by the Secretary for technology shall 
be transferred to ``Working Capital Fund''.

                  home investment partnerships program

    For an additional amount for capital investments in low-
income housing tax credit projects, $2,250,000,000, to remain 
available until September 30, 2011: Provided, That such funds 
shall be made available to State housing credit agencies, as 
defined in section 42(h) of the Internal Revenue Code of 1986, 
and shall be apportioned among the States based on the 
percentage of HOME funds apportioned to each State and the 
participating jurisdictions therein for Fiscal Year 2008: 
Provided further, That the housing credit agencies in each 
State shall distribute these funds competitively under this 
heading and pursuant to their qualified allocation plan (as 
defined in section 42(m) of the Internal Revenue Code of 1986) 
to owners of projects who have received or receive 
simultaneously an award of low-income housing tax credits under 
section 42(h) of the Internal Revenue Code of 1986: Provided 
further, That housing credit agencies in each State shall 
commit not less than 75 percent of such funds within one year 
of the date of enactment of this Act, and shall demonstrate 
that the project owners shall have expended 75 percent of the 
funds made available under this heading within 2 years of the 
date of enactment of this Act, and shall have expended 100 
percent of the funds within 3 years of the date of enactment of 
this Act: Provided further, That failure by an owner to expend 
funds within the parameters required within the previous 
proviso shall result in a redistribution of these funds by a 
housing credit agency to a more deserving project in such 
State, except any funds not expended after 3 years from 
enactment shall be redistributed by the Secretary to other 
States that have fully utilized the funds made available to 
them: Provided further, That projects awarded low income 
housing tax credits under section 42(h) of the IRC of 1986 in 
fiscal years 2007, 2008, or 2009 shall be eligible for funding 
under this heading: Provided further, That housing credit 
agencies shall give priority to projects that are expected to 
be completed within 3 years of enactment: Provided further, 
That any assistance provided to an eligible low income housing 
tax credit project under this heading shall be made in the same 
manner and be subject to the same limitations (including rent, 
income, and use restrictions, in lieu of corresponding 
limitations under the HOME program) as required by the State 
housing credit agency with respect to an award of low income 
housing credits under section 42 of the IRC of 1986: Provided 
further, That the housing credit agency shall perform asset 
management functions, or shall contract for the performance of 
such services, in either case, at the owner's expense, to 
ensure compliance with section 42 of the IRC of 1986, and the 
long term viability of buildings funded by assistance under 
this heading: Provided further, That the term eligible basis 
(as such term is defined in such section 42) of a qualified 
low-income housing tax credit building receiving assistance 
under this heading shall not be reduced by the amount of any 
grant described under this heading: Provided further, That the 
Secretary shall be given access upon reasonable notice to a 
State housing credit agency to information related to the award 
of Federal funds from such housing credit agency pursuant to 
this heading and shall establish an Internet site that shall 
identify all projects selected for an award, including the 
amount of the award and such site shall provide linkage to the 
housing credit agency allocation plan which describes the 
process that was used to make the award decision: Provided 
further, That in administering funds under this heading, the 
Secretary may waive any provision of any statute or regulation 
that the Secretary administers in connection with the 
obligation by the Secretary or the use by the recipient of 
these funds except for requirements imposed by this heading and 
requirements related to fair housing, non-discrimination, labor 
standards and the environment, upon a finding that such waiver 
is required to expedite the use of such funds: Provided 
further, That for purposes of environmental compliance review, 
funds under this heading that are made available to State 
housing credit agencies for distribution to projects awarded 
low income housing tax credits shall be treated as funds under 
the HOME program and shall be subject to Section 288 of the 
HOME Investment Partnership Act.

                      homelessness prevention fund

    For homelessness prevention and rapid re-housing 
activities, $1,500,000,000, to remain available until September 
30, 2011: Provided, That funds provided under this heading 
shall be used for the provision of short-term or medium-term 
rental assistance; housing relocation and stabilization 
services including housing search, mediation or outreach to 
property owners, credit repair, security or utility deposits, 
utility payments, rental assistance for a final month at a 
location, moving cost assistance, and case management; or other 
appropriate activities for homelessness prevention and rapid 
re-housing of persons who have become homeless: Provided 
further, That grantees receiving such assistance shall collect 
data on the use of the funds awarded and persons served with 
this assistance in the HUD Homeless Management Information 
System (``HMIS'') or other comparable database: Provided 
further, That grantees may use up to 5 percent of any grant for 
administrative costs: Provided further, That funding made 
available under this heading shall be allocated to eligible 
grantees (as defined and designated in sections 411 and 412 of 
subtitle B of title IV of the McKinney-Vento Homeless 
Assistance Act, (the ``Act'')) pursuant to the formula 
authorized by section 413 of the Act: Provided further, That 
the Secretary may establish a minimum grant size: Provided 
further, That grantees shall expend at least 60 percent of 
funds within 2 years of the date that funds became available to 
them for obligation, and 100 percent of funds within 3 years of 
such date, and the Secretary may recapture unexpended funds in 
violation of the 2-year expenditure requirement and reallocate 
such funds to grantees in compliance with that requirement: 
Provided further, That the Secretary may waive statutory or 
regulatory provisions (except provisions for fair housing, 
nondiscrimination, labor standards, and the environment) 
necessary to facilitate the timely expenditure of funds: 
Provided further, That the Secretary shall publish a notice to 
establish such requirements as may be necessary to carry out 
the provisions of this section within 30 days of enactment of 
this Act and that this notice shall take effect upon issuance: 
Provided further, That of the funds provided under this 
heading, up to .5 percent shall be available for staffing, 
training, technical assistance, technology, monitoring, 
research and evaluation activities: Provided further, That 
funds set aside under the previous proviso shall remain 
available until September 30, 2012: Provided further, That any 
funds made available under this heading used by the Secretary 
for personnel expenses related to administering funding under 
this heading shall be transferred to ``Community Planning and 
Development Personnel Compensation and Benefits'' and shall 
retain the terms and conditions of this account including 
reprogramming provisions except that the period of availability 
set forth in the previous proviso shall govern such transferred 
funds: Provided further, That any funds made available under 
this heading used by the Secretary for training or other 
administrative expenses shall be transferred to 
``Administration, Operations, and Management'' for non-
personnel expenses of the Department of Housing and Urban 
Development: Provided further, That any funding made available 
under this heading used by the Secretary for technology shall 
be transferred to ``Working Capital Fund.''

                            Housing Programs

  assisted housing stability and energy and green retrofit investments

    For assistance to owners of properties receiving project-
based assistance pursuant to section 202 of the Housing Act of 
1959 (12 U.S.C. 17012), section 811 of the Cranston-Gonzalez 
National Affordable Housing Act (42 U.S.C. 8013), or section 8 
of the United States Housing Act of 1937 as amended (42 U.S.C. 
1437f), $2,250,000,000, of which $2,000,000,000 shall be for an 
additional amount for paragraph (1) under the heading 
``Project-Based Rental Assistance'' in Public Law 110-161 for 
payments to owners for 12-month periods, and of which 
$250,000,000 shall be for grants or loans for energy retrofit 
and green investments in such assisted housing: Provided, That 
projects funded with grants or loans provided under this 
heading must comply with the requirements of subchapter IV of 
chapter 31 of title 40, United States Code: Provided further, 
That such grants or loans shall be provided through the 
policies, procedures, contracts, and transactional 
infrastructure of the authorized programs administered by the 
Office of Affordable Housing Preservation of the Department of 
Housing and Urban Development, on such terms and conditions as 
the Secretary of Housing and Urban Development deems 
appropriate to ensure the maintenance and preservation of the 
property, the continued operation and maintenance of energy 
efficiency technologies, and the timely expenditure of funds: 
Provided further, That the Secretary may provide incentives to 
owners to undertake energy or green retrofits as a part of such 
grant or loan terms, including, but not limited to, fees to 
cover investment oversight and implementation by said owner, or 
to encourage job creation for low-income or very low-income 
individuals: Provided further, That the Secretary may share in 
a portion of future property utility savings resulting from 
improvements made by grants or loans made available under this 
heading: Provided further, That the grants or loans shall 
include a financial assessment and physical inspection of such 
property: Provided further, That eligible owners must have at 
least a satisfactory management review rating, be in 
substantial compliance with applicable performance standards 
and legal requirements, and commit to an additional period of 
affordability determined by the Secretary, but of not fewer 
than 15 years: Provided further, That the Secretary shall 
undertake appropriate underwriting and oversight with respect 
to grant and loan transactions and may set aside up to 5 
percent of the funds made available under this heading for 
grants or loans for such purpose: Provided further, That the 
Secretary shall take steps necessary to ensure that owners 
receiving funding for energy and green retrofit investments 
under this heading shall expend such funding within 2 years of 
the date they received the funding: Provided further, That in 
administering funds appropriated or otherwise made available 
under this heading, the Secretary may waive or specify 
alternative requirements for any provision of any statute or 
regulation in connection with the obligation by the Secretary 
or the use of these funds (except for requirements related to 
fair housing, nondiscrimination, labor standards, and the 
environment), upon a finding that such a waiver is necessary to 
expedite or facilitate the use of such funds: Provided further, 
That of the funds provided under this heading for grants and 
loans, up to 1 percent shall be available for staffing, 
training, technical assistance, technology, monitoring, 
research and evaluation activities: Provided further, That 
funds set aside in the previous proviso shall remain available 
until September 30, 2012: Provided further, That funding made 
available under this heading and used by the Secretary for 
personnel expenses related to administering funding under this 
heading shall be transferred to ``Housing Personnel 
Compensation and Benefits'' and shall retain the terms and 
conditions of this account including reprogramming provisos 
except that the period of availability set forth in the 
previous proviso shall govern such transferred funds: Provided 
further, That any funding made available under this heading 
used by the Secretary for training and other administrative 
expenses shall be transferred to ``Administration, Operations 
and Management'' for non-personnel expenses of the Department 
of Housing and Urban Development: Provided further, That any 
funding made available under this heading used by the Secretary 
for technology shall be transferred to ``Working Capital 
Fund.''

            Office of Lead Hazard Control and Healthy Homes

    For an additional amount for the ``Lead Hazard Reduction 
Program'', as authorized by section 1011 of the Residential 
Lead-Based Paint Hazard Reduction Act of 1992, and by sections 
501 and 502 of the Housing and Urban Development Act of 1974, 
$100,000,000, to remain available until September 30, 2011: 
Provided, That for purposes of environmental review, pursuant 
to the National Environmental Policy Act of 1969 (42 U.S.C. 
4321 et seq.) and other provisions of law that further the 
purposes of such Act, a grant under the Healthy Homes 
Initiative, Operation Lead Elimination Action Plan (LEAP), or 
the Lead Technical Studies program under this heading or under 
prior appropriations Acts for such purposes under this heading, 
shall be considered to be funds for a special project for 
purposes of section 305(e) of the Multifamily Housing Property 
Disposition Reform Act of 1994: Provided further, That funds 
shall be awarded first to applicants which had applied under 
the Lead Hazard Reduction Program Notices of Funding 
Availability for fiscal year 2008, and were found in the 
application review to be qualified for award, but were not 
awarded because of funding limitations, and that any funds 
which remain after reservation of funds for such grants shall 
be added to the amount of funds to be awarded under the Lead 
Hazard Reduction Program Notices of Funding Availability for 
fiscal year 2009: Provided further, That each applicant for the 
Lead Hazard Program Notices of Funding Availability for fiscal 
year 2009 shall submit a detailed plan and strategy that 
demonstrates adequate capacity that is acceptable to the 
Secretary to carry out the proposed use of funds: Provided 
further, That recipients of funds under this heading shall 
expend at least 50 percent of such funds within 2 years of the 
date on which funds become available to such jurisdictions for 
obligation, and expend 100 percent of such funds within 3 years 
of such date: Provided further, That if a recipient fails to 
comply with the 2-year expenditure requirement, the Secretary 
shall recapture all remaining funds awarded to the recipient 
and reallocate such funds to recipients that are in compliance 
with those requirements: Provided further, That if a recipient 
fails to comply with the 3-year expenditure requirement, the 
Secretary shall recapture the balance of the funds awarded to 
the recipient: Provided further, That in administering funds 
appropriated or otherwise made available under this heading, 
the Secretary may waive or specify alternative requirements for 
any provision of any statute or regulation in connection with 
the obligation by the Secretary or the use of these funds 
(except for requirements related to fair housing, 
nondiscrimination, labor standards and the environment), upon a 
finding that such a waiver is necessary to expedite or 
facilitate the use of such funds: Provided further, That of the 
funds made available under this heading, up to .5 percent shall 
be available for staffing, training, technical assistance, 
technology, monitoring, travel, enforcement, research and 
evaluation activities: Provided further, That funds set aside 
in the previous proviso shall remain available until September 
30, 2012: Provided further, That any funds made available under 
this heading used by the Secretary for personnel expenses 
related to administering funding under this heading shall be 
transferred to ``Personnel Compensation and Benefits, Office of 
Lead Hazard Control and Healthy Homes'' and shall retain the 
terms and conditions of this account, including reprogramming 
provisions, except that the period of availability set forth in 
the previous proviso shall govern such transferred funds: 
Provided further, That any funds made available under this 
heading used by the Secretary for training or other 
administrative expenses shall be transferred to 
``Administration, Operations, and Management'', for non-
personnel expenses of the Department of Housing and Urban 
Development: Provided further, That any funds made available 
under this heading used by the Secretary for technology shall 
be transferred to ``Working Capital Fund''.

                     Management and Administration

                      office of inspector general

    For an additional amount for the necessary salaries and 
expenses of the Office of Inspector General in carrying out the 
Inspector General Act of 1978, as amended, $15,000,000, to 
remain available until September 30, 2013: Provided, That the 
Inspector General shall have independent authority over all 
personnel issues within this office.

    GENERAL PROVISIONS--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

    Sec. 1202. FHA Loan Limits for 2009. (a) Loan Limit Floor 
Based on 2008 Levels.--For mortgages for which the mortgagee 
issues credit approval for the borrower during calendar year 
2009, if the dollar amount limitation on the principal 
obligation of a mortgage determined under section 203(b)(2) of 
the National Housing Act (12 U.S.C. 1709(b)(2)) for any size 
residence for any area is less than such dollar amount 
limitation that was in effect for such size residence for such 
area for 2008 pursuant to section 202 of the Economic Stimulus 
Act of 2008 (Public Law 110-185; 122 Stat. 620), 
notwithstanding any other provision of law, the maximum dollar 
amount limitation on the principal obligation of a mortgage for 
such size residence for such area for purposes of such section 
203(b)(2) shall be considered (except for purposes of section 
255(g) of such Act (12 U.S.C. 1715z-20(g))) to be such dollar 
amount limitation in effect for such size residence for such 
area for 2008.
    (b) Discretionary Authority for Sub-Areas.--Notwithstanding 
any other provision of law, if the Secretary of Housing and 
Urban Development determines, for any geographic area that is 
smaller than an area for which dollar amount limitations on the 
principal obligation of a mortgage are determined under section 
203(b)(2) of the National Housing Act, that a higher such 
maximum dollar amount limitation is warranted for any 
particular size or sizes of residences in such sub-area by 
higher median home prices in such sub-area, the Secretary may, 
for mortgages for which the mortgagee issues credit approval 
for the borrower during calendar year 2009, increase the 
maximum dollar amount limitation for such size or sizes of 
residences for such sub-area that is otherwise in effect 
(including pursuant to subsection (a) of this section), but in 
no case to an amount that exceeds the amount specified in 
section 202(a)(2) of the Economic Stimulus Act of 2008.
    Sec. 1203. GSE Conforming Loan Limits for 2009. (a) Loan 
Limit Floor Based on 2008 Levels.--For mortgages originated 
during calendar year 2009, if the limitation on the maximum 
original principal obligation of a mortgage that may be 
purchased by the Federal National Mortgage Association or the 
Federal Home Loan Mortgage Corporation determined under section 
302(b)(2) of the Federal National Mortgage Association Charter 
Act (12 U.S.C. 1717(b)(2)) or section 305(a)(2) of the Federal 
Home Loan Mortgage Corporation Act (12 U.S.C. 1754(a)(2)), 
respectively, for any size residence for any area is less than 
such maximum original principal obligation limitation that was 
in effect for such size residence for such area for 2008 
pursuant to section 201 of the Economic Stimulus Act of 2008 
(Public Law 110-185; 122 Stat. 619), notwithstanding any other 
provision of law, the limitation on the maximum original 
principal obligation of a mortgage for such Association and 
Corporation for such size residence for such area shall be such 
maximum limitation in effect for such size residence for such 
area for 2008.
    (b) Discretionary Authority for Sub-Areas.--Notwithstanding 
any other provision of law, if the Director of the Federal 
Housing Finance Agency determines, for any geographic area that 
is smaller than an area for which limitations on the maximum 
original principal obligation of a mortgage are determined for 
the Federal National Mortgage Association or the Federal Home 
Loan Mortgage Corporation, that a higher such maximum original 
principal obligation limitation is warranted for any particular 
size or sizes of residences in such sub-area by higher median 
home prices in such sub-area, the Director may, for mortgages 
originated during 2009, increase the maximum original principal 
obligation limitation for such size or sizes of residences for 
such sub-area that is otherwise in effect (including pursuant 
to subsection (a) of this section) for such Association and 
Corporation, but in no case to an amount that exceeds the 
amount specified in the matter following the comma in section 
201(a)(1)(B) of the Economic Stimulus Act of 2008.
    Sec. 1204. FHA Reverse Mortgage Loan Limits for 2009.--For 
mortgages for which the mortgagee issues credit approval for 
the borrower during calendar year 2009, the second sentence of 
section 255(g) of the National Housing Act (12 U.S.C. 1715z-
20(g)) shall be considered to require that in no case may the 
benefits of insurance under such section 255 exceed 150 percent 
of the maximum dollar amount in effect under the sixth sentence 
of section 305(a)(2) of the Federal Home Loan Mortgage 
Corporation Act (12 U.S.C. 1454(a)(2)).

               TITLE XIII--HEALTH INFORMATION TECHNOLOGY

SEC. 13001. SHORT TITLE; TABLE OF CONTENTS OF TITLE.

    (a) Short Title.--This title (and title IV of division B) 
may be cited as the ``Health Information Technology for 
Economic and Clinical Health Act'' or the ``HITECH Act''.
    (b) Table of Contents of Title.--The table of contents of 
this title is as follows:

Sec. 13001. Short title; table of contents of title.


         Subtitle A--Promotion of Health Information Technology


      Part 1--Improving Health Care Quality, Safety, and Efficiency

Sec. 13101. ONCHIT; standards development and adoption.


         ``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY


    ``Sec. 3000. Definitions.

        ``Subtitle A--Promotion of Health Information Technology

    ``Sec. 3001. Office of the National Coordinator for Health 
              Information Technology.
    ``Sec. 3002. HIT Policy Committee.
    ``Sec. 3003. HIT Standards Committee.
    ``Sec. 3004. Process for adoption of endorsed recommendations; 
              adoption of initial set of standards, implementation 
              specifications, and certification criteria.
    ``Sec. 3005. Application and use of adopted standards and 
              implementation specifications by Federal agencies.
    ``Sec. 3006. Voluntary application and use of adopted standards and 
              implementation specifications by private entities.
    ``Sec. 3007. Federal health information technology.
    ``Sec. 3008. Transitions.
    ``Sec. 3009. Miscellaneous provisions.
Sec. 13102. Technical amendment.

  Part 2--Application and Use of Adopted Health Information Technology 
                           Standards; Reports

Sec. 13111. Coordination of Federal activities with adopted standards 
          and implementation specifications.
Sec. 13112. Application to private entities.
Sec. 13113. Study and reports.

          Subtitle B--Testing of Health Information Technology

Sec. 13201. National Institute for Standards and Technology testing.
Sec. 13202. Research and development programs.

                  Subtitle C--Grants and Loans Funding

Sec. 13301. Grant, loan, and demonstration programs.

  ``Subtitle B--Incentives for the Use of Health Information Technology

    ``Sec. 3011. Immediate funding to strengthen the health information 
              technology infrastructure.
    ``Sec. 3012. Health information technology implementation 
              assistance.
    ``Sec. 3013. State grants to promote health information technology.
    ``Sec. 3014. Competitive grants to States and Indian tribes for the 
              development of loan programs to facilitate the widespread 
              adoption of certified EHR technology.
    ``Sec. 3015. Demonstration program to integrate information 
              technology into clinical education.
    ``Sec. 3016. Information technology professionals in health care.
    ``Sec. 3017. General grant and loan provisions.
    ``Sec. 3018. Authorization for appropriations.''

                           Subtitle D--Privacy

Sec. 13400. Definitions.

       Part 1--Improved Privacy Provisions and Security Provisions

Sec. 13401. Application of security provisions and penalties to business 
          associates of covered entities; annual guidance on security 
          provisions.
Sec. 13402. Notification in the case of breach.
Sec. 13403. Education on health information privacy.
Sec. 13404. Application of privacy provisions and penalties to business 
          associates of covered entities.
Sec. 13405. Restrictions on certain disclosures and sales of health 
          information; accounting of certain protected health 
          information disclosures; access to certain information in 
          electronic format.
Sec. 13406. Conditions on certain contacts as part of health care 
          operations.
Sec. 13407. Temporary breach notification requirement for vendors of 
          personal health records and other non-HIPAA covered entities.
Sec. 13408. Business associate contracts required for certain entities.
Sec. 13409. Clarification of application of wrongful disclosures 
          criminal penalties.
Sec. 13410. Improved enforcement.
Sec. 13411. Audits.

  Part 2--Relationship to Other Laws; Regulatory References; Effective 
                              Date; Reports

Sec. 13421. Relationship to other laws.
Sec. 13422. Regulatory references.
Sec. 13423. Effective date.
Sec. 13424. Studies, reports, guidance.

         Subtitle A--Promotion of Health Information Technology

     PART 1--IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY

SEC. 13101. ONCHIT; STANDARDS DEVELOPMENT AND ADOPTION.

    The Public Health Service Act (42 U.S.C. 201 et seq.) is 
amended by adding at the end the following:

         ``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY

``SEC. 3000. DEFINITIONS.

    ``In this title:
            ``(1) Certified ehr technology.--The term 
        `certified EHR technology' means a qualified electronic 
        health record that is certified pursuant to section 
        3001(c)(5) as meeting standards adopted under section 
        3004 that are applicable to the type of record involved 
        (as determined by the Secretary, such as an ambulatory 
        electronic health record for office-based physicians or 
        an inpatient hospital electronic health record for 
        hospitals).
            ``(2) Enterprise integration.--The term `enterprise 
        integration' means the electronic linkage of health 
        care providers, health plans, the government, and other 
        interested parties, to enable the electronic exchange 
        and use of health information among all the components 
        in the health care infrastructure in accordance with 
        applicable law, and such term includes related 
        application protocols and other related standards.
            ``(3) Health care provider.--The term `health care 
        provider' includes a hospital, skilled nursing 
        facility, nursing facility, home health entity or other 
        long term care facility, health care clinic, community 
        mental health center (as defined in section 
        1913(b)(1)), renal dialysis facility, blood center, 
        ambulatory surgical center described in section 1833(i) 
        of the Social Security Act, emergency medical services 
        provider, Federally qualified health center, group 
        practice, a pharmacist, a pharmacy, a laboratory, a 
        physician (as defined in section 1861(r) of the Social 
        Security Act), a practitioner (as described in section 
        1842(b)(18)(C) of the Social Security Act), a provider 
        operated by, or under contract with, the Indian Health 
        Service or by an Indian tribe (as defined in the Indian 
        Self-Determination and Education Assistance Act), 
        tribal organization, or urban Indian organization (as 
        defined in section 4 of the Indian Health Care 
        Improvement Act), a rural health clinic, a covered 
        entity under section 340B, an ambulatory surgical 
        center described in section 1833(i) of the Social 
        Security Act, a therapist (as defined in section 
        1848(k)(3)(B)(iii) of the Social Security Act), and any 
        other category of health care facility, entity, 
        practitioner, or clinician determined appropriate by 
        the Secretary.
            ``(4) Health information.--The term `health 
        information' has the meaning given such term in section 
        1171(4) of the Social Security Act.
            ``(5) Health information technology.--The term 
        `health information technology' means hardware, 
        software, integrated technologies or related licenses, 
        intellectual property, upgrades, or packaged solutions 
        sold as services that are designed for or support the 
        use by health care entities or patients for the 
        electronic creation, maintenance, access, or exchange 
        of health information.
            ``(6) Health plan.--The term `health plan' has the 
        meaning given such term in section 1171(5) of the 
        Social Security Act.
            ``(7) HIT policy committee.--The term `HIT Policy 
        Committee' means such Committee established under 
        section 3002(a).
            ``(8) HIT standards committee.--The term `HIT 
        Standards Committee' means such Committee established 
        under section 3003(a).
            ``(9) Individually identifiable health 
        information.--The term `individually identifiable 
        health information' has the meaning given such term in 
        section 1171(6) of the Social Security Act.
            ``(10) Laboratory.--The term `laboratory' has the 
        meaning given such term in section 353(a).
            ``(11) National coordinator.--The term `National 
        Coordinator' means the head of the Office of the 
        National Coordinator for Health Information Technology 
        established under section 3001(a).
            ``(12) Pharmacist.--The term `pharmacist' has the 
        meaning given such term in section 804(2) of the 
        Federal Food, Drug, and Cosmetic Act.
            ``(13) Qualified electronic health record.--The 
        term `qualified electronic health record' means an 
        electronic record of health-related information on an 
        individual that--
                    ``(A) includes patient demographic and 
                clinical health information, such as medical 
                history and problem lists; and
                    ``(B) has the capacity--
                            ``(i) to provide clinical decision 
                        support;
                            ``(ii) to support physician order 
                        entry;
                            ``(iii) to capture and query 
                        information relevant to health care 
                        quality; and
                            ``(iv) to exchange electronic 
                        health information with, and integrate 
                        such information from other sources.
            ``(14) State.--The term `State' means each of the 
        several States, the District of Columbia, Puerto Rico, 
        the Virgin Islands, Guam, American Samoa, and the 
        Northern Mariana Islands.

        ``Subtitle A--Promotion of Health Information Technology

``SEC. 3001. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION 
                    TECHNOLOGY.

    ``(a) Establishment.--There is established within the 
Department of Health and Human Services an Office of the 
National Coordinator for Health Information Technology 
(referred to in this section as the `Office'). The Office shall 
be headed by a National Coordinator who shall be appointed by 
the Secretary and shall report directly to the Secretary.
    ``(b) Purpose.--The National Coordinator shall perform the 
duties under subsection (c) in a manner consistent with the 
development of a nationwide health information technology 
infrastructure that allows for the electronic use and exchange 
of information and that--
            ``(1) ensures that each patient's health 
        information is secure and protected, in accordance with 
        applicable law;
            ``(2) improves health care quality, reduces medical 
        errors, reduces health disparities, and advances the 
        delivery of patient-centered medical care;
            ``(3) reduces health care costs resulting from 
        inefficiency, medical errors, inappropriate care, 
        duplicative care, and incomplete information;
            ``(4) provides appropriate information to help 
        guide medical decisions at the time and place of care;
            ``(5) ensures the inclusion of meaningful public 
        input in such development of such infrastructure;
            ``(6) improves the coordination of care and 
        information among hospitals, laboratories, physician 
        offices, and other entities through an effective 
        infrastructure for the secure and authorized exchange 
        of health care information;
            ``(7) improves public health activities and 
        facilitates the early identification and rapid response 
        to public health threats and emergencies, including 
        bioterror events and infectious disease outbreaks;
            ``(8) facilitates health and clinical research and 
        health care quality;
            ``(9) promotes early detection, prevention, and 
        management of chronic diseases;
            ``(10) promotes a more effective marketplace, 
        greater competition, greater systems analysis, 
        increased consumer choice, and improved outcomes in 
        health care services; and
            ``(11) improves efforts to reduce health 
        disparities.
    ``(c) Duties of the National Coordinator.--
            ``(1) Standards.--The National Coordinator shall--
                    ``(A) review and determine whether to 
                endorse each standard, implementation 
                specification, and certification criterion for 
                the electronic exchange and use of health 
                information that is recommended by the HIT 
                Standards Committee under section 3003 for 
                purposes of adoption under section 3004;
                    ``(B) make such determinations under 
                subparagraph (A), and report to the Secretary 
                such determinations, not later than 45 days 
                after the date the recommendation is received 
                by the Coordinator; and
                    ``(C) review Federal health information 
                technology investments to ensure that Federal 
                health information technology programs are 
                meeting the objectives of the strategic plan 
                published under paragraph (3).
            ``(2) HIT policy coordination.--
                    ``(A) In general.--The National Coordinator 
                shall coordinate health information technology 
                policy and programs of the Department with 
                those of other relevant executive branch 
                agencies with a goal of avoiding duplication of 
                efforts and of helping to ensure that each 
                agency undertakes health information technology 
                activities primarily within the areas of its 
                greatest expertise and technical capability and 
                in a manner towards a coordinated national 
                goal.
                    ``(B) HIT policy and standards 
                committees.--The National Coordinator shall be 
                a leading member in the establishment and 
                operations of the HIT Policy Committee and the 
                HIT Standards Committee and shall serve as a 
                liaison among those two Committees and the 
                Federal Government.
            ``(3) Strategic plan.--
                    ``(A) In general.--The National Coordinator 
                shall, in consultation with other appropriate 
                Federal agencies (including the National 
                Institute of Standards and Technology), update 
                the Federal Health IT Strategic Plan (developed 
                as of June 3, 2008) to include specific 
                objectives, milestones, and metrics with 
                respect to the following:
                            ``(i) The electronic exchange and 
                        use of health information and the 
                        enterprise integration of such 
                        information.
                            ``(ii) The utilization of an 
                        electronic health record for each 
                        person in the United States by 2014.
                            ``(iii) The incorporation of 
                        privacy and security protections for 
                        the electronic exchange of an 
                        individual's individually identifiable 
                        health information.
                            ``(iv) Ensuring security methods to 
                        ensure appropriate authorization and 
                        electronic authentication of health 
                        information and specifying technologies 
                        or methodologies for rendering health 
                        information unusable, unreadable, or 
                        indecipherable.
                            ``(v) Specifying a framework for 
                        coordination and flow of 
                        recommendations and policies under this 
                        subtitle among the Secretary, the 
                        National Coordinator, the HIT Policy 
                        Committee, the HIT Standards Committee, 
                        and other health information exchanges 
                        and other relevant entities.
                            ``(vi) Methods to foster the public 
                        understanding of health information 
                        technology.
                            ``(vii) Strategies to enhance the 
                        use of health information technology in 
                        improving the quality of health care, 
                        reducing medical errors, reducing 
                        health disparities, improving public 
                        health, increasing prevention and 
                        coordination with community resources, 
                        and improving the continuity of care 
                        among health care settings.
                            ``(viii) Specific plans for 
                        ensuring that populations with unique 
                        needs, such as children, are 
                        appropriately addressed in the 
                        technology design, as appropriate, 
                        which may include technology that 
                        automates enrollment and retention for 
                        eligible individuals.
                    ``(B) Collaboration.--The strategic plan 
                shall be updated through collaboration of 
                public and private entities.
                    ``(C) Measurable outcome goals.--The 
                strategic plan update shall include measurable 
                outcome goals.
                    ``(D) Publication.--The National 
                Coordinator shall republish the strategic plan, 
                including all updates.
            ``(4) Website.--The National Coordinator shall 
        maintain and frequently update an Internet website on 
        which there is posted information on the work, 
        schedules, reports, recommendations, and other 
        information to ensure transparency in promotion of a 
        nationwide health information technology 
        infrastructure.
            ``(5) Certification.--
                    ``(A) In general.--The National 
                Coordinator, in consultation with the Director 
                of the National Institute of Standards and 
                Technology, shall keep or recognize a program 
                or programs for the voluntary certification of 
                health information technology as being in 
                compliance with applicable certification 
                criteria adopted under this subtitle. Such 
                program shall include, as appropriate, testing 
                of the technology in accordance with section 
                13201(b) of the Health Information Technology 
                for Economic and Clinical Health Act.
                    ``(B) Certification criteria described.--In 
                this title, the term `certification criteria' 
                means, with respect to standards and 
                implementation specifications for health 
                information technology, criteria to establish 
                that the technology meets such standards and 
                implementation specifications.
            ``(6) Reports and publications.--
                    ``(A) Report on additional funding or 
                authority needed.--Not later than 12 months 
                after the date of the enactment of this title, 
                the National Coordinator shall submit to the 
                appropriate committees of jurisdiction of the 
                House of Representatives and the Senate a 
                report on any additional funding or authority 
                the Coordinator or the HIT Policy Committee or 
                HIT Standards Committee requires to evaluate 
                and develop standards, implementation 
                specifications, and certification criteria, or 
                to achieve full participation of stakeholders 
                in the adoption of a nationwide health 
                information technology infrastructure that 
                allows for the electronic use and exchange of 
                health information.
                    ``(B) Implementation report.--The National 
                Coordinator shall prepare a report that 
                identifies lessons learned from major public 
                and private health care systems in their 
                implementation of health information 
                technology, including information on whether 
                the technologies and practices developed by 
                such systems may be applicable to and usable in 
                whole or in part by other health care 
                providers.
                    ``(C) Assessment of impact of hit on 
                communities with health disparities and 
                uninsured, underinsured, and medically 
                underserved areas.--The National Coordinator 
                shall assess and publish the impact of health 
                information technology in communities with 
                health disparities and in areas with a high 
                proportion of individuals who are uninsured, 
                underinsured, and medically underserved 
                individuals (including urban and rural areas) 
                and identify practices to increase the adoption 
                of such technology by health care providers in 
                such communities, and the use of health 
                information technology to reduce and better 
                manage chronic diseases.
                    ``(D) Evaluation of benefits and costs of 
                the electronic use and exchange of health 
                information.--The National Coordinator shall 
                evaluate and publish evidence on the benefits 
                and costs of the electronic use and exchange of 
                health information and assess to whom these 
                benefits and costs accrue.
                    ``(E) Resource requirements.--The National 
                Coordinator shall estimate and publish 
                resources required annually to reach the goal 
                of utilization of an electronic health record 
                for each person in the United States by 2014, 
                including--
                            ``(i) the required level of Federal 
                        funding;
                            ``(ii) expectations for regional, 
                        State, and private investment;
                            ``(iii) the expected contributions 
                        by volunteers to activities for the 
                        utilization of such records; and
                            ``(iv) the resources needed to 
                        establish a health information 
                        technology workforce sufficient to 
                        support this effort (including 
                        education programs in medical 
                        informatics and health information 
                        management).
            ``(7) Assistance.--The National Coordinator may 
        provide financial assistance to consumer advocacy 
        groups and not-for-profit entities that work in the 
        public interest for purposes of defraying the cost to 
        such groups and entities to participate under, whether 
        in whole or in part, the National Technology Transfer 
        Act of 1995 (15 U.S.C. 272 note).
            ``(8) Governance for nationwide health information 
        network.--The National Coordinator shall establish a 
        governance mechanism for the nationwide health 
        information network.
    ``(d) Detail of Federal Employees.--
            ``(1) In general.--Upon the request of the National 
        Coordinator, the head of any Federal agency is 
        authorized to detail, with or without reimbursement 
        from the Office, any of the personnel of such agency to 
        the Office to assist it in carrying out its duties 
        under this section.
            ``(2) Effect of detail.--Any detail of personnel 
        under paragraph (1) shall--
                    ``(A) not interrupt or otherwise affect the 
                civil service status or privileges of the 
                Federal employee; and
                    ``(B) be in addition to any other staff of 
                the Department employed by the National 
                Coordinator.
            ``(3) Acceptance of detailees.--Notwithstanding any 
        other provision of law, the Office may accept detailed 
        personnel from other Federal agencies without regard to 
        whether the agency described under paragraph (1) is 
        reimbursed.
    ``(e) Chief Privacy Officer of the Office of the National 
Coordinator.--Not later than 12 months after the date of the 
enactment of this title, the Secretary shall appoint a Chief 
Privacy Officer of the Office of the National Coordinator, 
whose duty it shall be to advise the National Coordinator on 
privacy, security, and data stewardship of electronic health 
information and to coordinate with other Federal agencies (and 
similar privacy officers in such agencies), with State and 
regional efforts, and with foreign countries with regard to the 
privacy, security, and data stewardship of electronic 
individually identifiable health information.

``SEC. 3002. HIT POLICY COMMITTEE.

    ``(a) Establishment.--There is established a HIT Policy 
Committee to make policy recommendations to the National 
Coordinator relating to the implementation of a nationwide 
health information technology infrastructure, including 
implementation of the strategic plan described in section 
3001(c)(3).
    ``(b) Duties.--
            ``(1) Recommendations on health information 
        technology infrastructure.--The HIT Policy Committee 
        shall recommend a policy framework for the development 
        and adoption of a nationwide health information 
        technology infrastructure that permits the electronic 
        exchange and use of health information as is consistent 
        with the strategic plan under section 3001(c)(3) and 
        that includes the recommendations under paragraph (2). 
        The Committee shall update such recommendations and 
        make new recommendations as appropriate.
            ``(2) Specific areas of standard development.--
                    ``(A) In general.--The HIT Policy Committee 
                shall recommend the areas in which standards, 
                implementation specifications, and 
                certification criteria are needed for the 
                electronic exchange and use of health 
                information for purposes of adoption under 
                section 3004 and shall recommend an order of 
                priority for the development, harmonization, 
                and recognition of such standards, 
                specifications, and certification criteria 
                among the areas so recommended. Such standards 
                and implementation specifications shall include 
                named standards, architectures, and software 
                schemes for the authentication and security of 
                individually identifiable health information 
                and other information as needed to ensure the 
                reproducible development of common solutions 
                across disparate entities.
                    ``(B) Areas required for consideration.--
                For purposes of subparagraph (A), the HIT 
                Policy Committee shall make recommendations for 
                at least the following areas:
                            ``(i) Technologies that protect the 
                        privacy of health information and 
                        promote security in a qualified 
                        electronic health record, including for 
                        the segmentation and protection from 
                        disclosure of specific and sensitive 
                        individually identifiable health 
                        information with the goal of minimizing 
                        the reluctance of patients to seek care 
                        (or disclose information about a 
                        condition) because of privacy concerns, 
                        in accordance with applicable law, and 
                        for the use and disclosure of limited 
                        data sets of such information.
                            ``(ii) A nationwide health 
                        information technology infrastructure 
                        that allows for the electronic use and 
                        accurate exchange of health 
                        information.
                            ``(iii) The utilization of a 
                        certified electronic health record for 
                        each person in the United States by 
                        2014.
                            ``(iv) Technologies that as a part 
                        of a qualified electronic health record 
                        allow for an accounting of disclosures 
                        made by a covered entity (as defined 
                        for purposes of regulations promulgated 
                        under section 264(c) of the Health 
                        Insurance Portability and 
                        Accountability Act of 1996) for 
                        purposes of treatment, payment, and 
                        health care operations (as such terms 
                        are defined for purposes of such 
                        regulations).
                            ``(v) The use of certified 
                        electronic health records to improve 
                        the quality of health care, such as by 
                        promoting the coordination of health 
                        care and improving continuity of health 
                        care among health care providers, by 
                        reducing medical errors, by improving 
                        population health, by reducing health 
                        disparities, by reducing chronic 
                        disease, and by advancing research and 
                        education.
                            ``(vi) Technologies that allow 
                        individually identifiable health 
                        information to be rendered unusable, 
                        unreadable, or indecipherable to 
                        unauthorized individuals when such 
                        information is transmitted in the 
                        nationwide health information network 
                        or physically transported outside of 
                        the secured, physical perimeter of a 
                        health care provider, health plan, or 
                        health care clearinghouse.
                            ``(vii) The use of electronic 
                        systems to ensure the comprehensive 
                        collection of patient demographic data, 
                        including, at a minimum, race, 
                        ethnicity, primary language, and gender 
                        information.
                            ``(viii) Technologies that address 
                        the needs of children and other 
                        vulnerable populations.
                    ``(C) Other areas for consideration.--In 
                making recommendations under subparagraph (A), 
                the HIT Policy Committee may consider the 
                following additional areas:
                            ``(i) The appropriate uses of a 
                        nationwide health information 
                        infrastructure, including for purposes 
                        of--
                                    ``(I) the collection of 
                                quality data and public 
                                reporting;
                                    ``(II) biosurveillance and 
                                public health;
                                    ``(III) medical and 
                                clinical research; and
                                    ``(IV) drug safety.
                            ``(ii) Self-service technologies 
                        that facilitate the use and exchange of 
                        patient information and reduce wait 
                        times.
                            ``(iii) Telemedicine technologies, 
                        in order to reduce travel requirements 
                        for patients in remote areas.
                            ``(iv) Technologies that facilitate 
                        home health care and the monitoring of 
                        patients recuperating at home.
                            ``(v) Technologies that help reduce 
                        medical errors.
                            ``(vi) Technologies that facilitate 
                        the continuity of care among health 
                        settings.
                            ``(vii) Technologies that meet the 
                        needs of diverse populations.
                            ``(viii) Methods to facilitate 
                        secure access by an individual to such 
                        individual's protected health 
                        information.
                            ``(ix) Methods, guidelines, and 
                        safeguards to facilitate secure access 
                        to patient information by a family 
                        member, caregiver, or guardian acting 
                        on behalf of a patient due to age-
                        related and other disability, cognitive 
                        impairment, or dementia.
                            ``(x) Any other technology that the 
                        HIT Policy Committee finds to be among 
                        the technologies with the greatest 
                        potential to improve the quality and 
                        efficiency of health care.
            ``(3) Forum.--The HIT Policy Committee shall serve 
        as a forum for broad stakeholder input with specific 
        expertise in policies relating to the matters described 
        in paragraphs (1) and (2).
            ``(4) Consistency with evaluation conducted under 
        mippa.--
                    ``(A) Requirement for consistency.--The HIT 
                Policy Committee shall ensure that 
                recommendations made under paragraph (2)(B)(vi) 
                are consistent with the evaluation conducted 
                under section 1809(a) of the Social Security 
                Act.
                    ``(B) Scope.--Nothing in subparagraph (A) 
                shall be construed to limit the recommendations 
                under paragraph (2)(B)(vi) to the elements 
                described in section 1809(a)(3) of the Social 
                Security Act.
                    ``(C) Timing.--The requirement under 
                subparagraph (A) shall be applicable to the 
                extent that evaluations have been conducted 
                under section 1809(a) of the Social Security 
                Act, regardless of whether the report described 
                in subsection (b) of such section has been 
                submitted.
    ``(c) Membership and Operations.--
            ``(1) In general.--The National Coordinator shall 
        take a leading position in the establishment and 
        operations of the HIT Policy Committee.
            ``(2) Membership.--The HIT Policy Committee shall 
        be composed of members to be appointed as follows:
                    ``(A) 3 members shall be appointed by the 
                Secretary, 1 of whom shall be appointed to 
                represent the Department of Health and Human 
                Services and 1 of whom shall be a public health 
                official.
                    ``(B) 1 member shall be appointed by the 
                majority leader of the Senate.
                    ``(C) 1 member shall be appointed by the 
                minority leader of the Senate.
                    ``(D) 1 member shall be appointed by the 
                Speaker of the House of Representatives.
                    ``(E) 1 member shall be appointed by the 
                minority leader of the House of 
                Representatives.
                    ``(F) Such other members as shall be 
                appointed by the President as representatives 
                of other relevant Federal agencies.
                    ``(G) 13 members shall be appointed by the 
                Comptroller General of the United States of 
                whom--
                            ``(i) 3 members shall be advocates 
                        for patients or consumers;
                            ``(ii) 2 members shall represent 
                        health care providers, one of which 
                        shall be a physician;
                            ``(iii) 1 member shall be from a 
                        labor organization representing health 
                        care workers;
                            ``(iv) 1 member shall have 
                        expertise in health information privacy 
                        and security;
                            ``(v) 1 member shall have expertise 
                        in improving the health of vulnerable 
                        populations;
                            ``(vi) 1 member shall be from the 
                        research community;
                            ``(vii) 1 member shall represent 
                        health plans or other third-party 
                        payers;
                            ``(viii) 1 member shall represent 
                        information technology vendors;
                            ``(ix) 1 member shall represent 
                        purchasers or employers; and
                            ``(x) 1 member shall have expertise 
                        in health care quality measurement and 
                        reporting.
            ``(3) Participation.--The members of the HIT Policy 
        Committee appointed under paragraph (2) shall represent 
        a balance among various sectors of the health care 
        system so that no single sector unduly influences the 
        recommendations of the Policy Committee.
            ``(4) Terms.--
                    ``(A) In general.--The terms of the members 
                of the HIT Policy Committee shall be for 3 
                years, except that the Comptroller General 
                shall designate staggered terms for the members 
                first appointed.
                    ``(B) Vacancies.--Any member appointed to 
                fill a vacancy in the membership of the HIT 
                Policy Committee that occurs prior to the 
                expiration of the term for which the member's 
                predecessor was appointed shall be appointed 
                only for the remainder of that term. A member 
                may serve after the expiration of that member's 
                term until a successor has been appointed. A 
                vacancy in the HIT Policy Committee shall be 
                filled in the manner in which the original 
                appointment was made.
            ``(5) Outside involvement.--The HIT Policy 
        Committee shall ensure an opportunity for the 
        participation in activities of the Committee of outside 
        advisors, including individuals with expertise in the 
        development of policies for the electronic exchange and 
        use of health information, including in the areas of 
        health information privacy and security.
            ``(6) Quorum.--A majority of the members of the HIT 
        Policy Committee shall constitute a quorum for purposes 
        of voting, but a lesser number of members may meet and 
        hold hearings.
            ``(7) Failure of initial appointment.--If, on the 
        date that is 45 days after the date of enactment of 
        this title, an official authorized under paragraph (2) 
        to appoint one or more members of the HIT Policy 
        Committee has not appointed the full number of members 
        that such paragraph authorizes such official to 
        appoint, the Secretary is authorized to appoint such 
        members.
            ``(8) Consideration.--The National Coordinator 
        shall ensure that the relevant and available 
        recommendations and comments from the National 
        Committee on Vital and Health Statistics are considered 
        in the development of policies.
    ``(d) Application of FACA.--The Federal Advisory Committee 
Act (5 U.S.C. App.), other than section 14 of such Act, shall 
apply to the HIT Policy Committee.
    ``(e) Publication.--The Secretary shall provide for 
publication in the Federal Register and the posting on the 
Internet website of the Office of the National Coordinator for 
Health Information Technology of all policy recommendations 
made by the HIT Policy Committee under this section.

``SEC. 3003. HIT STANDARDS COMMITTEE.

    ``(a) Establishment.--There is established a committee to 
be known as the HIT Standards Committee to recommend to the 
National Coordinator standards, implementation specifications, 
and certification criteria for the electronic exchange and use 
of health information for purposes of adoption under section 
3004, consistent with the implementation of the strategic plan 
described in section 3001(c)(3) and beginning with the areas 
listed in section 3002(b)(2)(B) in accordance with policies 
developed by the HIT Policy Committee.
    ``(b) Duties.--
            ``(1) Standards development.--
                    ``(A) In general.--The HIT Standards 
                Committee shall recommend to the National 
                Coordinator standards, implementation 
                specifications, and certification criteria 
                described in subsection (a) that have been 
                developed, harmonized, or recognized by the HIT 
                Standards Committee. The HIT Standards 
                Committee shall update such recommendations and 
                make new recommendations as appropriate, 
                including in response to a notification sent 
                under section 3004(a)(2)(B). Such 
                recommendations shall be consistent with the 
                latest recommendations made by the HIT Policy 
                Committee.
                    ``(B) Harmonization.--The HIT Standards 
                Committee shall recognize harmonized or updated 
                standards from an entity or entities for the 
                purpose of harmonizing or updating standards 
                and implementation specifications in order to 
                achieve uniform and consistent implementation 
                of the standards and implementation 
                specifications.
                    ``(C) Pilot testing of standards and 
                implementation specifications.--In the 
                development, harmonization, or recognition of 
                standards and implementation specifications, 
                the HIT Standards Committee shall, as 
                appropriate, provide for the testing of such 
                standards and specifications by the National 
                Institute for Standards and Technology under 
                section 13201(a) of the Health Information 
                Technology for Economic and Clinical Health 
                Act.
                    ``(D) Consistency.--The standards, 
                implementation specifications, and 
                certification criteria recommended under this 
                subsection shall be consistent with the 
                standards for information transactions and data 
                elements adopted pursuant to section 1173 of 
                the Social Security Act.
            ``(2) Forum.--The HIT Standards Committee shall 
        serve as a forum for the participation of a broad range 
        of stakeholders to provide input on the development, 
        harmonization, and recognition of standards, 
        implementation specifications, and certification 
        criteria necessary for the development and adoption of 
        a nationwide health information technology 
        infrastructure that allows for the electronic use and 
        exchange of health information.
            ``(3) Schedule.--Not later than 90 days after the 
        date of the enactment of this title, the HIT Standards 
        Committee shall develop a schedule for the assessment 
        of policy recommendations developed by the HIT Policy 
        Committee under section 3002. The HIT Standards 
        Committee shall update such schedule annually. The 
        Secretary shall publish such schedule in the Federal 
        Register.
            ``(4) Public input.--The HIT Standards Committee 
        shall conduct open public meetings and develop a 
        process to allow for public comment on the schedule 
        described in paragraph (3) and recommendations 
        described in this subsection. Under such process 
        comments shall be submitted in a timely manner after 
        the date of publication of a recommendation under this 
        subsection.
            ``(5) Consideration.--The National Coordinator 
        shall ensure that the relevant and available 
        recommendations and comments from the National 
        Committee on Vital and Health Statistics are considered 
        in the development of standards.
    ``(c) Membership and Operations.--
            ``(1) In general.--The National Coordinator shall 
        take a leading position in the establishment and 
        operations of the HIT Standards Committee.
            ``(2) Membership.--The membership of the HIT 
        Standards Committee shall at least reflect providers, 
        ancillary healthcare workers, consumers, purchasers, 
        health plans, technology vendors, researchers, relevant 
        Federal agencies, and individuals with technical 
        expertise on health care quality, privacy and security, 
        and on the electronic exchange and use of health 
        information.
            ``(3) Participation.--The members of the HIT 
        Standards Committee appointed under this subsection 
        shall represent a balance among various sectors of the 
        health care system so that no single sector unduly 
        influences the recommendations of such Committee.
            ``(4) Outside involvement.--The HIT Policy 
        Committee shall ensure an opportunity for the 
        participation in activities of the Committee of outside 
        advisors, including individuals with expertise in the 
        development of standards for the electronic exchange 
        and use of health information, including in the areas 
        of health information privacy and security.
            ``(5) Balance among sectors.--In developing the 
        procedures for conducting the activities of the HIT 
        Standards Committee, the HIT Standards Committee shall 
        act to ensure a balance among various sectors of the 
        health care system so that no single sector unduly 
        influences the actions of the HIT Standards Committee.
            ``(6) Assistance.--For the purposes of carrying out 
        this section, the Secretary may provide or ensure that 
        financial assistance is provided by the HIT Standards 
        Committee to defray in whole or in part any membership 
        fees or dues charged by such Committee to those 
        consumer advocacy groups and not for profit entities 
        that work in the public interest as a part of their 
        mission.
    ``(d) Application of FACA.--The Federal Advisory Committee 
Act (5 U.S.C. App.), other than section 14, shall apply to the 
HIT Standards Committee.
    ``(e) Publication.--The Secretary shall provide for 
publication in the Federal Register and the posting on the 
Internet website of the Office of the National Coordinator for 
Health Information Technology of all recommendations made by 
the HIT Standards Committee under this section.

``SEC. 3004. PROCESS FOR ADOPTION OF ENDORSED RECOMMENDATIONS; ADOPTION 
                    OF INITIAL SET OF STANDARDS, IMPLEMENTATION 
                    SPECIFICATIONS, AND CERTIFICATION CRITERIA.

    ``(a) Process for Adoption of Endorsed Recommendations.--
            ``(1) Review of endorsed standards, implementation 
        specifications, and certification criteria.--Not later 
        than 90 days after the date of receipt of standards, 
        implementation specifications, or certification 
        criteria endorsed under section 3001(c), the Secretary, 
        in consultation with representatives of other relevant 
        Federal agencies, shall jointly review such standards, 
        implementation specifications, or certification 
        criteria and shall determine whether or not to propose 
        adoption of such standards, implementation 
        specifications, or certification criteria.
            ``(2) Determination to adopt standards, 
        implementation specifications, and certification 
        criteria.--If the Secretary determines--
                    ``(A) to propose adoption of any grouping 
                of such standards, implementation 
                specifications, or certification criteria, the 
                Secretary shall, by regulation under section 
                553 of title 5, United States Code, determine 
                whether or not to adopt such grouping of 
                standards, implementation specifications, or 
                certification criteria; or
                    ``(B) not to propose adoption of any 
                grouping of standards, implementation 
                specifications, or certification criteria, the 
                Secretary shall notify the National Coordinator 
                and the HIT Standards Committee in writing of 
                such determination and the reasons for not 
                proposing the adoption of such recommendation.
            ``(3) Publication.--The Secretary shall provide for 
        publication in the Federal Register of all 
        determinations made by the Secretary under paragraph 
        (1).
    ``(b) Adoption of Standards, Implementation Specifications, 
and Certification Criteria.--
            ``(1) In general.--Not later than December 31, 
        2009, the Secretary shall, through the rulemaking 
        process consistent with subsection (a)(2)(A), adopt an 
        initial set of standards, implementation 
        specifications, and certification criteria for the 
        areas required for consideration under section 
        3002(b)(2)(B). The rulemaking for the initial set of 
        standards, implementation specifications, and 
        certification criteria may be issued on an interim, 
        final basis.
            ``(2) Application of current standards, 
        implementation specifications, and certification 
        criteria.--The standards, implementation 
        specifications, and certification criteria adopted 
        before the date of the enactment of this title through 
        the process existing through the Office of the National 
        Coordinator for Health Information Technology may be 
        applied towards meeting the requirement of paragraph 
        (1).
            ``(3) Subsequent standards activity.--The Secretary 
        shall adopt additional standards, implementation 
        specifications, and certification criteria as necessary 
        and consistent with the schedule published under 
        section 3003(b)(2).

``SEC. 3005. APPLICATION AND USE OF ADOPTED STANDARDS AND 
                    IMPLEMENTATION SPECIFICATIONS BY FEDERAL AGENCIES.

    ``For requirements relating to the application and use by 
Federal agencies of the standards and implementation 
specifications adopted under section 3004, see section 13111 of 
the Health Information Technology for Economic and Clinical 
Health Act.

``SEC. 3006. VOLUNTARY APPLICATION AND USE OF ADOPTED STANDARDS AND 
                    IMPLEMENTATION SPECIFICATIONS BY PRIVATE ENTITIES.

    ``(a) In General.--Except as provided under section 13112 
of the HITECH Act, nothing in such Act or in the amendments 
made by such Act shall be construed--
            ``(1) to require a private entity to adopt or 
        comply with a standard or implementation specification 
        adopted under section 3004; or
            ``(2) to provide a Federal agency authority, other 
        than the authority such agency may have under other 
        provisions of law, to require a private entity to 
        comply with such a standard or implementation 
        specification.
    ``(b) Rule of Construction.--Nothing in this subtitle shall 
be construed to require that a private entity that enters into 
a contract with the Federal Government apply or use the 
standards and implementation specifications adopted under 
section 3004 with respect to activities not related to the 
contract.

``SEC. 3007. FEDERAL HEALTH INFORMATION TECHNOLOGY.

    ``(a) In General.--The National Coordinator shall support 
the development and routine updating of qualified electronic 
health record technology (as defined in section 3000) 
consistent with subsections (b) and (c) and make available such 
qualified electronic health record technology unless the 
Secretary determines through an assessment that the needs and 
demands of providers are being substantially and adequately met 
through the marketplace.
    ``(b) Certification.--In making such electronic health 
record technology publicly available, the National Coordinator 
shall ensure that the qualified electronic health record 
technology described in subsection (a) is certified under the 
program developed under section 3001(c)(3) to be in compliance 
with applicable standards adopted under section 3003(a).
    ``(c) Authorization To Charge a Nominal Fee.--The National 
Coordinator may impose a nominal fee for the adoption by a 
health care provider of the health information technology 
system developed or approved under subsection (a) and (b). Such 
fee shall take into account the financial circumstances of 
smaller providers, low income providers, and providers located 
in rural or other medically underserved areas.
    ``(d) Rule of Construction.--Nothing in this section shall 
be construed to require that a private or government entity 
adopt or use the technology provided under this section.

``SEC. 3008. TRANSITIONS.

    ``(a) ONCHIT.--To the extent consistent with section 3001, 
all functions, personnel, assets, liabilities, and 
administrative actions applicable to the National Coordinator 
for Health Information Technology appointed under Executive 
Order No. 13335 or the Office of such National Coordinator on 
the date before the date of the enactment of this title shall 
be transferred to the National Coordinator appointed under 
section 3001(a) and the Office of such National Coordinator as 
of the date of the enactment of this title.
    ``(b) National EHealth Collaborative.--Nothing in sections 
3002 or 3003 or this subsection shall be construed as 
prohibiting the AHIC Successor, Inc. doing business as the 
National eHealth Collaborative from modifying its charter, 
duties, membership, and any other structure or function 
required to be consistent with section 3002 and 3003 so as to 
allow the Secretary to recognize such AHIC Successor, Inc. as 
the HIT Policy Committee or the HIT Standards Committee.
    ``(c) Consistency of Recommendations.--In carrying out 
section 3003(b)(1)(A), until recommendations are made by the 
HIT Policy Committee, recommendations of the HIT Standards 
Committee shall be consistent with the most recent 
recommendations made by such AHIC Successor, Inc.

``SEC. 3009. MISCELLANEOUS PROVISIONS.

    ``(a) Relation to HIPAA Privacy and Security Law.--
            ``(1) In general.--With respect to the relation of 
        this title to HIPAA privacy and security law:
                    ``(A) This title may not be construed as 
                having any effect on the authorities of the 
                Secretary under HIPAA privacy and security law.
                    ``(B) The purposes of this title include 
                ensuring that the health information technology 
                standards and implementation specifications 
                adopted under section 3004 take into account 
                the requirements of HIPAA privacy and security 
                law.
            ``(2) Definition.--For purposes of this section, 
        the term `HIPAA privacy and security law' means--
                    ``(A) the provisions of part C of title XI 
                of the Social Security Act, section 264 of the 
                Health Insurance Portability and Accountability 
                Act of 1996, and subtitle D of title IV of the 
                Health Information Technology for Economic and 
                Clinical Health Act; and
                    ``(B) regulations under such provisions.
    ``(b) Flexibility.--In administering the provisions of this 
title, the Secretary shall have flexibility in applying the 
definition of health care provider under section 3000(3), 
including the authority to omit certain entities listed in such 
definition when applying such definition under this title, 
where appropriate.''.

SEC. 13102. TECHNICAL AMENDMENT.

    Section 1171(5) of the Social Security Act (42 U.S.C. 
1320d) is amended by striking ``or C'' and inserting ``C, or 
D''.

 PART 2--APPLICATION AND USE OF ADOPTED HEALTH INFORMATION TECHNOLOGY 
                           STANDARDS; REPORTS

SEC. 13111. COORDINATION OF FEDERAL ACTIVITIES WITH ADOPTED STANDARDS 
                    AND IMPLEMENTATION SPECIFICATIONS.

    (a) Spending on Health Information Technology Systems.--As 
each agency (as defined by the Director of the Office of 
Management and Budget, in consultation with the Secretary of 
Health and Human Services) implements, acquires, or upgrades 
health information technology systems used for the direct 
exchange of individually identifiable health information 
between agencies and with non-Federal entities, it shall 
utilize, where available, health information technology systems 
and products that meet standards and implementation 
specifications adopted under section 3004 of the Public Health 
Service Act, as added by section 13101.
    (b) Federal Information Collection Activities.--With 
respect to a standard or implementation specification adopted 
under section 3004 of the Public Health Service Act, as added 
by section 13101, the President shall take measures to ensure 
that Federal activities involving the broad collection and 
submission of health information are consistent with such 
standard or implementation specification, respectively, within 
three years after the date of such adoption.
    (c) Application of Definitions.--The definitions contained 
in section 3000 of the Public Health Service Act, as added by 
section 13101, shall apply for purposes of this part.

SEC. 13112. APPLICATION TO PRIVATE ENTITIES.

    Each agency (as defined in such Executive Order issued on 
August 22, 2006, relating to promoting quality and efficient 
health care in Federal government administered or sponsored 
health care programs) shall require in contracts or agreements 
with health care providers, health plans, or health insurance 
issuers that as each provider, plan, or issuer implements, 
acquires, or upgrades health information technology systems, it 
shall utilize, where available, health information technology 
systems and products that meet standards and implementation 
specifications adopted under section 3004 of the Public Health 
Service Act, as added by section 13101.

SEC. 13113. STUDY AND REPORTS.

    (a) Report on Adoption of Nationwide System.--Not later 
than 2 years after the date of the enactment of this Act and 
annually thereafter, the Secretary of Health and Human Services 
shall submit to the appropriate committees of jurisdiction of 
the House of Representatives and the Senate a report that--
            (1) describes the specific actions that have been 
        taken by the Federal Government and private entities to 
        facilitate the adoption of a nationwide system for the 
        electronic use and exchange of health information;
            (2) describes barriers to the adoption of such a 
        nationwide system; and
            (3) contains recommendations to achieve full 
        implementation of such a nationwide system.
    (b) Reimbursement Incentive Study and Report.--
            (1) Study.--The Secretary of Health and Human 
        Services shall carry out, or contract with a private 
        entity to carry out, a study that examines methods to 
        create efficient reimbursement incentives for improving 
        health care quality in Federally qualified health 
        centers, rural health clinics, and free clinics.
            (2) Report.--Not later than 2 years after the date 
        of the enactment of this Act, the Secretary of Health 
        and Human Services shall submit to the appropriate 
        committees of jurisdiction of the House of 
        Representatives and the Senate a report on the study 
        carried out under paragraph (1).
    (c) Aging Services Technology Study and Report.--
            (1) In general.--The Secretary of Health and Human 
        Services shall carry out, or contract with a private 
        entity to carry out, a study of matters relating to the 
        potential use of new aging services technology to 
        assist seniors, individuals with disabilities, and 
        their caregivers throughout the aging process.
            (2) Matters to be studied.--The study under 
        paragraph (1) shall include--
                    (A) an evaluation of--
                            (i) methods for identifying 
                        current, emerging, and future health 
                        technology that can be used to meet the 
                        needs of seniors and individuals with 
                        disabilities and their caregivers 
                        across all aging services settings, as 
                        specified by the Secretary;
                            (ii) methods for fostering 
                        scientific innovation with respect to 
                        aging services technology within the 
                        business and academic communities; and
                            (iii) developments in aging 
                        services technology in other countries 
                        that may be applied in the United 
                        States; and
                    (B) identification of--
                            (i) barriers to innovation in aging 
                        services technology and devising 
                        strategies for removing such barriers; 
                        and
                            (ii) barriers to the adoption of 
                        aging services technology by health 
                        care providers and consumers and 
                        devising strategies to removing such 
                        barriers.
            (3) Report.--Not later than 24 months after the 
        date of the enactment of this Act, the Secretary shall 
        submit to the appropriate committees of jurisdiction of 
        the House of Representatives and of the Senate a report 
        on the study carried out under paragraph (1).
            (4) Definitions.--For purposes of this subsection:
                    (A) Aging services technology.--The term 
                ``aging services technology'' means health 
                technology that meets the health care needs of 
                seniors, individuals with disabilities, and the 
                caregivers of such seniors and individuals.
                    (B) Senior.--The term ``senior'' has such 
                meaning as specified by the Secretary.

          Subtitle B--Testing of Health Information Technology

SEC. 13201. NATIONAL INSTITUTE FOR STANDARDS AND TECHNOLOGY TESTING.

    (a) Pilot Testing of Standards and Implementation 
Specifications.--In coordination with the HIT Standards 
Committee established under section 3003 of the Public Health 
Service Act, as added by section 13101, with respect to the 
development of standards and implementation specifications 
under such section, the Director of the National Institute for 
Standards and Technology shall test such standards and 
implementation specifications, as appropriate, in order to 
assure the efficient implementation and use of such standards 
and implementation specifications.
    (b) Voluntary Testing Program.--In coordination with the 
HIT Standards Committee established under section 3003 of the 
Public Health Service Act, as added by section 13101, with 
respect to the development of standards and implementation 
specifications under such section, the Director of the National 
Institute of Standards and Technology shall support the 
establishment of a conformance testing infrastructure, 
including the development of technical test beds. The 
development of this conformance testing infrastructure may 
include a program to accredit independent, non-Federal 
laboratories to perform testing.

SEC. 13202. RESEARCH AND DEVELOPMENT PROGRAMS.

    (a) Health Care Information Enterprise Integration Research 
Centers.--
            (1) In general.--The Director of the National 
        Institute of Standards and Technology, in consultation 
        with the Director of the National Science Foundation 
        and other appropriate Federal agencies, shall establish 
        a program of assistance to institutions of higher 
        education (or consortia thereof which may include 
        nonprofit entities and Federal Government laboratories) 
        to establish multidisciplinary Centers for Health Care 
        Information Enterprise Integration.
            (2) Review; competition.--Grants shall be awarded 
        under this subsection on a merit-reviewed, competitive 
        basis.
            (3) Purpose.--The purposes of the Centers described 
        in paragraph (1) shall be--
                    (A) to generate innovative approaches to 
                health care information enterprise integration 
                by conducting cutting-edge, multidisciplinary 
                research on the systems challenges to health 
                care delivery; and
                    (B) the development and use of health 
                information technologies and other 
                complementary fields.
            (4) Research areas.--Research areas may include--
                    (A) interfaces between human information 
                and communications technology systems;
                    (B) voice-recognition systems;
                    (C) software that improves interoperability 
                and connectivity among health information 
                systems;
                    (D) software dependability in systems 
                critical to health care delivery;
                    (E) measurement of the impact of 
                information technologies on the quality and 
                productivity of health care;
                    (F) health information enterprise 
                management;
                    (G) health information technology security 
                and integrity; and
                    (H) relevant health information technology 
                to reduce medical errors.
            (5) Applications.--An institution of higher 
        education (or a consortium thereof) seeking funding 
        under this subsection shall submit an application to 
        the Director of the National Institute of Standards and 
        Technology at such time, in such manner, and containing 
        such information as the Director may require. The 
        application shall include, at a minimum, a description 
        of--
                    (A) the research projects that will be 
                undertaken by the Center established pursuant 
                to assistance under paragraph (1) and the 
                respective contributions of the participating 
                entities;
                    (B) how the Center will promote active 
                collaboration among scientists and engineers 
                from different disciplines, such as information 
                technology, biologic sciences, management, 
                social sciences, and other appropriate 
                disciplines;
                    (C) technology transfer activities to 
                demonstrate and diffuse the research results, 
                technologies, and knowledge; and
                    (D) how the Center will contribute to the 
                education and training of researchers and other 
                professionals in fields relevant to health 
                information enterprise integration.
    (b) National Information Technology Research and 
Development Program.--The National High-Performance Computing 
Program established by section 101 of the High-Performance 
Computing Act of 1991 (15 U.S.C. 5511) shall include Federal 
research and development programs related to health information 
technology.

                  Subtitle C--Grants and Loans Funding

SEC. 13301. GRANT, LOAN, AND DEMONSTRATION PROGRAMS.

    Title XXX of the Public Health Service Act, as added by 
section 13101, is amended by adding at the end the following 
new subtitle:

 ``Subtitle B--Incentives for the Use of Health Information Technology

``SEC. 3011. IMMEDIATE FUNDING TO STRENGTHEN THE HEALTH INFORMATION 
                    TECHNOLOGY INFRASTRUCTURE.

    ``(a) In General.--The Secretary shall, using amounts 
appropriated under section 3018, invest in the infrastructure 
necessary to allow for and promote the electronic exchange and 
use of health information for each individual in the United 
States consistent with the goals outlined in the strategic plan 
developed by the National Coordinator (and as available) under 
section 3001. The Secretary shall invest funds through the 
different agencies with expertise in such goals, such as the 
Office of the National Coordinator for Health Information 
Technology, the Health Resources and Services Administration, 
the Agency for Healthcare Research and Quality, the Centers of 
Medicare & Medicaid Services, the Centers for Disease Control 
and Prevention, and the Indian Health Service to support the 
following:
            ``(1) Health information technology architecture 
        that will support the nationwide electronic exchange 
        and use of health information in a secure, private, and 
        accurate manner, including connecting health 
        information exchanges, and which may include updating 
        and implementing the infrastructure necessary within 
        different agencies of the Department of Health and 
        Human Services to support the electronic use and 
        exchange of health information.
            ``(2) Development and adoption of appropriate 
        certified electronic health records for categories of 
        health care providers not eligible for support under 
        title XVIII or XIX of the Social Security Act for the 
        adoption of such records.
            ``(3) Training on and dissemination of information 
        on best practices to integrate health information 
        technology, including electronic health records, into a 
        provider's delivery of care, consistent with best 
        practices learned from the Health Information 
        Technology Research Center developed under section 
        3012(b), including community health centers receiving 
        assistance under section 330, covered entities under 
        section 340B, and providers participating in one or 
        more of the programs under titles XVIII, XIX, and XXI 
        of the Social Security Act (relating to Medicare, 
        Medicaid, and the State Children's Health Insurance 
        Program).
            ``(4) Infrastructure and tools for the promotion of 
        telemedicine, including coordination among Federal 
        agencies in the promotion of telemedicine.
            ``(5) Promotion of the interoperability of clinical 
        data repositories or registries.
            ``(6) Promotion of technologies and best practices 
        that enhance the protection of health information by 
        all holders of individually identifiable health 
        information.
            ``(7) Improvement and expansion of the use of 
        health information technology by public health 
        departments.
    ``(b) Coordination.--The Secretary shall ensure funds under 
this section are used in a coordinated manner with other health 
information promotion activities.
    ``(c) Additional Use of Funds.--In addition to using funds 
as provided in subsection (a), the Secretary may use amounts 
appropriated under section 3018 to carry out health information 
technology activities that are provided for under laws in 
effect on the date of the enactment of this title.
    ``(d) Standards for Acquisition of Health Information 
Technology.--To the greatest extent practicable, the Secretary 
shall ensure that where funds are expended under this section 
for the acquisition of health information technology, such 
funds shall be used to acquire health information technology 
that meets applicable standards adopted under section 3004. 
Where it is not practicable to expend funds on health 
information technology that meets such applicable standards, 
the Secretary shall ensure that such health information 
technology meets applicable standards otherwise adopted by the 
Secretary.

``SEC. 3012. HEALTH INFORMATION TECHNOLOGY IMPLEMENTATION ASSISTANCE.

    ``(a) Health Information Technology Extension Program.--To 
assist health care providers to adopt, implement, and 
effectively use certified EHR technology that allows for the 
electronic exchange and use of health information, the 
Secretary, acting through the Office of the National 
Coordinator, shall establish a health information technology 
extension program to provide health information technology 
assistance services to be carried out through the Department of 
Health and Human Services. The National Coordinator shall 
consult with other Federal agencies with demonstrated 
experience and expertise in information technology services, 
such as the National Institute of Standards and Technology, in 
developing and implementing this program.
    ``(b) Health Information Technology Research Center.--
            ``(1) In general.--The Secretary shall create a 
        Health Information Technology Research Center (in this 
        section referred to as the `Center') to provide 
        technical assistance and develop or recognize best 
        practices to support and accelerate efforts to adopt, 
        implement, and effectively utilize health information 
        technology that allows for the electronic exchange and 
        use of information in compliance with standards, 
        implementation specifications, and certification 
        criteria adopted under section 3004.
            ``(2) Input.--The Center shall incorporate input 
        from--
                    ``(A) other Federal agencies with 
                demonstrated experience and expertise in 
                information technology services such as the 
                National Institute of Standards and Technology;
                    ``(B) users of health information 
                technology, such as providers and their support 
                and clerical staff and others involved in the 
                care and care coordination of patients, from 
                the health care and health information 
                technology industry; and
                    ``(C) others as appropriate.
            ``(3) Purposes.--The purposes of the Center are 
        to--
                    ``(A) provide a forum for the exchange of 
                knowledge and experience;
                    ``(B) accelerate the transfer of lessons 
                learned from existing public and private sector 
                initiatives, including those currently 
                receiving Federal financial support;
                    ``(C) assemble, analyze, and widely 
                disseminate evidence and experience related to 
                the adoption, implementation, and effective use 
                of health information technology that allows 
                for the electronic exchange and use of 
                information including through the regional 
                centers described in subsection (c);
                    ``(D) provide technical assistance for the 
                establishment and evaluation of regional and 
                local health information networks to facilitate 
                the electronic exchange of information across 
                health care settings and improve the quality of 
                health care;
                    ``(E) provide technical assistance for the 
                development and dissemination of solutions to 
                barriers to the exchange of electronic health 
                information; and
                    ``(F) learn about effective strategies to 
                adopt and utilize health information technology 
                in medically underserved communities.
    ``(c) Health Information Technology Regional Extension 
Centers.--
            ``(1) In general.--The Secretary shall provide 
        assistance for the creation and support of regional 
        centers (in this subsection referred to as `regional 
        centers') to provide technical assistance and 
        disseminate best practices and other information 
        learned from the Center to support and accelerate 
        efforts to adopt, implement, and effectively utilize 
        health information technology that allows for the 
        electronic exchange and use of information in 
        compliance with standards, implementation 
        specifications, and certification criteria adopted 
        under section 3004. Activities conducted under this 
        subsection shall be consistent with the strategic plan 
        developed by the National Coordinator, (and, as 
        available) under section 3001.
            ``(2) Affiliation.--Regional centers shall be 
        affiliated with any United States-based nonprofit 
        institution or organization, or group thereof, that 
        applies and is awarded financial assistance under this 
        section. Individual awards shall be decided on the 
        basis of merit.
            ``(3) Objective.--The objective of the regional 
        centers is to enhance and promote the adoption of 
        health information technology through--
                    ``(A) assistance with the implementation, 
                effective use, upgrading, and ongoing 
                maintenance of health information technology, 
                including electronic health records, to 
                healthcare providers nationwide;
                    ``(B) broad participation of individuals 
                from industry, universities, and State 
                governments;
                    ``(C) active dissemination of best 
                practices and research on the implementation, 
                effective use, upgrading, and ongoing 
                maintenance of health information technology, 
                including electronic health records, to health 
                care providers in order to improve the quality 
                of healthcare and protect the privacy and 
                security of health information;
                    ``(D) participation, to the extent 
                practicable, in health information exchanges;
                    ``(E) utilization, when appropriate, of the 
                expertise and capability that exists in Federal 
                agencies other than the Department; and
                    ``(F) integration of health information 
                technology, including electronic health 
                records, into the initial and ongoing training 
                of health professionals and others in the 
                healthcare industry that would be instrumental 
                to improving the quality of healthcare through 
                the smooth and accurate electronic use and 
                exchange of health information.
            ``(4) Regional assistance.--Each regional center 
        shall aim to provide assistance and education to all 
        providers in a region, but shall prioritize any direct 
        assistance first to the following:
                    ``(A) Public or not-for-profit hospitals or 
                critical access hospitals.
                    ``(B) Federally qualified health centers 
                (as defined in section 1861(aa)(4) of the 
                Social Security Act).
                    ``(C) Entities that are located in rural 
                and other areas that serve uninsured, 
                underinsured, and medically underserved 
                individuals (regardless of whether such area is 
                urban or rural).
                    ``(D) Individual or small group practices 
                (or a consortium thereof) that are primarily 
                focused on primary care.
            ``(5) Financial support.--The Secretary may provide 
        financial support to any regional center created under 
        this subsection for a period not to exceed four years. 
        The Secretary may not provide more than 50 percent of 
        the capital and annual operating and maintenance funds 
        required to create and maintain such a center, except 
        in an instance of national economic conditions which 
        would render this cost-share requirement detrimental to 
        the program and upon notification to Congress as to the 
        justification to waive the cost-share requirement.
            ``(6) Notice of program description and 
        availability of funds.--The Secretary shall publish in 
        the Federal Register, not later than 90 days after the 
        date of the enactment of this title, a draft 
        description of the program for establishing regional 
        centers under this subsection. Such description shall 
        include the following:
                    ``(A) A detailed explanation of the program 
                and the programs goals.
                    ``(B) Procedures to be followed by the 
                applicants.
                    ``(C) Criteria for determining qualified 
                applicants.
                    ``(D) Maximum support levels expected to be 
                available to centers under the program.
            ``(7) Application review.--The Secretary shall 
        subject each application under this subsection to merit 
        review. In making a decision whether to approve such 
        application and provide financial support, the 
        Secretary shall consider at a minimum the merits of the 
        application, including those portions of the 
        application regarding--
                    ``(A) the ability of the applicant to 
                provide assistance under this subsection and 
                utilization of health information technology 
                appropriate to the needs of particular 
                categories of health care providers;
                    ``(B) the types of service to be provided 
                to health care providers;
                    ``(C) geographical diversity and extent of 
                service area; and
                    ``(D) the percentage of funding and amount 
                of in-kind commitment from other sources.
            ``(8) Biennial evaluation.--Each regional center 
        which receives financial assistance under this 
        subsection shall be evaluated biennially by an 
        evaluation panel appointed by the Secretary. Each 
        evaluation panel shall be composed of private experts, 
        none of whom shall be connected with the center 
        involved, and of Federal officials. Each evaluation 
        panel shall measure the involved center's performance 
        against the objective specified in paragraph (3). The 
        Secretary shall not continue to provide funding to a 
        regional center unless its evaluation is overall 
        positive.
            ``(9) Continuing support.--After the second year of 
        assistance under this subsection, a regional center may 
        receive additional support under this subsection if it 
        has received positive evaluations and a finding by the 
        Secretary that continuation of Federal funding to the 
        center was in the best interest of provision of health 
        information technology extension services.

``SEC. 3013. STATE GRANTS TO PROMOTE HEALTH INFORMATION TECHNOLOGY.

    ``(a) In General.--The Secretary, acting through the 
National Coordinator, shall establish a program in accordance 
with this section to facilitate and expand the electronic 
movement and use of health information among organizations 
according to nationally recognized standards.
    ``(b) Planning Grants.--The Secretary may award a grant to 
a State or qualified State-designated entity (as described in 
subsection (f)) that submits an application to the Secretary at 
such time, in such manner, and containing such information as 
the Secretary may specify, for the purpose of planning 
activities described in subsection (d).
    ``(c) Implementation Grants.--The Secretary may award a 
grant to a State or qualified State designated entity that--
            ``(1) has submitted, and the Secretary has 
        approved, a plan described in subsection (e) 
        (regardless of whether such plan was prepared using 
        amounts awarded under subsection (b); and
            ``(2) submits an application at such time, in such 
        manner, and containing such information as the 
        Secretary may specify.
    ``(d) Use of Funds.--Amounts received under a grant under 
subsection (c) shall be used to conduct activities to 
facilitate and expand the electronic movement and use of health 
information among organizations according to nationally 
recognized standards through activities that include--
            ``(1) enhancing broad and varied participation in 
        the authorized and secure nationwide electronic use and 
        exchange of health information;
            ``(2) identifying State or local resources 
        available towards a nationwide effort to promote health 
        information technology;
            ``(3) complementing other Federal grants, programs, 
        and efforts towards the promotion of health information 
        technology;
            ``(4) providing technical assistance for the 
        development and dissemination of solutions to barriers 
        to the exchange of electronic health information;
            ``(5) promoting effective strategies to adopt and 
        utilize health information technology in medically 
        underserved communities;
            ``(6) assisting patients in utilizing health 
        information technology;
            ``(7) encouraging clinicians to work with Health 
        Information Technology Regional Extension Centers as 
        described in section 3012, to the extent they are 
        available and valuable;
            ``(8) supporting public health agencies' authorized 
        use of and access to electronic health information;
            ``(9) promoting the use of electronic health 
        records for quality improvement including through 
        quality measures reporting; and
            ``(10) such other activities as the Secretary may 
        specify.
    ``(e) Plan.--
            ``(1) In general.--A plan described in this 
        subsection is a plan that describes the activities to 
        be carried out by a State or by the qualified State-
        designated entity within such State to facilitate and 
        expand the electronic movement and use of health 
        information among organizations according to nationally 
        recognized standards and implementation specifications.
            ``(2) Required elements.--A plan described in 
        paragraph (1) shall--
                    ``(A) be pursued in the public interest;
                    ``(B) be consistent with the strategic plan 
                developed by the National Coordinator (and, as 
                available) under section 3001;
                    ``(C) include a description of the ways the 
                State or qualified State-designated entity will 
                carry out the activities described in 
                subsection (b); and
                    ``(D) contain such elements as the 
                Secretary may require.
    ``(f) Qualified State-Designated Entity.--For purposes of 
this section, to be a qualified State-designated entity, with 
respect to a State, an entity shall--
            ``(1) be designated by the State as eligible to 
        receive awards under this section;
            ``(2) be a not-for-profit entity with broad 
        stakeholder representation on its governing board;
            ``(3) demonstrate that one of its principal goals 
        is to use information technology to improve health care 
        quality and efficiency through the authorized and 
        secure electronic exchange and use of health 
        information;
            ``(4) adopt nondiscrimination and conflict of 
        interest policies that demonstrate a commitment to 
        open, fair, and nondiscriminatory participation by 
        stakeholders; and
            ``(5) conform to such other requirements as the 
        Secretary may establish.
    ``(g) Required Consultation.--In carrying out activities 
described in subsections (b) and (c), a State or qualified 
State-designated entity shall consult with and consider the 
recommendations of--
            ``(1) health care providers (including providers 
        that provide services to low income and underserved 
        populations);
            ``(2) health plans;
            ``(3) patient or consumer organizations that 
        represent the population to be served;
            ``(4) health information technology vendors;
            ``(5) health care purchasers and employers;
            ``(6) public health agencies;
            ``(7) health professions schools, universities and 
        colleges;
            ``(8) clinical researchers;
            ``(9) other users of health information technology 
        such as the support and clerical staff of providers and 
        others involved in the care and care coordination of 
        patients; and
            ``(10) such other entities, as may be determined 
        appropriate by the Secretary.
    ``(h) Continuous Improvement.--The Secretary shall annually 
evaluate the activities conducted under this section and shall, 
in awarding grants under this section, implement the lessons 
learned from such evaluation in a manner so that awards made 
subsequent to each such evaluation are made in a manner that, 
in the determination of the Secretary, will lead towards the 
greatest improvement in quality of care, decrease in costs, and 
the most effective authorized and secure electronic exchange of 
health information.
    ``(i) Required Match.--
            ``(1) In general.--For a fiscal year (beginning 
        with fiscal year 2011), the Secretary may not make a 
        grant under this section to a State unless the State 
        agrees to make available non-Federal contributions 
        (which may include in-kind contributions) toward the 
        costs of a grant awarded under subsection (c) in an 
        amount equal to--
                    ``(A) for fiscal year 2011, not less than 
                $1 for each $10 of Federal funds provided under 
                the grant;
                    ``(B) for fiscal year 2012, not less than 
                $1 for each $7 of Federal funds provided under 
                the grant; and
                    ``(C) for fiscal year 2013 and each 
                subsequent fiscal year, not less than $1 for 
                each $3 of Federal funds provided under the 
                grant.
            ``(2) Authority to require state match for fiscal 
        years before fiscal year 2011.--For any fiscal year 
        during the grant program under this section before 
        fiscal year 2011, the Secretary may determine the 
        extent to which there shall be required a non-Federal 
        contribution from a State receiving a grant under this 
        section.

``SEC. 3014. COMPETITIVE GRANTS TO STATES AND INDIAN TRIBES FOR THE 
                    DEVELOPMENT OF LOAN PROGRAMS TO FACILITATE THE 
                    WIDESPREAD ADOPTION OF CERTIFIED EHR TECHNOLOGY.

    ``(a) In General.--The National Coordinator may award 
competitive grants to eligible entities for the establishment 
of programs for loans to health care providers to conduct the 
activities described in subsection (e).
    ``(b) Eligible Entity Defined.--For purposes of this 
subsection, the term `eligible entity' means a State or Indian 
tribe (as defined in the Indian Self-Determination and 
Education Assistance Act) that--
            ``(1) submits to the National Coordinator an 
        application at such time, in such manner, and 
        containing such information as the National Coordinator 
        may require;
            ``(2) submits to the National Coordinator a 
        strategic plan in accordance with subsection (d) and 
        provides to the National Coordinator assurances that 
        the entity will update such plan annually in accordance 
        with such subsection;
            ``(3) provides assurances to the National 
        Coordinator that the entity will establish a Loan Fund 
        in accordance with subsection (c);
            ``(4) provides assurances to the National 
        Coordinator that the entity will not provide a loan 
        from the Loan Fund to a health care provider unless the 
        provider agrees to--
                    ``(A) submit reports on quality measures 
                adopted by the Federal Government (by not later 
                than 90 days after the date on which such 
                measures are adopted), to--
                            ``(i) the Administrator of the 
                        Centers for Medicare & Medicaid 
                        Services (or his or her designee), in 
                        the case of an entity participating in 
                        the Medicare program under title XVIII 
                        of the Social Security Act or the 
                        Medicaid program under title XIX of 
                        such Act; or
                            ``(ii) the Secretary in the case of 
                        other entities;
                    ``(B) demonstrate to the satisfaction of 
                the Secretary (through criteria established by 
                the Secretary) that any certified EHR 
                technology purchased, improved, or otherwise 
                financially supported under a loan under this 
                section is used to exchange health information 
                in a manner that, in accordance with law and 
                standards (as adopted under section 3004) 
                applicable to the exchange of information, 
                improves the quality of health care, such as 
                promoting care coordination;
                    ``(C) comply with such other requirements 
                as the entity or the Secretary may require;
                    ``(D) include a plan on how health care 
                providers involved intend to maintain and 
                support the certified EHR technology over time; 
                and
                    ``(E) include a plan on how the health care 
                providers involved intend to maintain and 
                support the certified EHR technology that would 
                be purchased with such loan, including the type 
                of resources expected to be involved and any 
                such other information as the State or Indian 
                Tribe, respectively, may require; and
            ``(5) agrees to provide matching funds in 
        accordance with subsection (h).
    ``(c) Establishment of Fund.--For purposes of subsection 
(b)(3), an eligible entity shall establish a certified EHR 
technology loan fund (referred to in this subsection as a `Loan 
Fund') and comply with the other requirements contained in this 
section. A grant to an eligible entity under this section shall 
be deposited in the Loan Fund established by the eligible 
entity. No funds authorized by other provisions of this title 
to be used for other purposes specified in this title shall be 
deposited in any Loan Fund.
    ``(d) Strategic Plan.--
            ``(1) In general.--For purposes of subsection 
        (b)(2), a strategic plan of an eligible entity under 
        this subsection shall identify the intended uses of 
        amounts available to the Loan Fund of such entity.
            ``(2) Contents.--A strategic plan under paragraph 
        (1), with respect to a Loan Fund of an eligible entity, 
        shall include for a year the following:
                    ``(A) A list of the projects to be assisted 
                through the Loan Fund during such year.
                    ``(B) A description of the criteria and 
                methods established for the distribution of 
                funds from the Loan Fund during the year.
                    ``(C) A description of the financial status 
                of the Loan Fund as of the date of submission 
                of the plan.
                    ``(D) The short-term and long-term goals of 
                the Loan Fund.
    ``(e) Use of Funds.--Amounts deposited in a Loan Fund, 
including loan repayments and interest earned on such amounts, 
shall be used only for awarding loans or loan guarantees, 
making reimbursements described in subsection (g)(4)(A), or as 
a source of reserve and security for leveraged loans, the 
proceeds of which are deposited in the Loan Fund established 
under subsection (c). Loans under this section may be used by a 
health care provider to--
            ``(1) facilitate the purchase of certified EHR 
        technology;
            ``(2) enhance the utilization of certified EHR 
        technology (which may include costs associated with 
        upgrading health information technology so that it 
        meets criteria necessary to be a certified EHR 
        technology);
            ``(3) train personnel in the use of such 
        technology; or
            ``(4) improve the secure electronic exchange of 
        health information.
    ``(f) Types of Assistance.--Except as otherwise limited by 
applicable State law, amounts deposited into a Loan Fund under 
this section may only be used for the following:
            ``(1) To award loans that comply with the 
        following:
                    ``(A) The interest rate for each loan shall 
                not exceed the market interest rate.
                    ``(B) The principal and interest payments 
                on each loan shall commence not later than 1 
                year after the date the loan was awarded, and 
                each loan shall be fully amortized not later 
                than 10 years after the date of the loan.
                    ``(C) The Loan Fund shall be credited with 
                all payments of principal and interest on each 
                loan awarded from the Loan Fund.
            ``(2) To guarantee, or purchase insurance for, a 
        local obligation (all of the proceeds of which finance 
        a project eligible for assistance under this 
        subsection) if the guarantee or purchase would improve 
        credit market access or reduce the interest rate 
        applicable to the obligation involved.
            ``(3) As a source of revenue or security for the 
        payment of principal and interest on revenue or general 
        obligation bonds issued by the eligible entity if the 
        proceeds of the sale of the bonds will be deposited 
        into the Loan Fund.
            ``(4) To earn interest on the amounts deposited 
        into the Loan Fund.
            ``(5) To make reimbursements described in 
        subsection (g)(4)(A).
    ``(g) Administration of Loan Funds.--
            ``(1) Combined financial administration.--An 
        eligible entity may (as a convenience and to avoid 
        unnecessary administrative costs) combine, in 
        accordance with applicable State law, the financial 
        administration of a Loan Fund established under this 
        subsection with the financial administration of any 
        other revolving fund established by the entity if 
        otherwise not prohibited by the law under which the 
        Loan Fund was established.
            ``(2) Cost of administering fund.--Each eligible 
        entity may annually use not to exceed 4 percent of the 
        funds provided to the entity under a grant under this 
        section to pay the reasonable costs of the 
        administration of the programs under this section, 
        including the recovery of reasonable costs expended to 
        establish a Loan Fund which are incurred after the date 
        of the enactment of this title.
            ``(3) Guidance and regulations.--The National 
        Coordinator shall publish guidance and promulgate 
        regulations as may be necessary to carry out the 
        provisions of this section, including--
                    ``(A) provisions to ensure that each 
                eligible entity commits and expends funds 
                allotted to the entity under this section as 
                efficiently as possible in accordance with this 
                title and applicable State laws; and
                    ``(B) guidance to prevent waste, fraud, and 
                abuse.
            ``(4) Private sector contributions.--
                    ``(A) In general.--A Loan Fund established 
                under this section may accept contributions 
                from private sector entities, except that such 
                entities may not specify the recipient or 
                recipients of any loan issued under this 
                subsection. An eligible entity may agree to 
                reimburse a private sector entity for any 
                contribution made under this subparagraph, 
                except that the amount of such reimbursement 
                may not be greater than the principal amount of 
                the contribution made.
                    ``(B) Availability of information.--An 
                eligible entity shall make publicly available 
                the identity of, and amount contributed by, any 
                private sector entity under subparagraph (A) 
                and may issue letters of commendation or make 
                other awards (that have no financial value) to 
                any such entity.
    ``(h) Matching Requirements.--
            ``(1) In general.--The National Coordinator may not 
        make a grant under subsection (a) to an eligible entity 
        unless the entity agrees to make available (directly or 
        through donations from public or private entities) non-
        Federal contributions in cash to the costs of carrying 
        out the activities for which the grant is awarded in an 
        amount equal to not less than $1 for each $5 of Federal 
        funds provided under the grant.
            ``(2) Determination of amount of non-federal 
        contribution.--In determining the amount of non-Federal 
        contributions that an eligible entity has provided 
        pursuant to subparagraph (A), the National Coordinator 
        may not include any amounts provided to the entity by 
        the Federal Government.
    ``(i) Effective Date.--The Secretary may not make an award 
under this section prior to January 1, 2010.

``SEC. 3015. DEMONSTRATION PROGRAM TO INTEGRATE INFORMATION TECHNOLOGY 
                    INTO CLINICAL EDUCATION.

    ``(a) In General.--The Secretary may award grants under 
this section to carry out demonstration projects to develop 
academic curricula integrating certified EHR technology in the 
clinical education of health professionals. Such awards shall 
be made on a competitive basis and pursuant to peer review.
    ``(b) Eligibility.--To be eligible to receive a grant under 
subsection (a), an entity shall--
            ``(1) submit to the Secretary an application at 
        such time, in such manner, and containing such 
        information as the Secretary may require;
            ``(2) submit to the Secretary a strategic plan for 
        integrating certified EHR technology in the clinical 
        education of health professionals to reduce medical 
        errors, increase access to prevention, reduce chronic 
        diseases, and enhance health care quality;
            ``(3) be--
                    ``(A) a school of medicine, osteopathic 
                medicine, dentistry, or pharmacy, a graduate 
                program in behavioral or mental health, or any 
                other graduate health professions school;
                    ``(B) a graduate school of nursing or 
                physician assistant studies;
                    ``(C) a consortium of two or more schools 
                described in subparagraph (A) or (B); or
                    ``(D) an institution with a graduate 
                medical education program in medicine, 
                osteopathic medicine, dentistry, pharmacy, 
                nursing, or physician assistance studies;
            ``(4) provide for the collection of data regarding 
        the effectiveness of the demonstration project to be 
        funded under the grant in improving the safety of 
        patients, the efficiency of health care delivery, and 
        in increasing the likelihood that graduates of the 
        grantee will adopt and incorporate certified EHR 
        technology, in the delivery of health care services; 
        and
            ``(5) provide matching funds in accordance with 
        subsection (d).
    ``(c) Use of Funds.--
            ``(1) In general.--With respect to a grant under 
        subsection (a), an eligible entity shall--
                    ``(A) use grant funds in collaboration with 
                2 or more disciplines; and
                    ``(B) use grant funds to integrate 
                certified EHR technology into community-based 
                clinical education.
            ``(2) Limitation.--An eligible entity shall not use 
        amounts received under a grant under subsection (a) to 
        purchase hardware, software, or services.
    ``(d) Financial Support.--The Secretary may not provide 
more than 50 percent of the costs of any activity for which 
assistance is provided under subsection (a), except in an 
instance of national economic conditions which would render the 
cost-share requirement under this subsection detrimental to the 
program and upon notification to Congress as to the 
justification to waive the cost-share requirement.
    ``(e) Evaluation.--The Secretary shall take such action as 
may be necessary to evaluate the projects funded under this 
section and publish, make available, and disseminate the 
results of such evaluations on as wide a basis as is 
practicable.
    ``(f) Reports.--Not later than 1 year after the date of 
enactment of this title, and annually thereafter, the Secretary 
shall submit to the Committee on Health, Education, Labor, and 
Pensions and the Committee on Finance of the Senate, and the 
Committee on Energy and Commerce of the House of 
Representatives a report that--
            ``(1) describes the specific projects established 
        under this section; and
            ``(2) contains recommendations for Congress based 
        on the evaluation conducted under subsection (e).

``SEC. 3016. INFORMATION TECHNOLOGY PROFESSIONALS IN HEALTH CARE.

    ``(a) In General.--The Secretary, in consultation with the 
Director of the National Science Foundation, shall provide 
assistance to institutions of higher education (or consortia 
thereof) to establish or expand medical health informatics 
education programs, including certification, undergraduate, and 
masters degree programs, for both health care and information 
technology students to ensure the rapid and effective 
utilization and development of health information technologies 
(in the United States health care infrastructure).
    ``(b) Activities.--Activities for which assistance may be 
provided under subsection (a) may include the following:
            ``(1) Developing and revising curricula in medical 
        health informatics and related disciplines.
            ``(2) Recruiting and retaining students to the 
        program involved.
            ``(3) Acquiring equipment necessary for student 
        instruction in these programs, including the 
        installation of testbed networks for student use.
            ``(4) Establishing or enhancing bridge programs in 
        the health informatics fields between community 
        colleges and universities.
    ``(c) Priority.--In providing assistance under subsection 
(a), the Secretary shall give preference to the following:
            ``(1) Existing education and training programs.
            ``(2) Programs designed to be completed in less 
        than six months.

``SEC. 3017. GENERAL GRANT AND LOAN PROVISIONS.

    ``(a) Reports.--The Secretary may require that an entity 
receiving assistance under this subtitle shall submit to the 
Secretary, not later than the date that is 1 year after the 
date of receipt of such assistance, a report that includes--
            ``(1) an analysis of the effectiveness of the 
        activities for which the entity receives such 
        assistance, as compared to the goals for such 
        activities; and
            ``(2) an analysis of the impact of the project on 
        health care quality and safety.
    ``(b) Requirement To Improve Quality of Care and Decrease 
in Costs.--The National Coordinator shall annually evaluate the 
activities conducted under this subtitle and shall, in awarding 
grants, implement the lessons learned from such evaluation in a 
manner so that awards made subsequent to each such evaluation 
are made in a manner that, in the determination of the National 
Coordinator, will result in the greatest improvement in the 
quality and efficiency of health care.

``SEC. 3018. AUTHORIZATION FOR APPROPRIATIONS.

    ``For the purposes of carrying out this subtitle, there is 
authorized to be appropriated such sums as may be necessary for 
each of the fiscal years 2009 through 2013.''.

                          Subtitle D--Privacy

SEC. 13400. DEFINITIONS.

    In this subtitle, except as specified otherwise:
            (1) Breach.--
                    (A) In general.--The term ``breach'' means 
                the unauthorized acquisition, access, use, or 
                disclosure of protected health information 
                which compromises the security or privacy of 
                such information, except where an unauthorized 
                person to whom such information is disclosed 
                would not reasonably have been able to retain 
                such information.
                    (B) Exceptions.--The term ``breach'' does 
                not include--
                            (i) any unintentional acquisition, 
                        access, or use of protected health 
                        information by an employee or 
                        individual acting under the authority 
                        of a covered entity or business 
                        associate if--
                                    (I) such acquisition, 
                                access, or use was made in good 
                                faith and within the course and 
                                scope of the employment or 
                                other professional relationship 
                                of such employee or individual, 
                                respectively, with the covered 
                                entity or business associate; 
                                and
                                    (II) such information is 
                                not further acquired, accessed, 
                                used, or disclosed by any 
                                person; or
                            (ii) any inadvertent disclosure 
                        from an individual who is otherwise 
                        authorized to access protected health 
                        information at a facility operated by a 
                        covered entity or business associate to 
                        another similarly situated individual 
                        at same facility; and
                            (iii) any such information received 
                        as a result of such disclosure is not 
                        further acquired, accessed, used, or 
                        disclosed without authorization by any 
                        person.
            (2) Business associate.--The term ``business 
        associate'' has the meaning given such term in section 
        160.103 of title 45, Code of Federal Regulations.
            (3) Covered entity.--The term ``covered entity'' 
        has the meaning given such term in section 160.103 of 
        title 45, Code of Federal Regulations.
            (4) Disclose.--The terms ``disclose'' and 
        ``disclosure'' have the meaning given the term 
        ``disclosure'' in section 160.103 of title 45, Code of 
        Federal Regulations.
            (5) Electronic health record.--The term 
        ``electronic health record'' means an electronic record 
        of health-related information on an individual that is 
        created, gathered, managed, and consulted by authorized 
        health care clinicians and staff.
            (6) Health care operations.--The term ``health care 
        operation'' has the meaning given such term in section 
        164.501 of title 45, Code of Federal Regulations.
            (7) Health care provider.--The term ``health care 
        provider'' has the meaning given such term in section 
        160.103 of title 45, Code of Federal Regulations.
            (8) Health plan.--The term ``health plan'' has the 
        meaning given such term in section 160.103 of title 45, 
        Code of Federal Regulations.
            (9) National coordinator.--The term ``National 
        Coordinator'' means the head of the Office of the 
        National Coordinator for Health Information Technology 
        established under section 3001(a) of the Public Health 
        Service Act, as added by section 13101.
            (10) Payment.--The term ``payment'' has the meaning 
        given such term in section 164.501 of title 45, Code of 
        Federal Regulations.
            (11) Personal health record.--The term ``personal 
        health record'' means an electronic record of PHR 
        identifiable health information (as defined in section 
        13407(f)(2)) on an individual that can be drawn from 
        multiple sources and that is managed, shared, and 
        controlled by or primarily for the individual.
            (12) Protected health information.--The term 
        ``protected health information'' has the meaning given 
        such term in section 160.103 of title 45, Code of 
        Federal Regulations.
            (13) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.
            (14) Security.--The term ``security'' has the 
        meaning given such term in section 164.304 of title 45, 
        Code of Federal Regulations.
            (15) State.--The term ``State'' means each of the 
        several States, the District of Columbia, Puerto Rico, 
        the Virgin Islands, Guam, American Samoa, and the 
        Northern Mariana Islands.
            (16) Treatment.--The term ``treatment'' has the 
        meaning given such term in section 164.501 of title 45, 
        Code of Federal Regulations.
            (17) Use.--The term ``use'' has the meaning given 
        such term in section 160.103 of title 45, Code of 
        Federal Regulations.
            (18) Vendor of personal health records.--The term 
        ``vendor of personal health records'' means an entity, 
        other than a covered entity (as defined in paragraph 
        (3)), that offers or maintains a personal health 
        record.

      PART 1--IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS

SEC. 13401. APPLICATION OF SECURITY PROVISIONS AND PENALTIES TO 
                    BUSINESS ASSOCIATES OF COVERED ENTITIES; ANNUAL 
                    GUIDANCE ON SECURITY PROVISIONS.

    (a) Application of Security Provisions.--Sections 164.308, 
164.310, 164.312, and 164.316 of title 45, Code of Federal 
Regulations, shall apply to a business associate of a covered 
entity in the same manner that such sections apply to the 
covered entity. The additional requirements of this title that 
relate to security and that are made applicable with respect to 
covered entities shall also be applicable to such a business 
associate and shall be incorporated into the business associate 
agreement between the business associate and the covered 
entity.
    (b) Application of Civil and Criminal Penalties.--In the 
case of a business associate that violates any security 
provision specified in subsection (a), sections 1176 and 1177 
of the Social Security Act (42 U.S.C. 1320d-5, 1320d-6) shall 
apply to the business associate with respect to such violation 
in the same manner such sections apply to a covered entity that 
violates such security provision.
    (c) Annual Guidance.--For the first year beginning after 
the date of the enactment of this Act and annually thereafter, 
the Secretary of Health and Human Services shall, after 
consultation with stakeholders, annually issue guidance on the 
most effective and appropriate technical safeguards for use in 
carrying out the sections referred to in subsection (a) and the 
security standards in subpart C of part 164 of title 45, Code 
of Federal Regulations, including the use of standards 
developed under section 3002(b)(2)(B)(vi) of the Public Health 
Service Act, as added by section 13101 of this Act, as such 
provisions are in effect as of the date before the enactment of 
this Act.

SEC. 13402. NOTIFICATION IN THE CASE OF BREACH.

    (a) In General.--A covered entity that accesses, maintains, 
retains, modifies, records, stores, destroys, or otherwise 
holds, uses, or discloses unsecured protected health 
information (as defined in subsection (h)(1)) shall, in the 
case of a breach of such information that is discovered by the 
covered entity, notify each individual whose unsecured 
protected health information has been, or is reasonably 
believed by the covered entity to have been, accessed, 
acquired, or disclosed as a result of such breach.
    (b) Notification of Covered Entity by Business Associate.--
A business associate of a covered entity that accesses, 
maintains, retains, modifies, records, stores, destroys, or 
otherwise holds, uses, or discloses unsecured protected health 
information shall, following the discovery of a breach of such 
information, notify the covered entity of such breach. Such 
notice shall include the identification of each individual 
whose unsecured protected health information has been, or is 
reasonably believed by the business associate to have been, 
accessed, acquired, or disclosed during such breach.
    (c) Breaches Treated as Discovered.--For purposes of this 
section, a breach shall be treated as discovered by a covered 
entity or by a business associate as of the first day on which 
such breach is known to such entity or associate, respectively, 
(including any person, other than the individual committing the 
breach, that is an employee, officer, or other agent of such 
entity or associate, respectively) or should reasonably have 
been known to such entity or associate (or person) to have 
occurred.
    (d) Timeliness of Notification.--
            (1) In general.--Subject to subsection (g), all 
        notifications required under this section shall be made 
        without unreasonable delay and in no case later than 60 
        calendar days after the discovery of a breach by the 
        covered entity involved (or business associate involved 
        in the case of a notification required under subsection 
        (b)).
            (2) Burden of proof.--The covered entity involved 
        (or business associate involved in the case of a 
        notification required under subsection (b)), shall have 
        the burden of demonstrating that all notifications were 
        made as required under this part, including evidence 
        demonstrating the necessity of any delay.
    (e) Methods of Notice.--
            (1) Individual notice.--Notice required under this 
        section to be provided to an individual, with respect 
        to a breach, shall be provided promptly and in the 
        following form:
                    (A) Written notification by first-class 
                mail to the individual (or the next of kin of 
                the individual if the individual is deceased) 
                at the last known address of the individual or 
                the next of kin, respectively, or, if specified 
                as a preference by the individual, by 
                electronic mail. The notification may be 
                provided in one or more mailings as information 
                is available.
                    (B) In the case in which there is 
                insufficient, or out-of-date contact 
                information (including a phone number, email 
                address, or any other form of appropriate 
                communication) that precludes direct written 
                (or, if specified by the individual under 
                subparagraph (A), electronic) notification to 
                the individual, a substitute form of notice 
                shall be provided, including, in the case that 
                there are 10 or more individuals for which 
                there is insufficient or out-of-date contact 
                information, a conspicuous posting for a period 
                determined by the Secretary on the home page of 
                the Web site of the covered entity involved or 
                notice in major print or broadcast media, 
                including major media in geographic areas where 
                the individuals affected by the breach likely 
                reside. Such a notice in media or web posting 
                will include a toll-free phone number where an 
                individual can learn whether or not the 
                individual's unsecured protected health 
                information is possibly included in the breach.
                    (C) In any case deemed by the covered 
                entity involved to require urgency because of 
                possible imminent misuse of unsecured protected 
                health information, the covered entity, in 
                addition to notice provided under subparagraph 
                (A), may provide information to individuals by 
                telephone or other means, as appropriate.
            (2) Media notice.--Notice shall be provided to 
        prominent media outlets serving a State or 
        jurisdiction, following the discovery of a breach 
        described in subsection (a), if the unsecured protected 
        health information of more than 500 residents of such 
        State or jurisdiction is, or is reasonably believed to 
        have been, accessed, acquired, or disclosed during such 
        breach.
            (3) Notice to secretary.--Notice shall be provided 
        to the Secretary by covered entities of unsecured 
        protected health information that has been acquired or 
        disclosed in a breach. If the breach was with respect 
        to 500 or more individuals then such notice must be 
        provided immediately. If the breach was with respect to 
        less than 500 individuals, the covered entity may 
        maintain a log of any such breach occurring and 
        annually submit such a log to the Secretary documenting 
        such breaches occurring during the year involved.
            (4) Posting on hhs public website.--The Secretary 
        shall make available to the public on the Internet 
        website of the Department of Health and Human Services 
        a list that identifies each covered entity involved in 
        a breach described in subsection (a) in which the 
        unsecured protected health information of more than 500 
        individuals is acquired or disclosed.
    (f) Content of Notification.--Regardless of the method by 
which notice is provided to individuals under this section, 
notice of a breach shall include, to the extent possible, the 
following:
            (1) A brief description of what happened, including 
        the date of the breach and the date of the discovery of 
        the breach, if known.
            (2) A description of the types of unsecured 
        protected health information that were involved in the 
        breach (such as full name, Social Security number, date 
        of birth, home address, account number, or disability 
        code).
            (3) The steps individuals should take to protect 
        themselves from potential harm resulting from the 
        breach.
            (4) A brief description of what the covered entity 
        involved is doing to investigate the breach, to 
        mitigate losses, and to protect against any further 
        breaches.
            (5) Contact procedures for individuals to ask 
        questions or learn additional information, which shall 
        include a toll-free telephone number, an e-mail 
        address, Web site, or postal address.
    (g) Delay of Notification Authorized for Law Enforcement 
Purposes.--If a law enforcement official determines that a 
notification, notice, or posting required under this section 
would impede a criminal investigation or cause damage to 
national security, such notification, notice, or posting shall 
be delayed in the same manner as provided under section 
164.528(a)(2) of title 45, Code of Federal Regulations, in the 
case of a disclosure covered under such section.
    (h) Unsecured Protected Health Information.--
            (1) Definition.--
                    (A) In general.--Subject to subparagraph 
                (B), for purposes of this section, the term 
                ``unsecured protected health information'' 
                means protected health information that is not 
                secured through the use of a technology or 
                methodology specified by the Secretary in the 
                guidance issued under paragraph (2).
                    (B) Exception in case timely guidance not 
                issued.--In the case that the Secretary does 
                not issue guidance under paragraph (2) by the 
                date specified in such paragraph, for purposes 
                of this section, the term ``unsecured protected 
                health information'' shall mean protected 
                health information that is not secured by a 
                technology standard that renders protected 
                health information unusable, unreadable, or 
                indecipherable to unauthorized individuals and 
                is developed or endorsed by a standards 
                developing organization that is accredited by 
                the American National Standards Institute.
            (2) Guidance.--For purposes of paragraph (1) and 
        section 13407(f)(3), not later than the date that is 60 
        days after the date of the enactment of this Act, the 
        Secretary shall, after consultation with stakeholders, 
        issue (and annually update) guidance specifying the 
        technologies and methodologies that render protected 
        health information unusable, unreadable, or 
        indecipherable to unauthorized individuals, including 
        the use of standards developed under section 
        3002(b)(2)(B)(vi) of the Public Health Service Act, as 
        added by section 13101 of this Act.
    (i) Report to Congress on Breaches.--
            (1) In general.--Not later than 12 months after the 
        date of the enactment of this Act and annually 
        thereafter, the Secretary shall prepare and submit to 
        the Committee on Finance and the Committee on Health, 
        Education, Labor, and Pensions of the Senate and the 
        Committee on Ways and Means and the Committee on Energy 
        and Commerce of the House of Representatives a report 
        containing the information described in paragraph (2) 
        regarding breaches for which notice was provided to the 
        Secretary under subsection (e)(3).
            (2) Information.--The information described in this 
        paragraph regarding breaches specified in paragraph (1) 
        shall include--
                    (A) the number and nature of such breaches; 
                and
                    (B) actions taken in response to such 
                breaches.
    (j) Regulations; Effective Date.--To carry out this 
section, the Secretary of Health and Human Services shall 
promulgate interim final regulations by not later than the date 
that is 180 days after the date of the enactment of this title. 
The provisions of this section shall apply to breaches that are 
discovered on or after the date that is 30 days after the date 
of publication of such interim final regulations.

SEC. 13403. EDUCATION ON HEALTH INFORMATION PRIVACY.

    (a) Regional Office Privacy Advisors.--Not later than 6 
months after the date of the enactment of this Act, the 
Secretary shall designate an individual in each regional office 
of the Department of Health and Human Services to offer 
guidance and education to covered entities, business 
associates, and individuals on their rights and 
responsibilities related to Federal privacy and security 
requirements for protected health information.
    (b) Education Initiative on Uses of Health Information.--
Not later than 12 months after the date of the enactment of 
this Act, the Office for Civil Rights within the Department of 
Health and Human Services shall develop and maintain a multi-
faceted national education initiative to enhance public 
transparency regarding the uses of protected health 
information, including programs to educate individuals about 
the potential uses of their protected health information, the 
effects of such uses, and the rights of individuals with 
respect to such uses. Such programs shall be conducted in a 
variety of languages and present information in a clear and 
understandable manner.

SEC. 13404. APPLICATION OF PRIVACY PROVISIONS AND PENALTIES TO BUSINESS 
                    ASSOCIATES OF COVERED ENTITIES.

    (a) Application of Contract Requirements.--In the case of a 
business associate of a covered entity that obtains or creates 
protected health information pursuant to a written contract (or 
other written arrangement) described in section 164.502(e)(2) 
of title 45, Code of Federal Regulations, with such covered 
entity, the business associate may use and disclose such 
protected health information only if such use or disclosure, 
respectively, is in compliance with each applicable requirement 
of section 164.504(e) of such title. The additional 
requirements of this subtitle that relate to privacy and that 
are made applicable with respect to covered entities shall also 
be applicable to such a business associate and shall be 
incorporated into the business associate agreement between the 
business associate and the covered entity.
    (b) Application of Knowledge Elements Associated With 
Contracts.--Section 164.504(e)(1)(ii) of title 45, Code of 
Federal Regulations, shall apply to a business associate 
described in subsection (a), with respect to compliance with 
such subsection, in the same manner that such section applies 
to a covered entity, with respect to compliance with the 
standards in sections 164.502(e) and 164.504(e) of such title, 
except that in applying such section 164.504(e)(1)(ii) each 
reference to the business associate, with respect to a 
contract, shall be treated as a reference to the covered entity 
involved in such contract.
    (c) Application of Civil and Criminal Penalties.--In the 
case of a business associate that violates any provision of 
subsection (a) or (b), the provisions of sections 1176 and 1177 
of the Social Security Act (42 U.S.C. 1320d-5, 1320d-6) shall 
apply to the business associate with respect to such violation 
in the same manner as such provisions apply to a person who 
violates a provision of part C of title XI of such Act.

SEC. 13405. RESTRICTIONS ON CERTAIN DISCLOSURES AND SALES OF HEALTH 
                    INFORMATION; ACCOUNTING OF CERTAIN PROTECTED HEALTH 
                    INFORMATION DISCLOSURES; ACCESS TO CERTAIN 
                    INFORMATION IN ELECTRONIC FORMAT.

    (a) Requested Restrictions on Certain Disclosures of Health 
Information.--In the case that an individual requests under 
paragraph (a)(1)(i)(A) of section 164.522 of title 45, Code of 
Federal Regulations, that a covered entity restrict the 
disclosure of the protected health information of the 
individual, notwithstanding paragraph (a)(1)(ii) of such 
section, the covered entity must comply with the requested 
restriction if--
            (1) except as otherwise required by law, the 
        disclosure is to a health plan for purposes of carrying 
        out payment or health care operations (and is not for 
        purposes of carrying out treatment); and
            (2) the protected health information pertains 
        solely to a health care item or service for which the 
        health care provider involved has been paid out of 
        pocket in full.
    (b) Disclosures Required To Be Limited to the Limited Data 
Set or the Minimum Necessary.--
            (1) In general.--
                    (A) In general.--Subject to subparagraph 
                (B), a covered entity shall be treated as being 
                in compliance with section 164.502(b)(1) of 
                title 45, Code of Federal Regulations, with 
                respect to the use, disclosure, or request of 
                protected health information described in such 
                section, only if the covered entity limits such 
                protected health information, to the extent 
                practicable, to the limited data set (as 
                defined in section 164.514(e)(2) of such title) 
                or, if needed by such entity, to the minimum 
                necessary to accomplish the intended purpose of 
                such use, disclosure, or request, respectively.
                    (B) Guidance.--Not later than 18 months 
                after the date of the enactment of this 
                section, the Secretary shall issue guidance on 
                what constitutes ``minimum necessary'' for 
                purposes of subpart E of part 164 of title 45, 
                Code of Federal Regulations. In issuing such 
                guidance the Secretary shall take into 
                consideration the guidance under section 
                13424(c) and the information necessary to 
                improve patient outcomes and to detect, 
                prevent, and manage chronic disease.
                    (C) Sunset.--Subparagraph (A) shall not 
                apply on and after the effective date on which 
                the Secretary issues the guidance under 
                subparagraph (B).
            (2) Determination of minimum necessary.--For 
        purposes of paragraph (1), in the case of the 
        disclosure of protected health information, the covered 
        entity or business associate disclosing such 
        information shall determine what constitutes the 
        minimum necessary to accomplish the intended purpose of 
        such disclosure.
            (3) Application of exceptions.--The exceptions 
        described in section 164.502(b)(2) of title 45, Code of 
        Federal Regulations, shall apply to the requirement 
        under paragraph (1) as of the effective date described 
        in section 13423 in the same manner that such 
        exceptions apply to section 164.502(b)(1) of such title 
        before such date.
            (4) Rule of construction.--Nothing in this 
        subsection shall be construed as affecting the use, 
        disclosure, or request of protected health information 
        that has been de-identified.
    (c) Accounting of Certain Protected Health Information 
Disclosures Required if Covered Entity Uses Electronic Health 
Record.--
            (1) In general.--In applying section 164.528 of 
        title 45, Code of Federal Regulations, in the case that 
        a covered entity uses or maintains an electronic health 
        record with respect to protected health information--
                    (A) the exception under paragraph (a)(1)(i) 
                of such section shall not apply to disclosures 
                through an electronic health record made by 
                such entity of such information; and
                    (B) an individual shall have a right to 
                receive an accounting of disclosures described 
                in such paragraph of such information made by 
                such covered entity during only the three years 
                prior to the date on which the accounting is 
                requested.
            (2) Regulations.--The Secretary shall promulgate 
        regulations on what information shall be collected 
        about each disclosure referred to in paragraph (1), not 
        later than 6 months after the date on which the 
        Secretary adopts standards on accounting for disclosure 
        described in the section 3002(b)(2)(B)(iv) of the 
        Public Health Service Act, as added by section 13101. 
        Such regulations shall only require such information to 
        be collected through an electronic health record in a 
        manner that takes into account the interests of the 
        individuals in learning the circumstances under which 
        their protected health information is being disclosed 
        and takes into account the administrative burden of 
        accounting for such disclosures.
            (3) Process.--In response to a request from an 
        individual for an accounting, a covered entity shall 
        elect to provide either an--
                    (A) accounting, as specified under 
                paragraph (1), for disclosures of protected 
                health information that are made by such 
                covered entity and by a business associate 
                acting on behalf of the covered entity; or
                    (B) accounting, as specified under 
                paragraph (1), for disclosures that are made by 
                such covered entity and provide a list of all 
                business associates acting on behalf of the 
                covered entity, including contact information 
                for such associates (such as mailing address, 
                phone, and email address).
        A business associate included on a list under 
        subparagraph (B) shall provide an accounting of 
        disclosures (as required under paragraph (1) for a 
        covered entity) made by the business associate upon a 
        request made by an individual directly to the business 
        associate for such an accounting.
            (4) Effective date.--
                    (A) Current users of electronic records.--
                In the case of a covered entity insofar as it 
                acquired an electronic health record as of 
                January 1, 2009, paragraph (1) shall apply to 
                disclosures, with respect to protected health 
                information, made by the covered entity from 
                such a record on and after January 1, 2014.
                    (B) Others.--In the case of a covered 
                entity insofar as it acquires an electronic 
                health record after January 1, 2009, paragraph 
                (1) shall apply to disclosures, with respect to 
                protected health information, made by the 
                covered entity from such record on and after 
                the later of the following:
                            (i) January 1, 2011; or
                            (ii) the date that it acquires an 
                        electronic health record.
                    (C) Later date.--The Secretary may set an 
                effective date that is later than the date 
                specified under subparagraph (A) or (B) if the 
                Secretary determines that such later date is 
                necessary, but in no case may the date 
                specified under--
                            (i) subparagraph (A) be later than 
                        2016; or
                            (ii) subparagraph (B) be later than 
                        2013.
    (d) Prohibition on Sale of Electronic Health Records or 
Protected Health Information.--
            (1) In general.--Except as provided in paragraph 
        (2), a covered entity or business associate shall not 
        directly or indirectly receive remuneration in exchange 
        for any protected health information of an individual 
        unless the covered entity obtained from the individual, 
        in accordance with section 164.508 of title 45, Code of 
        Federal Regulations, a valid authorization that 
        includes, in accordance with such section, a 
        specification of whether the protected health 
        information can be further exchanged for remuneration 
        by the entity receiving protected health information of 
        that individual.
            (2) Exceptions.--Paragraph (1) shall not apply in 
        the following cases:
                    (A) The purpose of the exchange is for 
                public health activities (as described in 
                section 164.512(b) of title 45, Code of Federal 
                Regulations).
                    (B) The purpose of the exchange is for 
                research (as described in sections 164.501 and 
                164.512(i) of title 45, Code of Federal 
                Regulations) and the price charged reflects the 
                costs of preparation and transmittal of the 
                data for such purpose.
                    (C) The purpose of the exchange is for the 
                treatment of the individual, subject to any 
                regulation that the Secretary may promulgate to 
                prevent protected health information from 
                inappropriate access, use, or disclosure.
                    (D) The purpose of the exchange is the 
                health care operation specifically described in 
                subparagraph (iv) of paragraph (6) of the 
                definition of healthcare operations in section 
                164.501 of title 45, Code of Federal 
                Regulations.
                    (E) The purpose of the exchange is for 
                remuneration that is provided by a covered 
                entity to a business associate for activities 
                involving the exchange of protected health 
                information that the business associate 
                undertakes on behalf of and at the specific 
                request of the covered entity pursuant to a 
                business associate agreement.
                    (F) The purpose of the exchange is to 
                provide an individual with a copy of the 
                individual's protected health information 
                pursuant to section 164.524 of title 45, Code 
                of Federal Regulations.
                    (G) The purpose of the exchange is 
                otherwise determined by the Secretary in 
                regulations to be similarly necessary and 
                appropriate as the exceptions provided in 
                subparagraphs (A) through (F).
            (3) Regulations.--Not later than 18 months after 
        the date of enactment of this title, the Secretary 
        shall promulgate regulations to carry out this 
        subsection. In promulgating such regulations, the 
        Secretary--
                    (A) shall evaluate the impact of 
                restricting the exception described in 
                paragraph (2)(A) to require that the price 
                charged for the purposes described in such 
                paragraph reflects the costs of the preparation 
                and transmittal of the data for such purpose, 
                on research or public health activities, 
                including those conducted by or for the use of 
                the Food and Drug Administration; and
                    (B) may further restrict the exception 
                described in paragraph (2)(A) to require that 
                the price charged for the purposes described in 
                such paragraph reflects the costs of the 
                preparation and transmittal of the data for 
                such purpose, if the Secretary finds that such 
                further restriction will not impede such 
                research or public health activities.
            (4) Effective date.--Paragraph (1) shall apply to 
        exchanges occurring on or after the date that is 6 
        months after the date of the promulgation of final 
        regulations implementing this subsection.
    (e) Access to Certain Information in Electronic Format.--In 
applying section 164.524 of title 45, Code of Federal 
Regulations, in the case that a covered entity uses or 
maintains an electronic health record with respect to protected 
health information of an individual--
            (1) the individual shall have a right to obtain 
        from such covered entity a copy of such information in 
        an electronic format and, if the individual chooses, to 
        direct the covered entity to transmit such copy 
        directly to an entity or person designated by the 
        individual, provided that any such choice is clear, 
        conspicuous, and specific; and
            (2) notwithstanding paragraph (c)(4) of such 
        section, any fee that the covered entity may impose for 
        providing such individual with a copy of such 
        information (or a summary or explanation of such 
        information) if such copy (or summary or explanation) 
        is in an electronic form shall not be greater than the 
        entity's labor costs in responding to the request for 
        the copy (or summary or explanation).

SEC. 13406. CONDITIONS ON CERTAIN CONTACTS AS PART OF HEALTH CARE 
                    OPERATIONS.

    (a) Marketing.--
            (1) In general.--A communication by a covered 
        entity or business associate that is about a product or 
        service and that encourages recipients of the 
        communication to purchase or use the product or service 
        shall not be considered a health care operation for 
        purposes of subpart E of part 164 of title 45, Code of 
        Federal Regulations, unless the communication is made 
        as described in subparagraph (i), (ii), or (iii) of 
        paragraph (1) of the definition of marketing in section 
        164.501 of such title.
            (2) Payment for certain communications.--A 
        communication by a covered entity or business associate 
        that is described in subparagraph (i), (ii), or (iii) 
        of paragraph (1) of the definition of marketing in 
        section 164.501 of title 45, Code of Federal 
        Regulations, shall not be considered a health care 
        operation for purposes of subpart E of part 164 of 
        title 45, Code of Federal Regulations, if the covered 
        entity receives or has received direct or indirect 
        payment in exchange for making such communication, 
        except where--
                    (A)(i) such communication describes only a 
                drug or biologic that is currently being 
                prescribed for the recipient of the 
                communication; and
                    (ii) any payment received by such covered 
                entity in exchange for making a communication 
                described in clause (i) is reasonable in 
                amount;
                    (B) each of the following conditions 
                apply--
                            (i) the communication is made by 
                        the covered entity; and
                            (ii) the covered entity making such 
                        communication obtains from the 
                        recipient of the communication, in 
                        accordance with section 164.508 of 
                        title 45, Code of Federal Regulations, 
                        a valid authorization (as described in 
                        subsection (b) of such section) with 
                        respect to such communication; or
                    (C) each of the following conditions 
                apply--
                            (i) the communication is made by a 
                        business associate on behalf of the 
                        covered entity; and
                            (ii) the communication is 
                        consistent with the written contract 
                        (or other written arrangement described 
                        in section 164.502(e)(2) of such title) 
                        between such business associate and 
                        covered entity.
            (3) Reasonable in amount defined.--For purposes of 
        paragraph (2), the term ``reasonable in amount'' shall 
        have the meaning given such term by the Secretary by 
        regulation.
            (4) Direct or indirect payment.--For purposes of 
        paragraph (2), the term ``direct or indirect payment'' 
        shall not include any payment for treatment (as defined 
        in section 164.501 of title 45, Code of Federal 
        Regulations) of an individual.
    (b) Opportunity To Opt Out of Fundraising.--The Secretary 
shall by rule provide that any written fundraising 
communication that is a healthcare operation as defined under 
section 164.501 of title 45, Code of Federal Regulations, 
shall, in a clear and conspicuous manner, provide an 
opportunity for the recipient of the communications to elect 
not to receive any further such communication. When an 
individual elects not to receive any further such 
communication, such election shall be treated as a revocation 
of authorization under section 164.508 of title 45, Code of 
Federal Regulations.
    (c) Effective Date.--This section shall apply to written 
communications occurring on or after the effective date 
specified under section 13423.

SEC. 13407. TEMPORARY BREACH NOTIFICATION REQUIREMENT FOR VENDORS OF 
                    PERSONAL HEALTH RECORDS AND OTHER NON-HIPAA COVERED 
                    ENTITIES.

    (a) In General.--In accordance with subsection (c), each 
vendor of personal health records, following the discovery of a 
breach of security of unsecured PHR identifiable health 
information that is in a personal health record maintained or 
offered by such vendor, and each entity described in clause 
(ii), (iii), or (iv) of section 13424(b)(1)(A), following the 
discovery of a breach of security of such information that is 
obtained through a product or service provided by such entity, 
shall--
            (1) notify each individual who is a citizen or 
        resident of the United States whose unsecured PHR 
        identifiable health information was acquired by an 
        unauthorized person as a result of such a breach of 
        security; and
            (2) notify the Federal Trade Commission.
    (b) Notification by Third Party Service Providers.--A third 
party service provider that provides services to a vendor of 
personal health records or to an entity described in clause 
(ii), (iii), or (iv) of section 13424(b)(1)(A) in connection 
with the offering or maintenance of a personal health record or 
a related product or service and that accesses, maintains, 
retains, modifies, records, stores, destroys, or otherwise 
holds, uses, or discloses unsecured PHR identifiable health 
information in such a record as a result of such services 
shall, following the discovery of a breach of security of such 
information, notify such vendor or entity, respectively, of 
such breach. Such notice shall include the identification of 
each individual whose unsecured PHR identifiable health 
information has been, or is reasonably believed to have been, 
accessed, acquired, or disclosed during such breach.
    (c) Application of Requirements for Timeliness, Method, and 
Content of Notifications.--Subsections (c), (d), (e), and (f) 
of section 13402 shall apply to a notification required under 
subsection (a) and a vendor of personal health records, an 
entity described in subsection (a) and a third party service 
provider described in subsection (b), with respect to a breach 
of security under subsection (a) of unsecured PHR identifiable 
health information in such records maintained or offered by 
such vendor, in a manner specified by the Federal Trade 
Commission.
    (d) Notification of the Secretary.--Upon receipt of a 
notification of a breach of security under subsection (a)(2), 
the Federal Trade Commission shall notify the Secretary of such 
breach.
    (e) Enforcement.--A violation of subsection (a) or (b) 
shall be treated as an unfair and deceptive act or practice in 
violation of a regulation under section 18(a)(1)(B) of the 
Federal Trade Commission Act (15 U.S.C. 57a(a)(1)(B)) regarding 
unfair or deceptive acts or practices.
    (f) Definitions.--For purposes of this section:
            (1) Breach of security.--The term ``breach of 
        security'' means, with respect to unsecured PHR 
        identifiable health information of an individual in a 
        personal health record, acquisition of such information 
        without the authorization of the individual.
            (2) PHR identifiable health information.--The term 
        ``PHR identifiable health information'' means 
        individually identifiable health information, as 
        defined in section 1171(6) of the Social Security Act 
        (42 U.S.C. 1320d(6)), and includes, with respect to an 
        individual, information--
                    (A) that is provided by or on behalf of the 
                individual; and
                    (B) that identifies the individual or with 
                respect to which there is a reasonable basis to 
                believe that the information can be used to 
                identify the individual.
            (3) Unsecured phr identifiable health 
        information.--
                    (A) In general.--Subject to subparagraph 
                (B), the term ``unsecured PHR identifiable 
                health information'' means PHR identifiable 
                health information that is not protected 
                through the use of a technology or methodology 
                specified by the Secretary in the guidance 
                issued under section 13402(h)(2).
                    (B) Exception in case timely guidance not 
                issued.--In the case that the Secretary does 
                not issue guidance under section 13402(h)(2) by 
                the date specified in such section, for 
                purposes of this section, the term ``unsecured 
                PHR identifiable health information'' shall 
                mean PHR identifiable health information that 
                is not secured by a technology standard that 
                renders protected health information unusable, 
                unreadable, or indecipherable to unauthorized 
                individuals and that is developed or endorsed 
                by a standards developing organization that is 
                accredited by the American National Standards 
                Institute.
    (g) Regulations; Effective Date; Sunset.--
            (1) Regulations; effective date.--To carry out this 
        section, the Federal Trade Commission shall promulgate 
        interim final regulations by not later than the date 
        that is 180 days after the date of the enactment of 
        this section. The provisions of this section shall 
        apply to breaches of security that are discovered on or 
        after the date that is 30 days after the date of 
        publication of such interim final regulations.
            (2) Sunset.--If Congress enacts new legislation 
        establishing requirements for notification in the case 
        of a breach of security, that apply to entities that 
        are not covered entities or business associates, the 
        provisions of this section shall not apply to breaches 
        of security discovered on or after the effective date 
        of regulations implementing such legislation.

SEC. 13408. BUSINESS ASSOCIATE CONTRACTS REQUIRED FOR CERTAIN ENTITIES.

    Each organization, with respect to a covered entity, that 
provides data transmission of protected health information to 
such entity (or its business associate) and that requires 
access on a routine basis to such protected health information, 
such as a Health Information Exchange Organization, Regional 
Health Information Organization, E-prescribing Gateway, or each 
vendor that contracts with a covered entity to allow that 
covered entity to offer a personal health record to patients as 
part of its electronic health record, is required to enter into 
a written contract (or other written arrangement) described in 
section 164.502(e)(2) of title 45, Code of Federal Regulations 
and a written contract (or other arrangement) described in 
section 164.308(b) of such title, with such entity and shall be 
treated as a business associate of the covered entity for 
purposes of the provisions of this subtitle and subparts C and 
E of part 164 of title 45, Code of Federal Regulations, as such 
provisions are in effect as of the date of enactment of this 
title.

SEC. 13409. CLARIFICATION OF APPLICATION OF WRONGFUL DISCLOSURES 
                    CRIMINAL PENALTIES.

    Section 1177(a) of the Social Security Act (42 U.S.C. 
1320d-6(a)) is amended by adding at the end the following new 
sentence: ``For purposes of the previous sentence, a person 
(including an employee or other individual) shall be considered 
to have obtained or disclosed individually identifiable health 
information in violation of this part if the information is 
maintained by a covered entity (as defined in the HIPAA privacy 
regulation described in section 1180(b)(3)) and the individual 
obtained or disclosed such information without 
authorization.''.

SEC. 13410. IMPROVED ENFORCEMENT.

    (a) In General.--
            (1) Noncompliance due to willful neglect.--Section 
        1176 of the Social Security Act (42 U.S.C. 1320d-5) is 
        amended--
                    (A) in subsection (b)(1), by striking ``the 
                act constitutes an offense punishable under 
                section 1177'' and inserting ``a penalty has 
                been imposed under section 1177 with respect to 
                such act''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(c) Noncompliance Due to Willful Neglect.--
            ``(1) In general.--A violation of a provision of 
        this part due to willful neglect is a violation for 
        which the Secretary is required to impose a penalty 
        under subsection (a)(1).
            ``(2) Required investigation.--For purposes of 
        paragraph (1), the Secretary shall formally investigate 
        any complaint of a violation of a provision of this 
        part if a preliminary investigation of the facts of the 
        complaint indicate such a possible violation due to 
        willful neglect.''.
            (2) Enforcement under social security act.--Any 
        violation by a covered entity under this subtitle is 
        subject to enforcement and penalties under section 1176 
        and 1177 of the Social Security Act.
    (b) Effective Date; Regulations.--
            (1) The amendments made by subsection (a) shall 
        apply to penalties imposed on or after the date that is 
        24 months after the date of the enactment of this 
        title.
            (2) Not later than 18 months after the date of the 
        enactment of this title, the Secretary of Health and 
        Human Services shall promulgate regulations to 
        implement such amendments.
    (c) Distribution of Certain Civil Monetary Penalties 
Collected.--
            (1) In general.--Subject to the regulation 
        promulgated pursuant to paragraph (3), any civil 
        monetary penalty or monetary settlement collected with 
        respect to an offense punishable under this subtitle or 
        section 1176 of the Social Security Act (42 U.S.C. 
        1320d-5) insofar as such section relates to privacy or 
        security shall be transferred to the Office for Civil 
        Rights of the Department of Health and Human Services 
        to be used for purposes of enforcing the provisions of 
        this subtitle and subparts C and E of part 164 of title 
        45, Code of Federal Regulations, as such provisions are 
        in effect as of the date of enactment of this Act.
            (2) GAO report.--Not later than 18 months after the 
        date of the enactment of this title, the Comptroller 
        General shall submit to the Secretary a report 
        including recommendations for a methodology under which 
        an individual who is harmed by an act that constitutes 
        an offense referred to in paragraph (1) may receive a 
        percentage of any civil monetary penalty or monetary 
        settlement collected with respect to such offense.
            (3) Establishment of methodology to distribute 
        percentage of cmps collected to harmed individuals.--
        Not later than 3 years after the date of the enactment 
        of this title, the Secretary shall establish by 
        regulation and based on the recommendations submitted 
        under paragraph (2), a methodology under which an 
        individual who is harmed by an act that constitutes an 
        offense referred to in paragraph (1) may receive a 
        percentage of any civil monetary penalty or monetary 
        settlement collected with respect to such offense.
            (4) Application of methodology.--The methodology 
        under paragraph (3) shall be applied with respect to 
        civil monetary penalties or monetary settlements 
        imposed on or after the effective date of the 
        regulation.
    (d) Tiered Increase in Amount of Civil Monetary 
Penalties.--
            (1) In general.--Section 1176(a)(1) of the Social 
        Security Act (42 U.S.C. 1320d-5(a)(1)) is amended by 
        striking ``who violates a provision of this part a 
        penalty of not more than'' and all that follows and 
        inserting the following: ``who violates a provision of 
        this part--
                    ``(A) in the case of a violation of such 
                provision in which it is established that the 
                person did not know (and by exercising 
                reasonable diligence would not have known) that 
                such person violated such provision, a penalty 
                for each such violation of an amount that is at 
                least the amount described in paragraph (3)(A) 
                but not to exceed the amount described in 
                paragraph (3)(D);
                    ``(B) in the case of a violation of such 
                provision in which it is established that the 
                violation was due to reasonable cause and not 
                to willful neglect, a penalty for each such 
                violation of an amount that is at least the 
                amount described in paragraph (3)(B) but not to 
                exceed the amount described in paragraph 
                (3)(D); and
                    ``(C) in the case of a violation of such 
                provision in which it is established that the 
                violation was due to willful neglect--
                            ``(i) if the violation is corrected 
                        as described in subsection (b)(3)(A), a 
                        penalty in an amount that is at least 
                        the amount described in paragraph 
                        (3)(C) but not to exceed the amount 
                        described in paragraph (3)(D); and
                            ``(ii) if the violation is not 
                        corrected as described in such 
                        subsection, a penalty in an amount that 
                        is at least the amount described in 
                        paragraph (3)(D).
                In determining the amount of a penalty under 
                this section for a violation, the Secretary 
                shall base such determination on the nature and 
                extent of the violation and the nature and 
                extent of the harm resulting from such 
                violation.''.
            (2) Tiers of penalties described.--Section 1176(a) 
        of such Act (42 U.S.C. 1320d-5(a)) is further amended 
        by adding at the end the following new paragraph:
            ``(3) Tiers of penalties described.--For purposes 
        of paragraph (1), with respect to a violation by a 
        person of a provision of this part--
                    ``(A) the amount described in this 
                subparagraph is $100 for each such violation, 
                except that the total amount imposed on the 
                person for all such violations of an identical 
                requirement or prohibition during a calendar 
                year may not exceed $25,000;
                    ``(B) the amount described in this 
                subparagraph is $1,000 for each such violation, 
                except that the total amount imposed on the 
                person for all such violations of an identical 
                requirement or prohibition during a calendar 
                year may not exceed $100,000;
                    ``(C) the amount described in this 
                subparagraph is $10,000 for each such 
                violation, except that the total amount imposed 
                on the person for all such violations of an 
                identical requirement or prohibition during a 
                calendar year may not exceed $250,000; and
                    ``(D) the amount described in this 
                subparagraph is $50,000 for each such 
                violation, except that the total amount imposed 
                on the person for all such violations of an 
                identical requirement or prohibition during a 
                calendar year may not exceed $1,500,000.''.
            (3) Conforming amendments.--Section 1176(b) of such 
        Act (42 U.S.C. 1320d-5(b)) is amended--
                    (A) by striking paragraph (2) and 
                redesignating paragraphs (3) and (4) as 
                paragraphs (2) and (3), respectively; and
                    (B) in paragraph (2), as so redesignated--
                            (i) in subparagraph (A), by 
                        striking ``in subparagraph (B), a 
                        penalty may not be imposed under 
                        subsection (a) if'' and all that 
                        follows through ``the failure to comply 
                        is corrected'' and inserting ``in 
                        subparagraph (B) or subsection 
                        (a)(1)(C), a penalty may not be imposed 
                        under subsection (a) if the failure to 
                        comply is corrected''; and
                            (ii) in subparagraph (B), by 
                        striking ``(A)(ii)'' and inserting 
                        ``(A)'' each place it appears.
            (4) Effective date.--The amendments made by this 
        subsection shall apply to violations occurring after 
        the date of the enactment of this title.
    (e) Enforcement Through State Attorneys General.--
            (1) In general.--Section 1176 of the Social 
        Security Act (42 U.S.C. 1320d-5) is amended by adding 
        at the end the following new subsection:
    ``(d) Enforcement by State Attorneys General.--
            ``(1) Civil action.--Except as provided in 
        subsection (b), in any case in which the attorney 
        general of a State has reason to believe that an 
        interest of one or more of the residents of that State 
        has been or is threatened or adversely affected by any 
        person who violates a provision of this part, the 
        attorney general of the State, as parens patriae, may 
        bring a civil action on behalf of such residents of the 
        State in a district court of the United States of 
        appropriate jurisdiction--
                    ``(A) to enjoin further such violation by 
                the defendant; or
                    ``(B) to obtain damages on behalf of such 
                residents of the State, in an amount equal to 
                the amount determined under paragraph (2).
            ``(2) Statutory damages.--
                    ``(A) In general.--For purposes of 
                paragraph (1)(B), the amount determined under 
                this paragraph is the amount calculated by 
                multiplying the number of violations by up to 
                $100. For purposes of the preceding sentence, 
                in the case of a continuing violation, the 
                number of violations shall be determined 
                consistent with the HIPAA privacy regulations 
                (as defined in section 1180(b)(3)) for 
                violations of subsection (a).
                    ``(B) Limitation.--The total amount of 
                damages imposed on the person for all 
                violations of an identical requirement or 
                prohibition during a calendar year may not 
                exceed $25,000.
                    ``(C) Reduction of damages.--In assessing 
                damages under subparagraph (A), the court may 
                consider the factors the Secretary may consider 
                in determining the amount of a civil money 
                penalty under subsection (a) under the HIPAA 
                privacy regulations.
            ``(3) Attorney fees.--In the case of any successful 
        action under paragraph (1), the court, in its 
        discretion, may award the costs of the action and 
        reasonable attorney fees to the State.
            ``(4) Notice to secretary.--The State shall serve 
        prior written notice of any action under paragraph (1) 
        upon the Secretary and provide the Secretary with a 
        copy of its complaint, except in any case in which such 
        prior notice is not feasible, in which case the State 
        shall serve such notice immediately upon instituting 
        such action. The Secretary shall have the right--
                    ``(A) to intervene in the action;
                    ``(B) upon so intervening, to be heard on 
                all matters arising therein; and
                    ``(C) to file petitions for appeal.
            ``(5) Construction.--For purposes of bringing any 
        civil action under paragraph (1), nothing in this 
        section shall be construed to prevent an attorney 
        general of a State from exercising the powers conferred 
        on the attorney general by the laws of that State.
            ``(6) Venue; service of process.--
                    ``(A) Venue.--Any action brought under 
                paragraph (1) may be brought in the district 
                court of the United States that meets 
                applicable requirements relating to venue under 
                section 1391 of title 28, United States Code.
                    ``(B) Service of process.--In an action 
                brought under paragraph (1), process may be 
                served in any district in which the defendant--
                            ``(i) is an inhabitant; or
                            ``(ii) maintains a physical place 
                        of business.
            ``(7) Limitation on state action while federal 
        action is pending.--If the Secretary has instituted an 
        action against a person under subsection (a) with 
        respect to a specific violation of this part, no State 
        attorney general may bring an action under this 
        subsection against the person with respect to such 
        violation during the pendency of that action.
            ``(8) Application of cmp statute of limitation.--A 
        civil action may not be instituted with respect to a 
        violation of this part unless an action to impose a 
        civil money penalty may be instituted under subsection 
        (a) with respect to such violation consistent with the 
        second sentence of section 1128A(c)(1).''.
            (2) Conforming amendments.--Subsection (b) of such 
        section, as amended by subsection (d)(3), is amended--
                    (A) in paragraph (1), by striking ``A 
                penalty may not be imposed under subsection 
                (a)'' and inserting ``No penalty may be imposed 
                under subsection (a) and no damages obtained 
                under subsection (d)'';
                    (B) in paragraph (2)(A)--
                            (i) after ``subsection 
                        (a)(1)(C),'', by striking ``a penalty 
                        may not be imposed under subsection 
                        (a)'' and inserting ``no penalty may be 
                        imposed under subsection (a) and no 
                        damages obtained under subsection 
                        (d)''; and
                            (ii) in clause (ii), by inserting 
                        ``or damages'' after ``the penalty'';
                    (C) in paragraph (2)(B)(i), by striking 
                ``The period'' and inserting ``With respect to 
                the imposition of a penalty by the Secretary 
                under subsection (a), the period''; and
                    (D) in paragraph (3), by inserting ``and 
                any damages under subsection (d)'' after ``any 
                penalty under subsection (a)''.
            (3) Effective date.--The amendments made by this 
        subsection shall apply to violations occurring after 
        the date of the enactment of this Act.
    (f) Allowing Continued Use of Corrective Action.--Such 
section is further amended by adding at the end the following 
new subsection:
    ``(e) Allowing Continued Use of Corrective Action.--Nothing 
in this section shall be construed as preventing the Office for 
Civil Rights of the Department of Health and Human Services 
from continuing, in its discretion, to use corrective action 
without a penalty in cases where the person did not know (and 
by exercising reasonable diligence would not have known) of the 
violation involved.''.

SEC. 13411. AUDITS.

    The Secretary shall provide for periodic audits to ensure 
that covered entities and business associates that are subject 
to the requirements of this subtitle and subparts C and E of 
part 164 of title 45, Code of Federal Regulations, as such 
provisions are in effect as of the date of enactment of this 
Act, comply with such requirements.

 PART 2--RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE 
                             DATE; REPORTS

SEC. 13421. RELATIONSHIP TO OTHER LAWS.

    (a) Application of HIPAA State Preemption.--Section 1178 of 
the Social Security Act (42 U.S.C. 1320d-7) shall apply to a 
provision or requirement under this subtitle in the same manner 
that such section applies to a provision or requirement under 
part C of title XI of such Act or a standard or implementation 
specification adopted or established under sections 1172 
through 1174 of such Act.
    (b) Health Insurance Portability and Accountability Act.--
The standards governing the privacy and security of 
individually identifiable health information promulgated by the 
Secretary under sections 262(a) and 264 of the Health Insurance 
Portability and Accountability Act of 1996 shall remain in 
effect to the extent that they are consistent with this 
subtitle. The Secretary shall by rule amend such Federal 
regulations as required to make such regulations consistent 
with this subtitle.
    (c) Construction.--Nothing in this subtitle shall 
constitute a waiver of any privilege otherwise applicable to an 
individual with respect to the protected health information of 
such individual.

SEC. 13422. REGULATORY REFERENCES.

    Each reference in this subtitle to a provision of the Code 
of Federal Regulations refers to such provision as in effect on 
the date of the enactment of this title (or to the most recent 
update of such provision).

SEC. 13423. EFFECTIVE DATE.

    Except as otherwise specifically provided, the provisions 
of part I shall take effect on the date that is 12 months after 
the date of the enactment of this title.

SEC. 13424. STUDIES, REPORTS, GUIDANCE.

    (a) Report on Compliance.--
            (1) In general.--For the first year beginning after 
        the date of the enactment of this Act and annually 
        thereafter, the Secretary shall prepare and submit to 
        the Committee on Health, Education, Labor, and Pensions 
        of the Senate and the Committee on Ways and Means and 
        the Committee on Energy and Commerce of the House of 
        Representatives a report concerning complaints of 
        alleged violations of law, including the provisions of 
        this subtitle as well as the provisions of subparts C 
        and E of part 164 of title 45, Code of Federal 
        Regulations, (as such provisions are in effect as of 
        the date of enactment of this Act) relating to privacy 
        and security of health information that are received by 
        the Secretary during the year for which the report is 
        being prepared. Each such report shall include, with 
        respect to such complaints received during the year--
                    (A) the number of such complaints;
                    (B) the number of such complaints resolved 
                informally, a summary of the types of such 
                complaints so resolved, and the number of 
                covered entities that received technical 
                assistance from the Secretary during such year 
                in order to achieve compliance with such 
                provisions and the types of such technical 
                assistance provided;
                    (C) the number of such complaints that have 
                resulted in the imposition of civil monetary 
                penalties or have been resolved through 
                monetary settlements, including the nature of 
                the complaints involved and the amount paid in 
                each penalty or settlement;
                    (D) the number of compliance reviews 
                conducted and the outcome of each such review;
                    (E) the number of subpoenas or inquiries 
                issued;
                    (F) the Secretary's plan for improving 
                compliance with and enforcement of such 
                provisions for the following year; and
                    (G) the number of audits performed and a 
                summary of audit findings pursuant to section 
                13411.
            (2) Availability to public.--Each report under 
        paragraph (1) shall be made available to the public on 
        the Internet website of the Department of Health and 
        Human Services.
    (b) Study and Report on Application of Privacy and Security 
Requirements to Non-HIPAA Covered Entities.--
            (1) Study.--Not later than one year after the date 
        of the enactment of this title, the Secretary, in 
        consultation with the Federal Trade Commission, shall 
        conduct a study, and submit a report under paragraph 
        (2), on privacy and security requirements for entities 
        that are not covered entities or business associates as 
        of the date of the enactment of this title, including--
                    (A) requirements relating to security, 
                privacy, and notification in the case of a 
                breach of security or privacy (including the 
                applicability of an exemption to notification 
                in the case of individually identifiable health 
                information that has been rendered unusable, 
                unreadable, or indecipherable through 
                technologies or methodologies recognized by 
                appropriate professional organization or 
                standard setting bodies to provide effective 
                security for the information) that should be 
                applied to--
                            (i) vendors of personal health 
                        records;
                            (ii) entities that offer products 
                        or services through the website of a 
                        vendor of personal health records;
                            (iii) entities that are not covered 
                        entities and that offer products or 
                        services through the websites of 
                        covered entities that offer individuals 
                        personal health records;
                            (iv) entities that are not covered 
                        entities and that access information in 
                        a personal health record or send 
                        information to a personal health 
                        record; and
                            (v) third party service providers 
                        used by a vendor or entity described in 
                        clause (i), (ii), (iii), or (iv) to 
                        assist in providing personal health 
                        record products or services;
                    (B) a determination of which Federal 
                government agency is best equipped to enforce 
                such requirements recommended to be applied to 
                such vendors, entities, and service providers 
                under subparagraph (A); and
                    (C) a timeframe for implementing 
                regulations based on such findings.
            (2) Report.--The Secretary shall submit to the 
        Committee on Finance, the Committee on Health, 
        Education, Labor, and Pensions, and the Committee on 
        Commerce of the Senate and the Committee on Ways and 
        Means and the Committee on Energy and Commerce of the 
        House of Representatives a report on the findings of 
        the study under paragraph (1) and shall include in such 
        report recommendations on the privacy and security 
        requirements described in such paragraph.
    (c) Guidance on Implementation Specification To De-Identify 
Protected Health Information.--Not later than 12 months after 
the date of the enactment of this title, the Secretary shall, 
in consultation with stakeholders, issue guidance on how best 
to implement the requirements for the de-identification of 
protected health information under section 164.514(b) of title 
45, Code of Federal Regulations.
    (d) GAO Report on Treatment Disclosures.--Not later than 
one year after the date of the enactment of this title, the 
Comptroller General of the United States shall submit to the 
Committee on Health, Education, Labor, and Pensions of the 
Senate and the Committee on Ways and Means and the Committee on 
Energy and Commerce of the House of Representatives a report on 
the best practices related to the disclosure among health care 
providers of protected health information of an individual for 
purposes of treatment of such individual. Such report shall 
include an examination of the best practices implemented by 
States and by other entities, such as health information 
exchanges and regional health information organizations, an 
examination of the extent to which such best practices are 
successful with respect to the quality of the resulting health 
care provided to the individual and with respect to the ability 
of the health care provider to manage such best practices, and 
an examination of the use of electronic informed consent for 
disclosing protected health information for treatment, payment, 
and health care operations.
    (e) Report Required.--Not later than 5 years after the date 
of enactment of this section, the Government Accountability 
Office shall submit to Congress and the Secretary of Health and 
Human Services a report on the impact of any of the provisions 
of this Act on health insurance premiums, overall health care 
costs, adoption of electronic health records by providers, and 
reduction in medical errors and other quality improvements.
    (f) Study.--The Secretary shall study the definition of 
``psychotherapy notes'' in section 164.501 of title 45, Code of 
Federal Regulations, with regard to including test data that is 
related to direct responses, scores, items, forms, protocols, 
manuals, or other materials that are part of a mental health 
evaluation, as determined by the mental health professional 
providing treatment or evaluation in such definitions and may, 
based on such study, issue regulations to revise such 
definition.

               TITLE XIV--STATE FISCAL STABILIZATION FUND

                        DEPARTMENT OF EDUCATION

                    State Fiscal Stabilization Fund

    For necessary expenses for a State Fiscal Stabilization 
Fund, $53,600,000,000, which shall be administered by the 
Department of Education.

                     GENERAL PROVISIONS--THIS TITLE

SEC. 14001. ALLOCATIONS.

    (a) Outlying Areas.--From the amount appropriated to carry 
out this title, the Secretary of Education shall first allocate 
up to one-half of 1 percent to the outlying areas on the basis 
of their respective needs, as determined by the Secretary, in 
consultation with the Secretary of the Interior, for activities 
consistent with this title under such terms and conditions as 
the Secretary may determine.
    (b) Administration and Oversight.--The Secretary may, in 
addition, reserve up to $14,000,000 for administration and 
oversight of this title, including for program evaluation.
    (c) Reservation for Additional Programs.--After reserving 
funds under subsections (a) and (b), the Secretary shall 
reserve $5,000,000,000 for grants under sections 14006 and 
14007.
    (d) State Allocations.--After carrying out subsections (a), 
(b), and (c), the Secretary shall allocate the remaining funds 
made available to carry out this title to the States as 
follows:
            (1) 61 percent on the basis of their relative 
        population of individuals aged 5 through 24.
            (2) 39 percent on the basis of their relative total 
        population.
    (e) State Grants.--From funds allocated under subsection 
(d), the Secretary shall make grants to the Governor of each 
State.
    (f) Reallocation.--The Governor shall return to the 
Secretary any funds received under subsection (e) that the 
Governor does not award as subgrants or otherwise commit within 
two years of receiving such funds, and the Secretary shall 
reallocate such funds to the remaining States in accordance 
with subsection (d).

SEC. 14002. STATE USES OF FUNDS.

    (a) Education Fund.--
            (1) In general.--For each fiscal year, the Governor 
        shall use 81.8 percent of the State's allocation under 
        section 14001(d) for the support of elementary, 
        secondary, and postsecondary education and, as 
        applicable, early childhood education programs and 
        services.
            (2) Restoring state support for education.--
                    (A) In general.--The Governor shall first 
                use the funds described in paragraph (1)--
                            (i) to provide the amount of funds, 
                        through the State's primary elementary 
                        and secondary funding formulae, that is 
                        needed--
                                    (I) to restore, in each of 
                                fiscal years 2009, 2010, and 
                                2011, the level of State 
                                support provided through such 
                                formulae to the greater of the 
                                fiscal year 2008 or fiscal year 
                                2009 level; and
                                    (II) where applicable, to 
                                allow existing State formulae 
                                increases to support elementary 
                                and secondary education for 
                                fiscal years 2010 and 2011 to 
                                be implemented and allow 
                                funding for phasing in State 
                                equity and adequacy 
                                adjustments, if such increases 
                                were enacted pursuant to State 
                                law prior to October 1, 2008.
                            (ii) to provide, in each of fiscal 
                        years 2009, 2010, and 2011, the amount 
                        of funds to public institutions of 
                        higher education in the State that is 
                        needed to restore State support for 
                        such institutions (excluding tuition 
                        and fees paid by students) to the 
                        greater of the fiscal year 2008 or 
                        fiscal year 2009 level.
                    (B) Shortfall.--If the Governor determines 
                that the amount of funds available under 
                paragraph (1) is insufficient to support, in 
                each of fiscal years 2009, 2010, and 2011, 
                public elementary, secondary, and higher 
                education at the levels described in clauses 
                (i) and (ii) of subparagraph (A), the Governor 
                shall allocate those funds between those 
                clauses in proportion to the relative shortfall 
                in State support for the education sectors 
                described in those clauses.
                    (C) Fiscal year.--For purposes of this 
                paragraph, the term ``fiscal year'' shall have 
                the meaning given such term under State law.
            (3) Subgrants to improve basic programs operated by 
        local educational agencies.--After carrying out 
        paragraph (2), the Governor shall use any funds 
        remaining under paragraph (1) to provide local 
        educational agencies in the State with subgrants based 
        on their relative shares of funding under part A of 
        title I of the Elementary and Secondary Education Act 
        of 1965 (20 U.S.C. 6311 et seq.) for the most recent 
        year for which data are available.
    (b) Other Government Services.--
            (1) In general.--The Governor shall use 18.2 
        percent of the State's allocation under section 14001 
        for public safety and other government services, which 
        may include assistance for elementary and secondary 
        education and public institutions of higher education, 
        and for modernization, renovation, or repair of public 
        school facilities and institutions of higher education 
        facilities, including modernization, renovation, and 
        repairs that are consistent with a recognized green 
        building rating system.
            (2) Availability to all institutions of higher 
        education.--A Governor shall not consider the type or 
        mission of an institution of higher education, and 
        shall consider any institution for funding for 
        modernization, renovation, and repairs within the State 
        that--
                    (A) qualifies as an institution of higher 
                education, as defined in subsection 14013(3); 
                and
                    (B) continues to be eligible to participate 
                in the programs under title IV of the Higher 
                Education Act of 1965.
    (c) Rule of Construction.--Nothing in this section shall 
allow a local educational agency to engage in school 
modernization, renovation, or repair that is inconsistent with 
State law.

SEC. 14003. USES OF FUNDS BY LOCAL EDUCATIONAL AGENCIES.

    (a) In General.--A local educational agency that receives 
funds under this title may use the funds for any activity 
authorized by the Elementary and Secondary Education Act of 
1965 (20 U.S.C. 6301 et seq.) (``ESEA''), the Individuals with 
Disabilities Education Act (20 U.S.C. 1400 et seq.) (``IDEA''), 
the Adult and Family Literacy Act (20 U.S.C. 1400 et seq.), or 
the Carl D. Perkins Career and Technical Education Act of 2006 
(20 U.S.C. 2301 et seq.) (``the Perkins Act'') or for 
modernization, renovation, or repair of public school 
facilities, including modernization, renovation, and repairs 
that are consistent with a recognized green building rating 
system.
    (b) Prohibition.--A local educational agency may not use 
funds received under this title for--
            (1) payment of maintenance costs;
            (2) stadiums or other facilities primarily used for 
        athletic contests or exhibitions or other events for 
        which admission is charged to the general public;
            (3) purchase or upgrade of vehicles; or
            (4) improvement of stand-alone facilities whose 
        purpose is not the education of children, including 
        central office administration or operations or 
        logistical support facilities.
    (c) Rule of Construction.--Nothing in this section shall 
allow a local educational agency to engage in school 
modernization, renovation, or repair that is inconsistent with 
State law.

SEC. 14004. USES OF FUNDS BY INSTITUTIONS OF HIGHER EDUCATION.

    (a) In General.--A public institution of higher education 
that receives funds under this title shall use the funds for 
education and general expenditures, and in such a way as to 
mitigate the need to raise tuition and fees for in-State 
students, or for modernization, renovation, or repair of 
institution of higher education facilities that are primarily 
used for instruction, research, or student housing, including 
modernization, renovation, and repairs that are consistent with 
a recognized green building rating system.
    (b) Prohibition.--An institution of higher education may 
not use funds received under this title to increase its 
endowment.
    (c) Additional Prohibition.--No funds awarded under this 
title may be used for--
            (1) the maintenance of systems, equipment, or 
        facilities;
            (2) modernization, renovation, or repair of 
        stadiums or other facilities primarily used for 
        athletic contests or exhibitions or other events for 
        which admission is charged to the general public; or
            (3) modernization, renovation, or repair of 
        facilities--
                    (A) used for sectarian instruction or 
                religious worship; or
                    (B) in which a substantial portion of the 
                functions of the facilities are subsumed in a 
                religious mission.

SEC. 14005. STATE APPLICATIONS.

    (a) In General.--The Governor of a State desiring to 
receive an allocation under section 14001 shall submit an 
application at such time, in such manner, and containing such 
information as the Secretary may reasonably require.
    (b) Application.--In such application, the Governor shall--
            (1) include the assurances described in subsection 
        (d);
            (2) provide baseline data that demonstrates the 
        State's current status in each of the areas described 
        in such assurances; and
            (3) describe how the State intends to use its 
        allocation, including whether the State will use such 
        allocation to meet maintenance of effort requirements 
        under the ESEA and IDEA and, in such cases, what amount 
        will be used to meet such requirements.
    (c) Incentive Grant Application.--The Governor of a State 
seeking a grant under section 14006 shall--
            (1) submit an application for consideration;
            (2) describe the status of the State's progress in 
        each of the areas described in subsection (d), and the 
        strategies the State is employing to help ensure that 
        students in the subgroups described in section 
        1111(b)(2)(C)(v)(II) of the ESEA (20 U.S.C. 
        6311(b)(2)(C)(v)(II)) who have not met the State's 
        proficiency targets continue making progress toward 
        meeting the State's student academic achievement 
        standards;
            (3) describe the achievement and graduation rates 
        (as described in section 1111(b)(2)(C)(vi) of the ESEA 
        (20 U.S.C. 6311(b)(2)(C)(vi)) and as clarified in 
        section 200.19(b)(1) of title 34, Code of Federal 
        Regulations) of public elementary and secondary school 
        students in the State, and the strategies the State is 
        employing to help ensure that all subgroups of students 
        identified in section 1111(b)(2) of the ESEA (20 U.S.C. 
        6311(b)(2)) in the State continue making progress 
        toward meeting the State's student academic achievement 
        standards;
            (4) describe how the State would use its grant 
        funding to improve student academic achievement in the 
        State, including how it will allocate the funds to give 
        priority to high-need local educational agencies; and
            (5) include a plan for evaluating the State's 
        progress in closing achievement gaps.
    (d) Assurances.--An application under subsection (b) shall 
include the following assurances:
            (1) Maintenance of effort.--
                    (A) Elementary and secondary education.--
                The State will, in each of fiscal years 2009, 
                2010, and 2011, maintain State support for 
                elementary and secondary education at least at 
                the level of such support in fiscal year 2006.
                    (B) Higher education.--The State will, in 
                each of fiscal years 2009, 2010, and 2011, 
                maintain State support for public institutions 
                of higher education (not including support for 
                capital projects or for research and 
                development or tuition and fees paid by 
                students) at least at the level of such support 
                in fiscal year 2006.
            (2) Achieving equity in teacher distribution.--The 
        State will take actions to improve teacher 
        effectiveness and comply with section 1111(b)(8)(C) of 
        the ESEA (20 U.S.C. 6311(b)(8)(C)) in order to address 
        inequities in the distribution of highly qualified 
        teachers between high- and low-poverty schools, and to 
        ensure that low-income and minority children are not 
        taught at higher rates than other children by 
        inexperienced, unqualified, or out-of-field teachers.
            (3) Improving collection and use of data.--The 
        State will establish a longitudinal data system that 
        includes the elements described in section 
        6401(e)(2)(D) of the America COMPETES Act (20 U.S.C. 
        9871).
            (4) Standards and assessments.--The State--
                    (A) will enhance the quality of the 
                academic assessments it administers pursuant to 
                section 1111(b)(3) of the ESEA (20 U.S.C. 
                6311(b)(3)) through activities such as those 
                described in section 6112(a) of such Act (20 
                U.S.C. 7301a(a));
                    (B) will comply with the requirements of 
                paragraphs (3)(C)(ix) and (6) of section 
                1111(b) of the ESEA (20 U.S.C. 6311(b)) and 
                section 612(a)(16) of the IDEA (20 U.S.C. 
                1412(a)(16)) related to the inclusion of 
                children with disabilities and limited English 
                proficient students in State assessments, the 
                development of valid and reliable assessments 
                for those students, and the provision of 
                accommodations that enable their participation 
                in State assessments; and
                    (C) will take steps to improve State 
                academic content standards and student academic 
                achievement standards consistent with section 
                6401(e)(1)(9)(A)(ii) of the America COMPETES 
                Act.
            (5) Supporting struggling schools.--The State will 
        ensure compliance with the requirements of section 
        1116(a)(7)(C)(iv) and section 1116(a)(8)(B) of the ESEA 
        with respect to schools identified under such sections.

SEC. 14006. STATE INCENTIVE GRANTS.

    (a) In General.--
            (1) Reservation.--From the total amount reserved 
        under section 14001(c) that is not used for section 
        14007, the Secretary may reserve up to 1 percent for 
        technical assistance to States to assist them in 
        meeting the objectives of paragraphs (2), (3), (4), and 
        (5) of section 14005(d).
            (2) Remainder.--Of the remaining funds, the 
        Secretary shall, in fiscal year 2010, make grants to 
        States that have made significant progress in meeting 
        the objectives of paragraphs (2), (3), (4), and (5) of 
        section 14005(d).
    (b) Basis for Grants.--The Secretary shall determine which 
States receive grants under this section, and the amount of 
those grants, on the basis of information provided in State 
applications under section 14005 and such other criteria as the 
Secretary determines appropriate, which may include a State's 
need for assistance to help meet the objective of paragraphs 
(2), (3), (4), and (5) of section 14005(d).
    (c) Subgrants to Local Educational Agencies.--Each State 
receiving a grant under this section shall use at least 50 
percent of the grant to provide local educational agencies in 
the State with subgrants based on their relative shares of 
funding under part A of title I of the ESEA (20 U.S.C. 6311 et 
seq.) for the most recent year.

SEC. 14007. INNOVATION FUND.

    (a) In General.--
            (1) Eligible entities.--For the purposes of this 
        section, the term ``eligible entity'' means--
                    (A) a local educational agency; or
                    (B) a partnership between a nonprofit 
                organization and--
                            (i) one or more local educational 
                        agencies; or
                            (ii) a consortium of schools.
            (2) Program established.--From the total amount 
        reserved under section 14001(c), the Secretary may 
        reserve up to $650,000,000 to establish an Innovation 
        Fund, which shall consist of academic achievement 
        awards that recognize eligible entities that meet the 
        requirements described in subsection (b).
            (3) Basis for awards.--The Secretary shall make 
        awards to eligible entities that have made significant 
        gains in closing the achievement gap as described in 
        subsection (b)(1)--
                    (A) to allow such eligible entities to 
                expand their work and serve as models for best 
                practices;
                    (B) to allow such eligible entities to work 
                in partnership with the private sector and the 
                philanthropic community; and
                    (C) to identify and document best practices 
                that can be shared, and taken to scale based on 
                demonstrated success.
    (b) Eligibility.--To be eligible for such an award, an 
eligible entity shall--
            (1) have significantly closed the achievement gaps 
        between groups of students described in section 
        1111(b)(2) of the ESEA (20 U.S.C. 6311(b)(2));
            (2) have exceeded the State's annual measurable 
        objectives consistent with such section 1111(b)(2) for 
        2 or more consecutive years or have demonstrated 
        success in significantly increasing student academic 
        achievement for all groups of students described in 
        such section through another measure, such as measures 
        described in section 1111(c)(2) of the ESEA;
            (3) have made significant improvement in other 
        areas, such as graduation rates or increased 
        recruitment and placement of high-quality teachers and 
        school leaders, as demonstrated with meaningful data; 
        and
            (4) demonstrate that they have established 
        partnerships with the private sector, which may include 
        philanthropic organizations, and that the private 
        sector will provide matching funds in order to help 
        bring results to scale.
    (c) Special Rule.--In the case of an eligible entity that 
includes a nonprofit organization, the eligible entity shall be 
considered to have met the eligibility requirements of 
paragraphs (1), (2), and (3) of subsection (b) if such 
nonprofit organization has a record of meeting such 
requirements.

SEC. 14008. STATE REPORTS.

    For each year of the program under this title, a State 
receiving funds under this title shall submit a report to the 
Secretary, at such time and in such manner as the Secretary may 
require, that describes--
            (1) the uses of funds provided under this title 
        within the State;
            (2) how the State distributed the funds it received 
        under this title;
            (3) the number of jobs that the Governor estimates 
        were saved or created with funds the State received 
        under this title;
            (4) tax increases that the Governor estimates were 
        averted because of the availability of funds from this 
        title;
            (5) the State's progress in reducing inequities in 
        the distribution of highly qualified teachers, in 
        implementing a State longitudinal data system, and in 
        developing and implementing valid and reliable 
        assessments for limited English proficient students and 
        children with disabilities;
            (6) the tuition and fee increases for in-State 
        students imposed by public institutions of higher 
        education in the State during the period of 
        availability of funds under this title, and a 
        description of any actions taken by the State to limit 
        those increases;
            (7) the extent to which public institutions of 
        higher education maintained, increased, or decreased 
        enrollment of in-State students, including students 
        eligible for Pell Grants or other need-based financial 
        assistance; and
            (8) a description of each modernization, renovation 
        and repair project funded, which shall include the 
        amounts awarded and project costs.

SEC. 14009. EVALUATION.

    The Comptroller General of the United States shall conduct 
evaluations of the programs under sections 14006 and 14007 
which shall include, but not be limited to, the criteria used 
for the awards made, the States selected for awards, award 
amounts, how each State used the award received, and the impact 
of this funding on the progress made toward closing achievement 
gaps.

SEC. 14010. SECRETARY'S REPORT TO CONGRESS.

    The Secretary shall submit a report to the Committee on 
Education and Labor of the House of Representatives, the 
Committee on Health, Education, Labor, and Pensions of the 
Senate, and the Committees on Appropriations of the House of 
Representatives and of the Senate, not less than 6 months 
following the submission of State reports, that evaluates the 
information provided in the State reports under section 14008 
and the information required by section 14005(b)(3) including 
State-by-State information.

SEC. 14011. PROHIBITION ON PROVISION OF CERTAIN ASSISTANCE.

    No recipient of funds under this title shall use such funds 
to provide financial assistance to students to attend private 
elementary or secondary schools.

SEC. 14012. FISCAL RELIEF.

    (a) In General.--For the purpose of relieving fiscal 
burdens on States and local educational agencies that have 
experienced a precipitous decline in financial resources, the 
Secretary of Education may waive or modify any requirement of 
this title relating to maintaining fiscal effort.
    (b) Duration.--A waiver or modification under this section 
shall be for any of fiscal year 2009, fiscal year 2010, or 
fiscal year 2011, as determined by the Secretary.
    (c) Criteria.--The Secretary shall not grant a waiver or 
modification under this section unless the Secretary determines 
that the State or local educational agency receiving such 
waiver or modification will not provide for elementary and 
secondary education, for the fiscal year under consideration, a 
smaller percentage of the total revenues available to the State 
or local educational agency than the amount provided for such 
purpose in the preceding fiscal year.
    (d) Maintenance of Effort.--Upon prior approval from the 
Secretary, a State or local educational agency that receives 
funds under this title may treat any portion of such funds that 
is used for elementary, secondary, or postsecondary education 
as non-Federal funds for the purpose of any requirement to 
maintain fiscal effort under any other program, including part 
C of the Individuals with Disabilities Education Act (20 U.S.C. 
1431 et seq.), administered by the Secretary.
    (e) Subsequent Level of Effort.--Notwithstanding (d), the 
level of effort required by a State or local educational agency 
for the following fiscal year shall not be reduced.

SEC. 14013. DEFINITIONS.

    Except as otherwise provided in this title, as used in this 
title--
            (1) the terms ``elementary education'' and 
        ``secondary education'' have the meaning given such 
        terms under State law;
            (2) the term ``high-need local educational agency'' 
        means a local educational agency--
                    (A) that serves not fewer than 10,000 
                children from families with incomes below the 
                poverty line; or
                    (B) for which not less than 20 percent of 
                the children served by the agency are from 
                families with incomes below the poverty line;
            (3) the term ``institution of higher education'' 
        has the meaning given such term in section 101 of the 
        Higher Education Act of 1965 (20 U.S.C. 1001);
            (4) the term ``Secretary'' means the Secretary of 
        Education;
            (5) the term ``State'' means each of the 50 States, 
        the District of Columbia, and the Commonwealth of 
        Puerto Rico; and
            (6) any other term used that is defined in section 
        9101 of the ESEA (20 U.S.C. 7801) shall have the 
        meaning given the term in such section.

               TITLE XV--ACCOUNTABILITY AND TRANSPARENCY

SEC. 1501. DEFINITIONS.

    In this title:
            (1) Agency.--The term ``agency'' has the meaning 
        given under section 551 of title 5, United States Code.
            (2) Board.--The term ``Board'' means the Recovery 
        Accountability and Transparency Board established in 
        section 1521.
            (3) Chairperson.--The term ``Chairperson'' means 
        the Chairperson of the Board.
            (4) Covered funds.--The term ``covered funds'' 
        means any funds that are expended or obligated from 
        appropriations made under this Act.
            (5) Panel.--The term ``Panel'' means the Recovery 
        Independent Advisory Panel established in section 1541.

          Subtitle A--Transparency and Oversight Requirements

SEC. 1511. CERTIFICATIONS.

    With respect to covered funds made available to State or 
local governments for infrastructure investments, the Governor, 
mayor, or other chief executive, as appropriate, shall certify 
that the infrastructure investment has received the full review 
and vetting required by law and that the chief executive 
accepts responsibility that the infrastructure investment is an 
appropriate use of taxpayer dollars. Such certification shall 
include a description of the investment, the estimated total 
cost, and the amount of covered funds to be used, and shall be 
posted on a website and linked to the website established by 
section 1526. A State or local agency may not receive 
infrastructure investment funding from funds made available in 
this Act unless this certification is made and posted.

SEC. 1512. REPORTS ON USE OF FUNDS.

    (a) Short Title.--This section may be cited as the ``Jobs 
Accountability Act''.
    (b) Definitions.--In this section:
            (1) Recipient.--The term ``recipient''--
                    (A) means any entity that receives recovery 
                funds directly from the Federal Government 
                (including recovery funds received through 
                grant, loan, or contract) other than an 
                individual; and
                    (B) includes a State that receives recovery 
                funds.
            (2) Recovery funds.--The term ``recovery funds'' 
        means any funds that are made available from 
        appropriations made under this Act.
    (c) Recipient Reports.--Not later than 10 days after the 
end of each calendar quarter, each recipient that received 
recovery funds from a Federal agency shall submit a report to 
that agency that contains--
            (1) the total amount of recovery funds received 
        from that agency;
            (2) the amount of recovery funds received that were 
        expended or obligated to projects or activities; and
            (3) a detailed list of all projects or activities 
        for which recovery funds were expended or obligated, 
        including--
                    (A) the name of the project or activity;
                    (B) a description of the project or 
                activity;
                    (C) an evaluation of the completion status 
                of the project or activity;
                    (D) an estimate of the number of jobs 
                created and the number of jobs retained by the 
                project or activity; and
                    (E) for infrastructure investments made by 
                State and local governments, the purpose, total 
                cost, and rationale of the agency for funding 
                the infrastructure investment with funds made 
                available under this Act, and name of the 
                person to contact at the agency if there are 
                concerns with the infrastructure investment.
            (4) Detailed information on any subcontracts or 
        subgrants awarded by the recipient to include the data 
        elements required to comply with the Federal Funding 
        Accountability and Transparency Act of 2006 (Public Law 
        109-282), allowing aggregate reporting on awards below 
        $25,000 or to individuals, as prescribed by the 
        Director of the Office of Management and Budget.
    (d) Agency Reports.--Not later than 30 days after the end 
of each calendar quarter, each agency that made recovery funds 
available to any recipient shall make the information in 
reports submitted under subsection (c) publicly available by 
posting the information on a website.
    (e) Other Reports.--The Congressional Budget Office and the 
Government Accountability Office shall comment on the 
information described in subsection (c)(3)(D) for any reports 
submitted under subsection (c). Such comments shall be due 
within 45 days after such reports are submitted.
    (f) Compliance.--Within 180 days of enactment, as a 
condition of receipt of funds under this Act, Federal agencies 
shall require any recipient of such funds to provide the 
information required under subsection (c).
    (g) Guidance.--Federal agencies, in coordination with the 
Director of the Office of Management and Budget, shall provide 
for user-friendly means for recipients of covered funds to meet 
the requirements of this section.
    (h) Registration.--Funding recipients required to report 
information per subsection (c)(4) must register with the 
Central Contractor Registration database or complete other 
registration requirements as determined by the Director of the 
Office of Management and Budget.

SEC. 1513. REPORTS OF THE COUNCIL OF ECONOMIC ADVISERS.

    (a) In General.--In consultation with the Director of the 
Office of Management and Budget and the Secretary of the 
Treasury, the Chairperson of the Council of Economic Advisers 
shall submit quarterly reports to the Committees on 
Appropriations of the Senate and House of Representatives that 
detail the impact of programs funded through covered funds on 
employment, estimated economic growth, and other key economic 
indicators.
    (b) Submission of Reports.--
            (1) First report.--The first report submitted under 
        subsection (a) shall be submitted not later than 45 
        days after the end of the first full quarter following 
        the date of enactment of this Act.
            (2) Last report.--The last report required to be 
        submitted under subsection (a) shall apply to the 
        quarter in which the Board terminates under section 
        1530.

SEC. 1514. INSPECTOR GENERAL REVIEWS.

    (a) Reviews.--Any inspector general of a Federal department 
or executive agency shall review, as appropriate, any concerns 
raised by the public about specific investments using funds 
made available in this Act. Any findings of such reviews not 
related to an ongoing criminal proceeding shall be relayed 
immediately to the head of the department or agency concerned. 
In addition, the findings of such reviews, along with any 
audits conducted by any inspector general of funds made 
available in this Act, shall be posted on the inspector 
general's website and linked to the website established by 
section 1526, except that portions of reports may be redacted 
to the extent the portions would disclose information that is 
protected from public disclosure under sections 552 and 552a of 
title 5, United States Code.

SEC. 1515. ACCESS OF OFFICES OF INSPECTOR GENERAL TO CERTAIN RECORDS 
                    AND EMPLOYEES.

    (a) Access.--With respect to each contract or grant awarded 
using covered funds, any representative of an appropriate 
inspector general appointed under section 3 or 8G of the 
Inspector General Act of 1978 (5 U.S.C. App.), is authorized--
            (1) to examine any records of the contractor or 
        grantee, any of its subcontractors or subgrantees, or 
        any State or local agency administering such contract, 
        that pertain to, and involve transactions relating to, 
        the contract, subcontract, grant, or subgrant; and
            (2) to interview any officer or employee of the 
        contractor, grantee, subgrantee, or agency regarding 
        such transactions.
    (b) Relationship to Existing Authority.--Nothing in this 
section shall be interpreted to limit or restrict in any way 
any existing authority of an inspector general.

       Subtitle B--Recovery Accountability and Transparency Board

SEC. 1521. ESTABLISHMENT OF THE RECOVERY ACCOUNTABILITY AND 
                    TRANSPARENCY BOARD.

    There is established the Recovery Accountability and 
Transparency Board to coordinate and conduct oversight of 
covered funds to prevent fraud, waste, and abuse.

SEC. 1522. COMPOSITION OF BOARD.

    (a) Chairperson.--
            (1) Designation or appointment.--The President 
        shall--
                    (A) designate the Deputy Director for 
                Management of the Office of Management and 
                Budget to serve as Chairperson of the Board;
                    (B) designate another Federal officer who 
                was appointed by the President to a position 
                that required the advice and consent of the 
                Senate, to serve as Chairperson of the Board; 
                or
                    (C) appoint an individual as the 
                Chairperson of the Board, by and with the 
                advice and consent of the Senate.
            (2) Compensation.--
                    (A) Designation of federal officer.--If the 
                President designates a Federal officer under 
                paragraph (1)(A) or (B) to serve as 
                Chairperson, that Federal officer may not 
                receive additional compensation for services 
                performed as Chairperson.
                    (B) Appointment of non-federal officer.--If 
                the President appoints an individual as 
                Chairperson under paragraph (1)(C), that 
                individual shall be compensated at the rate of 
                basic pay prescribed for level IV of the 
                Executive Schedule under section 5315 of title 
                5, United States Code.
    (b) Members.--The members of the Board shall include--
            (1) the Inspectors General of the Departments of 
        Agriculture, Commerce, Education, Energy, Health and 
        Human Services, Homeland Security, Justice, 
        Transportation, Treasury, and the Treasury Inspector 
        General for Tax Administration; and
            (2) any other Inspector General as designated by 
        the President from any agency that expends or obligates 
        covered funds.

SEC. 1523. FUNCTIONS OF THE BOARD.

    (a) Functions.--
            (1) In general.--The Board shall coordinate and 
        conduct oversight of covered funds in order to prevent 
        fraud, waste, and abuse.
            (2) Specific functions.--The functions of the Board 
        shall include--
                    (A) reviewing whether the reporting of 
                contracts and grants using covered funds meets 
                applicable standards and specifies the purpose 
                of the contract or grant and measures of 
                performance;
                    (B) reviewing whether competition 
                requirements applicable to contracts and grants 
                using covered funds have been satisfied;
                    (C) auditing or reviewing covered funds to 
                determine whether wasteful spending, poor 
                contract or grant management, or other abuses 
                are occurring and referring matters it 
                considers appropriate for investigation to the 
                inspector general for the agency that disbursed 
                the covered funds;
                    (D) reviewing whether there are sufficient 
                qualified acquisition and grant personnel 
                overseeing covered funds;
                    (E) reviewing whether personnel whose 
                duties involve acquisitions or grants made with 
                covered funds receive adequate training; and
                    (F) reviewing whether there are appropriate 
                mechanisms for interagency collaboration 
                relating to covered funds, including 
                coordinating and collaborating to the extent 
                practicable with the Inspectors General Council 
                on Integrity and Efficiency established by the 
                Inspector General Reform Act of 2008 (Public 
                Law 110-409).
    (b) Reports.--
            (1) Flash and other reports.--The Board shall 
        submit to the President and Congress, including the 
        Committees on Appropriations of the Senate and House of 
        Representatives, reports, to be known as ``flash 
        reports'', on potential management and funding problems 
        that require immediate attention. The Board also shall 
        submit to Congress such other reports as the Board 
        considers appropriate on the use and benefits of funds 
        made available in this Act.
            (2) Quarterly reports.--The Board shall submit 
        quarterly reports to the President and Congress, 
        including the Committees on Appropriations of the 
        Senate and House of Representatives, summarizing the 
        findings of the Board and the findings of inspectors 
        general of agencies. The Board may submit additional 
        reports as appropriate.
            (3) Annual reports.--The Board shall submit annual 
        reports to the President and Congress, including the 
        Committees on Appropriations of the Senate and House of 
        Representatives, consolidating applicable quarterly 
        reports on the use of covered funds.
            (4) Public availability.--
                    (A) In general.--All reports submitted 
                under this subsection shall be made publicly 
                available and posted on the website established 
                by section 1526.
                    (B) Redactions.--Any portion of a report 
                submitted under this subsection may be redacted 
                when made publicly available, if that portion 
                would disclose information that is not subject 
                to disclosure under sections 552 and 552a of 
                title 5, United States Code.
    (c) Recommendations.--
            (1) In general.--The Board shall make 
        recommendations to agencies on measures to prevent 
        fraud, waste, and abuse relating to covered funds.
            (2) Responsive reports.--Not later than 30 days 
        after receipt of a recommendation under paragraph (1), 
        an agency shall submit a report to the President, the 
        congressional committees of jurisdiction, including the 
        Committees on Appropriations of the Senate and House of 
        Representatives, and the Board on--
                    (A) whether the agency agrees or disagrees 
                with the recommendations; and
                    (B) any actions the agency will take to 
                implement the recommendations.

SEC. 1524. POWERS OF THE BOARD.

    (a) In General.--The Board shall conduct audits and reviews 
of spending of covered funds and coordinate on such activities 
with the inspectors general of the relevant agency to avoid 
duplication and overlap of work.
    (b) Audits and Reviews.--The Board may--
            (1) conduct its own independent audits and reviews 
        relating to covered funds; and
            (2) collaborate on audits and reviews relating to 
        covered funds with any inspector general of an agency.
    (c) Authorities.--
            (1) Audits and reviews.--In conducting audits and 
        reviews, the Board shall have the authorities provided 
        under section 6 of the Inspector General Act of 1978 (5 
        U.S.C. App.). Additionally, the Board may issue 
        subpoenas to compel the testimony of persons who are 
        not Federal officers or employees and may enforce such 
        subpoenas in the same manner as provided for inspector 
        general subpoenas under section 6 of the Inspector 
        General Act of 1978 (5 U.S.C. App.).
            (2) Standards and guidelines.--The Board shall 
        carry out the powers under subsections (a) and (b) in 
        accordance with section 4(b)(1) of the Inspector 
        General Act of 1978 (5 U.S.C. App.).
    (d) Public Hearings.--The Board may hold public hearings 
and Board personnel may conduct necessary inquiries. The head 
of each agency shall make all officers and employees of that 
agency available to provide testimony to the Board and Board 
personnel. The Board may issue subpoenas to compel the 
testimony of persons who are not Federal officers or employees 
at such public hearings. Any such subpoenas may be enforced in 
the same manner as provided for inspector general subpoenas 
under section 6 of the Inspector General Act of 1978 (5 U.S.C. 
App.).
    (e) Contracts.--The Board may enter into contracts to 
enable the Board to discharge its duties under this subtitle, 
including contracts and other arrangements for audits, studies, 
analyses, and other services with public agencies and with 
private persons, and make such payments as may be necessary to 
carry out the duties of the Board.
    (f) Transfer of Funds.--The Board may transfer funds 
appropriated to the Board for expenses to support 
administrative support services and audits, reviews, or other 
activities related to oversight by the Board of covered funds 
to any office of inspector general, the Office of Management 
and Budget, the General Services Administration, and the Panel.

SEC. 1525. EMPLOYMENT, PERSONNEL, AND RELATED AUTHORITIES.

    (a) Employment and Personnel Authorities.--
            (1) In general.--
                    (A) Authorities.--Subject to paragraph (2), 
                the Board may exercise the authorities of 
                subsections (b) through (i) of section 3161 of 
                title 5, United States Code (without regard to 
                subsection (a) of that section).
                    (B) Application.--For purposes of 
                exercising the authorities described under 
                subparagraph (A), the term ``Chairperson of the 
                Board'' shall be substituted for the term 
                ``head of a temporary organization''.
                    (C) Consultation.--In exercising the 
                authorities described under subparagraph (A), 
                the Chairperson shall consult with members of 
                the Board.
            (2) Employment authorities.--In exercising the 
        employment authorities under subsection (b) of section 
        3161 of title 5, United States Code, as provided under 
        paragraph (1) of this subsection--
                    (A) paragraph (2) of subsection (b) of 
                section 3161 of that title (relating to periods 
                of appointments) shall not apply; and
                    (B) no period of appointment may exceed the 
                date on which the Board terminates under 
                section 1530.
    (b) Information and Assistance.--
            (1) In general.--Upon request of the Board for 
        information or assistance from any agency or other 
        entity of the Federal Government, the head of such 
        entity shall, insofar as is practicable and not in 
        contravention of any existing law, furnish such 
        information or assistance to the Board, or an 
        authorized designee.
            (2) Report of refusals.--Whenever information or 
        assistance requested by the Board is, in the judgment 
        of the Board, unreasonably refused or not provided, the 
        Board shall report the circumstances to the 
        congressional committees of jurisdiction, including the 
        Committees on Appropriations of the Senate and House of 
        Representatives, without delay.
    (c) Administrative Support.--The General Services 
Administration shall provide the Board with administrative 
support services, including the provision of office space and 
facilities.

SEC. 1526. BOARD WEBSITE.

    (a) Establishment.--The Board shall establish and maintain, 
no later than 30 days after enactment of this Act, a user-
friendly, public-facing website to foster greater 
accountability and transparency in the use of covered funds.
    (b) Purpose.--The website established and maintained under 
subsection (a) shall be a portal or gateway to key information 
relating to this Act and provide connections to other 
Government websites with related information.
    (c) Content and Function.--In establishing the website 
established and maintained under subsection (a), the Board 
shall ensure the following:
            (1) The website shall provide materials explaining 
        what this Act means for citizens. The materials shall 
        be easy to understand and regularly updated.
            (2) The website shall provide accountability 
        information, including findings from audits, inspectors 
        general, and the Government Accountability Office.
            (3) The website shall provide data on relevant 
        economic, financial, grant, and contract information in 
        user-friendly visual presentations to enhance public 
        awareness of the use of covered funds.
            (4) The website shall provide detailed data on 
        contracts awarded by the Federal Government that expend 
        covered funds, including information about the 
        competitiveness of the contracting process, information 
        about the process that was used for the award of 
        contracts, and for contracts over $500,000 a summary of 
        the contract.
            (5) The website shall include printable reports on 
        covered funds obligated by month to each State and 
        congressional district.
            (6) The website shall provide a means for the 
        public to give feedback on the performance of contracts 
        that expend covered funds.
            (7) The website shall include detailed information 
        on Federal Government contracts and grants that expend 
        covered funds, to include the data elements required to 
        comply with the Federal Funding Accountability and 
        Transparency Act of 2006 (Public Law 109-282), allowing 
        aggregate reporting on awards below $25,000 or to 
        individuals, as prescribed by the Director of the 
        Office of Management and Budget.
            (8) The website shall provide a link to estimates 
        of the jobs sustained or created by the Act.
            (9) The website shall provide a link to information 
        about announcements of grant competitions and 
        solicitations for contracts to be awarded.
            (10) The website shall include appropriate links to 
        other government websites with information concerning 
        covered funds, including Federal agency and State 
        websites.
            (11) The website shall include a plan from each 
        Federal agency for using funds made available in this 
        Act to the agency.
            (12) The website shall provide information on 
        Federal allocations of formula grants and awards of 
        competitive grants using covered funds.
            (13) The website shall provide information on 
        Federal allocations of mandatory and other entitlement 
        programs by State, county, or other appropriate 
        geographical unit.
            (14) To the extent practical, the website shall 
        provide, organized by the location of the job 
        opportunities involved, links to and information about 
        how to access job opportunities, including, if 
        possible, links to or information about local 
        employment agencies, job banks operated by State 
        workforce agencies, the Department of Labor's 
        CareerOneStop website, State, local and other public 
        agencies receiving Federal funding, and private firms 
        contracted to perform work with Federal funding, in 
        order to direct job seekers to job opportunities 
        created by this Act.
            (15) The website shall be enhanced and updated as 
        necessary to carry out the purposes of this subtitle.
    (d) Waiver.--The Board may exclude posting contractual or 
other information on the website on a case-by-case basis when 
necessary to protect national security or to protect 
information that is not subject to disclosure under sections 
552 and 552a of title 5, United States Code.

SEC. 1527. INDEPENDENCE OF INSPECTORS GENERAL.

    (a) Independent Authority.--Nothing in this subtitle shall 
affect the independent authority of an inspector general to 
determine whether to conduct an audit or investigation of 
covered funds.
    (b) Requests by Board.--If the Board requests that an 
inspector general conduct or refrain from conducting an audit 
or investigation and the inspector general rejects the request 
in whole or in part, the inspector general shall, not later 
than 30 days after rejecting the request, submit a report to 
the Board, the head of the applicable agency, and the 
congressional committees of jurisdiction, including the 
Committees on Appropriations of the Senate and House of 
Representatives. The report shall state the reasons that the 
inspector general has rejected the request in whole or in part. 
The inspector general's decision shall be final.

SEC. 1528. COORDINATION WITH THE COMPTROLLER GENERAL AND STATE 
                    AUDITORS.

    The Board shall coordinate its oversight activities with 
the Comptroller General of the United States and State 
auditors.

SEC. 1529. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as 
necessary to carry out this subtitle.

SEC. 1530. TERMINATION OF THE BOARD.

    The Board shall terminate on September 30, 2013.

            Subtitle C--Recovery Independent Advisory Panel

SEC. 1541. ESTABLISHMENT OF RECOVERY INDEPENDENT ADVISORY PANEL.

    (a) Establishment.--There is established the Recovery 
Independent Advisory Panel.
    (b) Membership.--The Panel shall be composed of 5 members 
who shall be appointed by the President.
    (c) Qualifications.--Members shall be appointed on the 
basis of expertise in economics, public finance, contracting, 
accounting, or any other relevant field.
    (d) Initial Meeting.--Not later than 30 days after the date 
on which all members of the Panel have been appointed, the 
Panel shall hold its first meeting.
    (e) Meetings.--The Panel shall meet at the call of the 
Chairperson of the Panel.
    (f) Quorum.--A majority of the members of the Panel shall 
constitute a quorum, but a lesser number of members may hold 
hearings.
    (g) Chairperson and Vice Chairperson.--The Panel shall 
select a Chairperson and Vice Chairperson from among its 
members.

SEC. 1542. DUTIES OF THE PANEL.

    The Panel shall make recommendations to the Board on 
actions the Board could take to prevent fraud, waste, and abuse 
relating to covered funds.

SEC. 1543. POWERS OF THE PANEL.

    (a) Hearings.--The Panel may hold such hearings, sit and 
act at such times and places, take such testimony, and receive 
such evidence as the Panel considers advisable to carry out 
this subtitle.
    (b) Information From Federal Agencies.--The Panel may 
secure directly from any agency such information as the Panel 
considers necessary to carry out this subtitle. Upon request of 
the Chairperson of the Panel, the head of such agency shall 
furnish such information to the Panel.
    (c) Postal Services.--The Panel may use the United States 
mails in the same manner and under the same conditions as 
agencies of the Federal Government.
    (d) Gifts.--The Panel may accept, use, and dispose of gifts 
or donations of services or property.

SEC. 1544. PANEL PERSONNEL MATTERS.

    (a) Compensation of Members.--Each member of the Panel who 
is not an officer or employee of the Federal Government shall 
be compensated at a rate equal to the daily equivalent of the 
annual rate of basic pay prescribed for level IV of the 
Executive Schedule under section 5315 of title 5, United States 
Code, for each day (including travel time) during which such 
member is engaged in the performance of the duties of the 
Panel. All members of the Panel who are officers or employees 
of the United States shall serve without compensation in 
addition to that received for their services as officers or 
employees of the United States.
    (b) Travel Expenses.--The members of the Panel shall be 
allowed travel expenses, including per diem in lieu of 
subsistence, at rates authorized for employees of agencies 
under subchapter I of chapter 57 of title 5, United States 
Code, while away from their homes or regular places of business 
in the performance of services for the Panel.
    (c) Staff.--
            (1) In general.--The Chairperson of the Panel may, 
        without regard to the civil service laws and 
        regulations, appoint and terminate an executive 
        director and such other additional personnel as may be 
        necessary to enable the Panel to perform its duties. 
        The employment of an executive director shall be 
        subject to confirmation by the Panel.
            (2) Compensation.--The Chairperson of the Panel may 
        fix the compensation of the executive director and 
        other personnel without regard to chapter 51 and 
        subchapter III of chapter 53 of title 5, United States 
        Code, relating to classification of positions and 
        General Schedule pay rates, except that the rate of pay 
        for the executive director and other personnel may not 
        exceed the rate payable for level V of the Executive 
        Schedule under section 5316 of such title.
            (3) Personnel as federal employees.--
                    (A) In general.--The executive director and 
                any personnel of the Panel who are employees 
                shall be employees under section 2105 of title 
                5, United States Code, for purposes of chapters 
                63, 81, 83, 84, 85, 87, 89, 89A, 89B, and 90 of 
                that title.
                    (B) Members of panel.--Subparagraph (A) 
                shall not be construed to apply to members of 
                the Panel.
    (d) Detail of Government Employees.--Any Federal Government 
employee may be detailed to the Panel without reimbursement, 
and such detail shall be without interruption or loss of civil 
service status or privilege.
    (e) Procurement of Temporary and Intermittent Services.--
The Chairperson of the Panel may procure temporary and 
intermittent services under section 3109(b) of title 5, United 
States Code, at rates for individuals which do not exceed the 
daily equivalent of the annual rate of basic pay prescribed for 
level V of the Executive Schedule under section 5316 of such 
title.
    (f) Administrative Support.--The General Services 
Administration shall provide the Panel with administrative 
support services, including the provision of office space and 
facilities.

SEC. 1545. TERMINATION OF THE PANEL.

    The Panel shall terminate on September 30, 2013.

SEC. 1546. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated such sums as 
necessary to carry out this subtitle.

  Subtitle D--Additional Accountability and Transparency Requirements

SEC. 1551. AUTHORITY TO ESTABLISH SEPARATE FUNDING ACCOUNTS.

    Although this Act provides supplemental appropriations for 
programs, projects, and activities in existing Treasury 
accounts, to facilitate tracking these funds through Treasury 
and agency accounting systems, the Secretary of the Treasury 
shall ensure that all funds appropriated in this Act shall be 
established in separate Treasury accounts, unless a waiver from 
this provision is approved by the Director of the Office of 
Management and Budget.

SEC. 1552. SET-ASIDE FOR STATE AND LOCAL GOVERNMENT REPORTING AND 
                    RECORDKEEPING.

    Federal agencies receiving funds under this Act, may, after 
following the notice and comment rulemaking requirements under 
the Administrative Procedures Act (5 U.S.C. 500), reasonably 
adjust applicable limits on administrative expenditures for 
Federal awards to help award recipients defray the costs of 
data collection requirements initiated pursuant to this Act.

SEC. 1553. PROTECTING STATE AND LOCAL GOVERNMENT AND CONTRACTOR 
                    WHISTLEBLOWERS.

    (a) Prohibition of Reprisals.--An employee of any non-
Federal employer receiving covered funds may not be discharged, 
demoted, or otherwise discriminated against as a reprisal for 
disclosing, including a disclosure made in the ordinary course 
of an employee's duties, to the Board, an inspector general, 
the Comptroller General, a member of Congress, a State or 
Federal regulatory or law enforcement agency, a person with 
supervisory authority over the employee (or such other person 
working for the employer who has the authority to investigate, 
discover, or terminate misconduct), a court or grand jury, the 
head of a Federal agency, or their representatives, information 
that the employee reasonably believes is evidence of--
            (1) gross mismanagement of an agency contract or 
        grant relating to covered funds;
            (2) a gross waste of covered funds;
            (3) a substantial and specific danger to public 
        health or safety related to the implementation or use 
        of covered funds;
            (4) an abuse of authority related to the 
        implementation or use of covered funds; or
            (5) a violation of law, rule, or regulation related 
        to an agency contract (including the competition for or 
        negotiation of a contract) or grant, awarded or issued 
        relating to covered funds.
    (b) Investigation of Complaints.--
            (1) In general.--A person who believes that the 
        person has been subjected to a reprisal prohibited by 
        subsection (a) may submit a complaint regarding the 
        reprisal to the appropriate inspector general. Except 
        as provided under paragraph (3), unless the inspector 
        general determines that the complaint is frivolous, 
        does not relate to covered funds, or another Federal or 
        State judicial or administrative proceeding has 
        previously been invoked to resolve such complaint, the 
        inspector general shall investigate the complaint and, 
        upon completion of such investigation, submit a report 
        of the findings of the investigation to the person, the 
        person's employer, the head of the appropriate agency, 
        and the Board.
            (2) Time limitations for actions.--
                    (A) In general.--Except as provided under 
                subparagraph (B), the inspector general shall, 
                not later than 180 days after receiving a 
                complaint under paragraph (1)--
                            (i) make a determination that the 
                        complaint is frivolous, does not relate 
                        to covered funds, or another Federal or 
                        State judicial or administrative 
                        proceeding has previously been invoked 
                        to resolve such complaint; or
                            (ii) submit a report under 
                        paragraph (1).
                    (B) Extensions.--
                            (i) Voluntary extension agreed to 
                        between inspector general and 
                        complainant.--If the inspector general 
                        is unable to complete an investigation 
                        under this section in time to submit a 
                        report within the 180-day period 
                        specified under subparagraph (A) and 
                        the person submitting the complaint 
                        agrees to an extension of time, the 
                        inspector general shall submit a report 
                        under paragraph (1) within such 
                        additional period of time as shall be 
                        agreed upon between the inspector 
                        general and the person submitting the 
                        complaint.
                            (ii) Extension granted by inspector 
                        general.--If the inspector general is 
                        unable to complete an investigation 
                        under this section in time to submit a 
                        report within the 180-day period 
                        specified under subparagraph (A), the 
                        inspector general may extend the period 
                        for not more than 180 days without 
                        agreeing with the person submitting the 
                        complaint to such extension, provided 
                        that the inspector general provides a 
                        written explanation (subject to the 
                        authority to exclude information under 
                        paragraph (4)(C)) for the decision, 
                        which shall be provided to both the 
                        person submitting the complaint and the 
                        non-Federal employer.
                            (iii) Semi-annual report on 
                        extensions.--The inspector general 
                        shall include in semi-annual reports to 
                        Congress a list of those investigations 
                        for which the inspector general 
                        received an extension.
            (3) Discretion not to investigate complaints.--
                    (A) In general.--The inspector general may 
                decide not to conduct or continue an 
                investigation under this section upon providing 
                to the person submitting the complaint and the 
                non-Federal employer a written explanation 
                (subject to the authority to exclude 
                information under paragraph (4)(C)) for such 
                decision.
                    (B) Assumption of rights to civil remedy.--
                Upon receipt of an explanation of a decision 
                not to conduct or continue an investigation 
                under subparagraph (A), the person submitting a 
                complaint shall immediately assume the right to 
                a civil remedy under subsection (c)(3) as if 
                the 210-day period specified under such 
                subsection has already passed.
                    (C) Semi-annual report.--The inspector 
                general shall include in semi-annual reports to 
                Congress a list of those investigations the 
                inspector general decided not to conduct or 
                continue under this paragraph.
            (4) Access to investigative file of inspector 
        general.--
                    (A) In general.--The person alleging a 
                reprisal under this section shall have access 
                to the investigation file of the appropriate 
                inspector general in accordance with section 
                552a of title 5, United States Code (commonly 
                referred to as the ``Privacy Act''). The 
                investigation of the inspector general shall be 
                deemed closed for purposes of disclosure under 
                such section when an employee files an appeal 
                to an agency head or a court of competent 
                jurisdiction.
                    (B) Civil action.--In the event the person 
                alleging the reprisal brings suit under 
                subsection (c)(3), the person alleging the 
                reprisal and the non-Federal employer shall 
                have access to the investigative file of the 
                inspector general in accordance with the 
                Privacy Act.
                    (C) Exception.--The inspector general may 
                exclude from disclosure--
                            (i) information protected from 
                        disclosure by a provision of law; and
                            (ii) any additional information the 
                        inspector general determines disclosure 
                        of which would impede a continuing 
                        investigation, provided that such 
                        information is disclosed once such 
                        disclosure would no longer impede such 
                        investigation, unless the inspector 
                        general determines that disclosure of 
                        law enforcement techniques, procedures, 
                        or information could reasonably be 
                        expected to risk circumvention of the 
                        law or disclose the identity of a 
                        confidential source.
            (5) Privacy of information.--An inspector general 
        investigating an alleged reprisal under this section 
        may not respond to any inquiry or disclose any 
        information from or about any person alleging such 
        reprisal, except in accordance with the provisions of 
        section 552a of title 5, United States Code, or as 
        required by any other applicable Federal law.
    (c) Remedy and Enforcement Authority.--
            (1) Burden of proof.--
                    (A) Disclosure as contributing factor in 
                reprisal.--
                            (i) In general.--A person alleging 
                        a reprisal under this section shall be 
                        deemed to have affirmatively 
                        established the occurrence of the 
                        reprisal if the person demonstrates 
                        that a disclosure described in 
                        subsection (a) was a contributing 
                        factor in the reprisal.
                            (ii) Use of circumstantial 
                        evidence.--A disclosure may be 
                        demonstrated as a contributing factor 
                        in a reprisal for purposes of this 
                        paragraph by circumstantial evidence, 
                        including--
                                    (I) evidence that the 
                                official undertaking the 
                                reprisal knew of the 
                                disclosure; or
                                    (II) evidence that the 
                                reprisal occurred within a 
                                period of time after the 
                                disclosure such that a 
                                reasonable person could 
                                conclude that the disclosure 
                                was a contributing factor in 
                                the reprisal.
                    (B) Opportunity for rebuttal.--The head of 
                an agency may not find the occurrence of a 
                reprisal with respect to a reprisal that is 
                affirmatively established under subparagraph 
                (A) if the non-Federal employer demonstrates by 
                clear and convincing evidence that the non-
                Federal employer would have taken the action 
                constituting the reprisal in the absence of the 
                disclosure.
            (2) Agency action.--Not later than 30 days after 
        receiving an inspector general report under subsection 
        (b), the head of the agency concerned shall determine 
        whether there is sufficient basis to conclude that the 
        non-Federal employer has subjected the complainant to a 
        reprisal prohibited by subsection (a) and shall either 
        issue an order denying relief in whole or in part or 
        shall take 1 or more of the following actions:
                    (A) Order the employer to take affirmative 
                action to abate the reprisal.
                    (B) Order the employer to reinstate the 
                person to the position that the person held 
                before the reprisal, together with the 
                compensation (including back pay), compensatory 
                damages, employment benefits, and other terms 
                and conditions of employment that would apply 
                to the person in that position if the reprisal 
                had not been taken.
                    (C) Order the employer to pay the 
                complainant an amount equal to the aggregate 
                amount of all costs and expenses (including 
                attorneys' fees and expert witnesses' fees) 
                that were reasonably incurred by the 
                complainant for, or in connection with, 
                bringing the complaint regarding the reprisal, 
                as determined by the head of the agency or a 
                court of competent jurisdiction.
            (3) Civil action.--If the head of an agency issues 
        an order denying relief in whole or in part under 
        paragraph (1), has not issued an order within 210 days 
        after the submission of a complaint under subsection 
        (b), or in the case of an extension of time under 
        subsection (b)(2)(B)(i), within 30 days after the 
        expiration of the extension of time, or decides under 
        subsection (b)(3) not to investigate or to discontinue 
        an investigation, and there is no showing that such 
        delay or decision is due to the bad faith of the 
        complainant, the complainant shall be deemed to have 
        exhausted all administrative remedies with respect to 
        the complaint, and the complainant may bring a de novo 
        action at law or equity against the employer to seek 
        compensatory damages and other relief available under 
        this section in the appropriate district court of the 
        United States, which shall have jurisdiction over such 
        an action without regard to the amount in controversy. 
        Such an action shall, at the request of either party to 
        the action, be tried by the court with a jury.
            (4) Judicial enforcement of order.--Whenever a 
        person fails to comply with an order issued under 
        paragraph (2), the head of the agency shall file an 
        action for enforcement of such order in the United 
        States district court for a district in which the 
        reprisal was found to have occurred. In any action 
        brought under this paragraph, the court may grant 
        appropriate relief, including injunctive relief, 
        compensatory and exemplary damages, and attorneys fees 
        and costs.
            (5) Judicial review.--Any person adversely affected 
        or aggrieved by an order issued under paragraph (2) may 
        obtain review of the order's conformance with this 
        subsection, and any regulations issued to carry out 
        this section, in the United States court of appeals for 
        a circuit in which the reprisal is alleged in the order 
        to have occurred. No petition seeking such review may 
        be filed more than 60 days after issuance of the order 
        by the head of the agency. Review shall conform to 
        chapter 7 of title 5, United States Code.
    (d) Nonenforceability of Certain Provisions Waiving Rights 
and Remedies or Requiring Arbitration of Disputes.--
            (1) Waiver of rights and remedies.--Except as 
        provided under paragraph (3), the rights and remedies 
        provided for in this section may not be waived by any 
        agreement, policy, form, or condition of employment, 
        including by any predispute arbitration agreement.
            (2) Predispute arbitration agreements.--Except as 
        provided under paragraph (3), no predispute arbitration 
        agreement shall be valid or enforceable if it requires 
        arbitration of a dispute arising under this section.
            (3) Exception for collective bargaining 
        agreements.--Notwithstanding paragraphs (1) and (2), an 
        arbitration provision in a collective bargaining 
        agreement shall be enforceable as to disputes arising 
        under the collective bargaining agreement.
    (e) Requirement to Post Notice of Rights and Remedies.--Any 
employer receiving covered funds shall post notice of the 
rights and remedies provided under this section.
    (f) Rules of Construction.--
            (1) No implied authority to retaliate for non-
        protected disclosures.--Nothing in this section may be 
        construed to authorize the discharge of, demotion of, 
        or discrimination against an employee for a disclosure 
        other than a disclosure protected by subsection (a) or 
        to modify or derogate from a right or remedy otherwise 
        available to the employee.
            (2) Relationship to state laws.--Nothing may be 
        construed to preempt, preclude, or limit the 
        protections provided for public or private employees 
        under State whistleblower laws.
    (g) Definitions.--In this section:
            (1) Abuse of authority.--The term ``abuse of 
        authority'' means an arbitrary and capricious exercise 
        of authority by a contracting official or employee that 
        adversely affects the rights of any person, or that 
        results in personal gain or advantage to the official 
        or employee or to preferred other persons.
            (2) Covered funds.--The term ``covered funds'' 
        means any contract, grant, or other payment received by 
        any non-Federal employer if--
                    (A) the Federal Government provides any 
                portion of the money or property that is 
                provided, requested, or demanded; and
                    (B) at least some of the funds are 
                appropriated or otherwise made available by 
                this Act.
            (3) Employee.--The term ``employee''--
                    (A) except as provided under subparagraph 
                (B), means an individual performing services on 
                behalf of an employer; and
                    (B) does not include any Federal employee 
                or member of the uniformed services (as that 
                term is defined in section 101(a)(5) of title 
                10, United States Code).
            (4) Non-federal employer.--The term ``non-Federal 
        employer''--
                    (A) means any employer--
                            (i) with respect to covered funds--
                                    (I) the contractor, 
                                subcontractor, grantee, or 
                                recipient, as the case may be, 
                                if the contractor, 
                                subcontractor, grantee, or 
                                recipient is an employer; and
                                    (II) any professional 
                                membership organization, 
                                certification or other 
                                professional body, any agent or 
                                licensee of the Federal 
                                government, or any person 
                                acting directly or indirectly 
                                in the interest of an employer 
                                receiving covered funds; or
                            (ii) with respect to covered funds 
                        received by a State or local 
                        government, the State or local 
                        government receiving the funds and any 
                        contractor or subcontractor of the 
                        State or local government; and
                    (B) does not mean any department, agency, 
                or other entity of the Federal Government.
            (5) State or local government.--The term ``State or 
        local government'' means--
                    (A) the government of each of the several 
                States, the District of Columbia, the 
                Commonwealth of Puerto Rico, Guam, American 
                Samoa, the Virgin Islands, the Commonwealth of 
                the Northern Mariana Islands, or any other 
                territory or possession of the United States; 
                or
                    (B) the government of any political 
                subdivision of a government listed in 
                subparagraph (A).

SEC. 1554. SPECIAL CONTRACTING PROVISIONS.

    To the maximum extent possible, contracts funded under this 
Act shall be awarded as fixed-price contracts through the use 
of competitive procedures. A summary of any contract awarded 
with such funds that is not fixed-price and not awarded using 
competitive procedures shall be posted in a special section of 
the website established in section 1526.

                TITLE XVI--GENERAL PROVISIONS--THIS ACT

                  RELATIONSHIP TO OTHER APPROPRIATIONS

    Sec. 1601.  Each amount appropriated or made available in 
this Act is in addition to amounts otherwise appropriated for 
the fiscal year involved. Enactment of this Act shall have no 
effect on the availability of amounts under the Continuing 
Appropriations Resolution, 2009 (division A of Public Law 110-
329).

                 PREFERENCE FOR QUICK-START ACTIVITIES

    Sec. 1602. In using funds made available in this Act for 
infrastructure investment, recipients shall give preference to 
activities that can be started and completed expeditiously, 
including a goal of using at least 50 percent of the funds for 
activities that can be initiated not later than 120 days after 
the date of the enactment of this Act. Recipients shall also 
use grant funds in a manner that maximizes job creation and 
economic benefit.

                         PERIOD OF AVAILABILITY

    Sec. 1603. All funds appropriated in this Act shall remain 
available for obligation until September 30, 2010, unless 
expressly provided otherwise in this Act.

                             LIMIT ON FUNDS

    Sec. 1604. None of the funds appropriated or otherwise made 
available in this Act may be used by any State or local 
government, or any private entity, for any casino or other 
gambling establishment, aquarium, zoo, golf course, or swimming 
pool.

                              BUY AMERICAN

    Sec. 1605.  Use of American Iron, Steel, and Manufactured 
Goods. (a) None of the funds appropriated or otherwise made 
available by this Act may be used for a project for the 
construction, alteration, maintenance, or repair of a public 
building or public work unless all of the iron, steel, and 
manufactured goods used in the project are produced in the 
United States.
    (b) Subsection (a) shall not apply in any case or category 
of cases in which the head of the Federal department or agency 
involved finds that--
            (1) applying subsection (a) would be inconsistent 
        with the public interest;
            (2) iron, steel, and the relevant manufactured 
        goods are not produced in the United States in 
        sufficient and reasonably available quantities and of a 
        satisfactory quality; or
            (3) inclusion of iron, steel, and manufactured 
        goods produced in the United States will increase the 
        cost of the overall project by more than 25 percent.
    (c) If the head of a Federal department or agency 
determines that it is necessary to waive the application of 
subsection (a) based on a finding under subsection (b), the 
head of the department or agency shall publish in the Federal 
Register a detailed written justification as to why the 
provision is being waived.
    (d) This section shall be applied in a manner consistent 
with United States obligations under international agreements.

                         WAGE RATE REQUIREMENTS

    Sec. 1606. Notwithstanding any other provision of law and 
in a manner consistent with other provisions in this Act, all 
laborers and mechanics employed by contractors and 
subcontractors on projects funded directly by or assisted in 
whole or in part by and through the Federal Government pursuant 
to this Act shall be paid wages at rates not less than those 
prevailing on projects of a character similar in the locality 
as determined by the Secretary of Labor in accordance with 
subchapter IV of chapter 31 of title 40, United States Code. 
With respect to the labor standards specified in this section, 
the Secretary of Labor shall have the authority and functions 
set forth in Reorganization Plan Numbered 14 of 1950 (64 Stat. 
1267; 5 U.S.C. App.) and section 3145 of title 40, United 
States Code.

  ADDITIONAL FUNDING DISTRIBUTION AND ASSURANCE OF APPROPRIATE USE OF 
                                 FUNDS

    Sec. 1607. (a) Certification by Governor.--Not later than 
45 days after the date of enactment of this Act, for funds 
provided to any State or agency thereof, the Governor of the 
State shall certify that: (1) the State will request and use 
funds provided by this Act; and (2) the funds will be used to 
create jobs and promote economic growth.
    (b) Acceptance by State Legislature.--If funds provided to 
any State in any division of this Act are not accepted for use 
by the Governor, then acceptance by the State legislature, by 
means of the adoption of a concurrent resolution, shall be 
sufficient to provide funding to such State.
    (c) Distribution.--After the adoption of a State 
legislature's concurrent resolution, funding to the State will 
be for distribution to local governments, councils of 
government, public entities, and public-private entities within 
the State either by formula or at the State's discretion.

                   ECONOMIC STABILIZATION CONTRACTING

    Sec. 1608. Reform of Contracting Procedures Under EESA.--
Section 107(b) of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5217(b)) is amended by inserting ``and 
individuals with disabilities and businesses owned by 
individuals with disabilities (for purposes of this subsection 
the term `individual with disability' has the same meaning as 
the term `handicapped individual' as that term is defined in 
section 3(f) of the Small Business Act (15 U.S.C. 632(f)),'' 
after ``(12 U.S.C. 1441a(r)(4)),''.
    Sec. 1609. (a) Findings.--
            (1) The National Environmental Policy Act protects 
        public health, safety and environmental quality: by 
        ensuring transparency, accountability and public 
        involvement in federal actions and in the use of public 
        funds;
            (2) When President Nixon signed the National 
        Environmental Policy Act into law on January 1, 1970, 
        he said that the Act provided the ``direction'' for the 
        country to ``regain a productive harmony between man 
        and nature'';
            (3) The National Environmental Policy Act helps to 
        provide an orderly process for considering federal 
        actions and funding decisions and prevents ligation and 
        delay that would otherwise be inevitable and existed 
        prior to the establishment of the National 
        Environmental Policy Act.
    (b) Adequate resources within this bill must be devoted to 
ensuring that applicable environmental reviews under the 
National Environmental Policy Act are completed on an 
expeditious basis and that the shortest existing applicable 
process under the National Environmental Policy Act shall be 
utilized.
    (c) The President shall report to the Senate Environment 
and Public Works Committee and the House Natural Resources 
Committee every 90 days following the date of enactment until 
September 30, 2011 on the status and progress of projects and 
activities funded by this Act with respect to compliance with 
National Environmental Policy Act requirements and 
documentation.
    Sec. 1610. (a) None of the funds appropriated or otherwise 
made available by this Act, for projects initiated after the 
effective date of this Act, may be used by an executive agency 
to enter into any Federal contract unless such contract is 
entered into in accordance with the Federal Property and 
Administrative Services Act (41 U.S.C. 253) or chapter 137 of 
title 10, United States Code, and the Federal Acquisition 
Regulation, unless such contract is otherwise authorized by 
statute to be entered into without regard to the above 
referenced statutes.
    (b) All projects to be conducted under the authority of the 
Indian Self-Determination and Education Assistance Act, the 
Tribally-Controlled Schools Act, the Sanitation and Facilities 
Act, the Native American Housing and Self-Determination 
Assistance Act and the Buy-Indian Act shall be identified by 
the appropriate Secretary and the appropriate Secretary shall 
incorporate provisions to ensure that the agreement conforms 
with the provisions of this Act regarding the timing for use of 
funds and transparency, oversight, reporting, and 
accountability, including review by the Inspectors General, the 
Accountability and Transparency Board, and Government 
Accountability Office, consistent with the objectives of this 
Act.
    Sec. 1611. Hiring American Workers in Companies Receiving 
TARP Funding. (a) Short Title.--This section may be cited as 
the ``Employ American Workers Act''.
    (b) Prohibition.--
            (1) In general.--Notwithstanding any other 
        provision of law, it shall be unlawful for any 
        recipient of funding under title I of the Emergency 
        Economic Stabilization Act of 2008 (Public Law 110-343) 
        or section 13 of the Federal Reserve Act (12 U.S.C. 342 
        et seq.) to hire any nonimmigrant described in section 
        101(a)(15)(h)(i)(b) of the Immigration and Nationality 
        Act (8 U.S.C. 1101(a)(15)(h)(i)(b)) unless the 
        recipient is in compliance with the requirements for an 
        H-1B dependent employer (as defined in section 
        212(n)(3) of such Act (8 U.S.C. 1182(n)(3))), except 
        that the second sentence of section 212(n)(1)(E)(ii) of 
        such Act shall not apply.
            (2) Defined term.--In this subsection, the term 
        ``hire'' means to permit a new employee to commence a 
        period of employment.
    (c) Sunset Provision.--This section shall be effective 
during the 2-year period beginning on the date of the enactment 
of this Act.
    Sec. 1612. During the current fiscal year not to exceed 1 
percent of any appropriation made available by this Act may be 
transferred by an agency head between such appropriations 
funded in this Act of that department or agency: Provided, That 
such appropriations shall be merged with and available for the 
same purposes, and for the same time period, as the 
appropriation to which transferred: Provided further, That the 
agency head shall notify the Committees on Appropriations of 
the Senate and House of Representatives of the transfer 15 days 
in advance: Provided further, That notice of any transfer made 
pursuant to this authority be posted on the website established 
by the Recovery Act Accountability and Transparency Board 15 
days following such transfer: Provided further, That the 
authority contained in this section is in addition to transfer 
authorities otherwise available under current law: Provided 
further, That the authority provided in this section shall not 
apply to any appropriation that is subject to transfer 
provisions included elsewhere in this Act.

 DIVISION B--TAX, UNEMPLOYMENT, HEALTH, STATE FISCAL RELIEF, AND OTHER 
                               PROVISIONS

                        TITLE I--TAX PROVISIONS

SEC. 1000. SHORT TITLE, ETC.

    (a) Short Title.--This title may be cited as the ``American 
Recovery and Reinvestment Tax Act of 2009''.
    (b) Reference.--Except as otherwise expressly provided, 
whenever in this title an amendment or repeal is expressed in 
terms of an amendment to, or repeal of, a section or other 
provision, the reference shall be considered to be made to a 
section or other provision of the Internal Revenue Code of 
1986.
    (c) Table of Contents.--The table of contents for this 
title is as follows:

                         TITLE I--TAX PROVISIONS

Sec. 1000. Short title, etc.

           Subtitle A--Tax Relief for Individuals and Families

                       PART I--General Tax Relief

Sec. 1001. Making work pay credit.
Sec. 1002. Temporary increase in earned income tax credit.
Sec. 1003. Temporary increase of refundable portion of child credit.
Sec. 1004. American opportunity tax credit.
Sec. 1005. Computer technology and equipment allowed as a qualified 
          higher education expense for section 529 accounts in 2009 and 
          2010.
Sec. 1006. Extension of and increase in first-time homebuyer credit; 
          waiver of requirement to repay.
Sec. 1007. Suspension of tax on portion of unemployment compensation.
Sec. 1008. Additional deduction for State sales tax and excise tax on 
          the purchase of certain motor vehicles.

                 PART II--Alternative Minimum Tax Relief

Sec. 1011. Extension of alternative minimum tax relief for nonrefundable 
          personal credits.
Sec. 1012. Extension of increased alternative minimum tax exemption 
          amount.

                      Subtitle B--Energy Incentives

                   PART I--Renewable Energy Incentives

Sec. 1101. Extension of credit for electricity produced from certain 
          renewable resources.
Sec. 1102. Election of investment credit in lieu of production credit.
Sec. 1103. Repeal of certain limitations on credit for renewable energy 
          property.
Sec. 1104. Coordination with renewable energy grants.

 PART II--Increased Allocations of New Clean Renewable Energy Bonds and 
                   Qualified Energy Conservation Bonds

Sec. 1111. Increased limitation on issuance of new clean renewable 
          energy bonds.
Sec. 1112. Increased limitation on issuance of qualified energy 
          conservation bonds.

                PART III--Energy Conservation Incentives

Sec. 1121. Extension and modification of credit for nonbusiness energy 
          property.
Sec. 1122. Modification of credit for residential energy efficient 
          property.
Sec. 1123. Temporary increase in credit for alternative fuel vehicle 
          refueling property.

    PART IV--Modification of Credit for Carbon Dioxide Sequestration

Sec. 1131. Application of monitoring requirements to carbon dioxide used 
          as a tertiary injectant.

              PART V--Plug-in Electric Drive Motor Vehicles

Sec. 1141. Credit for new qualified plug-in electric drive motor 
          vehicles.
Sec. 1142. Credit for certain plug-in electric vehicles.
Sec. 1143. Conversion kits.
Sec. 1144. Treatment of alternative motor vehicle credit as a personal 
          credit allowed against AMT.

           PART VI--Parity for Transportation Fringe Benefits

Sec. 1151. Increased exclusion amount for commuter transit benefits and 
          transit passes.

                 Subtitle C--Tax Incentives for Business

                 PART I--Temporary Investment Incentives

Sec. 1201. Special allowance for certain property acquired during 2009.
Sec. 1202. Temporary increase in limitations on expensing of certain 
          depreciable business assets.

                   PART II--Small Business Provisions

Sec. 1211. 5-year carryback of operating losses of small businesses.
Sec. 1212. Decreased required estimated tax payments in 2009 for certain 
          small businesses.

                    PART III--Incentives for New Jobs

Sec. 1221. Incentives to hire unemployed veterans and disconnected 
          youth.

               PART IV--Rules Relating to Debt Instruments

Sec. 1231. Deferral and ratable inclusion of income arising from 
          business indebtedness discharged by the reacquisition of a 
          debt instrument.
Sec. 1232. Modifications of rules for original issue discount on certain 
          high yield obligations.

                 PART V--Qualified Small Business Stock

Sec. 1241. Special rules applicable to qualified small business stock 
          for 2009 and 2010.

                         PART VI--S Corporations

Sec. 1251. Temporary reduction in recognition period for built-in gains 
          tax.

              PART VII--Rules Relating to Ownership Changes

Sec. 1261. Clarification of regulations related to limitations on 
          certain built-in losses following an ownership change.
Sec. 1262. Treatment of certain ownership changes for purposes of 
          limitations on net operating loss carryforwards and certain 
          built-in losses.

              Subtitle D--Manufacturing Recovery Provisions

Sec. 1301. Temporary expansion of availability of industrial development 
          bonds to facilities manufacturing intangible property.
Sec. 1302. Credit for investment in advanced energy facilities.

                   Subtitle E--Economic Recovery Tools

Sec. 1401. Recovery zone bonds.
Sec. 1402. Tribal economic development bonds.
Sec. 1403. Increase in new markets tax credit.
Sec. 1404. Coordination of low-income housing credit and low-income 
          housing grants.

               Subtitle F--Infrastructure Financing Tools

           PART I--Improved Marketability for Tax-Exempt Bonds

Sec. 1501. De minimis safe harbor exception for tax-exempt interest 
          expense of financial institutions.
Sec. 1502. Modification of small issuer exception to tax-exempt interest 
          expense allocation rules for financial institutions.
Sec. 1503. Temporary modification of alternative minimum tax limitations 
          on tax-exempt bonds.
Sec. 1504. Modification to high speed intercity rail facility bonds.

     PART II--Delay in Application of Withholding Tax on Government 
                               Contractors

Sec. 1511. Delay in application of withholding tax on government 
          contractors.

                 PART III--Tax Credit Bonds for Schools

Sec. 1521. Qualified school construction bonds.
Sec. 1522. Extension and expansion of qualified zone academy bonds.

                      PART IV--Build America Bonds

Sec. 1531. Build America bonds.

 PART V--Regulated Investment Companies Allowed to Pass-Thru Tax Credit 
                              Bond Credits

Sec. 1541. Regulated investment companies allowed to pass-thru tax 
          credit bond credits.

                      Subtitle G--Other Provisions

Sec. 1601. Application of certain labor standards to projects financed 
          with certain tax-favored bonds.
Sec. 1602. Grants to States for low-income housing projects in lieu of 
          low-income housing credit allocations for 2009.
Sec. 1603. Grants for specified energy property in lieu of tax credits.
Sec. 1604. Increase in public debt limit.

Subtitle H--Prohibition on Collection of Certain Payments Made Under the 
            Continued Dumping and Subsidy Offset Act of 2000

Sec. 1701. Prohibition on collection of certain payments made under the 
          Continued Dumping and Subsidy Offset Act of 2000.

                 Subtitle I--Trade Adjustment Assistance

Sec. 1800. Short title.

             PART I--Trade Adjustment Assistance for Workers

    subpart a--trade adjustment assistance for service sector workers

Sec. 1801. Extension of trade adjustment assistance to service sector 
          and public agency workers; shifts in production.
Sec. 1802. Separate basis for certification.
Sec. 1803. Determinations by Secretary of Labor.
Sec. 1804. Monitoring and reporting relating to service sector.

    subpart b--industry notifications following certain affirmative 
                             determinations

Sec. 1811. Notifications following certain affirmative determinations.
Sec. 1812. Notification to Secretary of Commerce.

                       subpart c--program benefits

Sec. 1821. Qualifying Requirements for Workers.
Sec. 1822. Weekly amounts.
Sec. 1823. Limitations on trade readjustment allowances; allowances for 
          extended training and breaks in training.
Sec. 1824. Special rules for calculation of eligibility period.
Sec. 1825. Application of State laws and regulations on good cause for 
          waiver of time limits or late filing of claims.
Sec. 1826. Employment and case management services.
Sec. 1827. Administrative expenses and employment and case management 
          services.
Sec. 1828. Training funding.
Sec. 1829. Prerequisite education; approved training programs.
Sec. 1830. Pre-layoff and part-time training.
Sec. 1831. On-the-job training.
Sec. 1832. Eligibility for unemployment insurance and program benefits 
          while in training.
Sec. 1833. Job search and relocation allowances.

       subpart d--reemployment trade adjustment assistance program

Sec. 1841. Reemployment trade adjustment assistance program.

                        subpart e--other matters

Sec. 1851. Office of Trade Adjustment Assistance.
Sec. 1852. Accountability of State agencies; collection and publication 
          of program data; agreements with States.
Sec. 1853. Verification of eligibility for program benefits.
Sec. 1854. Collection of data and reports; information to workers.
Sec. 1855. Fraud and recovery of overpayments.
Sec. 1856. Sense of Congress on application of trade adjustment 
          assistance.
Sec. 1857. Consultations in promulgation of regulations.
Sec. 1858. Technical corrections.

             PART II--Trade Adjustment Assistance for Firms

Sec. 1861. Expansion to service sector firms.
Sec. 1862. Modification of requirements for certification.
Sec. 1863. Basis for determinations.
Sec. 1864. Oversight and administration; authorization of 
          appropriations.
Sec. 1865. Increased penalties for false statements.
Sec. 1866. Annual report on trade adjustment assistance for firms.
Sec. 1867. Technical corrections.

          PART III--Trade Adjustment Assistance for Communities

Sec. 1871. Purpose.
Sec. 1872. Trade adjustment assistance for communities.
Sec. 1873. Conforming amendments.

            PART IV--Trade Adjustment Assistance for Farmers

Sec. 1881. Definitions.
Sec. 1882. Eligibility.
Sec. 1883. Benefits.
Sec. 1884. Report.
Sec. 1885. Fraud and recovery of overpayments.
Sec. 1886. Determination of increases of imports for certain fishermen.
Sec. 1887. Extension of trade adjustment assistance for farmers.

                       PART V--General Provisions

Sec. 1891. Effective date.
Sec. 1892. Extension of trade adjustment assistance programs.
Sec. 1893. Termination; related provisions.
Sec. 1894. Government Accountability Office report.
Sec. 1895. Emergency designation.

                  PART VI--Health Coverage Improvement

Sec. 1899. Short title.
Sec. 1899A. Improvement of the affordability of the credit.
Sec. 1899B. Payment for monthly premiums paid prior to commencement of 
          advance payments of credit.
Sec. 1899C. TAA recipients not enrolled in training programs eligible 
          for credit.
Sec. 1899D. TAA pre-certification period rule for purposes of 
          determining whether there is a 63-day lapse in creditable 
          coverage.
Sec. 1899E. Continued qualification of family members after certain 
          events.
Sec. 1899F. Extension of COBRA benefits for certain TAA-eligible 
          individuals and PBGC recipients.
Sec. 1899G. Addition of coverage through voluntary employees' 
          beneficiary associations.
Sec. 1899H. Notice requirements.
Sec. 1899I. Survey and report on enhanced health coverage tax credit 
          program.
Sec. 1899J. Authorization of appropriations.
Sec. 1899K. Extension of national emergency grants.
Sec. 1899L. GAO study and report.

          Subtitle A--Tax Relief for Individuals and Families

                       PART I--GENERAL TAX RELIEF

SEC. 1001. MAKING WORK PAY CREDIT.

    (a) In General.--Subpart C of part IV of subchapter A of 
chapter 1 is amended by inserting after section 36 the 
following new section:

``SEC. 36A. MAKING WORK PAY CREDIT.

    ``(a) Allowance of Credit.--In the case of an eligible 
individual, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount equal 
to the lesser of--
            ``(1) 6.2 percent of earned income of the taxpayer, 
        or
            ``(2) $400 ($800 in the case of a joint return).
    ``(b) Limitation Based on Modified Adjusted Gross Income.--
            ``(1) In general.--The amount allowable as a credit 
        under subsection (a) (determined without regard to this 
        paragraph and subsection (c)) for the taxable year 
        shall be reduced (but not below zero) by 2 percent of 
        so much of the taxpayer's modified adjusted gross 
        income as exceeds $75,000 ($150,000 in the case of a 
        joint return).
            ``(2) Modified adjusted gross income.--For purposes 
        of subparagraph (A), the term `modified adjusted gross 
        income' means the adjusted gross income of the taxpayer 
        for the taxable year increased by any amount excluded 
        from gross income under section 911, 931, or 933.
    ``(c) Reduction for Certain Other Payments.--The credit 
allowed under subsection (a) for any taxable year shall be 
reduced by the amount of any payments received by the taxpayer 
during such taxable year under section 2201, and any credit 
allowed to the taxpayer under section 2202, of the American 
Recovery and Reinvestment Tax Act of 2009.
    ``(d) Definitions and Special Rules.--For purposes of this 
section--
            ``(1) Eligible individual.--
                    ``(A) In general.--The term `eligible 
                individual' means any individual other than--
                            ``(i) any nonresident alien 
                        individual,
                            ``(ii) 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 the individual's taxable 
                        year begins, and
                            ``(iii) an estate or trust.
                    ``(B) Identification number requirement.--
                Such term shall not include any individual who 
                does not include on the return of tax for the 
                taxable year--
                            ``(i) such individual's social 
                        security account number, and
                            ``(ii) in the case of a joint 
                        return, the social security account 
                        number of one of the taxpayers on such 
                        return.
                For purposes of the preceding sentence, the 
                social security account number shall not 
                include a TIN issued by the Internal Revenue 
                Service.
            ``(2) Earned income.--The term `earned income' has 
        the meaning given such term by section 32(c)(2), except 
        that such term shall not include net earnings from 
        self-employment which are not taken into account in 
        computing taxable income. For purposes of the preceding 
        sentence, any amount excluded from gross income by 
        reason of section 112 shall be treated as earned income 
        which is taken into account in computing taxable income 
        for the taxable year.
    ``(e) Termination.--This section shall not apply to taxable 
years beginning after December 31, 2010.''.
    (b) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possession.--The Secretary 
                of the Treasury shall pay to each possession of 
                the United States with a mirror code tax system 
                amounts equal to the loss to that possession by 
                reason of the amendments made by this section 
                with respect to taxable years beginning in 2009 
                and 2010. Such amounts shall be determined by 
                the Secretary of the Treasury based on 
                information provided by the government of the 
                respective possession.
                    (B) Other possessions.--The Secretary of 
                the Treasury shall pay to each possession of 
                the United States which does not have a mirror 
                code tax system amounts estimated by the 
                Secretary of the Treasury as being equal to the 
                aggregate benefits that would have been 
                provided to residents of such possession by 
                reason of the amendments made by this section 
                for taxable years beginning in 2009 and 2010 if 
                a mirror code tax system had been in effect in 
                such possession. The preceding sentence shall 
                not apply with respect to any possession of the 
                United States unless such possession has a 
                plan, which has been approved by the Secretary 
                of the Treasury, under which such possession 
                will promptly distribute such payments to the 
                residents of such possession.
            (2) Coordination with credit allowed against united 
        states income taxes.--No credit shall be allowed 
        against United States income taxes for any taxable year 
        under section 36A of the Internal Revenue Code of 1986 
        (as added by this section) to any person--
                    (A) to whom a credit is allowed against 
                taxes imposed by the possession by reason of 
                the amendments made by this section for such 
                taxable year, or
                    (B) who is eligible for a payment under a 
                plan described in paragraph (1)(B) with respect 
                to such taxable year.
            (3) Definitions and special rules.--
                    (A) Possession of the united states.--For 
                purposes of this subsection, the term 
                ``possession of the United States'' includes 
                the Commonwealth of Puerto Rico and the 
                Commonwealth of the Northern Mariana Islands.
                    (B) Mirror code tax system.--For purposes 
                of this subsection, the term ``mirror code tax 
                system'' means, with respect to any possession 
                of the United States, the income tax system of 
                such possession if the income tax liability of 
                the residents of such possession under such 
                system is determined by reference to the income 
                tax laws of the United States as if such 
                possession were the United States.
                    (C) Treatment of payments.--For purposes of 
                section 1324(b)(2) of title 31, United States 
                Code, the payments under this subsection shall 
                be treated in the same manner as a refund due 
                from the credit allowed under section 36A of 
                the Internal Revenue Code of 1986 (as added by 
                this section).
    (c) Refunds Disregarded in the Administration of Federal 
Programs and Federally Assisted Programs.--Any credit or refund 
allowed or made to any individual by reason of section 36A of 
the Internal Revenue Code of 1986 (as added by this section) or 
by reason of subsection (b) of this section shall not be taken 
into account as income and shall not be taken into account as 
resources for the month of receipt and the following 2 months, 
for purposes of determining the eligibility of such individual 
or any other individual for benefits or assistance, or the 
amount or extent of benefits or assistance, under any Federal 
program or under any State or local program financed in whole 
or in part with Federal funds.
    (d) Authority Relating to Clerical Errors.--Section 
6213(g)(2) is amended by striking ``and'' at the end of 
subparagraph (L)(ii), by striking the period at the end of 
subparagraph (M) and inserting ``, and'', and by adding at the 
end the following new subparagraph:
                    ``(N) an omission of the reduction required 
                under section 36A(c) with respect to the credit 
                allowed under section 36A or an omission of the 
                correct social security account number required 
                under section 36A(d)(1)(B).''.
    (e) Conforming Amendments.--
            (1) Section 6211(b)(4)(A) is amended by inserting 
        ``36A,'' after ``36,''.
            (2) Section 1324(b)(2) of title 31, United States 
        Code, is amended by inserting ``36A,'' after ``36,''.
            (3) The table of sections for subpart C of part IV 
        of subchapter A of chapter 1 is amended by inserting 
        after the item relating to section 36 the following new 
        item:

``Sec. 36A. Making work pay credit.''.

    (f) Effective Date.--This section, and the amendments made 
by this section, shall apply to taxable years beginning after 
December 31, 2008.

SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX CREDIT.

    (a) In General.--Subsection (b) of section 32 is amended by 
adding at the end the following new paragraph:
            ``(3) Special rules for 2009 and 2010.--In the case 
        of any taxable year beginning in 2009 or 2010--
                    ``(A) Increased credit percentage for 3 or 
                more qualifying children.--In the case of a 
                taxpayer with 3 or more qualifying children, 
                the credit percentage is 45 percent.
                    ``(B) Reduction of marriage penalty.--
                            ``(i) In general.--The dollar 
                        amount in effect under paragraph (2)(B) 
                        shall be $5,000.
                            ``(ii) Inflation adjustment.--In 
                        the case of any taxable year beginning 
                        in 2010, the $5,000 amount in clause 
                        (i) shall be increased by an amount 
                        equal to--
                                    ``(I) such dollar amount, 
                                multiplied by
                                    ``(II) the cost of living 
                                adjustment determined under 
                                section 1(f)(3) for the 
                                calendar year in which the 
                                taxable year begins determined 
                                by substituting `calendar year 
                                2008' for `calendar year 1992' 
                                in subparagraph (B) thereof.
                            ``(iii) Rounding.--Subparagraph (A) 
                        of subsection (j)(2) shall apply after 
                        taking into account any increase under 
                        clause (ii).''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE PORTION OF CHILD CREDIT.

    (a) In General.--Paragraph (4) of section 24(d) is amended 
to read as follows:
            ``(4) Special rule for 2009 and 2010.--
        Notwithstanding paragraph (3), in the case of any 
        taxable year beginning in 2009 or 2010, the dollar 
        amount in effect for such taxable year under paragraph 
        (1)(B)(i) shall be $3,000.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT.

    (a) In General.--Section 25A (relating to Hope Scholarship 
Credit) is amended by redesignating subsection (i) as 
subsection (j) and by inserting after subsection (h) the 
following new subsection:
    ``(i) American Opportunity Tax Credit.--In the case of any 
taxable year beginning in 2009 or 2010--
            ``(1) Increase in credit.--The Hope Scholarship 
        Credit shall be an amount equal to the sum of--
                    ``(A) 100 percent of so much of the 
                qualified tuition and related expenses paid by 
                the taxpayer during the taxable year (for 
                education furnished to the eligible student 
                during any academic period beginning in such 
                taxable year) as does not exceed $2,000, plus
                    ``(B) 25 percent of such expenses so paid 
                as exceeds $2,000 but does not exceed $4,000.
            ``(2) Credit allowed for first 4 years of post-
        secondary education.--Subparagraphs (A) and (C) of 
        subsection (b)(2) shall be applied by substituting `4' 
        for `2'.
            ``(3) Qualified tuition and related expenses to 
        include required course materials.--Subsection 
        (f)(1)(A) shall be applied by substituting `tuition, 
        fees, and course materials' for `tuition and fees'.
            ``(4) Increase in agi limits for hope scholarship 
        credit.--In lieu of applying subsection (d) with 
        respect to the Hope Scholarship Credit, such credit 
        (determined without regard to this paragraph) shall be 
        reduced (but not below zero) by the amount which bears 
        the same ratio to such credit (as so determined) as--
                    ``(A) the excess of--
                            ``(i) the taxpayer's modified 
                        adjusted gross income (as defined in 
                        subsection (d)(3)) for such taxable 
                        year, over
                            ``(ii) $80,000 ($160,000 in the 
                        case of a joint return), bears to
                    ``(B) $10,000 ($20,000 in the case of a 
                joint return).
            ``(5) Credit allowed against alternative minimum 
        tax.--In the case of a taxable year to which section 
        26(a)(2) does not apply, so much of the credit allowed 
        under subsection (a) as is attributable to the Hope 
        Scholarship Credit shall not exceed the excess of--
                    ``(A) the sum of the regular tax liability 
                (as defined in section 26(b)) plus the tax 
                imposed by section 55, over
                    ``(B) the sum of the credits allowable 
                under this subpart (other than this subsection 
                and sections 23, 25D, and 30D) and section 27 
                for the taxable year.
        Any reference in this section or section 24, 25, 26, 
        25B, 904, or 1400C to a credit allowable under this 
        subsection shall be treated as a reference to so much 
        of the credit allowable under subsection (a) as is 
        attributable to the Hope Scholarship Credit.
            ``(6) Portion of credit made refundable.--40 
        percent of so much of the credit allowed under 
        subsection (a) as is attributable to the Hope 
        Scholarship Credit (determined after application of 
        paragraph (4) and without regard to this paragraph and 
        section 26(a)(2) or paragraph (5), as the case may be) 
        shall be treated as a credit allowable under subpart C 
        (and not allowed under subsection (a)). The preceding 
        sentence shall not apply to any taxpayer for any 
        taxable year if such taxpayer is a child to whom 
        subsection (g) of section 1 applies for such taxable 
        year.
            ``(7) Coordination with midwestern disaster area 
        benefits.--In the case of a taxpayer with respect to 
        whom section 702(a)(1)(B) of the Heartland Disaster Tax 
        Relief Act of 2008 applies for any taxable year, such 
        taxpayer may elect to waive the application of this 
        subsection to such taxpayer for such taxable year.''.
    (b) Conforming Amendments.--
            (1) Section 24(b)(3)(B) is amended by inserting 
        ``25A(i),'' after ``23,''.
            (2) Section 25(e)(1)(C)(ii) is amended by inserting 
        ``25A(i),'' after ``24,''.
            (3) Section 26(a)(1) is amended by inserting 
        ``25A(i),'' after ``24,''.
            (4) Section 25B(g)(2) is amended by inserting 
        ``25A(i),'' after ``23,''.
            (5) Section 904(i) is amended by inserting 
        ``25A(i),'' after ``24,''.
            (6) Section 1400C(d)(2) is amended by inserting 
        ``25A(i),'' after ``24,''.
            (7) Section 6211(b)(4)(A) is amended by inserting 
        ``25A by reason of subsection (i)(6) thereof,'' after 
        ``24(d),''.
            (8) Section 1324(b)(2) of title 31, United States 
        Code, is amended by inserting ``25A,'' before ``35''.
    (c) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possession.--The Secretary 
                of the Treasury shall pay to each possession of 
                the United States with a mirror code tax system 
                amounts equal to the loss to that possession by 
                reason of the application of section 25A(i)(6) 
                of the Internal Revenue Code of 1986 (as added 
                by this section) with respect to taxable years 
                beginning in 2009 and 2010. Such amounts shall 
                be determined by the Secretary of the Treasury 
                based on information provided by the government 
                of the respective possession.
                    (B) Other possessions.--The Secretary of 
                the Treasury shall pay to each possession of 
                the United States which does not have a mirror 
                code tax system amounts estimated by the 
                Secretary of the Treasury as being equal to the 
                aggregate benefits that would have been 
                provided to residents of such possession by 
                reason of the application of section 25A(i)(6) 
                of such Code (as so added) for taxable years 
                beginning in 2009 and 2010 if a mirror code tax 
                system had been in effect in such possession. 
                The preceding sentence shall not apply with 
                respect to any possession of the United States 
                unless such possession has a plan, which has 
                been approved by the Secretary of the Treasury, 
                under which such possession will promptly 
                distribute such payments to the residents of 
                such possession.
            (2) Coordination with credit allowed against united 
        states income taxes.--Section 25A(i)(6) of such Code 
        (as added by this section) shall not apply to a bona 
        fide resident of any possession of the United States.
            (3) Definitions and special rules.--
                    (A) Possession of the united states.--For 
                purposes of this subsection, the term 
                ``possession of the United States'' includes 
                the Commonwealth of Puerto Rico and the 
                Commonwealth of the Northern Mariana Islands.
                    (B) Mirror code tax system.--For purposes 
                of this subsection, the term ``mirror code tax 
                system'' means, with respect to any possession 
                of the United States, the income tax system of 
                such possession if the income tax liability of 
                the residents of such possession under such 
                system is determined by reference to the income 
                tax laws of the United States as if such 
                possession were the United States.
                    (C) Treatment of payments.--For purposes of 
                section 1324(b)(2) of title 31, United States 
                Code, the payments under this subsection shall 
                be treated in the same manner as a refund due 
                from the credit allowed under section 25A of 
                the Internal Revenue Code of 1986 by reason of 
                subsection (i)(6) of such section (as added by 
                this section).
    (d) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.
    (e) Application of EGTRRA Sunset.--The amendment made by 
subsection (b)(1) shall be subject to title IX of the Economic 
Growth and Tax Relief Reconciliation Act of 2001 in the same 
manner as the provision of such Act to which such amendment 
relates.
    (f) Treasury Studies Regarding Education Incentives.--
            (1) Study regarding coordination with non-tax 
        student financial assistance.--The Secretary of the 
        Treasury and the Secretary of Education, or their 
        delegates, shall--
                    (A) study how to coordinate the credit 
                allowed under section 25A of the Internal 
                Revenue Code of 1986 with the Federal Pell 
                Grant program under section 401 of the Higher 
                Education Act of 1965 to maximize their 
                effectiveness at promoting college 
                affordability, and
                    (B) examine ways to expedite the delivery 
                of the tax credit.
            (2) Study regarding inclusion of community service 
        requirements.--The Secretary of the Treasury and the 
        Secretary of Education, or their delegates, shall study 
        the feasibility of requiring including community 
        service as a condition of taking their tuition and 
        related expenses into account under section 25A of the 
        Internal Revenue Code of 1986.
            (3) Report.--Not later than 1 year after the date 
        of the enactment of this Act, the Secretary of the 
        Treasury, or the Secretary's delegate, shall report to 
        Congress on the results of the studies conducted under 
        this paragraph.

SEC. 1005. COMPUTER TECHNOLOGY AND EQUIPMENT ALLOWED AS A QUALIFIED 
                    HIGHER EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS 
                    IN 2009 AND 2010.

    (a) In General.--Section 529(e)(3)(A) is amended by 
striking ``and'' at the end of clause (i), by striking the 
period at the end of clause (ii), and by adding at the end the 
following:
                            ``(iii) expenses paid or incurred 
                        in 2009 or 2010 for the purchase of any 
                        computer technology or equipment (as 
                        defined in section 170(e)(6)(F)(i)) or 
                        Internet access and related services, 
                        if such technology, equipment, or 
                        services are to be used by the 
                        beneficiary and the beneficiary's 
                        family during any of the years the 
                        beneficiary is enrolled at an eligible 
                        educational institution.
                Clause (iii) shall not include expenses for 
                computer software designed for sports, games, 
                or hobbies unless the software is predominantly 
                educational in nature.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to expenses paid or incurred after December 31, 
2008.

SEC. 1006. EXTENSION OF AND INCREASE IN FIRST-TIME HOMEBUYER CREDIT; 
                    WAIVER OF REQUIREMENT TO REPAY.

    (a) Extension.--
            (1) In general.--Section 36(h) is amended by 
        striking ``July 1, 2009'' and inserting ``December 1, 
        2009''.
            (2) Conforming amendment.--Section 36(g) is amended 
        by striking ``July 1, 2009'' and inserting ``December 
        1, 2009''.
    (b) Increase.--
            (1) In general.--Section 36(b) is amended by 
        striking ``$7,500'' each place it appears and inserting 
        ``$8,000''.
            (2) Conforming amendment.--Section 36(b)(1)(B) is 
        amended by striking ``$3,750'' and inserting 
        ``$4,000''.
    (c) Waiver of Recapture.--
            (1) In general.--Paragraph (4) of section 36(f) is 
        amended by adding at the end the following new 
        subparagraph:
                    ``(D) Waiver of recapture for purchases in 
                2009.--In the case of any credit allowed with 
                respect to the purchase of a principal 
                residence after December 31, 2008, and before 
                December 1, 2009--
                            ``(i) paragraph (1) shall not 
                        apply, and
                            ``(ii) paragraph (2) shall apply 
                        only if the disposition or cessation 
                        described in paragraph (2) with respect 
                        to such residence occurs during the 36-
                        month period beginning on the date of 
                        the purchase of such residence by the 
                        taxpayer.''.
            (2) Conforming amendment.--Subsection (g) of 
        section 36 is amended by striking ``subsection (c)'' 
        and inserting ``subsections (c) and (f)(4)(D)''.
    (d) Coordination With First-Time Homebuyer Credit for 
District of Columbia.--
            (1) In general.--Subsection (e) of section 1400C is 
        amended by adding at the end the following new 
        paragraph:
            ``(4) Coordination with national first-time 
        homebuyers credit.--No credit shall be allowed under 
        this section to any taxpayer with respect to the 
        purchase of a residence after December 31, 2008, and 
        before December 1, 2009, if a credit under section 36 
        is allowable to such taxpayer (or the taxpayer's 
        spouse) with respect to such purchase.''.
            (2) Conforming amendment.--Section 36(d) is amended 
        by striking paragraph (1).
    (e) Removal of Prohibition on Financing by Mortgage Revenue 
Bonds.--Section 36(d), as amended by subsection (c)(2), is 
amended by striking paragraph (2) and by redesignating 
paragraphs (3) and (4) as paragraphs (1) and (2), respectively.
    (f) Effective Date.--The amendments made by this section 
shall apply to residences purchased after December 31, 2008.

SEC. 1007. SUSPENSION OF TAX ON PORTION OF UNEMPLOYMENT COMPENSATION.

    (a) In General.--Section 85 of the Internal Revenue Code of 
1986 (relating to unemployment compensation) is amended by 
adding at the end the following new subsection:
    ``(c) Special Rule for 2009.--In the case of any taxable 
year beginning in 2009, gross income shall not include so much 
of the unemployment compensation received by an individual as 
does not exceed $2,400.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to taxable years beginning after December 31, 2008.

SEC. 1008. ADDITIONAL DEDUCTION FOR STATE SALES TAX AND EXCISE TAX ON 
                    THE PURCHASE OF CERTAIN MOTOR VEHICLES.

    (a) In General.--Subsection (a) of section 164 is amended 
by inserting after paragraph (5) the following new paragraph:
            ``(6) Qualified motor vehicle taxes.''.
    (b) Qualified Motor Vehicle Taxes.--Subsection (b) of 
section 164 is amended by adding at the end the following new 
paragraph:
            ``(6) Qualified motor vehicle taxes.--
                    ``(A) In general.--For purposes of this 
                section, the term `qualified motor vehicle 
                taxes' means any State or local sales or excise 
                tax imposed on the purchase of a qualified 
                motor vehicle.
                    ``(B) Limitation based on vehicle price.--
                The amount of any State or local sales or 
                excise tax imposed on the purchase of a 
                qualified motor vehicle taken into account 
                under subparagraph (A) shall not exceed the 
                portion of such tax attributable to so much of 
                the purchase price as does not exceed $49,500.
                    ``(C) Income limitation.--The amount 
                otherwise taken into account under subparagraph 
                (A) (after the application of subparagraph (B)) 
                for any taxable year shall be reduced (but not 
                below zero) by the amount which bears the same 
                ratio to the amount which is so treated as--
                            ``(i) the excess (if any) of--
                                    ``(I) the taxpayer's 
                                modified adjusted gross income 
                                for such taxable year, over
                                    ``(II) $125,000 ($250,000 
                                in the case of a joint return), 
                                bears to
                            ``(ii) $10,000.
                For purposes of the preceding sentence, the 
                term `modified adjusted gross income' means the 
                adjusted gross income of the taxpayer for the 
                taxable year (determined without regard to 
                sections 911, 931, and 933).
                    ``(D) Qualified motor vehicle.--For 
                purposes of this paragraph--
                            ``(i) In general.--The term 
                        `qualified motor vehicle' means--
                                    ``(I) a passenger 
                                automobile or light truck which 
                                is treated as a motor vehicle 
                                for purposes of title II of the 
                                Clean Air Act, the gross 
                                vehicle weight rating of which 
                                is not more than 8,500 pounds, 
                                and the original use of which 
                                commences with the taxpayer,
                                    ``(II) a motorcycle the 
                                gross vehicle weight rating of 
                                which is not more than 8,500 
                                pounds and the original use of 
                                which commences with the 
                                taxpayer, and
                                    ``(III) a motor home the 
                                original use of which commences 
                                with the taxpayer.
                            ``(ii) Other terms.--The terms 
                        `motorcycle' and `motor home' have the 
                        meanings given such terms under section 
                        571.3 of title 49, Code of Federal 
                        Regulations (as in effect on the date 
                        of the enactment of this paragraph).
                    ``(E) Qualified motor vehicle taxes not 
                included in cost of acquired property.--The 
                last sentence of subsection (a) shall not apply 
                to any qualified motor vehicle taxes.
                    ``(F) Coordination with general sales 
                tax.--This paragraph shall not apply in the 
                case of a taxpayer who makes an election under 
                paragraph (5) for the taxable year.
                    ``(G) Termination.--This paragraph shall 
                not apply to purchases after December 31, 
                2009.''.
    (c) Deduction Allowed to Nonitemizers.--
            (1) In general.--Paragraph (1) of section 63(c) is 
        amended by striking ``and'' at the end of subparagraph 
        (C), by striking the period at the end of subparagraph 
        (D) and inserting ``, and'', and by adding at the end 
        the following new subparagraph:
                    ``(E) the motor vehicle sales tax 
                deduction.''.
            (2) Definition.--Section 63(c) is amended by adding 
        at the end the following new paragraph:
            ``(9) Motor vehicle sales tax deduction.--For 
        purposes of paragraph (1), the term `motor vehicle 
        sales tax deduction' means the amount allowable as a 
        deduction under section 164(a)(6). Such term shall not 
        include any amount taken into account under section 
        62(a).''.
    (d) Treatment of Deduction Under Alternative Minimum Tax.--
The last sentence of section 56(b)(1)(E) is amended by striking 
``section 63(c)(1)(D)'' and inserting ``subparagraphs (D) and 
(E) of section 63(c)(1)''.
    (e) Effective Date.--The amendments made by this section 
shall apply to purchases on or after the date of the enactment 
of this Act in taxable years ending after such date.

                PART II--ALTERNATIVE MINIMUM TAX RELIEF

SEC. 1011. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR 
                    NONREFUNDABLE PERSONAL CREDITS.

    (a) In General.--Paragraph (2) of section 26(a) (relating 
to special rule for taxable years 2000 through 2008) is 
amended--
            (1) by striking ``or 2008'' and inserting ``2008, 
        or 2009'', and
            (2) by striking ``2008'' in the heading thereof and 
        inserting ``2009''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

SEC. 1012. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION 
                    AMOUNT.

    (a) In General.--Paragraph (1) of section 55(d) (relating 
to exemption amount) is amended--
            (1) by striking ``($69,950 in the case of taxable 
        years beginning in 2008)'' in subparagraph (A) and 
        inserting ``($70,950 in the case of taxable years 
        beginning in 2009)'', and
            (2) by striking ``($46,200 in the case of taxable 
        years beginning in 2008)'' in subparagraph (B) and 
        inserting ``($46,700 in the case of taxable years 
        beginning in 2009)''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

                     Subtitle B--Energy Incentives

                  PART I--RENEWABLE ENERGY INCENTIVES

SEC. 1101. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN 
                    RENEWABLE RESOURCES.

    (a) In General.--Subsection (d) of section 45 is amended--
            (1) by striking ``2010'' in paragraph (1) and 
        inserting ``2013'',
            (2) by striking ``2011'' each place it appears in 
        paragraphs (2), (3), (4), (6), (7) and (9) and 
        inserting ``2014'', and
            (3) by striking ``2012'' in paragraph (11)(B) and 
        inserting ``2014''.
    (b) Technical Amendment.--Paragraph (5) of section 45(d) is 
amended by striking ``and before'' and all that follows and 
inserting `` and before October 3, 2008.''.
    (c) Effective Date.--
            (1) In general.--The amendments made by subsection 
        (a) shall apply to property placed in service after the 
        date of the enactment of this Act.
            (2) Technical amendment.--The amendment made by 
        subsection (b) shall take effect as if included in 
        section 102 of the Energy Improvement and Extension Act 
        of 2008.

SEC. 1102. ELECTION OF INVESTMENT CREDIT IN LIEU OF PRODUCTION CREDIT.

    (a) In General.--Subsection (a) of section 48 is amended by 
adding at the end the following new paragraph:
            ``(5) Election to treat qualified facilities as 
        energy property.--
                    ``(A) In general.--In the case of any 
                qualified property which is part of a qualified 
                investment credit facility--
                            ``(i) such property shall be 
                        treated as energy property for purposes 
                        of this section, and
                            ``(ii) the energy percentage with 
                        respect to such property shall be 30 
                        percent.
                    ``(B) Denial of production credit.--No 
                credit shall be allowed under section 45 for 
                any taxable year with respect to any qualified 
                investment credit facility.
                    ``(C) Qualified investment credit 
                facility.--For purposes of this paragraph, the 
                term `qualified investment credit facility' 
                means any of the following facilities if no 
                credit has been allowed under section 45 with 
                respect to such facility and the taxpayer makes 
                an irrevocable election to have this paragraph 
                apply to such facility:
                            ``(i) Wind facilities.--Any 
                        qualified facility (within the meaning 
                        of section 45) described in paragraph 
                        (1) of section 45(d) if such facility 
                        is placed in service in 2009, 2010, 
                        2011, or 2012.
                            ``(ii) Other facilities.--Any 
                        qualified facility (within the meaning 
                        of section 45) described in paragraph 
                        (2), (3), (4), (6), (7), (9), or (11) 
                        of section 45(d) if such facility is 
                        placed in service in 2009, 2010, 2011, 
                        2012, or 2013.
                    ``(D) Qualified property.--For purposes of 
                this paragraph, the term `qualified property' 
                means property--
                            ``(i) which is--
                                    ``(I) tangible personal 
                                property, or
                                    ``(II) other tangible 
                                property (not including a 
                                building or its structural 
                                components), but only if such 
                                property is used as an integral 
                                part of the qualified 
                                investment credit facility, and
                            ``(ii) with respect to which 
                        depreciation (or amortization in lieu 
                        of depreciation) is allowable.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to facilities placed in service after December 31, 
2008.

SEC. 1103. REPEAL OF CERTAIN LIMITATIONS ON CREDIT FOR RENEWABLE ENERGY 
                    PROPERTY.

    (a) Repeal of Limitation on Credit for Qualified Small Wind 
Energy Property.--Paragraph (4) of section 48(c) is amended by 
striking subparagraph (B) and by redesignating subparagraphs 
(C) and (D) as subparagraphs (B) and (C).
    (b) Repeal of Limitation on Property Financed by Subsidized 
Energy Financing.--
            (1) In general.--Section 48(a)(4) is amended by 
        adding at the end the following new subparagraph:
                    ``(D) Termination.--This paragraph shall 
                not apply to periods after December 31, 2008, 
                under rules similar to the rules of section 
                48(m) (as in effect on the day before the date 
                of the enactment of the Revenue Reconciliation 
                Act of 1990).''.
            (2) Conforming amendments.--
                    (A) Section 25C(e)(1) is amended by 
                striking ``(8), and (9)'' and inserting ``and 
                (8)''.
                    (B) Section 25D(e) is amended by striking 
                paragraph (9).
                    (C) Section 48A(b)(2) is amended by 
                inserting ``(without regard to subparagraph (D) 
                thereof)'' after ``section 48(a)(4)''.
                    (D) Section 48B(b)(2) is amended by 
                inserting ``(without regard to subparagraph (D) 
                thereof)'' after ``section 48(a)(4)''.
    (c) Effective Date.--
            (1) In general.--Except as provided in paragraph 
        (2), the amendment made by this section shall apply to 
        periods after December 31, 2008, under rules similar to 
        the rules of section 48(m) of the Internal Revenue Code 
        of 1986 (as in effect on the day before the date of the 
        enactment of the Revenue Reconciliation Act of 1990).
            (2) Conforming amendments.--The amendments made by 
        subparagraphs (A) and (B) of subsection (b)(2) shall 
        apply to taxable years beginning after December 31, 
        2008.

SEC. 1104. COORDINATION WITH RENEWABLE ENERGY GRANTS.

    Section 48 is amended by adding at the end the following 
new subsection:
    ``(d) Coordination With Department of Treasury Grants.--In 
the case of any property with respect to which the Secretary 
makes a grant under section 1603 of the American Recovery and 
Reinvestment Tax Act of 2009--
            ``(1) Denial of production and investment 
        credits.--No credit shall be determined under this 
        section or section 45 with respect to such property for 
        the taxable year in which such grant is made or any 
        subsequent taxable year.
            ``(2) Recapture of credits for progress 
        expenditures made before grant.--If a credit was 
        determined under this section with respect to such 
        property for any taxable year ending before such grant 
        is made--
                    ``(A) the tax imposed under subtitle A on 
                the taxpayer for the taxable year in which such 
                grant is made shall be increased by so much of 
                such credit as was allowed under section 38,
                    ``(B) the general business carryforwards 
                under section 39 shall be adjusted so as to 
                recapture the portion of such credit which was 
                not so allowed, and
                    ``(C) the amount of such grant shall be 
                determined without regard to any reduction in 
                the basis of such property by reason of such 
                credit.
            ``(3) Treatment of grants.--Any such grant shall--
                    ``(A) not be includible in the gross income 
                of the taxpayer, but
                    ``(B) shall be taken into account in 
                determining the basis of the property to which 
                such grant relates, except that the basis of 
                such property shall be reduced under section 
                50(c) in the same manner as a credit allowed 
                under subsection (a).''.

PART II--INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY BONDS AND 
                  QUALIFIED ENERGY CONSERVATION BONDS

SEC. 1111. INCREASED LIMITATION ON ISSUANCE OF NEW CLEAN RENEWABLE 
                    ENERGY BONDS.

    Subsection (c) of section 54C is amended by adding at the 
end the following new paragraph:
            ``(4) Additional limitation.--The national new 
        clean renewable energy bond limitation shall be 
        increased by $1,600,000,000. Such increase shall be 
        allocated by the Secretary consistent with the rules of 
        paragraphs (2) and (3).''.

SEC. 1112. INCREASED LIMITATION ON ISSUANCE OF QUALIFIED ENERGY 
                    CONSERVATION BONDS.

    (a) In General.--Section 54D(d) is amended by striking 
``$800,000,000'' and inserting ``$3,200,000,000''.
    (b) Clarification With Respect to Green Community 
Programs.--
            (1) In general.--Clause (ii) of section 
        54D(f)(1)(A) is amended by inserting ``(including the 
        use of loans, grants, or other repayment mechanisms to 
        implement such programs)'' after ``green community 
        programs''.
            (2) Special rules for bonds for implementing green 
        community programs.--Subsection (e) of section 54D is 
        amended by adding at the end the following new 
        paragraph:
            ``(4) Special rules for bonds to implement green 
        community programs.--In the case of any bond issued for 
        the purpose of providing loans, grants, or other 
        repayment mechanisms for capital expenditures to 
        implement green community programs, such bond shall not 
        be treated as a private activity bond for purposes of 
        paragraph (3).''.

                PART III--ENERGY CONSERVATION INCENTIVES

SEC. 1121. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY 
                    PROPERTY.

    (a) In General.--Section 25C is amended by striking 
subsections (a) and (b) and inserting the following new 
subsections:
    ``(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 30 percent 
of the sum of--
            ``(1) the amount paid or incurred by the taxpayer 
        during such taxable year for qualified energy 
        efficiency improvements, and
            ``(2) the amount of the residential energy property 
        expenditures paid or incurred by the taxpayer during 
        such taxable year.
    ``(b) Limitation.--The aggregate amount of the credits 
allowed under this section for taxable years beginning in 2009 
and 2010 with respect to any taxpayer shall not exceed 
$1,500.''.
    (b) Modifications of Standards for Energy-Efficient 
Building Property.--
            (1) Electric heat pumps.--Subparagraph (B) of 
        section 25C(d)(3) is amended to read as follows:
                    ``(B) an electric heat pump which achieves 
                the highest efficiency tier established by the 
                Consortium for Energy Efficiency, as in effect 
                on January 1, 2009.''.
            (2) Central air conditioners.--Subparagraph (C) of 
        section 25C(d)(3) is amended by striking ``2006'' and 
        inserting ``2009''.
            (3) Water heaters.--Subparagraph (D) of section 
        25C(d)(3) is amended to read as follows:
                    ``(D) a natural gas, propane, or oil water 
                heater which has either an energy factor of at 
                least 0.82 or a thermal efficiency of at least 
                90 percent.''.
            (4) Wood stoves.--Subparagraph (E) of section 
        25C(d)(3) is amended by inserting ``, as measured using 
        a lower heating value'' after ``75 percent''.
    (c) Modifications of Standards for Oil Furnaces and Hot 
Water Boilers.--
            (1) In general.--Paragraph (4) of section 25C(d) is 
        amended to read as follows:
            ``(4) Qualified natural gas, propane, and oil 
        furnaces and hot water boilers.--
                    ``(A) Qualified natural gas furnace.--The 
                term `qualified natural gas furnace' means any 
                natural gas furnace which achieves an annual 
                fuel utilization efficiency rate of not less 
                than 95.
                    ``(B) Qualified natural gas hot water 
                boiler.--The term `qualified natural gas hot 
                water boiler' means any natural gas hot water 
                boiler which achieves an annual fuel 
                utilization efficiency rate of not less than 
                90.
                    ``(C) Qualified propane furnace.--The term 
                `qualified propane furnace' means any propane 
                furnace which achieves an annual fuel 
                utilization efficiency rate of not less than 
                95.
                    ``(D) Qualified propane hot water boiler.--
                The term `qualified propane hot water boiler' 
                means any propane hot water boiler which 
                achieves an annual fuel utilization efficiency 
                rate of not less than 90.
                    ``(E) Qualified oil furnaces.--The term 
                `qualified oil furnace' means any oil furnace 
                which achieves an annual fuel utilization 
                efficiency rate of not less than 90.
                    ``(F) Qualified oil hot water boiler.--The 
                term `qualified oil hot water boiler' means any 
                oil hot water boiler which achieves an annual 
                fuel utilization efficiency rate of not less 
                than 90.''.
            (2) Conforming amendment.--Clause (ii) of section 
        25C(d)(2)(A) is amended to read as follows:
                            ``(ii) any qualified natural gas 
                        furnace, qualified propane furnace, 
                        qualified oil furnace, qualified 
                        natural gas hot water boiler, qualified 
                        propane hot water boiler, or qualified 
                        oil hot water boiler, or''.
    (d) Modifications of Standards for Qualified Energy 
Efficiency Improvements.--
            (1) Qualifications for exterior windows, doors, and 
        skylights.--Subsection (c) of section 25C is amended by 
        adding at the end the following new paragraph:
            ``(4) Qualifications for exterior windows, doors, 
        and skylights.--Such term shall not include any 
        component described in subparagraph (B) or (C) of 
        paragraph (2) unless such component is equal to or 
        below a U factor of 0.30 and SHGC of 0.30.''.
            (2) Additional qualification for insulation.--
        Subparagraph (A) of section 25C(c)(2) is amended by 
        inserting ``and meets the prescriptive criteria for 
        such material or system established by the 2009 
        International Energy Conservation Code, as such Code 
        (including supplements) is in effect on the date of the 
        enactment of the American Recovery and Reinvestment Tax 
        Act of 2009'' after ``such dwelling unit''.
    (e) Extension.--Section 25C(g)(2) is amended by striking 
``December 31, 2009'' and inserting ``December 31, 2010''.
    (f) Effective Dates.--
            (1) In general.--Except as provided in paragraph 
        (2), the amendments made by this section shall apply to 
        taxable years beginning after December 31, 2008.
            (2) Efficiency standards.--The amendments made by 
        paragraphs (1), (2), and (3) of subsection (b) and 
        subsections (c) and (d) shall apply to property placed 
        in service after the date of the enactment of this Act.

SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT 
                    PROPERTY.

    (a) Removal of Credit Limitation for Property Placed in 
Service.--
            (1) In general.--Paragraph (1) of section 25D(b) is 
        amended to read as follows:
            ``(1) Maximum credit for fuel cells.--In the case 
        of any qualified fuel cell property expenditure, the 
        credit allowed under subsection (a) (determined without 
        regard to subsection (c)) for any taxable year shall 
        not exceed $500 with respect to each half kilowatt of 
        capacity of the qualified fuel cell property (as 
        defined in section 48(c)(1)) to which such expenditure 
        relates.''.
            (2) Conforming amendment.--Paragraph (4) of section 
        25D(e) is amended--
                    (A) by striking all that precedes 
                subparagraph (B) and inserting the following:
            ``(4) Fuel cell expenditure limitations in case of 
        joint occupancy.--In the case of any dwelling unit with 
        respect to which qualified fuel cell property 
        expenditures are made and which is jointly occupied and 
        used during any calendar year as a residence by two or 
        more individuals, the following rules shall apply:
                    ``(A) Maximum expenditures for fuel 
                cells.--The maximum amount of such expenditures 
                which may be taken into account under 
                subsection (a) by all such individuals with 
                respect to such dwelling unit during such 
                calendar year shall be $1,667 in the case of 
                each half kilowatt of capacity of qualified 
                fuel cell property (as defined in section 
                48(c)(1)) with respect to which such 
                expenditures relate.'', and
                    (B) by striking subparagraph (C).
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

SEC. 1123. TEMPORARY INCREASE IN CREDIT FOR ALTERNATIVE FUEL VEHICLE 
                    REFUELING PROPERTY.

    (a) In General.--Section 30C(e) is amended by adding at the 
end the following new paragraph:
            ``(6) Special rule for property placed in service 
        during 2009 and 2010.--In the case of property placed 
        in service in taxable years beginning after December 
        31, 2008, and before January 1, 2011--
                    ``(A) in the case of any such property 
                which does not relate to hydrogen--
                            ``(i) subsection (a) shall be 
                        applied by substituting `50 percent' 
                        for `30 percent',
                            ``(ii) subsection (b)(1) shall be 
                        applied by substituting `$50,000' for 
                        `$30,000', and
                            ``(iii) subsection (b)(2) shall be 
                        applied by substituting `$2,000' for 
                        `$1,000', and
                    ``(B) in the case of any such property 
                which relates to hydrogen, subsection (b)(1) 
                shall be applied by substituting `$200,000' for 
                `$30,000'.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to taxable years beginning after December 31, 2008.

    PART IV--MODIFICATION OF CREDIT FOR CARBON DIOXIDE SEQUESTRATION

SEC. 1131. APPLICATION OF MONITORING REQUIREMENTS TO CARBON DIOXIDE 
                    USED AS A TERTIARY INJECTANT.

    (a) In General.--Section 45Q(a)(2) is amended by striking 
``and'' at the end of subparagraph (A), by striking the period 
at the end of subparagraph (B) and inserting ``, and'', and by 
adding at the end the following new subparagraph:
                    ``(C) disposed of by the taxpayer in secure 
                geological storage.''.
    (b) Conforming Amendments.--
            (1) Section 45Q(d)(2) is amended--
                    (A) by striking ``subsection (a)(1)(B)'' 
                and inserting ``paragraph (1)(B) or (2)(C) of 
                subsection (a)'',
                    (B) by striking ``and unminable coal 
                seems'' and inserting ``, oil and gas 
                reservoirs, and unminable coal seams'', and
                    (C) by inserting ``the Secretary of Energy, 
                and the Secretary of the Interior,'' after 
                ``Environmental Protection Agency''.
            (2) Section 45Q(a)(1)(B) is amended by inserting 
        ``and not used by the taxpayer as described in 
        paragraph (2)(B)'' after ``storage''.
            (3) Section 45Q(e) is amended by striking 
        ``captured and disposed of or used as a tertiary 
        injectant'' and inserting ``taken into account in 
        accordance with subsection (a)''.
    (c) Effective Date.--The amendments made by this section 
shall apply to carbon dioxide captured after the date of the 
enactment of this Act.

             PART V--PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES

SEC. 1141. CREDIT FOR NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
                    VEHICLES.

    (a) In General.--Section 30D is amended to read as follows:

``SEC. 30D. NEW QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES.

    ``(a) Allowance of Credit.--There shall be allowed as a 
credit against the tax imposed by this chapter for the taxable 
year an amount equal to the sum of the credit amounts 
determined under subsection (b) with respect to each new 
qualified plug-in electric drive motor vehicle placed in 
service by the taxpayer during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--
            ``(1) In general.--The amount determined under this 
        subsection with respect to any new qualified plug-in 
        electric drive motor vehicle is the sum of the amounts 
        determined under paragraphs (2) and (3) with respect to 
        such vehicle.
            ``(2) Base amount.--The amount determined under 
        this paragraph is $2,500.
            ``(3) Battery capacity.--In the case of a vehicle 
        which draws propulsion energy from a battery with not 
        less than 5 kilowatt hours of capacity, the amount 
        determined under this paragraph is $417, plus $417 for 
        each kilowatt hour of capacity in excess of 5 kilowatt 
        hours. The amount determined under this paragraph shall 
        not exceed $5,000.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general 
        business credit.--So much of the credit which would be 
        allowed under subsection (a) for any taxable year 
        (determined without regard to this subsection) that is 
        attributable to property of a character subject to an 
        allowance for depreciation shall be treated as a credit 
        listed in section 38(b) for such taxable year (and not 
        allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this 
                title, the credit allowed under subsection (a) 
                for any taxable year (determined after 
                application of paragraph (1)) shall be treated 
                as a credit allowable under subpart A for such 
                taxable year.
                    ``(B) Limitation based on amount of tax.--
                In the case of a taxable year to which section 
                26(a)(2) does not apply, the credit allowed 
                under subsection (a) for any taxable year 
                (determined after application of paragraph (1)) 
                shall not exceed the excess 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 subpart A (other than 
                        this section and sections 23 and 25D) 
                        and section 27 for the taxable year.
    ``(d) New Qualified Plug-in Electric Drive Motor Vehicle.--
For purposes of this section--
            ``(1) In general.--The term `new qualified plug-in 
        electric drive motor vehicle' means a motor vehicle--
                    ``(A) the original use of which commences 
                with the taxpayer,
                    ``(B) which is acquired for use or lease by 
                the taxpayer and not for resale,
                    ``(C) which is made by a manufacturer,
                    ``(D) which is treated as a motor vehicle 
                for purposes of title II of the Clean Air Act,
                    ``(E) which has a gross vehicle weight 
                rating of less than 14,000 pounds, and
                    ``(F) which is propelled to a significant 
                extent by an electric motor which draws 
                electricity from a battery which--
                            ``(i) has a capacity of not less 
                        than 4 kilowatt hours, and
                            ``(ii) is capable of being 
                        recharged from an external source of 
                        electricity.
            ``(2) Motor vehicle.--The term `motor vehicle' 
        means any vehicle which is manufactured primarily for 
        use on public streets, roads, and highways (not 
        including a vehicle operated exclusively on a rail or 
        rails) and which has at least 4 wheels.
            ``(3) Manufacturer.--The term `manufacturer' has 
        the meaning given such term in regulations prescribed 
        by the Administrator of the Environmental Protection 
        Agency for purposes of the administration of title II 
        of the Clean Air Act (42 U.S.C. 7521 et seq.).
            ``(4) Battery capacity.--The term `capacity' means, 
        with respect to any battery, the quantity of 
        electricity which the battery is capable of storing, 
        expressed in kilowatt hours, as measured from a 100 
        percent state of charge to a 0 percent state of charge.
    ``(e) Limitation on Number of New Qualified Plug-in 
Electric Drive Motor Vehicles Eligible for Credit.--
            ``(1) In general.--In the case of a new qualified 
        plug-in electric drive motor vehicle sold during the 
        phaseout period, only the applicable percentage of the 
        credit otherwise allowable under subsection (a) shall 
        be allowed.
            ``(2) Phaseout period.--For purposes of this 
        subsection, the phaseout period is the period beginning 
        with the second calendar quarter following the calendar 
        quarter which includes the first date on which the 
        number of new qualified plug-in electric drive motor 
        vehicles manufactured by the manufacturer of the 
        vehicle referred to in paragraph (1) sold for use in 
        the United States after December 31, 2009, is at least 
        200,000.
            ``(3) Applicable percentage.--For purposes of 
        paragraph (1), the applicable percentage is--
                    ``(A) 50 percent for the first 2 calendar 
                quarters of the phaseout period,
                    ``(B) 25 percent for the 3d and 4th 
                calendar quarters of the phaseout period, and
                    ``(C) 0 percent for each calendar quarter 
                thereafter.
            ``(4) Controlled groups.--Rules similar to the 
        rules of section 30B(f)(4) shall apply for purposes of 
        this subsection.
    ``(f) Special Rules.--
            ``(1) Basis reduction.--For purposes of this 
        subtitle, the basis of any property for which a credit 
        is allowable under subsection (a) shall be reduced by 
        the amount of such credit so allowed.
            ``(2) No double benefit.--The amount of any 
        deduction or other credit allowable under this chapter 
        for a new qualified plug-in electric drive motor 
        vehicle shall be reduced by the amount of credit 
        allowed under subsection (a) for such vehicle.
            ``(3) Property used by tax-exempt entity.--In the 
        case of a vehicle the use of which is described in 
        paragraph (3) or (4) of section 50(b) and which is not 
        subject to a lease, the person who sold such vehicle to 
        the person or entity using such vehicle shall be 
        treated as the taxpayer that placed such vehicle in 
        service, but only if such person clearly discloses to 
        such person or entity in a document the amount of any 
        credit allowable under subsection (a) with respect to 
        such vehicle (determined without regard to subsection 
        (c)).
            ``(4) Property used outside united states not 
        qualified.--No credit shall be allowable under 
        subsection (a) with respect to any property referred to 
        in section 50(b)(1).
            ``(5) Recapture.--The Secretary shall, by 
        regulations, provide for recapturing the benefit of any 
        credit allowable under subsection (a) with respect to 
        any property which ceases to be property eligible for 
        such credit.
            ``(6) Election not to take credit.--No credit shall 
        be allowed under subsection (a) for any vehicle if the 
        taxpayer elects to not have this section apply to such 
        vehicle.
            ``(7) Interaction with air quality and motor 
        vehicle safety standards.--A motor vehicle shall not be 
        considered eligible for a credit under this section 
        unless such vehicle is in compliance with--
                    ``(A) the applicable provisions of the 
                Clean Air Act for the applicable make and model 
                year of the vehicle (or applicable air quality 
                provisions of State law in the case of a State 
                which has adopted such provision under a waiver 
                under section 209(b) of the Clean Air Act), and
                    ``(B) the motor vehicle safety provisions 
                of sections 30101 through 30169 of title 49, 
                United States Code.''.
    (b) Conforming Amendments.--
            (1) Section 30B(d)(3)(D) is amended by striking 
        ``subsection (d) thereof'' and inserting ``subsection 
        (c) thereof''.
            (2) Section 38(b)(35) is amended by striking 
        ``30D(d)(1)'' and inserting ``30D(c)(1)''.
            (3) Section 1016(a)(25) is amended by striking 
        ``section 30D(e)(4)'' and inserting ``section 
        30D(f)(1)''.
            (4) Section 6501(m) is amended by striking 
        ``section 30D(e)(9)'' and inserting ``section 
        30D(e)(4)''.
    (c) Effective Date.--The amendments made by this section 
shall apply to vehicles acquired after December 31, 2009.

SEC. 1142. CREDIT FOR CERTAIN PLUG-IN ELECTRIC VEHICLES.

    (a) In General.--Section 30 is amended to read as follows:

``SEC. 30. CERTAIN PLUG-IN ELECTRIC VEHICLES.

    ``(a) Allowance of Credit.--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 cost of any qualified 
plug-in electric vehicle placed in service by the taxpayer 
during the taxable year.
    ``(b) Per Vehicle Dollar Limitation.--The amount of the 
credit allowed under subsection (a) with respect to any vehicle 
shall not exceed $2,500.
    ``(c) Application With Other Credits.--
            ``(1) Business credit treated as part of general 
        business credit.--So much of the credit which would be 
        allowed under subsection (a) for any taxable year 
        (determined without regard to this subsection) that is 
        attributable to property of a character subject to an 
        allowance for depreciation shall be treated as a credit 
        listed in section 38(b) for such taxable year (and not 
        allowed under subsection (a)).
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this 
                title, the credit allowed under subsection (a) 
                for any taxable year (determined after 
                application of paragraph (1)) shall be treated 
                as a credit allowable under subpart A for such 
                taxable year.
                    ``(B) Limitation based on amount of tax.--
                In the case of a taxable year to which section 
                26(a)(2) does not apply, the credit allowed 
                under subsection (a) for any taxable year 
                (determined after application of paragraph (1)) 
                shall not exceed the excess 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 subpart A (other than 
                        this section and sections 23, 25D, and 
                        30D) and section 27 for the taxable 
                        year.
    ``(d) Qualified Plug-in Electric Vehicle.--For purposes of 
this section--
            ``(1) In general.--The term `qualified plug-in 
        electric vehicle' means a specified vehicle--
                    ``(A) the original use of which commences 
                with the taxpayer,
                    ``(B) which is acquired for use or lease by 
                the taxpayer and not for resale,
                    ``(C) which is made by a manufacturer,
                    ``(D) which is manufactured primarily for 
                use on public streets, roads, and highways,
                    ``(E) which has a gross vehicle weight 
                rating of less than 14,000 pounds, and
                    ``(F) which is propelled to a significant 
                extent by an electric motor which draws 
                electricity from a battery which--
                            ``(i) has a capacity of not less 
                        than 4 kilowatt hours (2.5 kilowatt 
                        hours in the case of a vehicle with 2 
                        or 3 wheels), and
                            ``(ii) is capable of being 
                        recharged from an external source of 
                        electricity.
            ``(2) Specified vehicle.--The term `specified 
        vehicle' means any vehicle which--
                    ``(A) is a low speed vehicle within the 
                meaning of section 571.3 of title 49, Code of 
                Federal Regulations (as in effect on the date 
                of the enactment of the American Recovery and 
                Reinvestment Tax Act of 2009), or
                    ``(B) has 2 or 3 wheels.
            ``(3) Manufacturer.--The term `manufacturer' has 
        the meaning given such term in regulations prescribed 
        by the Administrator of the Environmental Protection 
        Agency for purposes of the administration of title II 
        of the Clean Air Act (42 U.S.C. 7521 et seq.).
            ``(4) Battery capacity.--The term `capacity' means, 
        with respect to any battery, the quantity of 
        electricity which the battery is capable of storing, 
        expressed in kilowatt hours, as measured from a 100 
        percent state of charge to a 0 percent state of charge.
    ``(e) Special Rules.--
            ``(1) Basis reduction.--For purposes of this 
        subtitle, the basis of any property for which a credit 
        is allowable under subsection (a) shall be reduced by 
        the amount of such credit so allowed.
            ``(2) No double benefit.--The amount of any 
        deduction or other credit allowable under this chapter 
        for a new qualified plug-in electric drive motor 
        vehicle shall be reduced by the amount of credit 
        allowable under subsection (a) for such vehicle.
            ``(3) Property used by tax-exempt entity.--In the 
        case of a vehicle the use of which is described in 
        paragraph (3) or (4) of section 50(b) and which is not 
        subject to a lease, the person who sold such vehicle to 
        the person or entity using such vehicle shall be 
        treated as the taxpayer that placed such vehicle in 
        service, but only if such person clearly discloses to 
        such person or entity in a document the amount of any 
        credit allowable under subsection (a) with respect to 
        such vehicle (determined without regard to subsection 
        (c)).
            ``(4) Property used outside united states not 
        qualified.--No credit shall be allowable under 
        subsection (a) with respect to any property referred to 
        in section 50(b)(1).
            ``(5) Recapture.--The Secretary shall, by 
        regulations, provide for recapturing the benefit of any 
        credit allowable under subsection (a) with respect to 
        any property which ceases to be property eligible for 
        such credit.
            ``(6) Election not to take credit.--No credit shall 
        be allowed under subsection (a) for any vehicle if the 
        taxpayer elects to not have this section apply to such 
        vehicle.
    ``(f) Termination.--This section shall not apply to any 
vehicle acquired after December 31, 2011.''.
    (b) Conforming Amendments.--
            (1)(A) Section 24(b)(3)(B) is amended by inserting 
        ``30,'' after ``25D,''.
            (B) Section 25(e)(1)(C)(ii) is amended by inserting 
        ``30,'' after ``25D,''.
            (C) Section 25B(g)(2) is amended by inserting 
        ``30,'' after ``25D,''.
            (D) Section 26(a)(1) is amended by inserting 
        ``30,'' after ``25D,''.
            (E) Section 904(i) is amended by striking ``and 
        25B'' and inserting ``25B, 30, and 30D''.
            (F) Section 1400C(d)(2) is amended by striking 
        ``and 25D'' and inserting ``25D, and 30''.
            (2) Paragraph (1) of section 30B(h) is amended to 
        read as follows:
            ``(1) Motor vehicle.--The term `motor vehicle' 
        means any vehicle which is manufactured primarily for 
        use on public streets, roads, and highways (not 
        including a vehicle operated exclusively on a rail or 
        rails) and which has at least 4 wheels.''.
            (3) Section 30C(d)(2)(A) is amended by striking ``, 
        30,''.
            (4)(A) Section 53(d)(1)(B) is amended by striking 
        clause (iii) and redesignating clause (iv) as clause 
        (iii).
            (B) Subclause (II) of section 53(d)(1)(B)(iii), as 
        so redesignated, is amended by striking ``increased in 
        the manner provided in clause (iii)''.
            (5) Section 55(c)(3) is amended by striking 
        ``30(b)(3),''.
            (6) Section 1016(a)(25) is amended by striking 
        ``section 30(d)(1)'' and inserting ``section 
        30(e)(1)''.
            (7) Section 6501(m) is amended by striking 
        ``section 30(d)(4)'' and inserting ``section 
        30(e)(6)''.
            (8) The item in the table of sections for subpart B 
        of part IV of subchapter A of chapter 1 is amended to 
        read as follows:

``Sec. 30. Certain plug-in electric vehicles.''.

    (c) Effective Date.--The amendments made by this section 
shall apply to vehicles acquired after the date of the 
enactment of this Act.
    (d) Transitional Rule.--In the case of a vehicle acquired 
after the date of the enactment of this Act and before January 
1, 2010, no credit shall be allowed under section 30 of the 
Internal Revenue Code of 1986, as added by this section, if 
credit is allowable under section 30D of such Code with respect 
to such vehicle.
    (e) Application of EGTRRA Sunset.--The amendment made by 
subsection (b)(1)(A) shall be subject to title IX of the 
Economic Growth and Tax Relief Reconciliation Act of 2001 in 
the same manner as the provision of such Act to which such 
amendment relates.

SEC. 1143. CONVERSION KITS.

    (a) In General.--Section 30B (relating to alternative motor 
vehicle credit) is amended by redesignating subsections (i) and 
(j) as subsections (j) and (k), respectively, and by inserting 
after subsection (h) the following new subsection:
    ``(i) Plug-in Conversion Credit.--
            ``(1) In general.--For purposes of subsection (a), 
        the plug-in conversion credit determined under this 
        subsection with respect to any motor vehicle which is 
        converted to a qualified plug-in electric drive motor 
        vehicle is 10 percent of so much of the cost of the 
        converting such vehicle as does not exceed $40,000.
            ``(2) Qualified plug-in electric drive motor 
        vehicle.--For purposes of this subsection, the term 
        `qualified plug-in electric drive motor vehicle' means 
        any new qualified plug-in electric drive motor vehicle 
        (as defined in section 30D, determined without regard 
        to whether such vehicle is made by a manufacturer or 
        whether the original use of such vehicle commences with 
        the taxpayer).
            ``(3) Credit allowed in addition to other 
        credits.--The credit allowed under this subsection 
        shall be allowed with respect to a motor vehicle 
        notwithstanding whether a credit has been allowed with 
        respect to such motor vehicle under this section (other 
        than this subsection) in any preceding taxable year.
            ``(4) Termination.--This subsection shall not apply 
        to conversions made after December 31, 2011.''.
    (b) Credit Treated as Part of Alternative Motor Vehicle 
Credit.--Section 30B(a) is amended by striking ``and'' at the 
end of paragraph (3), by striking the period at the end of 
paragraph (4) and inserting ``, and'', and by adding at the end 
the following new paragraph:
            ``(5) the plug-in conversion credit determined 
        under subsection (i).''.
    (c) No Recapture for Vehicles Converted to Qualified Plug-
in Electric Drive Motor Vehicles.--Paragraph (8) of section 
30B(h) is amended by adding at the end the following: ``, 
except that no benefit shall be recaptured if such property 
ceases to be eligible for such credit by reason of conversion 
to a qualified plug-in electric drive motor vehicle.''.
    (d) Effective Date.--The amendments made by this section 
shall apply to property placed in service after the date of the 
enactment of this Act.

SEC. 1144. TREATMENT OF ALTERNATIVE MOTOR VEHICLE CREDIT AS A PERSONAL 
                    CREDIT ALLOWED AGAINST AMT.

    (a) In General.--Paragraph (2) of section 30B(g) is amended 
to read as follows:
            ``(2) Personal credit.--
                    ``(A) In general.--For purposes of this 
                title, the credit allowed under subsection (a) 
                for any taxable year (determined after 
                application of paragraph (1)) shall be treated 
                as a credit allowable under subpart A for such 
                taxable year.
                    ``(B) Limitation based on amount of tax.--
                In the case of a taxable year to which section 
                26(a)(2) does not apply, the credit allowed 
                under subsection (a) for any taxable year 
                (determined after application of paragraph (1)) 
                shall not exceed the excess 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 subpart A (other than 
                        this section and sections 23, 25D, 30, 
                        and 30D) and section 27 for the taxable 
                        year.''.
    (b) Conforming Amendments.--
            (1)(A) Section 24(b)(3)(B), as amended by this Act, 
        is amended by inserting ``30B,'' after ``30,''.
            (B) Section 25(e)(1)(C)(ii), as amended by this 
        Act, is amended by inserting ``30B,'' after ``30,''.
            (C) Section 25B(g)(2), as amended by this Act, is 
        amended by inserting ``30B,'' after ``30,''.
            (D) Section 26(a)(1), as amended by this Act, is 
        amended by inserting ``30B,'' after ``30,''.
            (E) Section 904(i), as amended by this Act, is 
        amended by inserting ``30B,'' after ``30''.
            (F) Section 1400C(d)(2), as amended by this Act, is 
        amended by striking ``and 30'' and inserting ``30, and 
        30B''.
            (2) Section 30C(d)(2)(A), as amended by this Act, 
        is amended by striking ``sections 27 and 30B'' and 
        inserting ``section 27''.
            (3) Section 55(c)(3) is amended by striking 
        ``30B(g)(2),''.
    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.
    (d) Application of EGTRRA Sunset.--The amendment made by 
subsection (b)(1)(A) shall be subject to title IX of the 
Economic Growth and Tax Relief Reconciliation Act of 2001 in 
the same manner as the provision of such Act to which such 
amendment relates.

           PART VI--PARITY FOR TRANSPORTATION FRINGE BENEFITS

SEC. 1151. INCREASED EXCLUSION AMOUNT FOR COMMUTER TRANSIT BENEFITS AND 
                    TRANSIT PASSES.

    (a) In General.--Paragraph (2) of section 132(f) is amended 
by adding at the end the following flush sentence:
        ``In the case of any month beginning on or after the 
        date of the enactment of this sentence and before 
        January 1, 2011, subparagraph (A) shall be applied as 
        if the dollar amount therein were the same as the 
        dollar amount in effect for such month under 
        subparagraph (B).''.
    (b) Effective Date.--The amendment made by this section 
shall apply to months beginning on or after the date of the 
enactment of this section.

                Subtitle C--Tax Incentives for Business

                PART I--TEMPORARY INVESTMENT INCENTIVES

SEC. 1201. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED DURING 2009.

    (a) Extension of Special Allowance.--
            (1) In general.--Paragraph (2) of section 168(k) is 
        amended--
                    (A) by striking ``January 1, 2010'' and 
                inserting ``January 1, 2011'', and
                    (B) by striking ``January 1, 2009'' each 
                place it appears and inserting ``January 1, 
                2010''.
            (2) Conforming amendments.--
                    (A) The heading for subsection (k) of 
                section 168 is amended by striking ``January 1, 
                2009'' and inserting ``January 1, 2010''.
                    (B) The heading for clause (ii) of section 
                168(k)(2)(B) is amended by striking ``pre-
                january 1, 2009'' and inserting ``pre-january 
                1, 2010''.
                    (C) Subparagraph (B) of section 168(l)(5) 
                is amended by striking ``January 1, 2009'' and 
                inserting ``January 1, 2010''.
                    (D) Subparagraph (C) of section 168(n)(2) 
                is amended by striking ``January 1, 2009'' and 
                inserting ``January 1, 2010''.
                    (E) Subparagraph (B) of section 1400N(d)(3) 
                is amended by striking ``January 1, 2009'' and 
                inserting ``January 1, 2010''.
            (3) Technical amendments.--
                    (A) Subparagraph (D) of section 168(k)(4) 
                is amended--
                            (i) by striking ``and'' at the end 
                        of clause (i),
                            (ii) by redesignating clause (ii) 
                        as clause (iii), and
                            (iii) by inserting after clause (i) 
                        the following new clause:
                            ``(ii) `April 1, 2008' shall be 
                        substituted for `January 1, 2008' in 
                        subparagraph (A)(iii)(I) thereof, 
                        and''.
                    (B) Subparagraph (A) of section 6211(b)(4) 
                is amended by inserting ``168(k)(4),'' after 
                ``53(e),''.
    (b) Extension of Election To Accelerate the AMT and 
Research Credits in Lieu of Bonus Depreciation.--
            (1) In general.--Section 168(k)(4) (relating to 
        election to accelerate the AMT and research credits in 
        lieu of bonus depreciation) is amended--
                    (A) by striking ``2009'' and inserting 
                ``2010'' in subparagraph (D)(iii) (as 
                redesignated by subsection (a)(3)), and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(H) Special rules for extension 
                property.--
                            ``(i) Taxpayers previously electing 
                        acceleration.--In the case of a 
                        taxpayer who made the election under 
                        subparagraph (A) for its first taxable 
                        year ending after March 31, 2008--
                                    ``(I) the taxpayer may 
                                elect not to have this 
                                paragraph apply to extension 
                                property, but
                                    ``(II) if the taxpayer does 
                                not make the election under 
                                subclause (I), in applying this 
                                paragraph to the taxpayer a 
                                separate bonus depreciation 
                                amount, maximum amount, and 
                                maximum increase amount shall 
                                be computed and applied to 
                                eligible qualified property 
                                which is extension property and 
                                to eligible qualified property 
                                which is not extension 
                                property.
                            ``(ii) Taxpayers not previously 
                        electing acceleration.--In the case of 
                        a taxpayer who did not make the 
                        election under subparagraph (A) for its 
                        first taxable year ending after March 
                        31, 2008--
                                    ``(I) the taxpayer may 
                                elect to have this paragraph 
                                apply to its first taxable year 
                                ending after December 31, 2008, 
                                and each subsequent taxable 
                                year, and
                                    ``(II) if the taxpayer 
                                makes the election under 
                                subclause (I), this paragraph 
                                shall only apply to eligible 
                                qualified property which is 
                                extension property.
                            ``(iii) Extension property.--For 
                        purposes of this subparagraph, the term 
                        `extension property' means property 
                        which is eligible qualified property 
                        solely by reason of the extension of 
                        the application of the special 
                        allowance under paragraph (1) pursuant 
                        to the amendments made by section 
                        1201(a) of the American Recovery and 
                        Reinvestment Tax Act of 2009 (and the 
                        application of such extension to this 
                        paragraph pursuant to the amendment 
                        made by section 1201(b)(1) of such 
                        Act).''.
            (2) Technical amendment.--Section 6211(b)(4)(A) is 
        amended by inserting ``168(k)(4),'' after ``53(e),''.
    (c) Effective Dates.--
            (1) In general.--Except as provided in paragraph 
        (2), the amendments made by this section shall apply to 
        property placed in service after December 31, 2008, in 
        taxable years ending after such date.
            (2) Technical amendments.--The amendments made by 
        subsections (a)(3) and (b)(2) shall apply to taxable 
        years ending after March 31, 2008.

SEC. 1202. TEMPORARY INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN 
                    DEPRECIABLE BUSINESS ASSETS.

    (a) In General.--Paragraph (7) of section 179(b) is 
amended--
            (1) by striking ``2008'' and inserting ``2008, or 
        2009'', and
            (2) by striking ``2008'' in the heading thereof and 
        inserting ``2008, and 2009''.
    (b) Effective Date.--The amendments made by this section 
shall apply to taxable years beginning after December 31, 2008.

                   PART II--SMALL BUSINESS PROVISIONS

SEC. 1211. 5-YEAR CARRYBACK OF OPERATING LOSSES OF SMALL BUSINESSES.

    (a) In General.--Subparagraph (H) of section 172(b)(1) is 
amended to read as follows:
                    ``(H) Carryback for 2008 net operating 
                losses of small businesses.--
                            ``(i) In general.--If an eligible 
                        small business elects the application 
                        of this subparagraph with respect to an 
                        applicable 2008 net operating loss--
                                    ``(I) subparagraph (A)(i) 
                                shall be applied by 
                                substituting any whole number 
                                elected by the taxpayer which 
                                is more than 2 and less than 6 
                                for `2',
                                    ``(II) subparagraph (E)(ii) 
                                shall be applied by 
                                substituting the whole number 
                                which is one less than the 
                                whole number substituted under 
                                subclause (I) for `2', and
                                    ``(III) subparagraph (F) 
                                shall not apply.
                            ``(ii) Applicable 2008 net 
                        operating loss.--For purposes of this 
                        subparagraph, the term `applicable 2008 
                        net operating loss' means--
                                    ``(I) the taxpayer's net 
                                operating loss for any taxable 
                                year ending in 2008, or
                                    ``(II) if the taxpayer 
                                elects to have this subclause 
                                apply in lieu of subclause (I), 
                                the taxpayer's net operating 
                                loss for any taxable year 
                                beginning in 2008.
                            ``(iii) Election.--Any election 
                        under this subparagraph shall be made 
                        in such manner as may be prescribed by 
                        the Secretary, and shall be made by the 
                        due date (including extension of time) 
                        for filing the taxpayer's return for 
                        the taxable year of the net operating 
                        loss. Any such election, once made, 
                        shall be irrevocable. Any election 
                        under this subparagraph may be made 
                        only with respect to 1 taxable year.
                            ``(iv) Eligible small business.--
                        For purposes of this subparagraph, the 
                        term `eligible small business' has the 
                        meaning given such term by subparagraph 
                        (F)(iii), except that in applying such 
                        subparagraph, section 448(c) shall be 
                        applied by substituting `$15,000,000' 
                        for `$5,000,000' each place it 
                        appears.''.
    (b) Conforming Amendment.--Section 172 is amended by 
striking subsection (k) and by redesignating subsection (l) as 
subsection (k).
    (c) Anti-Abuse Rules.--The Secretary of Treasury or the 
Secretary's designee shall prescribe such rules as are 
necessary to prevent the abuse of the purposes of the 
amendments made by this section, including anti-stuffing rules, 
anti-churning rules (including rules relating to sale-
leasebacks), and rules similar to the rules under section 1091 
of the Internal Revenue Code of 1986 relating to losses from 
wash sales.
    (d) Effective Date.--
            (1) In general.--Except as otherwise provided in 
        this subsection, the amendments made by this section 
        shall apply to net operating losses arising in taxable 
        years ending after December 31, 2007.
            (2) Transitional rule.--In the case of a net 
        operating loss for a taxable year ending before the 
        date of the enactment of this Act--
                    (A) any election made under section 
                172(b)(3) of the Internal Revenue Code of 1986 
                with respect to such loss may (notwithstanding 
                such section) be revoked before the applicable 
                date,
                    (B) any election made under section 
                172(b)(1)(H) of such Code with respect to such 
                loss shall (notwithstanding such section) be 
                treated as timely made if made before the 
                applicable date, and
                    (C) any application under section 6411(a) 
                of such Code with respect to such loss shall be 
                treated as timely filed if filed before the 
                applicable date.
        For purposes of this paragraph, the term ``applicable 
        date'' means the date which is 60 days after the date 
        of the enactment of this Act.

SEC. 1212. DECREASED REQUIRED ESTIMATED TAX PAYMENTS IN 2009 FOR 
                    CERTAIN SMALL BUSINESSES.

    Paragraph (1) of section 6654(d) is amended by adding at 
the end the following new subparagraph:
                    ``(D) Special rule for 2009.--
                            ``(i) In general.--Notwithstanding 
                        subparagraph (C), in the case of any 
                        taxable year beginning in 2009, clause 
                        (ii) of subparagraph (B) shall be 
                        applied to any qualified individual by 
                        substituting `90 percent' for `100 
                        percent'.
                            ``(ii) Qualified individual.--For 
                        purposes of this subparagraph, the term 
                        `qualified individual' means any 
                        individual if--
                                    ``(I) the adjusted gross 
                                income shown on the return of 
                                such individual for the 
                                preceding taxable year is less 
                                than $500,000, and
                                    ``(II) such individual 
                                certifies that more than 50 
                                percent of the gross income 
                                shown on the return of such 
                                individual for the preceding 
                                taxable year was income from a 
                                small business.
                        A certification under subclause (II) 
                        shall be in such form and manner and 
                        filed at such time as the Secretary may 
                        by regulations prescribe.
                            ``(iii) Income from a small 
                        business.--For purposes of clause (ii), 
                        income from a small business means, 
                        with respect to any individual, income 
                        from a trade or business the average 
                        number of employees of which was less 
                        than 500 employees for the calendar 
                        year ending with or within the 
                        preceding taxable year of the 
                        individual.
                            ``(iv) Separate returns.--In the 
                        case of a married individual (within 
                        the meaning of section 7703) who files 
                        a separate return for the taxable year 
                        for which the amount of the installment 
                        is being determined, clause (ii)(I) 
                        shall be applied by substituting 
                        `$250,000' for `$500,000'.
                            ``(v) Estates and trusts.--In the 
                        case of an estate or trust, adjusted 
                        gross income shall be determined as 
                        provided in section 67(e).''.

                   PART III--INCENTIVES FOR NEW JOBS

SEC. 1221. INCENTIVES TO HIRE UNEMPLOYED VETERANS AND DISCONNECTED 
                    YOUTH.

    (a) In General.--Subsection (d) of section 51 is amended by 
adding at the end the following new paragraph:
            ``(14) Credit allowed for unemployed veterans and 
        disconnected youth hired in 2009 or 2010.--
                    ``(A) In general.--Any unemployed veteran 
                or disconnected youth who begins work for the 
                employer during 2009 or 2010 shall be treated 
                as a member of a targeted group for purposes of 
                this subpart.
                    ``(B) Definitions.--For purposes of this 
                paragraph--
                            ``(i) Unemployed veteran.--The term 
                        `unemployed veteran' means any veteran 
                        (as defined in paragraph (3)(B), 
                        determined without regard to clause 
                        (ii) thereof) who is certified by the 
                        designated local agency as--
                                    ``(I) having been 
                                discharged or released from 
                                active duty in the Armed Forces 
                                at any time during the 5-year 
                                period ending on the hiring 
                                date, and
                                    ``(II) being in receipt of 
                                unemployment compensation under 
                                State or Federal law for not 
                                less than 4 weeks during the 1-
                                year period ending on the 
                                hiring date.
                            ``(ii) Disconnected youth.--The 
                        term `disconnected youth' means any 
                        individual who is certified by the 
                        designated local agency--
                                    ``(I) as having attained 
                                age 16 but not age 25 on the 
                                hiring date,
                                    ``(II) as not regularly 
                                attending any secondary, 
                                technical, or post-secondary 
                                school during the 6-month 
                                period preceding the hiring 
                                date,
                                    ``(III) as not regularly 
                                employed during such 6-month 
                                period, and
                                    ``(IV) as not readily 
                                employable by reason of lacking 
                                a sufficient number of basic 
                                skills.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to individuals who begin work for the employer 
after December 31, 2008.

              PART IV--RULES RELATING TO DEBT INSTRUMENTS

SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM 
                    BUSINESS INDEBTEDNESS DISCHARGED BY THE 
                    REACQUISITION OF A DEBT INSTRUMENT.

    (a) In General.--Section 108 (relating to income from 
discharge of indebtedness) is amended by adding at the end the 
following new subsection:
    ``(i) Deferral and Ratable Inclusion of Income Arising From 
Business Indebtedness Discharged by the Reacquisition of a Debt 
Instrument.--
            ``(1) In general.--At the election of the taxpayer, 
        income from the discharge of indebtedness in connection 
        with the reacquisition after December 31, 2008, and 
        before January 1, 2011, of an applicable debt 
        instrument shall be includible in gross income ratably 
        over the 5-taxable-year period beginning with--
                    ``(A) in the case of a reacquisition 
                occurring in 2009, the fifth taxable year 
                following the taxable year in which the 
                reacquisition occurs, and
                    ``(B) in the case of a reacquisition 
                occurring in 2010, the fourth taxable year 
                following the taxable year in which the 
                reacquisition occurs.
            ``(2) Deferral of deduction for original issue 
        discount in debt for debt exchanges.--
                    ``(A) In general.--If, as part of a 
                reacquisition to which paragraph (1) applies, 
                any debt instrument is issued for the 
                applicable debt instrument being reacquired (or 
                is treated as so issued under subsection (e)(4) 
                and the regulations thereunder) and there is 
                any original issue discount determined under 
                subpart A of part V of subchapter P of this 
                chapter with respect to the debt instrument so 
                issued--
                            ``(i) except as provided in clause 
                        (ii), no deduction otherwise allowable 
                        under this chapter shall be allowed to 
                        the issuer of such debt instrument with 
                        respect to the portion of such original 
                        issue discount which--
                                    ``(I) accrues before the 
                                1st taxable year in the 5-
                                taxable-year period in which 
                                income from the discharge of 
                                indebtedness attributable to 
                                the reacquisition of the debt 
                                instrument is includible under 
                                paragraph (1), and
                                    ``(II) does not exceed the 
                                income from the discharge of 
                                indebtedness with respect to 
                                the debt instrument being 
                                reacquired, and
                            ``(ii) the aggregate amount of 
                        deductions disallowed under clause (i) 
                        shall be allowed as a deduction ratably 
                        over the 5-taxable-year period 
                        described in clause (i)(I).
                If the amount of the original issue discount 
                accruing before such 1st taxable year exceeds 
                the income from the discharge of indebtedness 
                with respect to the applicable debt instrument 
                being reacquired, the deductions shall be 
                disallowed in the order in which the original 
                issue discount is accrued.
                    ``(B) Deemed debt for debt exchanges.--For 
                purposes of subparagraph (A), if any debt 
                instrument is issued by an issuer and the 
                proceeds of such debt instrument are used 
                directly or indirectly by the issuer to 
                reacquire an applicable debt instrument of the 
                issuer, the debt instrument so issued shall be 
                treated as issued for the debt instrument being 
                reacquired. If only a portion of the proceeds 
                from a debt instrument are so used, the rules 
                of subparagraph (A) shall apply to the portion 
                of any original issue discount on the newly 
                issued debt instrument which is equal to the 
                portion of the proceeds from such instrument 
                used to reacquire the outstanding instrument.
            ``(3) Applicable debt instrument.--For purposes of 
        this subsection--
                    ``(A) Applicable debt instrument.--The term 
                `applicable debt instrument' means any debt 
                instrument which was issued by--
                            ``(i) a C corporation, or
                            ``(ii) any other person in 
                        connection with the conduct of a trade 
                        or business by such person.
                    ``(B) Debt instrument.--The term `debt 
                instrument' means a bond, debenture, note, 
                certificate, or any other instrument or 
                contractual arrangement constituting 
                indebtedness (within the meaning of section 
                1275(a)(1)).
            ``(4) Reacquisition.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `reacquisition' 
                means, with respect to any applicable debt 
                instrument, any acquisition of the debt 
                instrument by--
                            ``(i) the debtor which issued (or 
                        is otherwise the obligor under) the 
                        debt instrument, or
                            ``(ii) a related person to such 
                        debtor.
                    ``(B) Acquisition.--The term `acquisition' 
                shall, with respect to any applicable debt 
                instrument, include an acquisition of the debt 
                instrument for cash, the exchange of the debt 
                instrument for another debt instrument 
                (including an exchange resulting from a 
                modification of the debt instrument), the 
                exchange of the debt instrument for corporate 
                stock or a partnership interest, and the 
                contribution of the debt instrument to capital. 
                Such term shall also include the complete 
                forgiveness of the indebtedness by the holder 
                of the debt instrument.
            ``(5) Other definitions and rules.--For purposes of 
        this subsection--
                    ``(A) Related person.--The determination of 
                whether a person is related to another person 
                shall be made in the same manner as under 
                subsection (e)(4).
                    ``(B) Election.--
                            ``(i) In general.--An election 
                        under this subsection with respect to 
                        any applicable debt instrument shall be 
                        made by including with the return of 
                        tax imposed by chapter 1 for the 
                        taxable year in which the reacquisition 
                        of the debt instrument occurs a 
                        statement which--
                                    ``(I) clearly identifies 
                                such instrument, and
                                    ``(II) includes the amount 
                                of income to which paragraph 
                                (1) applies and such other 
                                information as the Secretary 
                                may prescribe.
                            ``(ii) Election irrevocable.--Such 
                        election, once made, is irrevocable.
                            ``(iii) Pass-thru entities.--In the 
                        case of a partnership, S corporation, 
                        or other pass-thru entity, the election 
                        under this subsection shall be made by 
                        the partnership, the S corporation, or 
                        other entity involved.
                    ``(C) Coordination with other exclusions.--
                If a taxpayer elects to have this subsection 
                apply to an applicable debt instrument, 
                subparagraphs (A), (B), (C), and (D) of 
                subsection (a)(1) shall not apply to the income 
                from the discharge of such indebtedness for the 
                taxable year of the election or any subsequent 
                taxable year.
                    ``(D) Acceleration of deferred items.--
                            ``(i) In general.--In the case of 
                        the death of the taxpayer, the 
                        liquidation or sale of substantially 
                        all the assets of the taxpayer 
                        (including in a title 11 or similar 
                        case), the cessation of business by the 
                        taxpayer, or similar circumstances, any 
                        item of income or deduction which is 
                        deferred under this subsection (and has 
                        not previously been taken into account) 
                        shall be taken into account in the 
                        taxable year in which such event occurs 
                        (or in the case of a title 11 or 
                        similar case, the day before the 
                        petition is filed).
                            ``(ii) Special rule for pass-thru 
                        entities.--The rule of clause (i) shall 
                        also apply in the case of the sale or 
                        exchange or redemption of an interest 
                        in a partnership, S corporation, or 
                        other pass-thru entity by a partner, 
                        shareholder, or other person holding an 
                        ownership interest in such entity.
            ``(6) Special rule for partnerships.--In the case 
        of a partnership, any income deferred under this 
        subsection shall be allocated to the partners in the 
        partnership immediately before the discharge in the 
        manner such amounts would have been included in the 
        distributive shares of such partners under section 704 
        if such income were recognized at such time. Any 
        decrease in a partner's share of partnership 
        liabilities as a result of such discharge shall not be 
        taken into account for purposes of section 752 at the 
        time of the discharge to the extent it would cause the 
        partner to recognize gain under section 731. Any 
        decrease in partnership liabilities deferred under the 
        preceding sentence shall be taken into account by such 
        partner at the same time, and to the extent remaining 
        in the same amount, as income deferred under this 
        subsection is recognized.
            ``(7) Secretarial authority.--The Secretary may 
        prescribe such regulations, rules, or other guidance as 
        may be necessary or appropriate for purposes of 
        applying this subsection, including--
                    ``(A) extending the application of the 
                rules of paragraph (5)(D) to other 
                circumstances where appropriate,
                    ``(B) requiring reporting of the election 
                (and such other information as the Secretary 
                may require) on returns of tax for subsequent 
                taxable years, and
                    ``(C) rules for the application of this 
                subsection to partnerships, S corporations, and 
                other pass-thru entities, including for the 
                allocation of deferred deductions.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to discharges in taxable years ending after 
December 31, 2008.

SEC. 1232. MODIFICATIONS OF RULES FOR ORIGINAL ISSUE DISCOUNT ON 
                    CERTAIN HIGH YIELD OBLIGATIONS.

    (a) Suspension of Special Rules.--Section 163(e)(5) 
(relating to special rules for original issue discount on 
certain high yield obligations) is amended by redesignating 
subparagraph (F) as subparagraph (G) and by inserting after 
subparagraph (E) the following new subparagraph:
                    ``(F) Suspension of application of 
                paragraph.--
                            ``(i) Temporary suspension.--This 
                        paragraph shall not apply to any 
                        applicable high yield discount 
                        obligation issued during the period 
                        beginning on September 1, 2008, and 
                        ending on December 31, 2009, in 
                        exchange (including an exchange 
                        resulting from a modification of the 
                        debt instrument) for an obligation 
                        which is not an applicable high yield 
                        discount obligation and the issuer (or 
                        obligor) of which is the same as the 
                        issuer (or obligor) of such applicable 
                        high yield discount obligation. The 
                        preceding sentence shall not apply to 
                        any obligation the interest on which is 
                        interest described in section 871(h)(4) 
                        (without regard to subparagraph (D) 
                        thereof) or to any obligation issued to 
                        a related person (within the meaning of 
                        section 108(e)(4)).
                            ``(ii) Successive application.--Any 
                        obligation to which clause (i) applies 
                        shall not be treated as an applicable 
                        high yield discount obligation for 
                        purposes of applying this subparagraph 
                        to any other obligation issued in 
                        exchange for such obligation.
                            ``(iii) Secretarial authority to 
                        suspend application.--The Secretary may 
                        apply this paragraph with respect to 
                        debt instruments issued in periods 
                        following the period described in 
                        clause (i) if the Secretary determines 
                        that such application is appropriate in 
                        light of distressed conditions in the 
                        debt capital markets.''.
    (b) Interest Rate Used in Determining High Yield 
Obligations.--The last sentence of section 163(i)(1) is 
amended--
            (1) by inserting ``(i)'' after ``regulation'', and
            (2) by inserting ``, or (ii) permit, on a temporary 
        basis, a rate to be used with respect to any debt 
        instrument which is higher than the applicable Federal 
        rate if the Secretary determines that such rate is 
        appropriate in light of distressed conditions in the 
        debt capital markets'' before the period at the end.
    (c) Effective Date.--
            (1) Suspension.--The amendments made by subsection 
        (a) shall apply to obligations issued after August 31, 
        2008, in taxable years ending after such date.
            (2) Interest rate authority.--The amendments made 
        by subsection (b) shall apply to obligations issued 
        after December 31, 2009, in taxable years ending after 
        such date.

                 PART V--QUALIFIED SMALL BUSINESS STOCK

SEC. 1241. SPECIAL RULES APPLICABLE TO QUALIFIED SMALL BUSINESS STOCK 
                    FOR 2009 AND 2010.

    (a) In General.--Section 1202(a) is amended by adding at 
the end the following new paragraph:
            ``(3) Special rules for 2009 and 2010.--In the case 
        of qualified small business stock acquired after the 
        date of the enactment of this paragraph and before 
        January 1, 2011--
                    ``(A) paragraph (1) shall be applied by 
                substituting `75 percent' for `50 percent', and
                    ``(B) paragraph (2) shall not apply.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to stock acquired after the date of the enactment 
of this Act.

                        PART VI--S CORPORATIONS

SEC. 1251. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR BUILT-IN GAINS 
                    TAX.

    (a) In General.--Paragraph (7) of section 1374(d) (relating 
to definitions and special rules) is amended to read as 
follows:
            ``(7) Recognition period.--
                    ``(A) In general.--The term `recognition 
                period' means the 10-year period beginning with 
                the 1st day of the 1st taxable year for which 
                the corporation was an S corporation.
                    ``(B) Special rule for 2009 and 2010.--In 
                the case of any taxable year beginning in 2009 
                or 2010, no tax shall be imposed on the net 
                recognized built-in gain of an S corporation if 
                the 7th taxable year in the recognition period 
                preceded such taxable year. The preceding 
                sentence shall be applied separately with 
                respect to any asset to which paragraph (8) 
                applies.
                    ``(C) Special rule for distributions to 
                shareholders.--For purposes of applying this 
                section to any amount includible in income by 
                reason of distributions to shareholders 
                pursuant to section 593(e)--
                            ``(i) subparagraph (A) shall be 
                        applied without regard to the phrase 
                        `10-year', and
                            ``(ii) subparagraph (B) shall not 
                        apply.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to taxable years beginning after December 31, 2008.

             PART VII--RULES RELATING TO OWNERSHIP CHANGES

SEC. 1261. CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON 
                    CERTAIN BUILT-IN LOSSES FOLLOWING AN OWNERSHIP 
                    CHANGE.

    (a) Findings.--Congress finds as follows:
            (1) The delegation of authority to the Secretary of 
        the Treasury under section 382(m) of the Internal 
        Revenue Code of 1986 does not authorize the Secretary 
        to provide exemptions or special rules that are 
        restricted to particular industries or classes of 
        taxpayers.
            (2) Internal Revenue Service Notice 2008-83 is 
        inconsistent with the congressional intent in enacting 
        such section 382(m).
            (3) The legal authority to prescribe Internal 
        Revenue Service Notice 2008-83 is doubtful.
            (4) However, as taxpayers should generally be able 
        to rely on guidance issued by the Secretary of the 
        Treasury legislation is necessary to clarify the force 
        and effect of Internal Revenue Service Notice 2008-83 
        and restore the proper application under the Internal 
        Revenue Code of 1986 of the limitation on built-in 
        losses following an ownership change of a bank.
    (b) Determination of Force and Effect of Internal Revenue 
Service Notice 2008-83 Exempting Banks From Limitation on 
Certain Built-in Losses Following Ownership Change.--
            (1) In general.--Internal Revenue Service Notice 
        2008-83--
                    (A) shall be deemed to have the force and 
                effect of law with respect to any ownership 
                change (as defined in section 382(g) of the 
                Internal Revenue Code of 1986) occurring on or 
                before January 16, 2009, and
                    (B) shall have no force or effect with 
                respect to any ownership change after such 
                date.
            (2) Binding contracts.--Notwithstanding paragraph 
        (1), Internal Revenue Service Notice 2008-83 shall have 
        the force and effect of law with respect to any 
        ownership change (as so defined) which occurs after 
        January 16, 2009, if such change--
                    (A) is pursuant to a written binding 
                contract entered into on or before such date, 
                or
                    (B) is pursuant to a written agreement 
                entered into on or before such date and such 
                agreement was described on or before such date 
                in a public announcement or in a filing with 
                the Securities and Exchange Commission required 
                by reason of such ownership change.

SEC. 1262. TREATMENT OF CERTAIN OWNERSHIP CHANGES FOR PURPOSES OF 
                    LIMITATIONS ON NET OPERATING LOSS CARRYFORWARDS AND 
                    CERTAIN BUILT-IN LOSSES.

    (a) In General.--Section 382 is amended by adding at the 
end the following new subsection:
    ``(n) Special Rule for Certain Ownership Changes.--
            ``(1) In general.--The limitation contained in 
        subsection (a) shall not apply in the case of an 
        ownership change which is pursuant to a restructuring 
        plan of a taxpayer which--
                    ``(A) is required under a loan agreement or 
                a commitment for a line of credit entered into 
                with the Department of the Treasury under the 
                Emergency Economic Stabilization Act of 2008, 
                and
                    ``(B) is intended to result in a 
                rationalization of the costs, capitalization, 
                and capacity with respect to the manufacturing 
                workforce of, and suppliers to, the taxpayer 
                and its subsidiaries.
            ``(2) Subsequent acquisitions.--Paragraph (1) shall 
        not apply in the case of any subsequent ownership 
        change unless such ownership change is described in 
        such paragraph.
            ``(3) Limitation based on control in corporation.--
                    ``(A) In general.--Paragraph (1) shall not 
                apply in the case of any ownership change if, 
                immediately after such ownership change, any 
                person (other than a voluntary employees' 
                beneficiary association under section 
                501(c)(9)) owns stock of the new loss 
                corporation possessing 50 percent or more of 
                the total combined voting power of all classes 
                of stock entitled to vote, or of the total 
                value of the stock of such corporation.
                    ``(B) Treatment of related persons.--
                            ``(i) In general.--Related persons 
                        shall be treated as a single person for 
                        purposes of this paragraph.
                            ``(ii) Related persons.--For 
                        purposes of clause (i), a person shall 
                        be treated as related to another person 
                        if--
                                    ``(I) such person bears a 
                                relationship to such other 
                                person described in section 
                                267(b) or 707(b), or
                                    ``(II) such persons are 
                                members of a group of persons 
                                acting in concert.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to ownership changes after the date of the 
enactment of this Act.

             Subtitle D--Manufacturing Recovery Provisions

SEC. 1301. TEMPORARY EXPANSION OF AVAILABILITY OF INDUSTRIAL 
                    DEVELOPMENT BONDS TO FACILITIES MANUFACTURING 
                    INTANGIBLE PROPERTY.

    (a) In General.--Subparagraph (C) of section 144(a)(12) is 
amended--
            (1) by striking ``For purposes of this paragraph, 
        the term'' and inserting ``For purposes of this 
        paragraph--
                            ``(i) In general.--The term'', and
            (2) by striking the last sentence and inserting the 
        following new clauses:
                            ``(ii) Certain facilities 
                        included.--Such term includes 
                        facilities which are directly related 
                        and ancillary to a manufacturing 
                        facility (determined without regard to 
                        this clause) if--
                                    ``(I) such facilities are 
                                located on the same site as the 
                                manufacturing facility, and
                                    ``(II) not more than 25 
                                percent of the net proceeds of 
                                the issue are used to provide 
                                such facilities.
                            ``(iii) Special rules for bonds 
                        issued in 2009 and 2010.--In the case 
                        of any issue made after the date of 
                        enactment of this clause and before 
                        January 1, 2011, clause (ii) shall not 
                        apply and the net proceeds from a bond 
                        shall be considered to be used to 
                        provide a manufacturing facility if 
                        such proceeds are used to provide--
                                    ``(I) a facility which is 
                                used in the creation or 
                                production of intangible 
                                property which is described in 
                                section 197(d)(1)(C)(iii), or
                                    ``(II) a facility which is 
                                functionally related and 
                                subordinate to a manufacturing 
                                facility (determined without 
                                regard to this subclause) if 
                                such facility is located on the 
                                same site as the manufacturing 
                                facility.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to obligations issued after the date of the 
enactment of this Act.

SEC. 1302. CREDIT FOR INVESTMENT IN ADVANCED ENERGY FACILITIES.

    (a) In General.--Section 46 (relating to amount of credit) 
is amended by striking ``and'' at the end of paragraph (3), by 
striking the period at the end of paragraph (4), and by adding 
at the end the following new paragraph:
            ``(5) the qualifying advanced energy project 
        credit.''.
    (b) Amount of Credit.--Subpart E of part IV of subchapter A 
of chapter 1 (relating to rules for computing investment 
credit) is amended by inserting after section 48B the following 
new section:

``SEC. 48C. QUALIFYING ADVANCED ENERGY PROJECT CREDIT.

    ``(a) In General.--For purposes of section 46, the 
qualifying advanced energy project credit for any taxable year 
is an amount equal to 30 percent of the qualified investment 
for such taxable year with respect to any qualifying advanced 
energy project of the taxpayer.
    ``(b) Qualified Investment.--
            ``(1) In general.--For purposes of subsection (a), 
        the qualified investment for any taxable year is the 
        basis of eligible property placed in service by the 
        taxpayer during such taxable year which is part of a 
        qualifying advanced energy project.
            ``(2) Certain qualified progress expenditures rules 
        made applicable.--Rules similar to the rules of 
        subsections (c)(4) and (d) of section 46 (as in effect 
        on the day before the enactment of the Revenue 
        Reconciliation Act of 1990) shall apply for purposes of 
        this section.
            ``(3) Limitation.--The amount which is treated for 
        all taxable years with respect to any qualifying 
        advanced energy project shall not exceed the amount 
        designated by the Secretary as eligible for the credit 
        under this section.
    ``(c) Definitions.--
            ``(1) Qualifying advanced energy project.--
                    ``(A) In general.--The term `qualifying 
                advanced energy project' means a project--
                            ``(i) which re-equips, expands, or 
                        establishes a manufacturing facility 
                        for the production of--
                                    ``(I) property designed to 
                                be used to produce energy from 
                                the sun, wind, geothermal 
                                deposits (within the meaning of 
                                section 613(e)(2)), or other 
                                renewable resources,
                                    ``(II) fuel cells, 
                                microturbines, or an energy 
                                storage system for use with 
                                electric or hybrid-electric 
                                motor vehicles,
                                    ``(III) electric grids to 
                                support the transmission of 
                                intermittent sources of 
                                renewable energy, including 
                                storage of such energy,
                                    ``(IV) property designed to 
                                capture and sequester carbon 
                                dioxide emissions,
                                    ``(V) property designed to 
                                refine or blend renewable fuels 
                                or to produce energy 
                                conservation technologies 
                                (including energy-conserving 
                                lighting technologies and smart 
                                grid technologies),
                                    ``(VI) new qualified plug-
                                in electric drive motor 
                                vehicles (as defined by section 
                                30D), qualified plug-in 
                                electric vehicles (as defined 
                                by section 30(d)), or 
                                components which are designed 
                                specifically for use with such 
                                vehicles, including electric 
                                motors, generators, and power 
                                control units, or
                                    ``(VII) other advanced 
                                energy property designed to 
                                reduce greenhouse gas emissions 
                                as may be determined by the 
                                Secretary, and
                            ``(ii) any portion of the qualified 
                        investment of which is certified by the 
                        Secretary under subsection (d) as 
                        eligible for a credit under this 
                        section.
                    ``(B) Exception.--Such term shall not 
                include any portion of a project for the 
                production of any property which is used in the 
                refining or blending of any transportation fuel 
                (other than renewable fuels).
            ``(2) Eligible property.--The term `eligible 
        property' means any property--
                    ``(A) which is necessary for the production 
                of property described in paragraph (1)(A)(i),
                    ``(B) which is--
                            ``(i) tangible personal property, 
                        or
                            ``(ii) other tangible property (not 
                        including a building or its structural 
                        components), but only if such property 
                        is used as an integral part of the 
                        qualified investment credit facility, 
                        and
                    ``(C) with respect to which depreciation 
                (or amortization in lieu of depreciation) is 
                allowable.
    ``(d) Qualifying Advanced Energy Project Program.--
            ``(1) Establishment.--
                    ``(A) In general.--Not later than 180 days 
                after the date of enactment of this section, 
                the Secretary, in consultation with the 
                Secretary of Energy, shall establish a 
                qualifying advanced energy project program to 
                consider and award certifications for qualified 
                investments eligible for credits under this 
                section to qualifying advanced energy project 
                sponsors.
                    ``(B) Limitation.--The total amount of 
                credits that may be allocated under the program 
                shall not exceed $2,300,000,000.
            ``(2) Certification.--
                    ``(A) Application period.--Each applicant 
                for certification under this paragraph shall 
                submit an application containing such 
                information as the Secretary may require during 
                the 2-year period beginning on the date the 
                Secretary establishes the program under 
                paragraph (1).
                    ``(B) Time to meet criteria for 
                certification.--Each applicant for 
                certification shall have 1 year from the date 
                of acceptance by the Secretary of the 
                application during which to provide to the 
                Secretary evidence that the requirements of the 
                certification have been met.
                    ``(C) Period of issuance.--An applicant 
                which receives a certification shall have 3 
                years from the date of issuance of the 
                certification in order to place the project in 
                service and if such project is not placed in 
                service by that time period, then the 
                certification shall no longer be valid.
            ``(3) Selection criteria.--In determining which 
        qualifying advanced energy projects to certify under 
        this section, the Secretary--
                    ``(A) shall take into consideration only 
                those projects where there is a reasonable 
                expectation of commercial viability, and
                    ``(B) shall take into consideration which 
                projects--
                            ``(i) will provide the greatest 
                        domestic job creation (both direct and 
                        indirect) during the credit period,
                            ``(ii) will provide the greatest 
                        net impact in avoiding or reducing air 
                        pollutants or anthropogenic emissions 
                        of greenhouse gases,
                            ``(iii) have the greatest potential 
                        for technological innovation and 
                        commercial deployment,
                            ``(iv) have the lowest levelized 
                        cost of generated or stored energy, or 
                        of measured reduction in energy 
                        consumption or greenhouse gas emission 
                        (based on costs of the full supply 
                        chain), and
                            ``(v) have the shortest project 
                        time from certification to completion.
            ``(4) Review and redistribution.--
                    ``(A) Review.--Not later than 4 years after 
                the date of enactment of this section, the 
                Secretary shall review the credits allocated 
                under this section as of such date.
                    ``(B) Redistribution.--The Secretary may 
                reallocate credits awarded under this section 
                if the Secretary determines that--
                            ``(i) there is an insufficient 
                        quantity of qualifying applications for 
                        certification pending at the time of 
                        the review, or
                            ``(ii) any certification made 
                        pursuant to paragraph (2) has been 
                        revoked pursuant to paragraph (2)(B) 
                        because the project subject to the 
                        certification has been delayed as a 
                        result of third party opposition or 
                        litigation to the proposed project.
                    ``(C) Reallocation.--If the Secretary 
                determines that credits under this section are 
                available for reallocation pursuant to the 
                requirements set forth in paragraph (2), the 
                Secretary is authorized to conduct an 
                additional program for applications for 
                certification.
            ``(5) Disclosure of allocations.--The Secretary 
        shall, upon making a certification under this 
        subsection, publicly disclose the identity of the 
        applicant and the amount of the credit with respect to 
        such applicant.
    ``(e) Denial of Double Benefit.--A credit shall not be 
allowed under this section for any qualified investment for 
which a credit is allowed under section 48, 48A, or 48B.''.
    (c) Conforming Amendments.--
            (1) Section 49(a)(1)(C) is amended by striking 
        ``and'' at the end of clause (iii), by striking the 
        period at the end of clause (iv) and inserting ``, 
        and'', and by adding after clause (iv) the following 
        new clause:
                            ``(v) the basis of any property 
                        which is part of a qualifying advanced 
                        energy project under section 48C.''.
            (2) The table of sections for subpart E of part IV 
        of subchapter A of chapter 1 is amended by inserting 
        after the item relating to section 48B the following 
        new item:

``48C. Qualifying advanced energy project credit.''.

    (d) Effective Date.--The amendments made by this section 
shall apply to periods after the date of the enactment of this 
Act, under rules similar to the rules of section 48(m) of the 
Internal Revenue Code of 1986 (as in effect on the day before 
the date of the enactment of the Revenue Reconciliation Act of 
1990).

                  Subtitle E--Economic Recovery Tools

SEC. 1401. RECOVERY ZONE BONDS.

    (a) In General.--Subchapter Y of chapter 1 is amended by 
adding at the end the following new part:

                    ``PART III--RECOVERY ZONE BONDS

``Sec. 1400U-1. Allocation of recovery zone bonds.
``Sec. 1400U-2. Recovery zone economic development bonds.
``Sec. 1400U-3. Recovery zone facility bonds.

``SEC. 1400U-1. ALLOCATION OF RECOVERY ZONE BONDS.

    ``(a) Allocations.--
            ``(1) In general.--
                    ``(A) General allocation.--The Secretary 
                shall allocate the national recovery zone 
                economic development bond limitation and the 
                national recovery zone facility bond limitation 
                among the States in the proportion that each 
                such State's 2008 State employment decline 
                bears to the aggregate of the 2008 State 
                employment declines for all of the States.
                    ``(B) Minimum allocation.--The Secretary 
                shall adjust the allocations under subparagraph 
                (A) for any calendar year for each State to the 
                extent necessary to ensure that no State 
                receives less than 0.9 percent of the national 
                recovery zone economic development bond 
                limitation and 0.9 percent of the national 
                recovery zone facility bond limitation.
            ``(2) 2008 state employment decline.--For purposes 
        of this subsection, the term `2008 State employment 
        decline' means, with respect to any State, the excess 
        (if any) of--
                    ``(A) the number of individuals employed in 
                such State determined for December 2007, over
                    ``(B) the number of individuals employed in 
                such State determined for December 2008.
            ``(3) Allocations by states.--
                    ``(A) In general.--Each State with respect 
                to which an allocation is made under paragraph 
                (1) shall reallocate such allocation among the 
                counties and large municipalities in such State 
                in the proportion to each such county's or 
                municipality's 2008 employment decline bears to 
                the aggregate of the 2008 employment declines 
                for all the counties and municipalities in such 
                State. A county or municipality may waive any 
                portion of an allocation made under this 
                subparagraph.
                    ``(B) Large municipalities.--For purposes 
                of subparagraph (A), the term `large 
                municipality' means a municipality with a 
                population of more than 100,000.
                    ``(C) Determination of local employment 
                declines.--For purposes of this paragraph, the 
                employment decline of any municipality or 
                county shall be determined in the same manner 
                as determining the State employment decline 
                under paragraph (2), except that in the case of 
                a municipality any portion of which is in a 
                county, such portion shall be treated as part 
                of such municipality and not part of such 
                county.
            ``(4) National limitations.--
                    ``(A) Recovery zone economic development 
                bonds.--There is a national recovery zone 
                economic development bond limitation of 
                $10,000,000,000.
                    ``(B) Recovery zone facility bonds.--There 
                is a national recovery zone facility bond 
                limitation of $15,000,000,000.
    ``(b) Recovery Zone.--For purposes of this part, the term 
`recovery zone' means--
            ``(1) any area designated by the issuer as having 
        significant poverty, unemployment, rate of home 
        foreclosures, or general distress,
            ``(2) any area designated by the issuer as 
        economically distressed by reason of the closure or 
        realignment of a military installation pursuant to the 
        Defense Base Closure and Realignment Act of 1990, and
            ``(3) any area for which a designation as an 
        empowerment zone or renewal community is in effect.

``SEC. 1400U-2. RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS.

    ``(a) In General.--In the case of a recovery zone economic 
development bond--
            ``(1) such bond shall be treated as a qualified 
        bond for purposes of section 6431, and
            ``(2) subsection (b) of such section shall be 
        applied by substituting `45 percent' for `35 percent'.
    ``(b) Recovery Zone Economic Development Bond.--
            ``(1) In general.--For purposes of this section, 
        the term `recovery zone economic development bond' 
        means any build America bond (as defined in section 
        54AA(d)) issued before January 1, 2011, as part of 
        issue if--
                    ``(A) 100 percent of the excess of--
                            ``(i) the available project 
                        proceeds (as defined in section 54A) of 
                        such issue, over
                            ``(ii) the amounts in a reasonably 
                        required reserve (within the meaning of 
                        section 150(a)(3)) with respect to such 
                        issue,
                are to be used for one or more qualified 
                economic development purposes, and
                    ``(B) the issuer designates such bond for 
                purposes of this section.
            ``(2) Limitation on amount of bonds designated.--
        The maximum aggregate face amount of bonds which may be 
        designated by any issuer under paragraph (1) shall not 
        exceed the amount of the recovery zone economic 
        development bond limitation allocated to such issuer 
        under section 1400U-1.
    ``(c) Qualified Economic Development Purpose.--For purposes 
of this section, the term `qualified economic development 
purpose' means expenditures for purposes of promoting 
development or other economic activity in a recovery zone, 
including--
            ``(1) capital expenditures paid or incurred with 
        respect to property located in such zone,
            ``(2) expenditures for public infrastructure and 
        construction of public facilities, and
            ``(3) expenditures for job training and educational 
        programs.

``SEC. 1400U-3. RECOVERY ZONE FACILITY BONDS.

    ``(a) In General.--For purposes of part IV of subchapter B 
(relating to tax exemption requirements for State and local 
bonds), the term `exempt facility bond' includes any recovery 
zone facility bond.
    ``(b) Recovery Zone Facility Bond.--
            ``(1) In general.--For purposes of this section, 
        the term `recovery zone facility 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 recovery zone 
                property,
                    ``(B) such bond is issued before January 1, 
                2011, and
                    ``(C) the issuer designates such bond for 
                purposes of this section.
            ``(2) Limitation on amount of bonds designated.--
        The maximum aggregate face amount of bonds which may be 
        designated by any issuer under paragraph (1) shall not 
        exceed the amount of recovery zone facility bond 
        limitation allocated to such issuer under section 
        1400U-1.
    ``(c) Recovery Zone Property.--For purposes of this 
section--
            ``(1) In general.--The term `recovery zone 
        property' means any property to which section 168 
        applies (or would apply but for section 179) if--
                    ``(A) such property was constructed, 
                reconstructed, renovated, or acquired by 
                purchase (as defined in section 179(d)(2)) by 
                the taxpayer after the date on which the 
                designation of the recovery zone took effect,
                    ``(B) the original use of which in the 
                recovery zone commences with the taxpayer, and
                    ``(C) substantially all of the use of which 
                is in the recovery zone and is in the active 
                conduct of a qualified business by the taxpayer 
                in such zone.
            ``(2) Qualified business.--The term `qualified 
        business' means any trade or business except that--
                    ``(A) the rental to others of real property 
                located in a recovery zone shall be treated as 
                a qualified business only if the property is 
                not residential rental property (as defined in 
                section 168(e)(2)), and
                    ``(B) such term shall not include any trade 
                or business consisting of the operation of any 
                facility described in section 144(c)(6)(B).
            ``(3) Special rules for substantial renovations and 
        sale-leaseback.--Rules similar to the rules of 
        subsections (a)(2) and (b) of section 1397D shall apply 
        for purposes of this subsection.
    ``(d) Nonapplication of Certain Rules.--Sections 146 
(relating to volume cap) and 147(d) (relating to acquisition of 
existing property not permitted) shall not apply to any 
recovery zone facility bond.''.
    (b) Clerical Amendment.--The table of parts for subchapter 
Y of chapter 1 of such Code is amended by adding at the end the 
following new item:

                   ``Part III. Recovery Zone Bonds.''.

    (c) Effective Date.--The amendments made by this section 
shall apply to obligations issued after the date of the 
enactment of this Act.

SEC. 1402. TRIBAL ECONOMIC DEVELOPMENT BONDS.

    (a) In General.--Section 7871 is amended by adding at the 
end the following new subsection:
    ``(f) Tribal Economic Development Bonds.--
            ``(1) Allocation of limitation.--
                    ``(A) In general.--The Secretary shall 
                allocate the national tribal economic 
                development bond limitation among the Indian 
                tribal governments in such manner as the 
                Secretary, in consultation with the Secretary 
                of the Interior, determines appropriate.
                    ``(B) National limitation.--There is a 
                national tribal economic development bond 
                limitation of $2,000,000,000.
            ``(2) Bonds treated as exempt from tax.--In the 
        case of a tribal economic development bond--
                    ``(A) notwithstanding subsection (c), such 
                bond shall be treated for purposes of this 
                title in the same manner as if such bond were 
                issued by a State,
                    ``(B) the Indian tribal government issuing 
                such bond and any instrumentality of such 
                Indian tribal government shall be treated as a 
                State for purposes of section 141, and
                    ``(C) section 146 shall not apply.
            ``(3) Tribal economic development bond.--
                    ``(A) In general.--For purposes of this 
                section, the term `tribal economic development 
                bond' means any bond issued by an Indian tribal 
                government--
                            ``(i) the interest on which would 
                        be exempt from tax under section 103 if 
                        issued by a State or local government, 
                        and
                            ``(ii) which is designated by the 
                        Indian tribal government as a tribal 
                        economic development bond for purposes 
                        of this subsection.
                    ``(B) Exceptions.--Such term shall not 
                include any bond issued as part of an issue if 
                any portion of the proceeds of such issue are 
                used to finance--
                            ``(i) any portion of a building in 
                        which class II or class III gaming (as 
                        defined in section 4 of the Indian 
                        Gaming Regulatory Act) is conducted or 
                        housed or any other property actually 
                        used in the conduct of such gaming, or
                            ``(ii) any facility located outside 
                        the Indian reservation (as defined in 
                        section 168(j)(6)).
                    ``(C) Limitation on amount of bonds 
                designated.--The maximum aggregate face amount 
                of bonds which may be designated by any Indian 
                tribal government under subparagraph (A) shall 
                not exceed the amount of national tribal 
                economic development bond limitation allocated 
                to such government under paragraph (1).''.
    (b) Study.--The Secretary of the Treasury, or the 
Secretary's delegate, shall conduct a study of the effects of 
the amendment made by subsection (a). Not later than 1 year 
after the date of the enactment of this Act, the Secretary of 
the Treasury, or the Secretary's delegate, shall report to 
Congress on the results of the study conducted under this 
paragraph, including the Secretary's recommendations regarding 
such amendment.
    (c) Effective Date.--The amendment made by subsection (a) 
shall apply to obligations issued after the date of the 
enactment of this Act.

SEC. 1403. INCREASE IN NEW MARKETS TAX CREDIT.

    (a) In General.--Section 45D(f)(1) is amended--
            (1) by striking ``and'' at the end of subparagraph 
        (C),
            (2) by striking ``, 2007, 2008, and 2009.'' in 
        subparagraph (D), and inserting ``and 2007,'', and
            (3) by adding at the end the following new 
        subparagraphs:
                    ``(E) $5,000,000,000 for 2008, and
                    ``(F) $5,000,000,000 for 2009.''.
    (b) Special Rule for Allocation of Increased 2008 
Limitation.--The amount of the increase in the new markets tax 
credit limitation for calendar year 2008 by reason of the 
amendments made by subsection (a) shall be allocated in 
accordance with section 45D(f)(2) of the Internal Revenue Code 
of 1986 to qualified community development entities (as defined 
in section 45D(c) of such Code) which--
            (1) submitted an allocation application with 
        respect to calendar year 2008, and
            (2)(A) did not receive an allocation for such 
        calendar year, or
            (B) received an allocation for such calendar year 
        in an amount less than the amount requested in the 
        allocation application.

SEC. 1404. COORDINATION OF LOW-INCOME HOUSING CREDIT AND LOW-INCOME 
                    HOUSING GRANTS.

    Subsection (i) of section 42 is amended by adding at the 
end the following new paragraph:
            ``(9) Coordination with low-income housing 
        grants.--
                    ``(A) Reduction in state housing credit 
                ceiling for low-income housing grants received 
                in 2009.--For purposes of this section, the 
                amounts described in clauses (i) through (iv) 
                of subsection (h)(3)(C) with respect to any 
                State for 2009 shall each be reduced by so much 
                of such amount as is taken into account in 
                determining the amount of any grant to such 
                State under section 1602 of the American 
                Recovery and Reinvestment Tax Act of 2009.
                    ``(B) Special rule for basis.--Basis of a 
                qualified low-income building shall not be 
                reduced by the amount of any grant described in 
                subparagraph (A).''.

               Subtitle F--Infrastructure Financing Tools

          PART I--IMPROVED MARKETABILITY FOR TAX-EXEMPT BONDS

SEC. 1501. DE MINIMIS SAFE HARBOR EXCEPTION FOR TAX-EXEMPT INTEREST 
                    EXPENSE OF FINANCIAL INSTITUTIONS.

    (a) In General.--Subsection (b) of section 265 is amended 
by adding at the end the following new paragraph:
            ``(7) De minimis exception for bonds issued during 
        2009 or 2010.--
                    ``(A) In general.--In applying paragraph 
                (2)(A), there shall not be taken into account 
                tax-exempt obligations issued during 2009 or 
                2010.
                    ``(B) Limitation.--The amount of tax-exempt 
                obligations not taken into account by reason of 
                subparagraph (A) shall not exceed 2 percent of 
                the amount determined under paragraph (2)(B).
                    ``(C) Refundings.--For purposes of this 
                paragraph, a refunding bond (whether a current 
                or advance refunding) shall be treated as 
                issued on the date of the issuance of the 
                refunded bond (or in the case of a series of 
                refundings, the original bond).''.
    (b) Treatment as Financial Institution Preference Item.--
Clause (iv) of section 291(e)(1)(B) is amended by adding at the 
end the following: ``That portion of any obligation not taken 
into account under paragraph (2)(A) of section 265(b) by reason 
of paragraph (7) of such section shall be treated for purposes 
of this section as having been acquired on August 7, 1986.''.
    (c) Effective Date.--The amendments made by this section 
shall apply to obligations issued after December 31, 2008.

SEC. 1502. MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-EXEMPT 
                    INTEREST EXPENSE ALLOCATION RULES FOR FINANCIAL 
                    INSTITUTIONS.

    (a) In General.--Paragraph (3) of section 265(b) (relating 
to exception for certain tax-exempt obligations) is amended by 
adding at the end the following new subparagraph:
                    ``(G) Special rules for obligations issued 
                during 2009 and 2010.--
                            ``(i) Increase in limitation.--In 
                        the case of obligations issued during 
                        2009 or 2010, subparagraphs (C)(i), 
                        (D)(i), and (D)(iii)(II) shall each be 
                        applied by substituting `$30,000,000' 
                        for `$10,000,000'.
                            ``(ii) Qualified 501(c)(3) bonds 
                        treated as issued by exempt 
                        organization.--In the case of a 
                        qualified 501(c)(3) bond (as defined in 
                        section 145) issued during 2009 or 
                        2010, this paragraph shall be applied 
                        by treating the 501(c)(3) organization 
                        for whose benefit such bond was issued 
                        as the issuer.
                            ``(iii) Special rule for qualified 
                        financings.--In the case of a qualified 
                        financing issue issued during 2009 or 
                        2010--
                                    ``(I) subparagraph (F) 
                                shall not apply, and
                                    ``(II) any obligation 
                                issued as a part of such issue 
                                shall be treated as a qualified 
                                tax-exempt obligation if the 
                                requirements of this paragraph 
                                are met with respect to each 
                                qualified portion of the issue 
                                (determined by treating each 
                                qualified portion as a separate 
                                issue which is issued by the 
                                qualified borrower with respect 
                                to which such portion relates).
                            ``(iv) Qualified financing issue.--
                        For purposes of this subparagraph, the 
                        term `qualified financing issue' means 
                        any composite, pooled, or other conduit 
                        financing issue the proceeds of which 
                        are used directly or indirectly to make 
                        or finance loans to 1 or more ultimate 
                        borrowers each of whom is a qualified 
                        borrower.
                            ``(v) Qualified portion.--For 
                        purposes of this subparagraph, the term 
                        `qualified portion' means that portion 
                        of the proceeds which are used with 
                        respect to each qualified borrower 
                        under the issue.
                            ``(vi) Qualified borrower.--For 
                        purposes of this subparagraph, the term 
                        `qualified borrower' means a borrower 
                        which is a State or political 
                        subdivision thereof or an organization 
                        described in section 501(c)(3) and 
                        exempt from taxation under section 
                        501(a).''.
    (b) Effective Date.--The amendment made by this section 
shall apply to obligations issued after December 31, 2008.

SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE MINIMUM TAX 
                    LIMITATIONS ON TAX-EXEMPT BONDS.

    (a) Interest on Private Activity Bonds Issued During 2009 
and 2010 Not Treated as Tax Preference Item.--Subparagraph (C) 
of section 57(a)(5) is amended by adding at the end a new 
clause:
                            ``(vi) Exception for bonds issued 
                        in 2009 and 2010.--
                                    ``(I) In general.--For 
                                purposes of clause (i), the 
                                term `private activity bond' 
                                shall not include any bond 
                                issued after December 31, 2008, 
                                and before January 1, 2011.
                                    ``(II) Treatment of 
                                refunding bonds.--For purposes 
                                of subclause (I), a refunding 
                                bond (whether a current or 
                                advance refunding) shall be 
                                treated as issued on the date 
                                of the issuance of the refunded 
                                bond (or in the case of a 
                                series of refundings, the 
                                original bond).
                                    ``(III) Exception for 
                                certain refunding bonds.--
                                Subclause (II) shall not apply 
                                to any refunding bond which is 
                                issued to refund any bond which 
                                was issued after December 31, 
                                2003, and before January 1, 
                                2009.''.
    (b) No Adjustment to Adjusted Current Earnings for Interest 
on Tax-Exempt Bonds Issued During 2009 and 2010.--Subparagraph 
(B) of section 56(g)(4) is amended by adding at the end the 
following new clause:
                            ``(iv) Tax exempt interest on bonds 
                        issued in 2009 and 2010.--
                                    ``(I) In general.--Clause 
                                (i) shall not apply in the case 
                                of any interest on a bond 
                                issued after December 31, 2008, 
                                and before January 1, 2011.
                                    ``(II) Treatment of 
                                refunding bonds.--For purposes 
                                of subclause (I), a refunding 
                                bond (whether a current or 
                                advance refunding) shall be 
                                treated as issued on the date 
                                of the issuance of the refunded 
                                bond (or in the case of a 
                                series of refundings, the 
                                original bond).
                                    ``(III) Exception for 
                                certain refunding bonds.--
                                Subclause (II) shall not apply 
                                to any refunding bond which is 
                                issued to refund any bond which 
                                was issued after December 31, 
                                2003, and before January 1, 
                                2009.''.
    (c) Effective Date.--The amendments made by this section 
shall apply to obligations issued after December 31, 2008.

SEC. 1504. MODIFICATION TO HIGH SPEED INTERCITY RAIL FACILITY BONDS.

    (a) In General.--Paragraph (1) of section 142(i) is amended 
by striking ``operate at speeds in excess of'' and inserting 
``be capable of attaining a maximum speed in excess of''.
    (b) Effective Date.--The amendment made by this section 
shall apply to obligations issued after the date of the 
enactment of this Act.

    PART II--DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT 
                              CONTRACTORS

SEC. 1511. DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT 
                    CONTRACTORS.

    Subsection (b) of section 511 of the Tax Increase 
Prevention and Reconciliation Act of 2005 is amended by 
striking ``December 31, 2010'' and inserting ``December 31, 
2011''.

                 PART III--TAX CREDIT BONDS FOR SCHOOLS

SEC. 1521. QUALIFIED SCHOOL CONSTRUCTION BONDS.

    (a) In General.--Subpart I of part IV of subchapter A of 
chapter 1 is amended by adding at the end the following new 
section:

``SEC. 54F. QUALIFIED SCHOOL CONSTRUCTION BONDS.

    ``(a) Qualified School Construction Bond.--For purposes of 
this subchapter, the term `qualified school construction bond' 
means any bond issued as part of an issue if--
            ``(1) 100 percent of the available project proceeds 
        of such issue are to be used for the construction, 
        rehabilitation, or repair of a public school facility 
        or for the acquisition of land on which such a facility 
        is to be constructed with part of the proceeds of such 
        issue,
            ``(2) the bond is issued by a State or local 
        government within the jurisdiction of which such school 
        is located, and
            ``(3) the issuer designates such bond for purposes 
        of this section.
    ``(b) Limitation on Amount of Bonds Designated.--The 
maximum aggregate face amount of bonds issued during any 
calendar year which may be designated under subsection (a) by 
any issuer shall not exceed the limitation amount allocated 
under subsection (d) for such calendar year to such issuer.
    ``(c) National Limitation on Amount of Bonds Designated.--
There is a national qualified school construction bond 
limitation for each calendar year. Such limitation is--
            ``(1) $11,000,000,000 for 2009,
            ``(2) $11,000,000,000 for 2010, and
            ``(3) except as provided in subsection (e), zero 
        after 2010.
    ``(d) Allocation of Limitation.--
            ``(1) Allocation among states.--Except as provided 
        in paragraph (2)(C), the limitation applicable under 
        subsection (c) for any calendar year shall be allocated 
        by the Secretary among the States in proportion to the 
        respective amounts each such State is eligible to 
        receive under section 1124 of the Elementary and 
        Secondary Education Act of 1965 (20 U.S.C. 6333) for 
        the most recent fiscal year ending before such calendar 
        year. The limitation amount allocated to a State under 
        the preceding sentence shall be allocated by the State 
        to issuers within such State.
            ``(2) 40 percent of limitation allocated among 
        largest school districts.--
                    ``(A) In general.--40 percent of the 
                limitation applicable under subsection (c) for 
                any calendar year shall be allocated under 
                subparagraph (B) by the Secretary among local 
                educational agencies which are large local 
                educational agencies for such year.
                    ``(B) Allocation formula.--The amount to be 
                allocated under subparagraph (A) for any 
                calendar year shall be allocated among large 
                local educational agencies in proportion to the 
                respective amounts each such agency received 
                under section 1124 of the Elementary and 
                Secondary Education Act of 1965 (20 U.S.C. 
                6333) for the most recent fiscal year ending 
                before such calendar year.
                    ``(C) Reduction in state allocation.--The 
                allocation to any State under paragraph (1) 
                shall be reduced by the aggregate amount of the 
                allocations under this paragraph to large local 
                educational agencies within such State.
                    ``(D) Allocation of unused limitation to 
                state.--The amount allocated under this 
                paragraph to a large local educational agency 
                for any calendar year may be reallocated by 
                such agency to the State in which such agency 
                is located for such calendar year. Any amount 
                reallocated to a State under the preceding 
                sentence may be allocated as provided in 
                paragraph (1).
                    ``(E) Large local educational agency.--For 
                purposes of this paragraph, the term `large 
                local educational agency' means, with respect 
                to a calendar year, any local educational 
                agency if such agency is--
                            ``(i) among the 100 local 
                        educational agencies with the largest 
                        numbers of children aged 5 through 17 
                        from families living below the poverty 
                        level, as determined by the Secretary 
                        using the most recent data available 
                        from the Department of Commerce that 
                        are satisfactory to the Secretary, or
                            ``(ii) 1 of not more than 25 local 
                        educational agencies (other than those 
                        described in clause (i)) that the 
                        Secretary of Education determines 
                        (based on the most recent data 
                        available satisfactory to the 
                        Secretary) are in particular need of 
                        assistance, based on a low level of 
                        resources for school construction, a 
                        high level of enrollment growth, or 
                        such other factors as the Secretary 
                        deems appropriate.
            ``(3) Allocations to certain possessions.--The 
        amount to be allocated under paragraph (1) to any 
        possession of the United States other than Puerto Rico 
        shall be the amount which would have been allocated if 
        all allocations under paragraph (1) were made on the 
        basis of respective populations of individuals below 
        the poverty line (as defined by the Office of 
        Management and Budget). In making other allocations, 
        the amount to be allocated under paragraph (1) shall be 
        reduced by the aggregate amount allocated under this 
        paragraph to possessions of the United States.
            ``(4) Allocations for indian schools.--In addition 
        to the amounts otherwise allocated under this 
        subsection, $200,000,000 for calendar year 2009, and 
        $200,000,000 for calendar year 2010, shall be allocated 
        by the Secretary of the Interior for purposes of the 
        construction, rehabilitation, and repair of schools 
        funded by the Bureau of Indian Affairs. In the case of 
        amounts allocated under the preceding sentence, Indian 
        tribal governments (as defined in section 7701(a)(40)) 
        shall be treated as qualified issuers for purposes of 
        this subchapter.
    ``(e) Carryover of Unused Limitation.--If for any calendar 
year--
            ``(1) the amount allocated under subsection (d) to 
        any State, exceeds
            ``(2) the amount of bonds issued during such year 
        which are designated under subsection (a) pursuant to 
        such allocation,
the limitation amount under such subsection for such State for 
the following calendar year shall be increased by the amount of 
such excess. A similar rule shall apply to the amounts 
allocated under subsection (d)(4).''.
    (b) Conforming Amendments.--
            (1) Paragraph (1) of section 54A(d) is amended by 
        striking ``or'' at the end of subparagraph (C), by 
        inserting ``or'' at the end of subparagraph (D), and by 
        inserting after subparagraph (D) the following new 
        subparagraph:
                    ``(E) a qualified school construction 
                bond,''.
            (2) Subparagraph (C) of section 54A(d)(2) is 
        amended by striking ``and'' at the end of clause (iii), 
        by striking the period at the end of clause (iv) and 
        inserting ``, and'', and by adding at the end the 
        following new clause:
                            ``(v) in the case of a qualified 
                        school construction bond, a purpose 
                        specified in section 54F(a)(1).''.
            (3) The table of sections for subpart I of part IV 
        of subchapter A of chapter 1 is amended by adding at 
        the end the following new item:

``Sec. 54F. Qualified school construction bonds.''.

    (c) Effective Date.--The amendments made by this section 
shall apply to obligations issued after the date of the 
enactment of this Act.

SEC. 1522. EXTENSION AND EXPANSION OF QUALIFIED ZONE ACADEMY BONDS.

    (a) In General.--Section 54E(c)(1) is amended by striking 
``and 2009'' and inserting ``and $1,400,000,000 for 2009 and 
2010''.
    (b) Effective Date.--The amendment made by this section 
shall apply to obligations issued after December 31, 2008.

                      PART IV--BUILD AMERICA BONDS

SEC. 1531. BUILD AMERICA BONDS.

    (a) In General.--Part IV of subchapter A of chapter 1 is 
amended by adding at the end the following new subpart:

                    ``Subpart J--Build America Bonds

``Sec. 54AA. Build America bonds.

``SEC. 54AA. BUILD AMERICA BONDS.

    ``(a) In General.--If a taxpayer holds a build America bond 
on one or more interest payment dates of the bond 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 the sum of the credits determined under subsection (b) 
with respect to such dates.
    ``(b) Amount of Credit.--The amount of the credit 
determined under this subsection with respect to any interest 
payment date for a build America bond is 35 percent of the 
amount of interest payable by the issuer with respect to such 
date .
    ``(c) Limitation Based on Amount of Tax.--
            ``(1) In general.--The credit allowed under 
        subsection (a) for any taxable year shall not exceed 
        the excess of--
                    ``(A) the sum of the regular tax liability 
                (as defined in section 26(b)) plus the tax 
                imposed by section 55, over
                    ``(B) the sum of the credits allowable 
                under this part (other than subpart C and this 
                subpart).
            ``(2) Carryover of unused credit.--If the credit 
        allowable under subsection (a) exceeds the limitation 
        imposed by paragraph (1) for such taxable year, such 
        excess shall be carried to the succeeding taxable year 
        and added to the credit allowable under subsection (a) 
        for such taxable year (determined before the 
        application of paragraph (1) for such succeeding 
        taxable year).
    ``(d) Build America Bond.--
            ``(1) In general.--For purposes of this section, 
        the term `build America bond' means any obligation 
        (other than a private activity bond) if--
                    ``(A) the interest on such obligation would 
                (but for this section) be excludable from gross 
                income under section 103,
                    ``(B) such obligation is issued before 
                January 1, 2011, and
                    ``(C) the issuer makes an irrevocable 
                election to have this section apply.
            ``(2) Applicable rules.--For purposes of applying 
        paragraph (1)--
                    ``(A) for purposes of section 149(b), a 
                build America bond shall not be treated as 
                federally guaranteed by reason of the credit 
                allowed under subsection (a) or section 6431,
                    ``(B) for purposes of section 148, the 
                yield on a build America bond shall be 
                determined without regard to the credit allowed 
                under subsection (a), and
                    ``(C) a bond shall not be treated as a 
                build America bond if the issue price has more 
                than a de minimis amount (determined under 
                rules similar to the rules of section 
                1273(a)(3)) of premium over the stated 
                principal amount of the bond.
    ``(e) Interest Payment Date.--For purposes of this section, 
the term `interest payment date' means any date on which the 
holder of record of the build America bond is entitled to a 
payment of interest under such bond.
    ``(f) Special Rules.--
            ``(1) Interest on build america bonds includible in 
        gross income for federal income tax purposes.--For 
        purposes of this title, interest on any build America 
        bond shall be includible in gross income.
            ``(2) Application of certain rules.--Rules similar 
        to the rules of subsections (f), (g), (h), and (i) of 
        section 54A shall apply for purposes of the credit 
        allowed under subsection (a).
    ``(g) Special Rule for Qualified Bonds Issued Before 
2011.--In the case of a qualified bond issued before January 1, 
2011--
            ``(1) Issuer allowed refundable credit.--In lieu of 
        any credit allowed under this section with respect to 
        such bond, the issuer of such bond shall be allowed a 
        credit as provided in section 6431.
            ``(2) Qualified bond.--For purposes of this 
        subsection, the term `qualified bond' means any build 
        America bond issued as part of an issue if--
                    ``(A) 100 percent of the excess of--
                            ``(i) the available project 
                        proceeds (as defined in section 54A) of 
                        such issue, over
                            ``(ii) the amounts in a reasonably 
                        required reserve (within the meaning of 
                        section 150(a)(3)) with respect to such 
                        issue,
                are to be used for capital expenditures, and
                    ``(B) the issuer makes an irrevocable 
                election to have this subsection apply.
    ``(h) Regulations.--The Secretary may prescribe such 
regulations and other guidance as may be necessary or 
appropriate to carry out this section and section 6431.''.
    (b) Credit for Qualified Bonds Issued Before 2011.--
Subchapter B of chapter 65 is amended by adding at the end the 
following new section:

``SEC. 6431. CREDIT FOR QUALIFIED BONDS ALLOWED TO ISSUER.

    ``(a) In General.--In the case of a qualified bond issued 
before January 1, 2011, the issuer of such bond shall be 
allowed a credit with respect to each interest payment under 
such bond which shall be payable by the Secretary as provided 
in subsection (b).
    ``(b) Payment of Credit.--The Secretary shall pay 
(contemporaneously with each interest payment date under such 
bond) to the issuer of such bond (or to any person who makes 
such interest payments on behalf of the issuer) 35 percent of 
the interest payable under such bond on such date.
    ``(c) Application of Arbitrage Rules.--For purposes of 
section 148, the yield on a qualified bond shall be reduced by 
the credit allowed under this section.
    ``(d) Interest Payment Date.--For purposes of this 
subsection, the term `interest payment date' means each date on 
which interest is payable by the issuer under the terms of the 
bond.
    ``(e) Qualified Bond.--For purposes of this subsection, the 
term `qualified bond' has the meaning given such term in 
section 54AA(g).''.
    (c) Conforming Amendments.--
            (1) Section 1324(b)(2) of title 31, United States 
        Code, is amended by striking ``or 6428'' and inserting 
        ``6428, or 6431,''.
            (2) Section 54A(c)(1)(B) is amended by striking 
        ``subpart C'' and inserting ``subparts C and J''.
            (3) Sections 54(c)(2), 1397E(c)(2), and 
        1400N(l)(3)(B) are each amended by striking ``and I'' 
        and inserting ``, I, and J''.
            (4) Section 6211(b)(4)(A) is amended by striking 
        ``and 6428'' and inserting ``6428, and 6431''.
            (5) Section 6401(b)(1) is amended by striking ``and 
        I'' and inserting ``I, and J''.
            (6) The table of subparts for part IV of subchapter 
        A of chapter 1 is amended by adding at the end the 
        following new item:

                  ``subpart j. build america bonds.''.

            (7) The table of section for subchapter B of 
        chapter 65 is amended by adding at the end the 
        following new item:

``Sec. 6431. Credit for qualified bonds allowed to issuer.''.

    (d) Transitional Coordination With State Law.--Except as 
otherwise provided by a State after the date of the enactment 
of this Act, the interest on any build America bond (as defined 
in section 54AA of the Internal Revenue Code of 1986, as added 
by this section) and the amount of any credit determined under 
such section with respect to such bond shall be treated for 
purposes of the income tax laws of such State as being exempt 
from Federal income tax.
    (e) Effective Date.--The amendments made by this section 
shall apply to obligations issued after the date of the 
enactment of this Act.

PART V--REGULATED INVESTMENT COMPANIES ALLOWED TO PASS-THRU TAX CREDIT 
                              BOND CREDITS

SEC. 1541. REGULATED INVESTMENT COMPANIES ALLOWED TO PASS-THRU TAX 
                    CREDIT BOND CREDITS.

    (a) In General.--Part I of subchapter M of chapter 1 is 
amended by inserting after section 853 the following new 
section:

``SEC. 853A. CREDITS FROM TAX CREDIT BONDS ALLOWED TO SHAREHOLDERS.

    ``(a) General Rule.--A regulated investment company--
            ``(1) which holds (directly or indirectly) one or 
        more tax credit bonds on one or more applicable dates 
        during the taxable year, and
            ``(2) which meets the requirements of section 
        852(a) for the taxable year,
may elect the application of this section with respect to 
credits allowable to the investment company during such taxable 
year with respect to such bonds.
    ``(b) Effect of Election.--If the election provided in 
subsection (a) is in effect for any taxable year--
            ``(1) the regulated investment company shall not be 
        allowed any credits to which subsection (a) applies for 
        such taxable year,
            ``(2) the regulated investment company shall--
                    ``(A) include in gross income (as interest) 
                for such taxable year an amount equal to the 
                amount that such investment company would have 
                included in gross income with respect to such 
                credits if this section did not apply, and
                    ``(B) increase the amount of the dividends 
                paid deduction for such taxable year by the 
                amount of such income, and
            ``(3) each shareholder of such investment company 
        shall--
                    ``(A) include in gross income an amount 
                equal to such shareholder's proportionate share 
                of the interest income attributable to such 
                credits, and
                    ``(B) be allowed the shareholder's 
                proportionate share of such credits against the 
                tax imposed by this chapter.
    ``(c) Notice to Shareholders.--For purposes of subsection 
(b)(3), the shareholder's proportionate share of--
            ``(1) credits described in subsection (a), and
            ``(2) gross income in respect of such credits,
shall not exceed the amounts so designated by the regulated 
investment company in a written notice mailed to its 
shareholders not later than 60 days after the close of its 
taxable year.
    ``(d) Manner of Making Election and Notifying 
Shareholders.--The election provided in subsection (a) and the 
notice to shareholders required by subsection (c) shall be made 
in such manner as the Secretary may prescribe.
    ``(e) Definitions and Special Rules.--
            ``(1) Definitions.--For purposes of this 
        subsection--
                    ``(A) Tax credit bond.--The term `tax 
                credit bond' means--
                            ``(i) a qualified tax credit bond 
                        (as defined in section 54A(d)),
                            ``(ii) a build America bond (as 
                        defined in section 54AA(d)), and
                            ``(iii) any bond for which a credit 
                        is allowable under subpart H of part IV 
                        of subchapter A of this chapter.
                    ``(B) Applicable date.--The term 
                `applicable date' means--
                            ``(i) in the case of a qualified 
                        tax credit bond or a bond described in 
                        subparagraph (A)(iii), any credit 
                        allowance date (as defined in section 
                        54A(e)(1)), and
                            ``(ii) in the case of a build 
                        America bond (as defined in section 
                        54AA(d)), any interest payment date (as 
                        defined in section 54AA(e)).
            ``(2) Stripped tax credit bonds.--If the ownership 
        of a tax credit bond is separated from the credit with 
        respect to such bond, subsection (a) shall be applied 
        by reference to the instruments evidencing the 
        entitlement to the credit rather than the tax credit 
        bond.
    ``(f) Regulations, etc.--The Secretary shall prescribe such 
regulations or other guidance as may be necessary or 
appropriate to carry out the purposes of this section, 
including methods for determining a shareholder's proportionate 
share of credits.''.
    (b) Conforming Amendments.--
            (1) Section 54(l) is amended by striking paragraph 
        (4) and by redesignating paragraphs (5) and (6) as 
        paragraphs (4) and (5), respectively.
            (2) Section 54A(h) is amended to read as follows:
    ``(h) Bonds Held by Real Estate Investment Trusts.--If any 
qualified tax credit bond is held by a real estate investment 
trust, the credit determined under subsection (a) shall be 
allowed to beneficiaries of such trust (and any gross income 
included under subsection (f) with respect to such credit shall 
be distributed to such beneficiaries) under procedures 
prescribed by the Secretary.''.
            (3) The table of sections for part I of subchapter 
        M of chapter 1 is amended by inserting after the item 
        relating to section 853 the following new item:

``Sec. 853A. Credits from tax credit bonds allowed to shareholders.''.

    (c) Effective Date.--The amendments made by this section 
shall apply to taxable years ending after the date of the 
enactment of this Act.

                      Subtitle G--Other Provisions

SEC. 1601. APPLICATION OF CERTAIN LABOR STANDARDS TO PROJECTS FINANCED 
                    WITH CERTAIN TAX-FAVORED BONDS.

    Subchapter IV of chapter 31 of the title 40, United States 
Code, shall apply to projects financed with the proceeds of--
            (1) any new clean renewable energy bond (as defined 
        in section 54C of the Internal Revenue Code of 1986) 
        issued after the date of the enactment of this Act,
            (2) any qualified energy conservation bond (as 
        defined in section 54D of the Internal Revenue Code of 
        1986) issued after the date of the enactment of this 
        Act,
            (3) any qualified zone academy bond (as defined in 
        section 54E of the Internal Revenue Code of 1986) 
        issued after the date of the enactment of this Act,
            (4) any qualified school construction bond (as 
        defined in section 54F of the Internal Revenue Code of 
        1986), and
            (5) any recovery zone economic development bond (as 
        defined in section 1400U-2 of the Internal Revenue Code 
        of 1986).

SEC. 1602. GRANTS TO STATES FOR LOW-INCOME HOUSING PROJECTS IN LIEU OF 
                    LOW-INCOME HOUSING CREDIT ALLOCATIONS FOR 2009.

    (a) In General.--The Secretary of the Treasury shall make a 
grant to the housing credit agency of each State in an amount 
equal to such State's low-income housing grant election amount.
    (b) Low-Income Housing Grant Election Amount.--For purposes 
of this section, the term ``low-income housing grant election 
amount'' means, with respect to any State, such amount as the 
State may elect which does not exceed 85 percent of the product 
of--
            (1) the sum of--
                    (A) 100 percent of the State housing credit 
                ceiling for 2009 which is attributable to 
                amounts described in clauses (i) and (iii) of 
                section 42(h)(3)(C) of the Internal Revenue 
                Code of 1986, and
                    (B) 40 percent of the State housing credit 
                ceiling for 2009 which is attributable to 
                amounts described in clauses (ii) and (iv) of 
                such section, multiplied by
            (2) 10.
    (c) Subawards for Low-Income Buildings.--
            (1) In general.--A State housing credit agency 
        receiving a grant under this section shall use such 
        grant to make subawards to finance the construction or 
        acquisition and rehabilitation of qualified low-income 
        buildings. A subaward under this section may be made to 
        finance a qualified low-income building with or without 
        an allocation under section 42 of the Internal Revenue 
        Code of 1986, except that a State housing credit agency 
        may make subawards to finance qualified low-income 
        buildings without an allocation only if it makes a 
        determination that such use will increase the total 
        funds available to the State to build and rehabilitate 
        affordable housing. In complying with such 
        determination requirement, a State housing credit 
        agency shall establish a process in which applicants 
        that are allocated credits are required to demonstrate 
        good faith efforts to obtain investment commitments for 
        such credits before the agency makes such subawards.
            (2) Subawards subject to same requirements as low-
        income housing credit allocations.--Any such subaward 
        with respect to any qualified low-income building shall 
        be made in the same manner and shall be subject to the 
        same limitations (including rent, income, and use 
        restrictions on such building) as an allocation of 
        housing credit dollar amount allocated by such State 
        housing credit agency under section 42 of the Internal 
        Revenue Code of 1986, except that such subawards shall 
        not be limited by, or otherwise affect (except as 
        provided in subsection (h)(3)(J) of such section), the 
        State housing credit ceiling applicable to such agency.
            (3) Compliance and asset management.--The State 
        housing credit agency shall perform asset management 
        functions to ensure compliance with section 42 of the 
        Internal Revenue Code of 1986 and the long-term 
        viability of buildings funded by any subaward under 
        this section. The State housing credit agency may 
        collect reasonable fees from a subaward recipient to 
        cover expenses associated with the performance of its 
        duties under this paragraph. The State housing credit 
        agency may retain an agent or other private contractor 
        to satisfy the requirements of this paragraph.
            (4) Recapture.--The State housing credit agency 
        shall impose conditions or restrictions, including a 
        requirement providing for recapture, on any subaward 
        under this section so as to assure that the building 
        with respect to which such subaward is made remains a 
        qualified low-income building during the compliance 
        period. Any such recapture shall be payable to the 
        Secretary of the Treasury for deposit in the general 
        fund of the Treasury and may be enforced by means of 
        liens or such other methods as the Secretary of the 
        Treasury determines appropriate.
    (d) Return of Unused Grant Funds.--Any grant funds not used 
to make subawards under this section before January 1, 2011, 
shall be returned to the Secretary of the Treasury on such 
date. Any subawards returned to the State housing credit agency 
on or after such date shall be promptly returned to the 
Secretary of the Treasury. Any amounts returned to the 
Secretary of the Treasury under this subsection shall be 
deposited in the general fund of the Treasury.
    (e) Definitions.--Any term used in this section which is 
also used in section 42 of the Internal Revenue Code of 1986 
shall have the same meaning for purposes of this section as 
when used in such section 42. Any reference in this section to 
the Secretary of the Treasury shall be treated as including the 
Secretary's delegate.
    (f) Appropriations.--There is hereby appropriated to the 
Secretary of the Treasury such sums as may be necessary to 
carry out this section.

SEC. 1603. GRANTS FOR SPECIFIED ENERGY PROPERTY IN LIEU OF TAX CREDITS.

    (a) In General.--Upon application, the Secretary of the 
Treasury shall, subject to the requirements of this section, 
provide a grant to each person who places in service specified 
energy property to reimburse such person for a portion of the 
expense of such property as provided in subsection (b). No 
grant shall be made under this section with respect to any 
property unless such property--
            (1) is placed in service during 2009 or 2010, or
            (2) is placed in service after 2010 and before the 
        credit termination date with respect to such property, 
        but only if the construction of such property began 
        during 2009 or 2010.
    (b) Grant Amount.--
            (1) In general.--The amount of the grant under 
        subsection (a) with respect to any specified energy 
        property shall be the applicable percentage of the 
        basis of such property.
            (2) Applicable percentage.--For purposes of 
        paragraph (1), the term ``applicable percentage'' 
        means--
                    (A) 30 percent in the case of any property 
                described in paragraphs (1) through (4) of 
                subsection (d), and
                    (B) 10 percent in the case of any other 
                property.
            (3) Dollar limitations.--In the case of property 
        described in paragraph (2), (6), or (7) of subsection 
        (d), the amount of any grant under this section with 
        respect to such property shall not exceed the 
        limitation described in section 48(c)(1)(B), 
        48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue 
        Code of 1986, respectively, with respect to such 
        property.
    (c) Time for Payment of Grant.--The Secretary of the 
Treasury shall make payment of any grant under subsection (a) 
during the 60-day period beginning on the later of--
            (1) the date of the application for such grant, or
            (2) the date the specified energy property for 
        which the grant is being made is placed in service.
    (d) Specified Energy Property.--For purposes of this 
section, the term ``specified energy property'' means any of 
the following:
            (1) Qualified facilities.--Any qualified property 
        (as defined in section 48(a)(5)(D) of the Internal 
        Revenue Code of 1986) which is part of a qualified 
        facility (within the meaning of section 45 of such 
        Code) described in paragraph (1), (2), (3), (4), (6), 
        (7), (9), or (11) of section 45(d) of such Code.
            (2) Qualified fuel cell property.--Any qualified 
        fuel cell property (as defined in section 48(c)(1) of 
        such Code).
            (3) Solar property.--Any property described in 
        clause (i) or (ii) of section 48(a)(3)(A) of such Code.
            (4) Qualified small wind energy property.--Any 
        qualified small wind energy property (as defined in 
        section 48(c)(4) of such Code).
            (5) Geothermal property.--Any property described in 
        clause (iii) of section 48(a)(3)(A) of such Code.
            (6) Qualified microturbine property.--Any qualified 
        microturbine property (as defined in section 48(c)(2) 
        of such Code).
            (7) Combined heat and power system property.--Any 
        combined heat and power system property (as defined in 
        section 48(c)(3) of such Code).
            (8) Geothermal heat pump property.--Any property 
        described in clause (vii) of section 48(a)(3)(A) of 
        such Code.
Such term shall not include any property unless depreciation 
(or amortization in lieu of depreciation) is allowable with 
respect to such property.
    (e) Credit Termination Date.--For purposes of this section, 
the term ``credit termination date'' means--
            (1) in the case of any specified energy property 
        which is part of a facility described in paragraph (1) 
        of section 45(d) of the Internal Revenue Code of 1986, 
        January 1, 2013,
            (2) in the case of any specified energy property 
        which is part of a facility described in paragraph (2), 
        (3), (4), (6), (7), (9), or (11) of section 45(d) of 
        such Code, January 1, 2014, and
            (3) in the case of any specified energy property 
        described in section 48 of such Code, January 1, 2017.
In the case of any property which is described in paragraph (3) 
and also in another paragraph of this subsection, paragraph (3) 
shall apply with respect to such property.
    (f) Application of Certain Rules.--In making grants under 
this section, the Secretary of the Treasury shall apply rules 
similar to the rules of section 50 of the Internal Revenue Code 
of 1986. In applying such rules, if the property is disposed 
of, or otherwise ceases to be specified energy property, the 
Secretary of the Treasury shall provide for the recapture of 
the appropriate percentage of the grant amount in such manner 
as the Secretary of the Treasury determines appropriate.
    (g) Exception for Certain Non-Taxpayers.--The Secretary of 
the Treasury shall not make any grant under this section to--
            (1) any Federal, State, or local government (or any 
        political subdivision, agency, or instrumentality 
        thereof),
            (2) any organization described in section 501(c) of 
        the Internal Revenue Code of 1986 and exempt from tax 
        under section 501(a) of such Code,
            (3) any entity referred to in paragraph (4) of 
        section 54(j) of such Code, or
            (4) any partnership or other pass-thru entity any 
        partner (or other holder of an equity or profits 
        interest) of which is described in paragraph (1), (2) 
        or (3).
    (h) Definitions.--Terms used in this section which are also 
used in section 45 or 48 of the Internal Revenue Code of 1986 
shall have the same meaning for purposes of this section as 
when used in such section 45 or 48. Any reference in this 
section to the Secretary of the Treasury shall be treated as 
including the Secretary's delegate.
    (i) Appropriations.--There is hereby appropriated to the 
Secretary of the Treasury such sums as may be necessary to 
carry out this section.
    (j) Termination.--The Secretary of the Treasury shall not 
make any grant to any person under this section unless the 
application of such person for such grant is received before 
October 1, 2011.

SEC. 1604. INCREASE IN PUBLIC DEBT LIMIT.

    Subsection (b) of section 3101 of title 31, United States 
Code, is amended by striking out the dollar limitation 
contained in such subsection and inserting 
``$12,104,000,000,000''.

 Subtitle H--Prohibition on Collection of Certain Payments Made Under 
          the Continued Dumping and Subsidy Offset Act of 2000

SEC. 1701. PROHIBITION ON COLLECTION OF CERTAIN PAYMENTS MADE UNDER THE 
                    CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000.

    (a) In General.--Notwithstanding any other provision of 
law, neither the Secretary of Homeland Security nor any other 
person may--
            (1) require repayment of, or attempt in any other 
        way to recoup, any payments described in subsection 
        (b); or
            (2) offset any past, current, or future 
        distributions of antidumping or countervailing duties 
        assessed with respect to imports from countries that 
        are not parties to the North American Free Trade 
        Agreement in an attempt to recoup any payments 
        described in subsection (b).
    (b) Payments Described.--Payments described in this 
subsection are payments of antidumping or countervailing duties 
made pursuant to the Continued Dumping and Subsidy Offset Act 
of 2000 (section 754 of the Tariff Act of 1930 (19 U.S.C. 
1675c; repealed by subtitle F of title VII of the Deficit 
Reduction Act of 2005 (Public Law 109-171; 120 Stat. 154))) 
that were--
            (1) assessed and paid on imports of goods from 
        countries that are parties to the North American Free 
        Trade Agreement; and
            (2) distributed on or after January 1, 2001, and 
        before January 1, 2006.
    (c) Payment of Funds Collected or Withheld.--Not later than 
the date that is 60 days after the date of the enactment of 
this Act, the Secretary of Homeland Security shall--
            (1) refund any repayments, or any other recoupment, 
        of payments described in subsection (b); and
            (2) fully distribute any antidumping or 
        countervailing duties that the U.S. Customs and Border 
        Protection is withholding as an offset as described in 
        subsection (a)(2).
    (d) Limitation.--Nothing in this section shall be construed 
to prevent the Secretary of Homeland Security, or any other 
person, from requiring repayment of, or attempting to otherwise 
recoup, any payments described in subsection (b) as a result 
of--
            (1) a finding of false statements or other 
        misconduct by a recipient of such a payment; or
            (2) the reliquidation of an entry with respect to 
        which such a payment was made.

                Subtitle I--Trade Adjustment Assistance

SEC. 1800. SHORT TITLE.

    This subtitle may be cited as the ``Trade and Globalization 
Adjustment Assistance Act of 2009''.

            PART I--TRADE ADJUSTMENT ASSISTANCE FOR WORKERS

   Subpart A--Trade Adjustment Assistance for Service Sector Workers

SEC. 1801. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE TO SERVICE SECTOR 
                    AND PUBLIC AGENCY WORKERS; SHIFTS IN PRODUCTION.

    (a) Definitions.--Section 247 of the Trade Act of 1974 (19 
U.S.C. 2319) is amended--
            (1) in paragraph (1)--
                    (A) by striking ``or appropriate 
                subdivision of a firm''; and
                    (B) by striking ``or subdivision'';
            (2) in paragraph (2), by striking ``employment--'' 
        and all that follows and inserting ``employment, has 
        been totally or partially separated from such 
        employment.'';
            (3) by inserting after paragraph (2) the following:
            ``(3) Subject to section 222(d)(5), the term `firm' 
        means--
                    ``(A) a firm, including an agricultural 
                firm, service sector firm, or public agency; or
                    ``(B) an appropriate subdivision 
                thereof.'';
            (4) by inserting after paragraph (6) the following:
            ``(7) The term `public agency' means a department 
        or agency of a State or local government or of the 
        Federal Government, or a subdivision thereof.'';
            (5) in paragraph (11), by striking ``, or in a 
        subdivision of which,''; and
            (6) by adding at the end the following:
            ``(18) The term `service sector firm' means a firm 
        engaged in the business of supplying services.''.
    (b) Group Eligibility Requirements.--Section 222 of the 
Trade Act of 1974 (19 U.S.C. 2272) is amended--
            (1) in subsection (a)(2)--
                    (A) by amending subparagraph (A)(ii) to 
                read as follows:
            ``(ii)(I) imports of articles or services like or 
        directly competitive with articles produced or services 
        supplied by such firm have increased;
            ``(II) imports of articles like or directly 
        competitive with articles--
                    ``(aa) into which one or more component 
                parts produced by such firm are directly 
                incorporated, or
                    ``(bb) which are produced directly using 
                services supplied by such firm,
        have increased; or
            ``(III) imports of articles directly incorporating 
        one or more component parts produced outside the United 
        States that are like or directly competitive with 
        imports of articles incorporating one or more component 
        parts produced by such firm have increased; and''; and
                    (B) by amending subparagraph (B) to read as 
                follows:
            ``(B)(i)(I) there has been a shift by such workers' 
        firm to a foreign country in the production of articles 
        or the supply of services like or directly competitive 
        with articles which are produced or services which are 
        supplied by such firm; or
            ``(II) such workers' firm has acquired from a 
        foreign country articles or services that are like or 
        directly competitive with articles which are produced 
        or services which are supplied by such firm; and
            ``(ii) the shift described in clause (i)(I) or the 
        acquisition of articles or services described in clause 
        (i)(II) contributed importantly to such workers' 
        separation or threat of separation.'';
            (2) by redesignating subsections (b) and (c) as 
        subsections (c) and (d), respectively; and
            (3) by inserting after subsection (a) the 
        following:
    ``(b) Adversely Affected Workers in Public Agencies.--A 
group of workers in a public agency shall be certified by the 
Secretary as eligible to apply for adjustment assistance under 
this chapter pursuant to a petition filed under section 221 if 
the Secretary determines that--
            ``(1) a significant number or proportion of the 
        workers in the public agency have become totally or 
        partially separated, or are threatened to become 
        totally or partially separated;
            ``(2) the public agency has acquired from a foreign 
        country services like or directly competitive with 
        services which are supplied by such agency; and
            ``(3) the acquisition of services described in 
        paragraph (2) contributed importantly to such workers' 
        separation or threat of separation.''.
    (c) Basis for Secretary's Determinations.--Section 222 of 
the Trade Act of 1974 (19 U.S.C. 2272), as amended, is further 
amended by adding at the end the following:
    ``(e) Basis for Secretary's Determinations.--
            ``(1) In general.--The Secretary shall, in 
        determining whether to certify a group of workers under 
        section 223, obtain from the workers' firm, or a 
        customer of the workers' firm, information the 
        Secretary determines to be necessary to make the 
        certification, through questionnaires and in such other 
        manner as the Secretary determines appropriate.
            ``(2) Additional information.--The Secretary may 
        seek additional information to determine whether to 
        certify a group of workers under subsection (a), (b), 
        or (c)--
                    ``(A) by contacting--
                            ``(i) officials or employees of the 
                        workers' firm;
                            ``(ii) officials of customers of 
                        the workers' firm;
                            ``(iii) officials of certified or 
                        recognized unions or other duly 
                        authorized representatives of the group 
                        of workers; or
                            ``(iv) one-stop operators or one-
                        stop partners (as defined in section 
                        101 of the Workforce Investment Act of 
                        1998 (29 U.S.C. 2801)); or
                    ``(B) by using other available sources of 
                information.
            ``(3) Verification of information.--
                    ``(A) Certification.--The Secretary shall 
                require a firm or customer to certify--
                            ``(i) all information obtained 
                        under paragraph (1) from the firm or 
                        customer (as the case may be) through 
                        questionnaires; and
                            ``(ii) all other information 
                        obtained under paragraph (1) from the 
                        firm or customer (as the case may be) 
                        on which the Secretary relies in making 
                        a determination under section 223, 
                        unless the Secretary has a reasonable 
                        basis for determining that such 
                        information is accurate and complete 
                        without being certified.
                    ``(B) Use of subpoenas.--The Secretary 
                shall require the workers' firm or a customer 
                of the workers' firm to provide information 
                requested by the Secretary under paragraph (1) 
                by subpoena pursuant to section 249 if the firm 
                or customer (as the case may be) fails to 
                provide the information within 20 days after 
                the date of the Secretary's request, unless the 
                firm or customer (as the case may be) 
                demonstrates to the satisfaction of the 
                Secretary that the firm or customer (as the 
                case may be) will provide the information 
                within a reasonable period of time.
                    ``(C) Protection of confidential 
                information.--The Secretary may not release 
                information obtained under paragraph (1) that 
                the Secretary considers to be confidential 
                business information unless the firm or 
                customer (as the case may be) submitting the 
                confidential business information had notice, 
                at the time of submission, that the information 
                would be released by the Secretary, or the firm 
                or customer (as the case may be) subsequently 
                consents to the release of the information. 
                Nothing in this subparagraph shall be construed 
                to prohibit the Secretary from providing such 
                confidential business information to a court in 
                camera or to another party under a protective 
                order issued by a court.''.
    (d) Penalties.--Section 244 of the Trade Act of 1974 (19 
U.S.C. 2316) is amended to read as follows:

``SEC. 244. PENALTIES.

    ``Any person who--
            ``(1) makes a false statement of a material fact 
        knowing it to be false, or knowingly fails to disclose 
        a material fact, for the purpose of obtaining or 
        increasing for that person or for any other person any 
        payment authorized to be furnished under this chapter 
        or pursuant to an agreement under section 239, or
            ``(2) makes a false statement of a material fact 
        knowing it to be false, or knowingly fails to disclose 
        a material fact, when providing information to the 
        Secretary during an investigation of a petition under 
        section 221,
shall be imprisoned for not more than 1 year, or fined under 
title 18, United States Code, or both.''.
    (e) Conforming Amendments.--
            (1) Section 221(a) of the Trade Act of 1974 (19 
        U.S.C. 2271(a)) is amended--
                    (A) in paragraph (1)--
                            (i) in the matter preceding 
                        subparagraph (A)--
                                    (I) by striking 
                                ``Secretary'' and inserting 
                                ``Secretary of Labor''; and
                                    (II) by striking ``or 
                                subdivision'' and inserting 
                                ``(as defined in section 
                                247)''; and
                            (ii) in subparagraph (A), by 
                        striking ``(including workers in an 
                        agricultural firm or subdivision of any 
                        agricultural firm)'';
                    (B) in paragraph (2)(A), by striking 
                ``rapid response assistance'' and inserting 
                ``rapid response activities''; and
                    (C) in paragraph (3), by inserting ``and on 
                the website of the Department of Labor'' after 
                ``Federal Register''.
            (2) Section 222 of the Trade Act of 1974 (19 U.S.C. 
        2272), as amended, is further amended--
                    (A) by striking ``(including workers in any 
                agricultural firm or subdivision of an 
                agricultural firm)'' each place it appears;
                    (B) in subsection (a)--
                            (i) in paragraph (1), by striking 
                        ``, or an appropriate subdivision of 
                        the firm,''; and
                            (ii) in paragraph (2), by striking 
                        ``or subdivision'' each place it 
                        appears;
                    (C) in subsection (c) (as redesignated)--
                            (i) in paragraph (2)--
                                    (I) by striking ``(or 
                                subdivision)'' each place it 
                                appears;
                                    (II) by inserting ``or 
                                service'' after ``the 
                                article''; and
                                    (III) by striking 
                                ``(c)(3)'' and inserting 
                                ``(d)(3)''; and
                            (ii) in paragraph (3), by striking 
                        ``(or subdivision)'' each place it 
                        appears; and
                    (D) in subsection (d) (as redesignated)--
                            (i) by striking ``For purposes'' 
                        and inserting ``Definitions.--For 
                        purposes'';
                            (ii) in paragraph (2), by striking 
                        ``, or appropriate subdivision of a 
                        firm,'' each place it appears;
                            (iii) by amending paragraph (3) to 
                        read as follows:
            ``(3) Downstream producer.--
                    ``(A) In general.--The term `downstream 
                producer' means a firm that performs 
                additional, value-added production processes or 
                services directly for another firm for articles 
                or services with respect to which a group of 
                workers in such other firm has been certified 
                under subsection (a).
                    ``(B) Value-added production processes or 
                services.--For purposes of subparagraph (A), 
                value-added production processes or services 
                include final assembly, finishing, testing, 
                packaging, or maintenance or transportation 
                services.'';
                            (iv) in paragraph (4)--
                                    (I) by striking ``(or 
                                subdivision)''; and
                                    (II) by inserting ``, or 
                                services, used in the 
                                production of articles or in 
                                the supply of services, as the 
                                case may be,'' after ``for 
                                articles''; and
                            (v) by adding at the end the 
                        following:
            ``(5) Reference to firm.--For purposes of 
        subsection (a), the term `firm' does not include a 
        public agency.''.
            (3) Section 231(a)(2) of the Trade Act of 1974 (19 
        U.S.C. 2291(a)(2)) is amended--
                    (A) in the matter preceding subparagraph 
                (A), by striking ``or subdivision of a firm''; 
                and
                    (B) in subparagraph (C), by striking ``or 
                subdivision''.

SEC. 1802. SEPARATE BASIS FOR CERTIFICATION.

    Section 222 of the Trade Act of 1974 (19 U.S.C. 2272), as 
amended, is further amended by adding at the end the following:
    ``(f) Firms Identified by the International Trade 
Commission.--Notwithstanding any other provision of this 
chapter, a group of workers covered by a petition filed under 
section 221 shall be certified under subsection (a) as eligible 
to apply for adjustment assistance under this chapter if--
            ``(1) the workers' firm is publicly identified by 
        name by the International Trade Commission as a member 
        of a domestic industry in an investigation resulting 
        in--
                    ``(A) an affirmative determination of 
                serious injury or threat thereof under section 
                202(b)(1);
                    ``(B) an affirmative determination of 
                market disruption or threat thereof under 
                section 421(b)(1); or
                    ``(C) an affirmative final determination of 
                material injury or threat thereof under section 
                705(b)(1)(A) or 735(b)(1)(A) of the Tariff Act 
                of 1930 (19 U.S.C. 1671d(b)(1)(A) and 
                1673d(b)(1)(A));
            ``(2) the petition is filed during the 1-year 
        period beginning on the date on which--
                    ``(A) a summary of the report submitted to 
                the President by the International Trade 
                Commission under section 202(f)(1) with respect 
                to the affirmative determination described in 
                paragraph (1)(A) is published in the Federal 
                Register under section 202(f)(3); or
                    ``(B) notice of an affirmative 
                determination described in subparagraph (B) or 
                (C) of paragraph (1) is published in the 
                Federal Register; and
            ``(3) the workers have become totally or partially 
        separated from the workers' firm within--
                    ``(A) the 1-year period described in 
                paragraph (2); or
                    ``(B) notwithstanding section 223(b), the 
                one-year period preceding the one-year period 
                described in paragraph (2).''.

SEC. 1803. DETERMINATIONS BY SECRETARY OF LABOR.

    Section 223 of the Trade Act of 1974 (19 U.S.C. 2273) is 
amended--
            (1) in subsection (b), by striking ``or appropriate 
        subdivision of the firm before his application'' and 
        all that follows and inserting ``before the worker's 
        application under section 231 occurred more than one 
        year before the date of the petition on which such 
        certification was granted.'';
            (2) in subsection (c), by striking ``together with 
        his reasons'' and inserting ``and on the website of the 
        Department of Labor, together with the Secretary's 
        reasons'';
            (3) in subsection (d)--
                    (A) by striking ``or subdivision of the 
                firm'' and all that follows through ``he 
                shall'' and inserting ``, that total or partial 
                separations from such firm are no longer 
                attributable to the conditions specified in 
                section 222, the Secretary shall''; and
                    (B) by striking ``together with his 
                reasons'' and inserting ``and on the website of 
                the Department of Labor, together with the 
                Secretary's reasons''; and
            (4) by adding at the end the following:
    ``(e) Standards for Investigations and Determinations.--
            ``(1) In general.--The Secretary shall establish 
        standards, including data requirements, for 
        investigations of petitions filed under section 221 and 
        criteria for making determinations under subsection 
        (a).
            ``(2) Consultations.--Not less than 90 days before 
        issuing a final rule with respect to the standards 
        required under paragraph (1), the Secretary shall 
        consult with the Committee on Finance of the Senate and 
        the Committee on Ways and Means of the House of 
        Representatives with respect to such rule.''.

SEC. 1804. MONITORING AND REPORTING RELATING TO SERVICE SECTOR.

    (a) In General.--Section 282 of the Trade Act of 1974 (19 
U.S.C. 2393) is amended--
            (1) in the heading, by striking ``SYSTEM'' and 
        inserting ``AND DATA COLLECTION'';
            (2) in the first sentence--
                    (A) by striking ``The Secretary'' and 
                inserting ``(a) Monitoring Programs.--The 
                Secretary'';
                    (B) by inserting ``and services'' after 
                ``imports of articles'';
                    (C) by inserting ``and domestic supply of 
                services'' after ``domestic production'';
                    (D) by inserting ``or supplying services'' 
                after ``producing articles''; and
                    (E) by inserting ``, or supply of 
                services,'' after ``changes in production''; 
                and
            (3) by adding at the end the following:
    ``(b) Collection of Data and Reports on Service Sector.--
            ``(1) Secretary of labor.--Not later than 90 days 
        after the date of the enactment of this subsection, the 
        Secretary of Labor shall implement a system to collect 
        data on adversely affected workers employed in the 
        service sector that includes the number of workers by 
        State and industry, and by the cause of the dislocation 
        of each worker, as identified in the certification.
            ``(2) Secretary of commerce.--Not later than 1 year 
        after such date of enactment, the Secretary of Commerce 
        shall, in consultation with the Secretary of Labor, 
        conduct a study and submit to the Committee on Finance 
        of the Senate and the Committee on Ways and Means of 
        the House of Representatives a report on ways to 
        improve the timeliness and coverage of data on trade in 
        services, including methods to identify increased 
        imports due to the relocation of United States firms to 
        foreign countries, and increased imports due to United 
        States firms acquiring services from firms in foreign 
        countries.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
282 and inserting the following:

``Sec. 282. Trade monitoring and data collection.''.

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

    Subpart B--Industry Notifications Following Certain Affirmative 
                             Determinations

SEC. 1811. NOTIFICATIONS FOLLOWING CERTAIN AFFIRMATIVE DETERMINATIONS.

    (a) In General.--Section 224 of the Trade Act of 1974 (19 
U.S.C. 2274) is amended--
            (1) by amending the heading to read as follows:

``SEC. 224. STUDY AND NOTIFICATIONS REGARDING CERTAIN AFFIRMATIVE 
                    DETERMINATIONS; INDUSTRY NOTIFICATION OF 
                    ASSISTANCE.'';

            (2) in subsection (a), by striking ``Whenever'' and 
        inserting ``Study of Domestic Industry.--Whenever'';
            (3) in subsection (b)--
                    (A) by striking ``The report'' and 
                inserting ``Report by the Secretary.--The 
                report''; and
                    (B) by inserting ``and on the website of 
                the Department of Labor'' after ``Federal 
                Register''; and
            (4) by adding at the end the following:
    ``(c) Notifications Following Affirmative Global Safeguard 
Determinations.--Upon making an affirmative determination under 
section 202(b)(1), the Commission shall promptly notify the 
Secretary of Labor and the Secretary of Commerce and, in the 
case of a determination with respect to an agricultural 
commodity, the Secretary of Agriculture, of the determination.
    ``(d) Notifications Following Affirmative Bilateral or 
Plurilateral Safeguard Determinations.--
            ``(1) Notifications of determinations of market 
        disruption.--Upon making an affirmative determination 
        under section 421(b)(1), the Commission shall promptly 
        notify the Secretary of Labor and the Secretary of 
        Commerce and, in the case of a determination with 
        respect to an agricultural commodity, the Secretary of 
        Agriculture, of the determination.
            ``(2) Notifications regarding trade agreement 
        safeguards.--Upon making an affirmative determination 
        in a proceeding initiated under an applicable safeguard 
        provision (other than a provision described in 
        paragraph (3)) that is enacted to implement a trade 
        agreement to which the United States is a party, the 
        Commission shall promptly notify the Secretary of Labor 
        and the Secretary of Commerce and, in the case of a 
        determination with respect to an agricultural 
        commodity, the Secretary of Agriculture, of the 
        determination.
            ``(3) Notifications regarding textile and apparel 
        safeguards.--Upon making an affirmative determination 
        in a proceeding initiated under any safeguard provision 
        relating to textile and apparel articles that is 
        enacted to implement a trade agreement to which the 
        United States is a party, the President shall promptly 
        notify the Secretary of Labor and the Secretary of 
        Commerce of the determination.
    ``(e) Notifications Following Certain Affirmative 
Determinations Under Title VII of the Tariff Act of 1930.--Upon 
making an affirmative determination under section 705(b)(1)(A) 
or 735(b)(1)(A) of the Tariff Act of 1930 (19 U.S.C. 
1671d(b)(1)(A) and 1673d(b)(1)(A)), the Commission shall 
promptly notify the Secretary of Labor and the Secretary of 
Commerce and, in the case of a determination with respect to an 
agricultural commodity, the Secretary of Agriculture, of the 
determination.
    ``(f) Industry Notification of Assistance.--Upon receiving 
a notification of a determination under subsection (c), (d), or 
(e) with respect to a domestic industry--
            ``(1) the Secretary of Labor shall--
                    ``(A) notify the representatives of the 
                domestic industry affected by the 
                determination, firms publicly identified by 
                name during the course of the proceeding 
                relating to the determination, and any 
                certified or recognized union or, to the extent 
                practicable, other duly authorized 
                representative of workers employed by such 
                representatives of the domestic industry, of--
                            ``(i) the allowances, training, 
                        employment services, and other benefits 
                        available under this chapter;
                            ``(ii) the manner in which to file 
                        a petition and apply for such benefits; 
                        and
                            ``(iii) the availability of 
                        assistance in filing such petitions;
                    ``(B) notify the Governor of each State in 
                which one or more firms in the industry 
                described in subparagraph (A) are located of 
                the Commission's determination and the identity 
                of the firms; and
                    ``(C) upon request, provide any assistance 
                that is necessary to file a petition under 
                section 221;
            ``(2) the Secretary of Commerce shall--
                    ``(A) notify the representatives of the 
                domestic industry affected by the determination 
                and any firms publicly identified by name 
                during the course of the proceeding relating to 
                the determination of--
                            ``(i) the benefits available under 
                        chapter 3;
                            ``(ii) the manner in which to file 
                        a petition and apply for such benefits; 
                        and
                            ``(iii) the availability of 
                        assistance in filing such petitions; 
                        and
                    ``(B) upon request, provide any assistance 
                that is necessary to file a petition under 
                section 251; and
            ``(3) in the case of an affirmative determination 
        based upon imports of an agricultural commodity, the 
        Secretary of Agriculture shall--
                    ``(A) notify representatives of the 
                domestic industry affected by the determination 
                and any agricultural commodity producers 
                publicly identified by name during the course 
                of the proceeding relating to the determination 
                of--
                            ``(i) the benefits available under 
                        chapter 6;
                            ``(ii) the manner in which to file 
                        a petition and apply for such benefits; 
                        and
                            ``(iii) the availability of 
                        assistance in filing such petitions; 
                        and
                    ``(B) upon request, provide any assistance 
                that is necessary to file a petition under 
                section 292.
    ``(g) Representatives of the Domestic Industry.--For 
purposes of subsection (f), the term `representatives of the 
domestic industry' means the persons that petitioned for relief 
in connection with--
            ``(1) a proceeding under section 202 or 421 of this 
        Act;
            ``(2) a proceeding under section 702(b) or 732(b) 
        of the Tariff Act of 1930 (19 U.S.C. 1671d(b) and 
        1673d(b)); or
            ``(3) any safeguard investigation described in 
        subsection (d)(2) or (d)(3).''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
224 and inserting the following:

``Sec. 224. Study and notifications regarding certain affirmative 
          determinations; industry notification of assistance.''.

SEC. 1812. NOTIFICATION TO SECRETARY OF COMMERCE.

    Section 225 of the Trade Act of 1974 (19 U.S.C. 2275) is 
amended by adding at the end the following:
    ``(c) Upon issuing a certification under section 223, the 
Secretary shall notify the Secretary of Commerce of the 
identity of each firm covered by the certification.''.

                      Subpart C--Program Benefits

SEC. 1821. QUALIFYING REQUIREMENTS FOR WORKERS.

    (a) In General.--Section 231(a)(5)(A)(ii) of the Trade Act 
of 1974 (19 U.S.C. 2291 (a)(5)(A)(ii)) is amended--
            (1) by striking subclauses (I) and (II) and 
        inserting the following:
                            ``(I) in the case of a worker whose 
                        most recent total separation from 
                        adversely affected employment that 
                        meets the requirements of paragraphs 
                        (1) and (2) occurs after the date on 
                        which the Secretary issues a 
                        certification covering the worker, the 
                        last day of the 26th week after such 
                        total separation,
                            ``(II) in the case of a worker 
                        whose most recent total separation from 
                        adversely affected employment that 
                        meets the requirements of paragraphs 
                        (1) and (2) occurs before the date on 
                        which the Secretary issues a 
                        certification covering the worker, the 
                        last day of the 26th week after the 
                        date of such certification,'';
            (2) in subclause (III)--
                    (A) by striking ``later of the dates 
                specified in subclause (I) or (II)'' and 
                inserting ``date specified in subclause (I) or 
                (II), as the case may be''; and
                    (B) by striking ``or'' at the end;
            (3) by redesignating subclause (IV) as subclause 
        (V); and
            (4) by inserting after subclause (III) the 
        following:
                            ``(IV) in the case of a worker who 
                        fails to enroll by the date required by 
                        subclause (I), (II), or (III), as the 
                        case may be, due to the failure to 
                        provide the worker with timely 
                        information regarding the date 
                        specified in such subclause, the last 
                        day of a period determined by the 
                        Secretary, or''.
    (b) Waivers of Training Requirements.--Section 231(c) of 
the Trade Act of 1974 (19 U.S.C. 2291(c)) is amended--
            (1) in paragraph (1)(B)--
                    (A) by striking ``The worker possesses'' 
                and inserting the following:
                            ``(i) In general.--The worker 
                        possesses''; and
                    (B) by adding at the end the following:
                            ``(ii) Marketable skills defined.--
                        For purposes of clause (i), the term 
                        `marketable skills' may include the 
                        possession of a postgraduate degree 
                        from an institution of higher education 
                        (as defined in section 102 of the 
                        Higher Education Act of 1965 (20 U.S.C. 
                        1002)) or an equivalent institution, or 
                        the possession of an equivalent 
                        postgraduate certification in a 
                        specialized field.'';
            (2) in paragraph (2)(A), by striking ``A waiver'' 
        and inserting ``Except as provided in paragraph (3)(B), 
        a waiver''; and
            (3) in paragraph (3)--
                    (A) in subparagraph (A), by striking 
                ``Pursuant to an agreement under section 239, 
                the Secretary may authorize a'' and inserting 
                ``An agreement under section 239 shall 
                authorize a'';
                    (B) by redesignating subparagraph (B) as 
                subparagraph (C); and
                    (C) by inserting after subparagraph (A) the 
                following:
                    ``(B) Review of waivers.--An agreement 
                under section 239 shall require a cooperating 
                State to review each waiver issued by the State 
                under subparagraph (A), (B), (D), (E), or (F) 
                of paragraph (1)--
                            ``(i) 3 months after the date on 
                        which the State issues the waiver; and
                            ``(ii) on a monthly basis 
                        thereafter.''.
    (c) Conforming Amendments.--
            (1) Section 231 of the Trade Act of 1974 (19 U.S.C. 
        2291), as amended, is further amended--
                    (A) in subsection (a), in the matter 
                preceding paragraph (1), by striking ``more 
                than 60 days'' and all that follows through 
                ``section 221'' and inserting ``on or after the 
                date of such certification''; and
                    (B) in subsection (b)--
                            (i) by striking paragraph (2); and
                            (ii) in paragraph (1)--
                                    (I) by striking ``(1)'';
                                    (II) by redesignating 
                                subparagraphs (A) and (B) as 
                                paragraphs (1) and (2), 
                                respectively;
                                    (III) by redesignating 
                                clauses (i) and (ii) as 
                                subparagraphs (A) and (B), 
                                respectively; and
                                    (IV) by redesignating 
                                subclauses (I) and (II) as 
                                clauses (i) and (ii), 
                                respectively.
            (2) Section 233 of the Trade Act of 1974 (19 U.S.C. 
        2293) is amended--
                    (A) by striking subsection (b); and
                    (B) by redesignating subsections (c) 
                through (g) as subsections (b) through (f), 
                respectively.

SEC. 1822. WEEKLY AMOUNTS.

    Section 232 of the Trade Act of 1974 (19 U.S.C. 2292) is 
amended--
            (1) in subsection (a)--
                    (A) by striking ``subsections (b) and (c)'' 
                and inserting ``subsections (b), (c), and 
                (d)'';
                    (B) by striking ``total unemployment'' the 
                first place it appears and inserting 
                ``unemployment''; and
                    (C) in paragraph (2), by inserting before 
                the period the following: ``, except that in 
                the case of an adversely affected worker who is 
                participating in training under this chapter, 
                such income shall not include earnings from 
                work for such week that are equal to or less 
                than the most recent weekly benefit amount of 
                the unemployment insurance payable to the 
                worker for a week of total unemployment 
                preceding the worker's first exhaustion of 
                unemployment insurance (as determined for 
                purposes of section 231(a)(3)(B))''; and
            (2) by adding at the end the following:
    ``(d) Election of Trade Readjustment Allowance or 
Unemployment Insurance.--Notwithstanding section 231(a)(3)(B), 
an adversely affected worker may elect to receive a trade 
readjustment allowance instead of unemployment insurance during 
any week with respect to which the worker--
            ``(1) is entitled to receive unemployment insurance 
        as a result of the establishment by the worker of a new 
        benefit year under State law, based in whole or in part 
        upon part-time or short-term employment in which the 
        worker engaged after the worker's most recent total 
        separation from adversely affected employment; and
            ``(2) is otherwise entitled to a trade readjustment 
        allowance.''.

SEC. 1823. LIMITATIONS ON TRADE READJUSTMENT ALLOWANCES; ALLOWANCES FOR 
                    EXTENDED TRAINING AND BREAKS IN TRAINING.

    Section 233(a) of the Trade Act of 1974 (19 U.S.C. 2293(a)) 
is amended--
            (1) in paragraph (2), by inserting ``under 
        paragraph (1)'' after ``trade readjustment allowance''; 
        and
            (2) in paragraph (3)--
                    (A) in the matter preceding subparagraph 
                (A)--
                            (i) by striking ``training approved 
                        for him'' and inserting ``a training 
                        program approved for the worker'';
                            (ii) by striking ``52 additional 
                        weeks'' and inserting ``78 additional 
                        weeks''; and
                            (iii) by striking ``52-week'' and 
                        inserting ``91-week''; and
                    (B) in the matter following subparagraph 
                (B), by striking ``52-week'' and inserting 
                ``91-week''.

SEC. 1824. SPECIAL RULES FOR CALCULATION OF ELIGIBILITY PERIOD.

    Section 233 of the Trade Act of 1974 (19 U.S.C. 2293), as 
amended, is further amended by adding at the end the following:
    ``(g) Special Rule for Calculating Separation.--
Notwithstanding any other provision of this chapter, any period 
during which a judicial or administrative appeal is pending 
with respect to the denial by the Secretary of a petition under 
section 223 shall not be counted for purposes of calculating 
the period of separation under subsection (a)(2).
    ``(h) Special Rule for Justifiable Cause.--If the Secretary 
determines that there is justifiable cause, the Secretary may 
extend the period during which trade readjustment allowances 
are payable to an adversely affected worker under paragraphs 
(2) and (3) of subsection (a) (but not the maximum amounts of 
such allowances that are payable under this section).
    ``(i) Special Rule With Respect to Military Service.--
            ``(1) In general.--Notwithstanding any other 
        provision of this chapter, the Secretary may waive any 
        requirement of this chapter that the Secretary 
        determines is necessary to ensure that an adversely 
        affected worker who is a member of a reserve component 
        of the Armed Forces and serves a period of duty 
        described in paragraph (2) is eligible to receive a 
        trade readjustment allowance, training, and other 
        benefits under this chapter in the same manner and to 
        the same extent as if the worker had not served the 
        period of duty.
            ``(2) Period of duty described.--An adversely 
        affected worker serves a period of duty described in 
        this paragraph if, before completing training under 
        section 236, the worker--
                    ``(A) serves on active duty for a period of 
                more than 30 days under a call or order to 
                active duty of more than 30 days; or
                    ``(B) in the case of a member of the Army 
                National Guard of the United States or Air 
                National Guard of the United States, performs 
                full-time National Guard duty under section 
                502(f) of title 32, United States Code, for 30 
                consecutive days or more when authorized by the 
                President or the Secretary of Defense for the 
                purpose of responding to a national emergency 
                declared by the President and supported by 
                Federal funds.''.

SEC. 1825. APPLICATION OF STATE LAWS AND REGULATIONS ON GOOD CAUSE FOR 
                    WAIVER OF TIME LIMITS OR LATE FILING OF CLAIMS.

    Section 234 of the Trade Act of 1974 (19 U.S.C. 2294) is 
amended--
            (1) by striking ``Except where inconsistent'' and 
        inserting ``(a) In General.--Except where 
        inconsistent''; and
            (2) by adding at the end the following:
    ``(b) Special Rule With Respect to State Laws and 
Regulations on Good Cause for Waiver of Time Limits or Late 
Filing of Claims.--Any law, regulation, policy, or practice of 
a cooperating State that allows for a waiver for good cause of 
any time limitation relating to the administration of the State 
unemployment insurance law shall, in the administration of the 
program under this chapter by the State, apply to any time 
limitation with respect to an application for a trade 
readjustment allowance or enrollment in training under this 
chapter.''.

SEC. 1826. EMPLOYMENT AND CASE MANAGEMENT SERVICES.

    (a) In General.--Section 235 of the Trade Act of 1974 (19 
U.S.C. 2295) is amended to read as follows:

``SEC. 235. EMPLOYMENT AND CASE MANAGEMENT SERVICES.

    ``The Secretary shall make available, directly or through 
agreements with States under section 239, to adversely affected 
workers and adversely affected incumbent workers covered by a 
certification under subchapter A of this chapter the following 
employment and case management services:
            ``(1) Comprehensive and specialized assessment of 
        skill levels and service needs, including through--
                    ``(A) diagnostic testing and use of other 
                assessment tools; and
                    ``(B) in-depth interviewing and evaluation 
                to identify employment barriers and appropriate 
                employment goals.
            ``(2) Development of an individual employment plan 
        to identify employment goals and objectives, and 
        appropriate training to achieve those goals and 
        objectives.
            ``(3) Information on training available in local 
        and regional areas, information on individual 
        counseling to determine which training is suitable 
        training, and information on how to apply for such 
        training.
            ``(4) Information on how to apply for financial 
        aid, including referring workers to educational 
        opportunity centers described in section 402F of the 
        Higher Education Act of 1965 (20 U.S.C. 1070a-16), 
        where applicable, and notifying workers that the 
        workers may request financial aid administrators at 
        institutions of higher education (as defined in section 
        102 of such Act (20 U.S.C. 1002)) to use the 
        administrators' discretion under section 479A of such 
        Act (20 U.S.C. 1087tt) to use current year income data, 
        rather than preceding year income data, for determining 
        the amount of need of the workers for Federal financial 
        assistance under title IV of such Act (20 U.S.C. 1070 
        et seq.).
            ``(5) Short-term prevocational services, including 
        development of learning skills, communications skills, 
        interviewing skills, punctuality, personal maintenance 
        skills, and professional conduct to prepare individuals 
        for employment or training.
            ``(6) Individual career counseling, including job 
        search and placement counseling, during the period in 
        which the individual is receiving a trade adjustment 
        allowance or training under this chapter, and after 
        receiving such training for purposes of job placement.
            ``(7) Provision of employment statistics 
        information, including the provision of accurate 
        information relating to local, regional, and national 
        labor market areas, including--
                    ``(A) job vacancy listings in such labor 
                market areas;
                    ``(B) information on jobs skills necessary 
                to obtain jobs identified in job vacancy 
                listings described in subparagraph (A);
                    ``(C) information relating to local 
                occupations that are in demand and earnings 
                potential of such occupations; and
                    ``(D) skills requirements for local 
                occupations described in subparagraph (C).
            ``(8) Information relating to the availability of 
        supportive services, including services relating to 
        child care, transportation, dependent care, housing 
        assistance, and need-related payments that are 
        necessary to enable an individual to participate in 
        training.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
235 and inserting the following:

``235. Employment and case management services.''.

SEC. 1827. ADMINISTRATIVE EXPENSES AND EMPLOYMENT AND CASE MANAGEMENT 
                    SERVICES.

    (a) In General.--Part II of subchapter B of chapter 2 of 
title II of the Trade Act of 1974 (19 U.S.C. 2295 et seq.) is 
amended by inserting after section 235 the following:

``SEC. 235A. FUNDING FOR ADMINISTRATIVE EXPENSES AND EMPLOYMENT AND 
                    CASE MANAGEMENT SERVICES.

    ``(a) Funding for Administrative Expenses and Employment 
and Case Management Services.--
            ``(1) In general.--In addition to any funds made 
        available to a State to carry out section 236 for a 
        fiscal year, the State shall receive for the fiscal 
        year a payment in an amount that is equal to 15 percent 
        of the amount of such funds.
            ``(2) Use of funds.--A State that receives a 
        payment under paragraph (1) shall--
                    ``(A) use not more than \2/3\ of such 
                payment for the administration of the trade 
                adjustment assistance for workers program under 
                this chapter, including for--
                            ``(i) processing waivers of 
                        training requirements under section 
                        231;
                            ``(ii) collecting, validating, and 
                        reporting data required under this 
                        chapter; and
                            ``(iii) providing reemployment 
                        trade adjustment assistance under 
                        section 246; and
                    ``(B) use not less than \1/3\ of such 
                payment for employment and case management 
                services under section 235.
    ``(b) Additional Funding for Employment and Case Management 
Services.--
            ``(1) In general.--In addition to any funds made 
        available to a State to carry out section 236 and the 
        payment under subsection (a)(1) for a fiscal year, the 
        Secretary shall provide to the State for the fiscal 
        year a payment in the amount of $350,000.
            ``(2) Use of funds.--A State that receives a 
        payment under paragraph (1) shall use such payment for 
        the purpose of providing employment and case management 
        services under section 235.
            ``(3) Voluntary return of funds.--A State that 
        receives a payment under paragraph (1) may decline or 
        otherwise return such payment to the Secretary.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by inserting after the item relating to 
section 235 the following:

``Sec. 235A. Funding for administrative expenses and employment and case 
          management services.''.

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

SEC. 1828. TRAINING FUNDING.

    (a) In General.--Section 236(a)(2) of the Trade Act of 1974 
(19 U.S.C. 2296(a)(2)) is amended to read as follows:
    ``(2)(A) The total amount of payments that may be made 
under paragraph (1) shall not exceed--
            ``(i) for each of the fiscal years 2009 and 2010, 
        $575,000,000; and
            ``(ii) for the period beginning October 1, 2010, 
        and ending December 31, 2010, $143,750,000.
    ``(B)(i) The Secretary shall, as soon as practicable after 
the beginning of each fiscal year, make an initial distribution 
of the funds made available to carry out this section, in 
accordance with the requirements of subparagraph (C).
    ``(ii) The Secretary shall ensure that not less than 90 
percent of the funds made available to carry out this section 
for a fiscal year are distributed to the States by not later 
than July 15 of that fiscal year.
    ``(C)(i) In making the initial distribution of funds 
pursuant to subparagraph (B)(i) for a fiscal year, the 
Secretary shall hold in reserve 35 percent of the funds made 
available to carry out this section for that fiscal year for 
additional distributions during the remainder of the fiscal 
year.
    ``(ii) Subject to clause (iii), in determining how to 
apportion the initial distribution of funds pursuant to 
subparagraph (B)(i) in a fiscal year, the Secretary shall take 
into account, with respect to each State--
            ``(I) the trend in the number of workers covered by 
        certifications of eligibility under this chapter during 
        the most recent 4 consecutive calendar quarters for 
        which data are available;
            ``(II) the trend in the number of workers 
        participating in training under this section during the 
        most recent 4 consecutive calendar quarters for which 
        data are available;
            ``(III) the number of workers estimated to be 
        participating in training under this section during the 
        fiscal year;
            ``(IV) the amount of funding estimated to be 
        necessary to provide training approved under this 
        section to such workers during the fiscal year; and
            ``(V) such other factors as the Secretary considers 
        appropriate relating to the provision of training under 
        this section.
    ``(iii) In no case may the amount of the initial 
distribution to a State pursuant to subparagraph (B)(i) in a 
fiscal year be less than 25 percent of the initial distribution 
to the State in the preceding fiscal year.
    ``(D) The Secretary shall establish procedures for the 
distribution of the funds that remain available for the fiscal 
year after the initial distribution required under subparagraph 
(B)(i). Such procedures may include the distribution of funds 
pursuant to requests submitted by States in need of such funds.
    ``(E) If, during a fiscal year, the Secretary estimates 
that the amount of funds necessary to pay the costs of training 
approved under this section will exceed the dollar amount 
limitation specified in subparagraph (A), the Secretary shall 
decide how the amount of funds made available to carry out this 
section that have not been distributed at the time of the 
estimate will be apportioned among the States for the remainder 
of the fiscal year.''.
    (b) Determinations Regarding Training.--Section 236(a)(9) 
of the Trade Act of 1974 (19 U.S.C. 2296(a)(9)) is amended--
            (1) by striking ``The Secretary'' and inserting 
        ``(A) Subject to subparagraph (B), the Secretary''; and
            (2) by adding at the end the following:
    ``(B)(i) In determining under paragraph (1)(E) whether a 
worker is qualified to undertake and complete training, the 
Secretary may approve training for a period longer than the 
worker's period of eligibility for trade readjustment 
allowances under part I if the worker demonstrates a financial 
ability to complete the training after the expiration of the 
worker's period of eligibility for such trade readjustment 
allowances.
    ``(ii) In determining the reasonable cost of training under 
paragraph (1)(F) with respect to a worker, the Secretary may 
consider whether other public or private funds are reasonably 
available to the worker, except that the Secretary may not 
require a worker to obtain such funds as a condition of 
approval of training under paragraph (1).''.
    (c) Regulations.--Section 236 of the Trade Act of 1974 (19 
U.S.C. 2296) is amended by adding at the end the following:
    ``(g) Regulations With Respect to Apportionment of Training 
Funds to States.--
            ``(1) In general.--Not later than 1 year after the 
        date of the enactment of this subsection, the Secretary 
        shall issue such regulations as may be necessary to 
        carry out the provisions of subsection (a)(2).
            ``(2) Consultations.--The Secretary shall consult 
        with the Committee on Finance of the Senate and the 
        Committee on Ways and Means of the House of 
        Representatives not less than 90 days before issuing 
        any regulation pursuant to paragraph (1).''.
    (d) Effective Date.--This section and the amendments made 
by this section shall take effect upon the expiration of the 
90-day period beginning on the date of the enactment of this 
Act, except that--
            (1) subparagraph (A) of section 236(a)(2) of the 
        Trade Act of 1974, as amended by subsection (a) of this 
        section, shall take effect on the date of the enactment 
        of this Act; and
            (2) subparagraphs (B), (C), and (D) of such section 
        236(a)(2) shall take effect on October 1, 2009.

SEC. 1829. PREREQUISITE EDUCATION; APPROVED TRAINING PROGRAMS.

    (a) In General.--Section 236(a)(5) of the Trade Act of 1974 
(19 U.S.C. 2296(a)(5)) is amended--
            (1) in subparagraph (A)--
                    (A) by striking ``and'' at the end of 
                clause (i);
                    (B) by adding ``and'' at the end of clause 
                (ii); and
                    (C) by inserting after clause (ii) the 
                following:
                    ``(iii) apprenticeship programs registered 
                under the Act of August 16, 1937 (commonly 
                known as the `National Apprenticeship Act'; 50 
                Stat. 664, chapter 663; 29 U.S.C. 50 et 
                seq.),'';
            (2) by redesignating subparagraphs (E) and (F) as 
        subparagraphs (F) and (G), respectively;
            (3) by inserting after subparagraph (D) the 
        following:
            ``(E) any program of prerequisite education or 
        coursework required to enroll in training that may be 
        approved under this section,'';
            (4) in subparagraph (F)(ii), as redesignated by 
        paragraph (2), by striking ``and'' at the end;
            (5) in subparagraph (G), as redesignated by 
        paragraph (2), by striking the period at the end and 
        inserting ``, and''; and
            (6) by adding at the end the following:
            ``(H) any training program or coursework at an 
        accredited institution of higher education (described 
        in section 102 of the Higher Education Act of 1965 (20 
        U.S.C. 1002)), including a training program or 
        coursework for the purpose of--
                    ``(i) obtaining a degree or certification; 
                or
                    ``(ii) completing a degree or certification 
                that the worker had previously begun at an 
                accredited institution of higher education.
The Secretary may not limit approval of a training program 
under paragraph (1) to a program provided pursuant to title I 
of the Workforce Investment Act of 1998 (29 U.S.C. 2801 et 
seq.).''.
    (b) Conforming Amendments.--Section 233 of the Trade Act of 
1974 (19 U.S.C. 2293) is amended--
            (1) in subsection (a)(2), by inserting 
        ``prerequisite education or'' after ``requires a 
        program of''; and
            (2) in subsection (f) (as redesignated by section 
        1821(c) of this subtitle), by inserting ``prerequisite 
        education or'' after ``includes a program of''.
    (c) Technical Corrections.--Section 236 of the Trade Act of 
1974 (19 U.S.C. 2296) is amended--
            (1) in subsection (a)--
                    (A) in paragraph (1), in the flush text, by 
                striking ``his behalf'' and inserting ``the 
                worker's behalf''; and
                    (B) in paragraph (3), by striking ``this 
                paragraph (1)'' and inserting ``paragraph 
                (1)''; and
            (2) in subsection (b)(2), by striking ``, and'' and 
        inserting a period.

SEC. 1830. PRE-LAYOFF AND PART-TIME TRAINING.

    (a) Pre-Layoff Training.--
            (1) In general.--Section 236(a) of the Trade Act of 
        1974 (19 U.S.C. 2296(a)) is amended--
                    (A) in paragraph (1), by inserting after 
                ``determines'' the following: ``, with respect 
                to an adversely affected worker or an adversely 
                affected incumbent worker,'';
                    (B) in paragraph (4)--
                            (i) in subparagraphs (A) and (B), 
                        by inserting ``or an adversely affected 
                        incumbent worker'' after ``an adversely 
                        affected worker'' each place it 
                        appears; and
                            (ii) in subparagraph (C), by 
                        inserting ``or adversely affected 
                        incumbent worker'' after ``adversely 
                        affected worker'' each place it 
                        appears;
                    (C) in paragraph (5), in the matter 
                preceding subparagraph (A), by striking ``The 
                training programs'' and inserting ``Except as 
                provided in paragraph (10), the training 
                programs'';
                    (D) in paragraph (6)(B), by inserting ``or 
                adversely affected incumbent worker'' after 
                ``adversely affected worker'';
                    (E) in paragraph (7)(B), by inserting ``or 
                adversely affected incumbent worker'' after 
                ``adversely affected worker''; and
                    (F) by inserting after paragraph (9) the 
                following:
    ``(10) In the case of an adversely affected incumbent 
worker, the Secretary may not approve--
            ``(A) on-the-job training under paragraph 
        (5)(A)(i); or
            ``(B) customized training under paragraph 
        (5)(A)(ii), unless such training is for a position 
        other than the worker's adversely affected employment.
    ``(11) If the Secretary determines that an adversely 
affected incumbent worker for whom the Secretary approved 
training under this section is no longer threatened with a 
total or partial separation, the Secretary shall terminate the 
approval of such training.''.
            (2) Definitions.--Section 247 of the Trade Act of 
        1974 (19 U.S.C. 2319), as amended, is further amended 
        by adding at the end the following:
            ``(19) The term `adversely affected incumbent 
        worker' means a worker who--
                    ``(A) is a member of a group of workers who 
                have been certified as eligible to apply for 
                adjustment assistance under subchapter A;
                    ``(B) has not been totally or partially 
                separated from adversely affected employment; 
                and
                    ``(C) the Secretary determines, on an 
                individual basis, is threatened with total or 
                partial separation.''.
    (b) Part-Time Training.--Section 236 of the Trade Act of 
1974 (19 U.S.C. 2296), as amended, is further amended by adding 
at the end the following:
    ``(h) Part-Time Training.--
            ``(1) In general.--The Secretary may approve full-
        time or part-time training for a worker under 
        subsection (a).
            ``(2) Limitation.--Notwithstanding paragraph (1), a 
        worker participating in part-time training approved 
        under subsection (a) may not receive a trade 
        readjustment allowance under section 231.''.

SEC. 1831. ON-THE-JOB TRAINING.

    (a) In General.--Section 236(c) of the Trade Act of 1974 
(19 U.S.C. 2296(c)) is amended--
            (1) by redesignating paragraphs (1) through (10) as 
        subparagraphs (A) through (J) and moving such 
        subparagraphs 2 ems to the right;
            (2) by striking ``(c) The Secretary shall'' and all 
        that follows through ``such costs,'' and inserting the 
        following:
    ``(c) On-the-Job Training Requirements.--
            ``(1) In general.--The Secretary may approve on-
        the-job training for any adversely affected worker if--
                    ``(A) the worker meets the requirements for 
                training to be approved under subsection 
                (a)(1);
                    ``(B) the Secretary determines that on-the-
                job training--
                            ``(i) can reasonably be expected to 
                        lead to suitable employment with the 
                        employer offering the on-the-job 
                        training;
                            ``(ii) is compatible with the 
                        skills of the worker;
                            ``(iii) includes a curriculum 
                        through which the worker will gain the 
                        knowledge or skills to become 
                        proficient in the job for which the 
                        worker is being trained; and
                            ``(iv) can be measured by 
                        benchmarks that indicate that the 
                        worker is gaining such knowledge or 
                        skills; and
                    ``(C) the State determines that the on-the-
                job training program meets the requirements of 
                clauses (iii) and (iv) of subparagraph (B).
            ``(2) Monthly payments.--The Secretary shall pay 
        the costs of on-the-job training approved under 
        paragraph (1) in monthly installments.
            ``(3) Contracts for on-the-job training.--
                    ``(A) In general.--The Secretary shall 
                ensure, in entering into a contract with an 
                employer to provide on-the-job training to a 
                worker under this subsection, that the skill 
                requirements of the job for which the worker is 
                being trained, the academic and occupational 
                skill level of the worker, and the work 
                experience of the worker are taken into 
                consideration.
                    ``(B) Term of contract.--Training under any 
                such contract shall be limited to the period of 
                time required for the worker receiving on-the-
                job training to become proficient in the job 
                for which the worker is being trained, but may 
                not exceed 104 weeks in any case.
            ``(4) Exclusion of certain employers.--The 
        Secretary shall not enter into a contract for on-the-
        job training with an employer that exhibits a pattern 
        of failing to provide workers receiving on-the-job 
        training from the employer with--
                    ``(A) continued, long-term employment as 
                regular employees; and
                    ``(B) wages, benefits, and working 
                conditions that are equivalent to the wages, 
                benefits, and working conditions provided to 
                regular employees who have worked a similar 
                period of time and are doing the same type of 
                work as workers receiving on-the-job training 
                from the employer.
            ``(5) Labor standards.--The Secretary may pay the 
        costs of on-the-job training,''; and
            (3) in paragraph (5), as redesignated--
                    (A) in subparagraph (I), as redesignated by 
                paragraph (1) of this section, by striking 
                ``paragraphs (1), (2), (3), (4), (5), and (6)'' 
                and inserting ``subparagraphs (A), (B), (C), 
                (D), (E), and (F)''; and
                    (B) in subparagraph (J), as redesignated by 
                paragraph (1) of this section, by striking 
                ``paragraph (8)'' and inserting ``subparagraph 
                (H)''.
    (b) Repeal of Preference for Training on the Job.--Section 
236(a)(1) of the Trade Act of 1974 (19 U.S.C. 2296(a)(1)) is 
amended by striking the last sentence.

SEC. 1832. ELIGIBILITY FOR UNEMPLOYMENT INSURANCE AND PROGRAM BENEFITS 
                    WHILE IN TRAINING.

    Section 236(d) of the Trade Act of 1974 (19 U.S.C. 2296(d)) 
is amended to read as follows:
    ``(d) Eligibility.--An adversely affected worker may not be 
determined to be ineligible or disqualified for unemployment 
insurance or program benefits under this subchapter--
            ``(1) because the worker--
                    ``(A) is enrolled in training approved 
                under subsection (a);
                    ``(B) left work--
                            ``(i) that was not suitable 
                        employment in order to enroll in such 
                        training; or
                            ``(ii) that the worker engaged in 
                        on a temporary basis during a break in 
                        such training or a delay in the 
                        commencement of such training; or
                    ``(C) left on-the-job training not later 
                than 30 days after commencing such training 
                because the training did not meet the 
                requirements of subsection (c)(1)(B); or
            ``(2) because of the application to any such week 
        in training of the provisions of State law or Federal 
        unemployment insurance law relating to availability for 
        work, active search for work, or refusal to accept 
        work.''.

SEC. 1833. JOB SEARCH AND RELOCATION ALLOWANCES.

    (a) Job Search Allowances.--Section 237 of the Trade Act of 
1974 (19 U.S.C. 2297) is amended--
            (1) in subsection (a)(2)(C)(ii), by striking ``, 
        unless the worker received a waiver under section 
        231(c)''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``90 
                percent of the cost of'' and inserting ``all''; 
                and
                    (B) in paragraph (2), by striking 
                ``$1,250'' and inserting ``$1,500''.
    (b) Relocation Allowances.--Section 238 of the Trade Act of 
1974 (19 U.S.C. 2298) is amended--
            (1) in subsection (a)(2)(E)(ii), by striking ``, 
        unless the worker received a waiver under section 
        231(c)''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``90 
                percent of the'' and inserting ``all''; and
                    (B) in paragraph (2), by striking 
                ``$1,250'' and inserting ``$1,500''.

      Subpart D--Reemployment Trade Adjustment Assistance Program

SEC. 1841. REEMPLOYMENT TRADE ADJUSTMENT ASSISTANCE PROGRAM.

    (a) In General.--Section 246 of the Trade Act of 1974 (19 
U.S.C. 2318) is amended--
            (1) by amending the heading to read as follows:

``SEC. 246. REEMPLOYMENT TRADE ADJUSTMENT ASSISTANCE PROGRAM.'';

            (2) in subsection (a)--
                    (A) in paragraph (1)--
                            (i) by striking ``Not later than'' 
                        and all that follows through ``2002, 
                        the Secretary'' and inserting ``The 
                        Secretary''; and
                            (ii) by striking ``an alternative 
                        trade adjustment assistance program for 
                        older workers'' and inserting ``a 
                        reemployment trade adjustment 
                        assistance program'';
                    (B) in paragraph (2)--
                            (i) in subparagraph (A)--
                                    (I) in the matter preceding 
                                clause (i), by striking ``for a 
                                period not to exceed 2 years'' 
                                and inserting ``for the 
                                eligibility period under 
                                subparagraph (A) or (B) of 
                                paragraph (4) (as the case may 
                                be)''; and
                                    (II) by striking clauses 
                                (i) and (ii) and inserting the 
                                following:
                            ``(i) the wages received by the 
                        worker at the time of separation; and
                            ``(ii) the wages received by the 
                        worker from reemployment.'';
                            (ii) in subparagraph (B)--
                                    (I) by striking ``for a 
                                period not to exceed 2 years'' 
                                and inserting ``for the 
                                eligibility period under 
                                subparagraph (A) or (B) of 
                                paragraph (4) (as the case may 
                                be)''; and
                                    (II) by striking ``, as 
                                added by section 201 of the 
                                Trade Act of 2002''; and
                            (iii) by adding at the end the 
                        following:
                    ``(C) Training and other services.--A 
                worker described in paragraph (3)(B) 
                participating in the program established under 
                paragraph (1) is eligible to receive training 
                approved under section 236 and employment and 
                case management services under section 235.''; 
                and
                    (C) by striking paragraphs (3) through (5) 
                and inserting the following:
            ``(3) Eligibility.--
                    ``(A) In general.--A group of workers 
                certified under subchapter A as eligible for 
                adjustment assistance under subchapter A is 
                eligible for benefits described in paragraph 
                (2) under the program established under 
                paragraph (1).
                    ``(B) Individual eligibility.--A worker in 
                a group of workers described in subparagraph 
                (A) may elect to receive benefits described in 
                paragraph (2) under the program established 
                under paragraph (1) if the worker--
                            ``(i) is at least 50 years of age;
                            ``(ii) earns not more than $55,000 
                        each year in wages from reemployment;
                            ``(iii)(I) is employed on a full-
                        time basis as defined by the law of the 
                        State in which the worker is employed 
                        and is not enrolled in a training 
                        program approved under section 236; or
                            ``(II) is employed at least 20 
                        hours per week and is enrolled in a 
                        training program approved under section 
                        236; and
                            ``(iv) is not employed at the firm 
                        from which the worker was separated.
            ``(4) Eligibility period for payments.--
                    ``(A) Worker who has not received trade 
                readjustment allowance.--In the case of a 
                worker described in paragraph (3)(B) who has 
                not received a trade readjustment allowance 
                under part I of subchapter B pursuant to the 
                certification described in paragraph (3)(A), 
                the worker may receive benefits described in 
                paragraph (2) for a period not to exceed 2 
                years beginning on the earlier of--
                            ``(i) the date on which the worker 
                        exhausts all rights to unemployment 
                        insurance based on the separation of 
                        the worker from the adversely affected 
                        employment that is the basis of the 
                        certification; or
                            ``(ii) the date on which the worker 
                        obtains reemployment described in 
                        paragraph (3)(B).
                    ``(B) Worker who has received trade 
                readjustment allowance.--In the case of a 
                worker described in paragraph (3)(B) who has 
                received a trade readjustment allowance under 
                part I of subchapter B pursuant to the 
                certification described in paragraph (3)(A), 
                the worker may receive benefits described in 
                paragraph (2) for a period of 104 weeks 
                beginning on the date on which the worker 
                obtains reemployment described in paragraph 
                (3)(B), reduced by the total number of weeks 
                for which the worker received such trade 
                readjustment allowance.
            ``(5) Total amount of payments.--
                    ``(A) In general.--The payments described 
                in paragraph (2)(A) made to a worker may not 
                exceed--
                            ``(i) $12,000 per worker during the 
                        eligibility period under paragraph 
                        (4)(A); or
                            ``(ii) the amount described in 
                        subparagraph (B) per worker during the 
                        eligibility period under paragraph 
                        (4)(B).
                    ``(B) Amount described.--The amount 
                described in this subparagraph is the amount 
                equal to the product of--
                            ``(i) $12,000, and
                            ``(ii) the ratio of--
                                    ``(I) the total number of 
                                weeks in the eligibility period 
                                under paragraph (4)(B) with 
                                respect to the worker, to
                                    ``(II) 104 weeks.
            ``(6) Calculation of amount of payments for certain 
        workers.--
                    ``(A) In general.--In the case of a worker 
                described in paragraph (3)(B)(iii)(II), 
                paragraph (2)(A) shall be applied by 
                substituting the percentage described in 
                subparagraph (B) for `50 percent'.
                    ``(B) Percentage described.--The percentage 
                described in this subparagraph is the 
                percentage--
                            ``(i) equal to \1/2\ of the ratio 
                        of--
                                    ``(I) the number of weekly 
                                hours of employment of the 
                                worker referred to in paragraph 
                                (3)(B)(iii)(II), to
                                    ``(II) the number of weekly 
                                hours of employment of the 
                                worker at the time of 
                                separation, but
                            ``(ii) in no case more than 50 
                        percent.
            ``(7) Limitation on other benefits.--A worker 
        described in paragraph (3)(B) may not receive a trade 
        readjustment allowance under part I of subchapter B 
        pursuant to the certification described in paragraph 
        (3)(A) during any week for which the worker receives a 
        payment described in paragraph (2)(A).''; and
            (3) in subsection (b)(2), by striking ``subsection 
        (a)(3)(B)'' and inserting ``subsection (a)(3)''.
    (b) Extension of Program.--Section 246(b)(1) of the Trade 
Act of 1974 (19 U.S.C. 2318(b)(1)) is amended by striking ``the 
date that is 5 years'' and all that follows through the end 
period and inserting ``December 31, 2010.''.
    (c) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
246 and inserting the following:

``Sec. 246. Reemployment trade adjustment assistance program.''.

                        Subpart E--Other Matters

SEC. 1851. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

    (a) In General.--Subchapter C of chapter 2 of title II of 
the Trade Act of 1974 (19 U.S.C. 2311 et seq.) is amended by 
adding at the end the following:

``SEC. 249A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.

    ``(a) Establishment.--There is established in the 
Department of Labor an office to be known as the Office of 
Trade Adjustment Assistance (in this section referred to as the 
`Office').
    ``(b) Head of Office.--The head of the Office shall be an 
administrator, who shall report directly to the Deputy 
Assistant Secretary for Employment and Training.
    ``(c) Principal Functions.--The principal functions of the 
administrator of the Office shall be--
            ``(1) to oversee and implement the administration 
        of trade adjustment assistance program under this 
        chapter; and
            ``(2) to carry out functions delegated to the 
        Secretary of Labor under this chapter, including--
                    ``(A) making determinations under section 
                223;
                    ``(B) providing information under section 
                225 about trade adjustment assistance to 
                workers and assisting such workers to prepare 
                petitions or applications for program benefits;
                    ``(C) providing assistance to employers of 
                groups of workers that have filed petitions 
                under section 221 in submitting information 
                required by the Secretary relating to the 
                petitions;
                    ``(D) ensuring workers covered by a 
                certification of eligibility under subchapter A 
                receive the employment and case management 
                services described in section 235;
                    ``(E) ensuring that States fully comply 
                with agreements entered into under section 239;
                    ``(F) advocating for workers applying for 
                benefits available under this chapter;
                    ``(G) establishing and overseeing a hotline 
                that workers, employers, and other entities may 
                call to obtain information regarding 
                eligibility criteria, procedural requirements, 
                and benefits available under this chapter; and
                    ``(H) carrying out such other duties with 
                respect to this chapter as the Secretary 
                specifies for purposes of this section.
    ``(d) Administration.--
            ``(1) Designation.--The administrator shall 
        designate an employee of the Department of Labor with 
        appropriate experience and expertise to carry out the 
        duties described in paragraph (2).
            ``(2) Duties.--The employee designated under 
        paragraph (1) shall--
                    ``(A) receive complaints and requests for 
                assistance related to the trade adjustment 
                assistance program under this chapter;
                    ``(B) resolve such complaints and requests 
                for assistance, in coordination with other 
                employees of the Office;
                    ``(C) compile basic information concerning 
                such complaints and requests for assistance; 
                and
                    ``(D) carry out such other duties with 
                respect to this chapter as the Secretary 
                specifies for purposes of this section.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by inserting after the item relating to 
section 249 the following:

``Sec. 249A. Office of Trade Adjustment Assistance.''.

SEC. 1852. ACCOUNTABILITY OF STATE AGENCIES; COLLECTION AND PUBLICATION 
                    OF PROGRAM DATA; AGREEMENTS WITH STATES.

    (a) In General.--Section 239(a) of the Trade Act of 1974 
(19 U.S.C. 2311(a)) is amended--
            (1) by amending clause (2) to read as follows: 
        ``(2) in accordance with subsection (f), shall make 
        available to adversely affected workers and adversely 
        affected incumbent workers covered by a certification 
        under subchapter A the employment and case management 
        services described in section 235,''; and
            (2) by striking ``will'' each place it appears and 
        inserting ``shall''.
    (b) Form and Manner of Data.--Section 239 of the Trade Act 
of 1974 (19 U.S.C. 2311) is amended--
            (1) by redesignating subsections (c) through (g) as 
        subsections (d) through (h), respectively; and
            (2) by inserting after subsection (b) the 
        following:
    ``(c) Form and Manner of Data.--Each agreement under this 
subchapter shall--
            ``(1) provide the Secretary with the authority to 
        collect any data the Secretary determines necessary to 
        meet the requirements of this chapter; and
            ``(2) specify the form and manner in which any such 
        data requested by the Secretary shall be reported.''.
    (c) State Activities.--Section 239(g) of the Trade Act of 
1974 (as redesignated) is amended--
            (1) in paragraph (3), by striking ``and'' at the 
        end;
            (2) by amending paragraph (4) to read as follows:
            ``(4) perform outreach to, intake of, and 
        orientation for adversely affected workers and 
        adversely affected incumbent workers covered by a 
        certification under subchapter A with respect to 
        assistance and benefits available under this chapter, 
        and''; and
            (3) by adding at the end the following:
            ``(5) make employment and case management services 
        described in section 235 available to adversely 
        affected workers and adversely affected incumbent 
        workers covered by a certification under subchapter A 
        and, if funds provided to carry out this chapter are 
        insufficient to make such services available, make 
        arrangements to make such services available through 
        other Federal programs.''.
    (d) Reporting Requirement.--Section 239(h) of the Trade Act 
of 1974 (as redesignated) is amended by striking ``1998.'' and 
inserting ``1998 (29 U.S.C. 2822(b)) and a description of the 
State's rapid response activities under section 
221(a)(2)(A).''.
    (e) Control Measures.--Section 239 of the Trade Act of 1974 
(19 U.S.C. 2311), as amended, is further amended by adding at 
the end the following:
    ``(i) Control Measures.--
            ``(1) In general.--The Secretary shall require each 
        cooperating State and cooperating State agency to 
        implement effective control measures and to effectively 
        oversee the operation and administration of the trade 
        adjustment assistance program under this chapter, 
        including by means of monitoring the operation of 
        control measures to improve the accuracy and timeliness 
        of the data being collected and reported.
            ``(2) Definition.--For purposes of paragraph (1), 
        the term `control measures' means measures that--
                    ``(A) are internal to a system used by a 
                State to collect data; and
                    ``(B) are designed to ensure the accuracy 
                and verifiability of such data.
    ``(j) Data Reporting.--
            ``(1) In general.--Any agreement entered into under 
        this section shall require the cooperating State or 
        cooperating State agency to report to the Secretary on 
        a quarterly basis comprehensive performance 
        accountability data, to consist of--
                    ``(A) the core indicators of performance 
                described in paragraph (2)(A);
                    ``(B) the additional indicators of 
                performance described in paragraph (2)(B), if 
                any; and
                    ``(C) a description of efforts made to 
                improve outcomes for workers under the trade 
                adjustment assistance program.
            ``(2) Core indicators described.--
                    ``(A) In general.--The core indicators of 
                performance described in this paragraph are--
                            ``(i) the percentage of workers 
                        receiving benefits under this chapter 
                        who are employed during the second 
                        calendar quarter following the calendar 
                        quarter in which the workers cease 
                        receiving such benefits;
                            ``(ii) the percentage of such 
                        workers who are employed in each of the 
                        third and fourth calendar quarters 
                        following the calendar quarter in which 
                        the workers cease receiving such 
                        benefits; and
                            ``(iii) the earnings of such 
                        workers in each of the third and fourth 
                        calendar quarters following the 
                        calendar quarter in which the workers 
                        cease receiving such benefits.
                    ``(B) Additional indicators.--The Secretary 
                and a cooperating State or cooperating State 
                agency may agree upon additional indicators of 
                performance for the trade adjustment assistance 
                program under this chapter, as appropriate.
            ``(3) Standards with respect to reliability of 
        data.--In preparing the quarterly report required by 
        paragraph (1), each cooperating State or cooperating 
        State agency shall establish procedures that are 
        consistent with guidelines to be issued by the 
        Secretary to ensure that the data reported are valid 
        and reliable.''.

SEC. 1853. VERIFICATION OF ELIGIBILITY FOR PROGRAM BENEFITS.

    Section 239 of the Trade Act of 1974 (19 U.S.C. 2311), as 
amended, is further amended by adding at the end the following:
    ``(k) Verification of Eligibility for Program Benefits.--
            ``(1) In general.--An agreement under this 
        subchapter shall provide that the State shall 
        periodically redetermine that a worker receiving 
        benefits under this subchapter who is not a citizen or 
        national of the United States remains in a satisfactory 
        immigration status. Once satisfactory immigration 
        status has been initially verified through the 
        immigration status verification system described in 
        section 1137(d) of the Social Security Act (42 U.S.C. 
        1320b-7(d)) for purposes of establishing a worker's 
        eligibility for unemployment compensation, the State 
        shall reverify the worker's immigration status if the 
        documentation provided during initial verification will 
        expire during the period in which that worker is 
        potentially eligible to receive benefits under this 
        subchapter. The State shall conduct such 
        redetermination in a timely manner, utilizing the 
        immigration status verification system described in 
        section 1137(d) of the Social Security Act (42 U.S.C. 
        1320b-7(d)).
            ``(2) Procedures.--The Secretary shall establish 
        procedures to ensure the uniform application by the 
        States of the requirements of this subsection.''.

SEC. 1854. COLLECTION OF DATA AND REPORTS; INFORMATION TO WORKERS.

    (a) In General.--Subchapter C of chapter 2 of title II of 
the Trade Act of 1974 (19 U.S.C. 2311 et seq.), as amended, is 
further amended by adding at the end the following:

``SEC. 249B. COLLECTION AND PUBLICATION OF DATA AND REPORTS; 
                    INFORMATION TO WORKERS.

    ``(a) In General.--Not later than 180 days after the date 
of the enactment of this section, the Secretary shall implement 
a system to collect and report the data described in subsection 
(b), as well as any other information that the Secretary 
considers appropriate to effectively carry out this chapter.
    ``(b) Data To Be Included.--The system required under 
subsection (a) shall include collection of and reporting on the 
following data for each fiscal year:
            ``(1) Data on petitions filed, certified, and 
        denied.--
                    ``(A) The number of petitions filed, 
                certified, and denied under this chapter.
                    ``(B) The number of workers covered by 
                petitions filed, certified, and denied.
                    ``(C) The number of petitions, classified 
                by--
                            ``(i) the basis for certification, 
                        including increased imports, shifts in 
                        production, and other bases of 
                        eligibility; and
                            ``(ii) congressional district of 
                        the United States.
                    ``(D) The average time for processing such 
                petitions.
            ``(2) Data on benefits received.--
                    ``(A) The number of workers receiving 
                benefits under this chapter.
                    ``(B) The number of workers receiving each 
                type of benefit, including training, trade 
                readjustment allowances, employment and case 
                management services, and relocation and job 
                search allowances, and, to the extent feasible, 
                credits for health insurance costs under 
                section 35 of the Internal Revenue Code of 
                1986.
                    ``(C) The average time during which such 
                workers receive each such type of benefit.
            ``(3) Data on training.--
                    ``(A) The number of workers enrolled in 
                training approved under section 236, classified 
                by major types of training, including classroom 
                training, training through distance learning, 
                on-the-job training, and customized training.
                    ``(B) The number of workers enrolled in 
                full-time training and part-time training.
                    ``(C) The average duration of training.
                    ``(D) The number of training waivers 
                granted under section 231(c), classified by 
                type of waiver.
                    ``(E) The number of workers who complete 
                training and the duration of such training.
                    ``(F) The number of workers who do not 
                complete training.
            ``(4) Data on outcomes.--
                    ``(A) A summary of the quarterly reports 
                required under section 239(j).
                    ``(B) The sectors in which workers are 
                employed after receiving benefits under this 
                chapter.
            ``(5) Data on rapid response activities.--Whether 
        rapid response activities were provided with respect to 
        each petition filed under section 221.
    ``(c) Classification of Data.--To the extent possible, in 
collecting and reporting the data described in subsection (b), 
the Secretary shall classify the data by industry, State, and 
national totals.
    ``(d) Report.--Not later than December 15 of each year, the 
Secretary shall submit to the Committee on Finance of the 
Senate and the Committee on Ways and Means of the House of 
Representatives a report that includes--
            ``(1) a summary of the information collected under 
        this section for the preceding fiscal year;
            ``(2) information on the distribution of funds to 
        each State pursuant to section 236(a)(2); and
            ``(3) any recommendations of the Secretary with 
        respect to changes in eligibility requirements, 
        benefits, or training funding under this chapter based 
        on the data collected under this section.
    ``(e) Availability of Data.--
            ``(1) In general.--The Secretary shall make 
        available to the public, by publishing on the website 
        of the Department of Labor and by other means, as 
        appropriate--
                    ``(A) the report required under subsection 
                (d);
                    ``(B) the data collected under this 
                section, in a searchable format; and
                    ``(C) a list of cooperating States and 
                cooperating State agencies that failed to 
                submit the data required by this section to the 
                Secretary in a timely manner.
            ``(2) Updates.--The Secretary shall update the data 
        under paragraph (1) on a quarterly basis.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by inserting after the item relating to 
section 249A the following:

``Sec. 249B. Collection and publication of data and reports; information 
          to workers.''.

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

SEC. 1855. FRAUD AND RECOVERY OF OVERPAYMENTS.

    Section 243(a)(1) of the Trade Act of 1974 (19 U.S.C. 
2315(a)(1)) is amended--
            (1) in the matter preceding subparagraph (A)--
                    (A) by striking ``may waive'' and inserting 
                ``shall waive''; and
                    (B) by striking ``, in accordance with 
                guidelines prescribed by the Secretary,''; and
            (2) in subparagraph (B), by striking ``would be 
        contrary to equity and good conscience'' and inserting 
        ``would cause a financial hardship for the individual 
        (or the individual's household, if applicable) when 
        taking into consideration the income and resources 
        reasonably available to the individual (or household) 
        and other ordinary living expenses of the individual 
        (or household)''.

SEC. 1856. SENSE OF CONGRESS ON APPLICATION OF TRADE ADJUSTMENT 
                    ASSISTANCE.

    (a) In General.--Chapter 5 of title II of the Trade Act of 
1974 (19 U.S.C. 2391 et seq.) is amended by adding at the end 
the following:

``SEC. 288. SENSE OF CONGRESS.

    ``It is the sense of Congress that the Secretaries of 
Labor, Commerce, and Agriculture should apply the provisions of 
chapter 2 (relating to adjustment assistance for workers), 
chapter 3 (relating to adjustment assistance for firms), 
chapter 4 (relating to adjustment assistance for communities), 
and chapter 6 (relating to adjustment assistance for farmers), 
respectively, with the utmost regard for the interests of 
workers, firms, communities, and farmers petitioning for 
benefits under such chapters.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by inserting after the item relating to 
section 287 the following:

``Sec. 288. Sense of Congress.''.

SEC. 1857. CONSULTATIONS IN PROMULGATION OF REGULATIONS.

    Section 248 of the Trade Act of 1974 (19 U.S.C. 2320) is 
amended--
            (1) by striking ``The Secretary shall'' and 
        inserting the following:
    ``(a) In General.--The Secretary shall''; and
            (2) by adding at the end the following:
    ``(b) Consultations.--Not later than 90 days before issuing 
a regulation under subsection (a), the Secretary shall consult 
with the Committee on Finance of the Senate and the Committee 
on Ways and Means of the House of Representatives with respect 
to the regulation.''.

SEC. 1858. TECHNICAL CORRECTIONS.

    (a) Determinations by Secretary of Labor.--Section 223(c) 
of the Trade Act of 1974 (19 U.S.C. 2273(c)) is amended by 
striking ``his determination'' and inserting ``a 
determination''.
    (b) Qualifying Requirements for Workers.--Section 231(a) of 
the Trade Act of 1974 (19 U.S.C. 2291(a)) is amended--
            (1) in paragraph (1)--
                    (A) in the matter preceding subparagraph 
                (A), by striking ``his application'' and 
                inserting ``the worker's application''; and
                    (B) in subparagraph (A), by striking ``he 
                is covered'' and inserting ``the worker is 
                covered'';
            (2) in paragraph (2)--
                    (A) in subparagraph (A), by striking the 
                period and inserting a comma; and
                    (B) in subparagraph (D), by striking ``5 
                U.S.C. 8521(a)(1)'' and inserting ``section 
                8521(a)(1) of title 5, United States Code''; 
                and
            (3) in paragraph (3)--
                    (A) by striking ``he'' each place it 
                appears and inserting ``the worker''; and
                    (B) in subparagraph (C), by striking 
                ``him'' and inserting ``the worker''.
    (c) Subpoena Power.--Section 249 of the Trade Act of 1974 
(19 U.S.C. 2321) is amended--
            (1) in the section heading, by striking ``SUBPENA'' 
        and inserting ``SUBPOENA'';
            (2) by striking ``subpena'' and inserting 
        ``subpoena'' each place it appears; and
            (3) in subsection (a), by striking ``him'' and 
        inserting ``the Secretary''.
    (d) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
249 and inserting the following:

``Sec. 249. Subpoena power.''.

             PART II--TRADE ADJUSTMENT ASSISTANCE FOR FIRMS

SEC. 1861. EXPANSION TO SERVICE SECTOR FIRMS.

    (a) In General.--Section 251 of the Trade Act of 1974 (19 
U.S.C. 2341) is amended by inserting ``or service sector firm'' 
after ``agricultural firm'' each place it appears.
    (b) Definition of Service Sector Firm.--Section 261 of the 
Trade Act of 1974 (19 U.S.C. 2351) is amended--
            (1) by striking ``chapter,'' and inserting 
        ``chapter:'';
            (2) by striking ``the term `firm' '' and inserting 
        the following:
            ``(1) Firm.--The term `firm' ''; and
            (3) by adding at the end the following:
            ``(2) Service sector firm.--The term `service 
        sector firm' means a firm engaged in the business of 
        supplying services.''.
    (c) Conforming Amendments.--
            (1) Section 251(c)(1)(C) of the Trade Act of 1974 
        (19 U.S.C. 2341(c)(1)(C)) is amended--
                    (A) by inserting ``or services'' after 
                ``articles'' the first place it appears; and
                    (B) by inserting ``or services which are 
                supplied'' after ``produced''.
            (2) Section 251(c)(2)(B)(ii) of such Act is amended 
        to read as follows:
            ``(ii) Any firm that engages in exploration or 
        drilling for oil or natural gas, or otherwise produces 
        oil or natural gas, shall be considered to be producing 
        articles directly competitive with imports of oil and 
        with imports of natural gas.''.

SEC. 1862. MODIFICATION OF REQUIREMENTS FOR CERTIFICATION.

    Section 251(c)(1)(B) of the Trade Act of 1974 (19 U.S.C. 
2341(c)(1)(B)) is amended to read as follows:
            ``(B) that--
                    ``(i) sales or production, or both, of the 
                firm have decreased absolutely,
                    ``(ii) sales or production, or both, of an 
                article or service that accounted for not less 
                than 25 percent of the total sales or 
                production of the firm during the 12-month 
                period preceding the most recent 12-month 
                period for which data are available have 
                decreased absolutely,
                    ``(iii) sales or production, or both, of 
                the firm during the most recent 12-month period 
                for which data are available have decreased 
                compared to--
                            ``(I) the average annual sales or 
                        production for the firm during the 24-
                        month period preceding that 12-month 
                        period, or
                            ``(II) the average annual sales or 
                        production for the firm during the 36-
                        month period preceding that 12-month 
                        period, and
                    ``(iv) sales or production, or both, of an 
                article or service that accounted for not less 
                than 25 percent of the total sales or 
                production of the firm during the most recent 
                12-month period for which data are available 
                have decreased compared to--
                            ``(I) the average annual sales or 
                        production for the article or service 
                        during the 24-month period preceding 
                        that 12-month period, or
                            ``(II) the average annual sales or 
                        production for the article or service 
                        during the 36-month period preceding 
                        that 12-month period, and''.

SEC. 1863. BASIS FOR DETERMINATIONS.

    Section 251 of the Trade Act of 1974 (19 U.S.C. 2341), as 
amended, is further amended by adding at the end the following:
    ``(e) Basis for Secretary's Determinations.--For purposes 
of subsection (c)(1)(C), the Secretary may determine that there 
are increased imports of like or directly competitive articles 
or services, if customers accounting for a significant 
percentage of the decrease in the sales or production of the 
firm certify to the Secretary that such customers have 
increased their imports of such articles or services from a 
foreign country, either absolutely or relative to their 
acquisition of such articles or services from suppliers located 
in the United States.
    ``(f) Notification to Firms of Availability of Benefits.--
Upon receiving notice from the Secretary of Labor under section 
225 of the identity of a firm that is covered by a 
certification issued under section 223, the Secretary of 
Commerce shall notify the firm of the availability of 
adjustment assistance under this chapter.''.

SEC. 1864. OVERSIGHT AND ADMINISTRATION; AUTHORIZATION OF 
                    APPROPRIATIONS.

    (a) In General.--Chapter 3 of title II of the Trade Act of 
1974 (19 U.S.C. 2341 et seq.) is amended--
            (1) by striking sections 254, 255, 256, and 257;
            (2) by redesignating sections 258, 259, 260, 261, 
        262, 264, and 265, as sections 256, 257, 258, 259, 260, 
        261, and 262, respectively; and
            (3) by inserting after section 253 the following:

``SEC. 254. OVERSIGHT AND ADMINISTRATION.

    ``(a) In General.--The Secretary shall, to such extent and 
in such amounts as are provided in appropriations Acts, provide 
grants to intermediary organizations (referred to in section 
253(b)(1)) throughout the United States pursuant to agreements 
with such intermediary organizations. Each such agreement shall 
require the intermediary organization to provide benefits to 
firms certified under section 251. The Secretary shall, to the 
maximum extent practicable, provide by October 1, 2010, that 
contracts entered into with intermediary organizations be for a 
12-month period and that all such contracts have the same 
beginning date and the same ending date.
    ``(b) Distribution of Funds.--
            ``(1) In general.--Not later than 90 days after the 
        date of the enactment of this subsection, the Secretary 
        shall develop a methodology for the distribution of 
        funds among the intermediary organizations described in 
        subsection (a).
            ``(2) Prompt initial distribution.--The methodology 
        described in paragraph (1) shall ensure the prompt 
        initial distribution of funds and establish additional 
        criteria governing the apportionment and distribution 
        of the remainder of such funds among the intermediary 
        organizations.
            ``(3) Criteria.--The methodology described in 
        paragraph (1) shall include criteria based on the data 
        in the annual report on the trade adjustment assistance 
        for firms program described in section 1866 of the 
        Trade and Globalization Adjustment Assistance Act of 
        2009.
    ``(c) Requirements for Contracts.--An agreement with an 
intermediary organization described in subsection (a) shall 
require the intermediary organization to contract for the 
supply of services to carry out grants under this chapter in 
accordance with terms and conditions that are consistent with 
guidelines established by the Secretary.
    ``(d) Consultations.--
            ``(1) Consultations regarding methodology.--The 
        Secretary shall consult with the Committee on Finance 
        of the Senate and the Committee on Ways and Means of 
        the House of Representatives--
                    ``(A) not less than 30 days before 
                finalizing the methodology described in 
                subsection (b); and
                    ``(B) not less than 60 days before adopting 
                any changes to such methodology.
            ``(2) Consultations regarding guidelines.--The 
        Secretary shall consult with the Committee on Finance 
        of the Senate and the Committee on Ways and Means of 
        the House of Representatives not less than 60 days 
        before finalizing the guidelines described in 
        subsection (c) or adopting any subsequent changes to 
        such guidelines.

``SEC. 255. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated 
to the Secretary $50,000,000 for each of the fiscal years 2009 
through 2010, and $12,501,000 for the period beginning October 
1, 2010, and ending December 31, 2010, to carry out the 
provisions of this chapter. Amounts appropriated pursuant to 
this subsection shall--
            ``(1) be available to provide adjustment assistance 
        to firms that file a petition for such assistance 
        pursuant to this chapter on or before December 31, 
        2010; and
            ``(2) otherwise remain available until expended.
    ``(b) Personnel.--Of the amounts appropriated pursuant to 
this section for each fiscal year, $350,000 shall be available 
for full-time positions in the Department of Commerce to 
administer the provisions of this chapter. Of such funds the 
Secretary shall make available to the Economic Development 
Administration such sums as may be necessary to establish the 
position of Director of Adjustment Assistance for Firms and 
such other full-time positions as may be appropriate to 
administer the provisions of this chapter.''.
    (b) Residual Authority.--The Secretary of Commerce shall 
have the authority to modify, terminate, resolve, liquidate, or 
take any other action with respect to a loan, guarantee, 
contract, or any other financial assistance that was extended 
under section 254, 255, 256, or 257 of the Trade Act of 1974 
(19 U.S.C. 2344, 2345, 2346, and 2347), as in effect on the day 
before the effective date set forth in section 1891.
    (c) Conforming Amendments.--
            (1) Section 256 of the Trade Act of 1974, as 
        redesignated by subsection (a) of this section, is 
        amended by striking subsection (d).
            (2) Section 258 of the Trade Act of 1974, as 
        redesignated by subsection (a) of this section, is 
        amended--
                    (A) in the first sentence, by striking 
                ``and financial''; and
                    (B) in the last sentence--
                            (i) by striking ``sections 253 and 
                        254'' and inserting ``section 253''; 
                        and
                            (ii) by striking ``title 28 of the 
                        United States Code'' and inserting 
                        ``title 28, United States Code''.
    (d) Clerical Amendments.--The table of contents of the 
Trade Act of 1974 is amended by striking the items relating to 
sections 254, 255, 256, 257, 258, 259, 260, 261, 262, 264, and 
265, and inserting the following:

``Sec. 254. Oversight and administration.
``Sec. 255. Authorization of appropriations.
``Sec. 256. Protective provisions.
``Sec. 257. Penalties.
``Sec. 258. Civil actions.
``Sec. 259. Definitions.
``Sec. 260. Regulations.
``Sec. 261. Study by Secretary of Commerce when International Trade 
          Commission begins investigation; action where there is 
          affirmative finding.
``Sec. 262. Assistance to industries.''.

    (e) Effective Date.--This section and the amendments made 
by this section shall take effect upon the expiration of the 
90-day period beginning on the date of the enactment of this 
Act, except that subsections (b) and (d) of section 254 of the 
Trade Act of 1974 (as added by subsection (a) of this section) 
shall take effect on such date of enactment.

SEC. 1865. INCREASED PENALTIES FOR FALSE STATEMENTS.

    Section 257 of the Trade Act of 1974, as redesignated by 
section 1864(a), is amended to read as follows:

``SEC. 257. PENALTIES.

    ``Any person who--
            ``(1) makes a false statement of a material fact 
        knowing it to be false, or knowingly fails to disclose 
        a material fact, or willfully overvalues any security, 
        for the purpose of influencing in any way a 
        determination under this chapter, or for the purpose of 
        obtaining money, property, or anything of value under 
        this chapter, or
            ``(2) makes a false statement of a material fact 
        knowing it to be false, or knowingly fails to disclose 
        a material fact, when providing information to the 
        Secretary during an investigation of a petition under 
        this chapter,
shall be imprisoned for not more than 2 years, or fined under 
title 18, United States Code, or both.''.

SEC. 1866. ANNUAL REPORT ON TRADE ADJUSTMENT ASSISTANCE FOR FIRMS.

    (a) In General.--Not later than December 15, 2009, and each 
year thereafter, the Secretary of Commerce shall prepare a 
report containing data regarding the trade adjustment 
assistance for firms program provided for in chapter 3 of title 
II of the Trade Act of 1974 (19 U.S.C. 2341 et seq.) for the 
preceding fiscal year. The data shall include the following:
            (1) The number of firms that inquired about the 
        program.
            (2) The number of petitions filed under section 
        251.
            (3) The number of petitions certified and denied.
            (4) The average time for processing petitions.
            (5) The number of petitions filed and firms 
        certified for each congressional district of the United 
        States.
            (6) The number of firms that received assistance in 
        preparing their petitions.
            (7) The number of firms that received assistance 
        developing business recovery plans.
            (8) The number of business recovery plans approved 
        and denied by the Secretary of Commerce.
            (9) Sales, employment, and productivity at each 
        firm participating in the program at the time of 
        certification.
            (10) Sales, employment, and productivity at each 
        firm upon completion of the program and each year for 
        the 2-year period following completion.
            (11) The financial assistance received by each firm 
        participating in the program.
            (12) The financial contribution made by each firm 
        participating in the program.
            (13) The types of technical assistance included in 
        the business recovery plans of firms participating in 
        the program.
            (14) The number of firms leaving the program before 
        completing the project or projects in their business 
        recovery plans and the reason the project was not 
        completed.
    (b) Classification of Data.--To the extent possible, in 
collecting and reporting the data described in subsection (a), 
the Secretary shall classify the data by intermediary 
organization, State, and national totals.
    (c) Report to Congress; Publication.--The Secretary of 
Commerce shall--
            (1) submit the report described in subsection (a) 
        to the Committee on Finance of the Senate and the 
        Committee on Ways and Means of the House of 
        Representatives; and
            (2) publish the report in the Federal Register and 
        on the website of the Department of Commerce.
    (d) Protection of Confidential Information.--The Secretary 
of Commerce may not release information described in subsection 
(a) that the Secretary considers to be confidential business 
information unless the person submitting the confidential 
business information had notice, at the time of submission, 
that such information would be released by the Secretary, or 
such person subsequently consents to the release of the 
information. Nothing in this subsection shall be construed to 
prohibit the Secretary from providing such confidential 
business information to a court in camera or to another party 
under a protective order issued by a court.

SEC. 1867. TECHNICAL CORRECTIONS.

    (a) In General.--Section 251 of the Trade Act of 1974 (19 
U.S.C. 2341), as amended, is further amended--
            (1) in subsection (a), by striking ``he has'' and 
        inserting ``the Secretary has''; and
            (2) in subsection (d), by striking ``60 days'' and 
        inserting ``40 days''.
    (b) Technical Assistance.--Section 253(a)(3) of the Trade 
Act of 1974 (19 U.S.C. 2343(a)(3)) is amended by striking ``of 
a certified firm'' and inserting ``to a certified firm''.

         PART III--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

SEC. 1871. PURPOSE.

    The purpose of the amendments made by this part is to 
assist communities impacted by trade with economic adjustment 
through the coordination of Federal, State, and local 
resources, the creation of community-based development 
strategies, and the development and provision of programs that 
meet the training needs of workers covered by certifications 
under section 223.

SEC. 1872. TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES.

    (a) In General.--Chapter 4 of title II of the Trade Act of 
1974 (19 U.S.C. 2371 et seq.) is amended to read as follows:

        ``CHAPTER 4--TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES

      ``Subchapter A--Trade Adjustment Assistance for Communities

``SEC. 271. DEFINITIONS.

    ``In this subchapter:
            ``(1) Agricultural commodity producer.--The term 
        `agricultural commodity producer' has the meaning given 
        that term in section 291.
            ``(2) Community.--The term `community' means a 
        city, county, or other political subdivision of a State 
        or a consortium of political subdivisions of a State.
            ``(3) Community impacted by trade.--The term 
        `community impacted by trade' means a community 
        described in section 273(b)(2).
            ``(4) Eligible community.--The term `eligible 
        community' means a community that the Secretary has 
        determined under section 273(b)(1) is eligible to apply 
        for assistance under this subchapter.
            ``(5) Secretary.--The term `Secretary' means the 
        Secretary of Commerce.

``SEC. 272. ESTABLISHMENT OF TRADE ADJUSTMENT ASSISTANCE FOR 
                    COMMUNITIES PROGRAM.

    ``Not later than August 1, 2009, the Secretary shall 
establish a trade adjustment assistance for communities program 
at the Department of Commerce under which the Secretary shall--
            ``(1) provide technical assistance under section 
        274 to communities impacted by trade to facilitate the 
        economic adjustment of those communities; and
            ``(2) award grants to communities impacted by trade 
        to carry out strategic plans developed under section 
        276.

``SEC. 273. ELIGIBILITY; NOTIFICATION.

    ``(a) Petition.--
            ``(1) In general.--A community may submit a 
        petition to the Secretary for an affirmative 
        determination under subsection (b)(1) that the 
        community is eligible to apply for assistance under 
        this subchapter if--
                    ``(A) on or after August 1, 2009, one or 
                more certifications described in subsection 
                (b)(3) are made with respect to the community; 
                and
                    ``(B) the community submits the petition 
                not later than 180 days after the date of the 
                most recent certification.
            ``(2) Special rule with respect to certain 
        communities.--In the case of a community with respect 
        to which one or more certifications described in 
        subsection (b)(3) were made on or after January 1, 
        2007, and before August 1, 2009, the community may 
        submit not later than February 1, 2010, a petition to 
        the Secretary for an affirmative determination under 
        subsection (b)(1).
    ``(b) Affirmative Determination.--
            ``(1) In general.--The Secretary shall make an 
        affirmative determination that a community is eligible 
        to apply for assistance under this subchapter if the 
        Secretary determines that the community is a community 
        impacted by trade.
            ``(2) Community impacted by trade.--A community is 
        a community impacted by trade if--
                    ``(A) one or more certifications described 
                in paragraph (3) are made with respect to the 
                community; and
                    ``(B) the Secretary determines that the 
                community is significantly affected by the 
                threat to, or the loss of, jobs associated with 
                any such certification.
            ``(3) Certification described.--A certification 
        described in this paragraph is a certification--
                    ``(A) by the Secretary of Labor that a 
                group of workers in the community is eligible 
                to apply for assistance under section 223;
                    ``(B) by the Secretary of Commerce that a 
                firm located in the community is eligible to 
                apply for adjustment assistance under section 
                251; or
                    ``(C) by the Secretary of Agriculture that 
                a group of agricultural commodity producers in 
                the community is eligible to apply for 
                adjustment assistance under section 293.
    ``(c) Notifications.--
            ``(1) Notification to the governor.--The Governor 
        of a State shall be notified promptly--
                    ``(A) by the Secretary of Labor, upon 
                making a determination that a group of workers 
                in the State is eligible for assistance under 
                section 223;
                    ``(B) by the Secretary of Commerce, upon 
                making a determination that a firm in the State 
                is eligible for assistance under section 251; 
                and
                    ``(C) by the Secretary of Agriculture, upon 
                making a determination that a group of 
                agricultural commodity producers in the State 
                is eligible for assistance under section 293.
            ``(2) Notification to community.--Upon making an 
        affirmative determination under subsection (b)(1) that 
        a community is eligible to apply for assistance under 
        this subchapter, the Secretary shall promptly notify 
        the community and the Governor of the State in which 
        the community is located--
                    ``(A) of the affirmative determination;
                    ``(B) of the applicable provisions of this 
                subchapter; and
                    ``(C) of the means for obtaining assistance 
                under this subchapter and other appropriate 
                economic assistance that may be available to 
                the community.

``SEC. 274. TECHNICAL ASSISTANCE.

    ``(a) In General.--The Secretary shall provide 
comprehensive technical assistance to an eligible community to 
assist the community to--
            ``(1) diversify and strengthen the economy in the 
        community;
            ``(2) identify significant impediments to economic 
        development that result from the impact of trade on the 
        community; and
            ``(3) develop a strategic plan under section 276 to 
        address economic adjustment and workforce dislocation 
        in the community, including unemployment among 
        agricultural commodity producers.
    ``(b) Coordination of Federal Response.--The Secretary 
shall coordinate the Federal response to an eligible community 
by--
            ``(1) identifying Federal, State, and local 
        resources that are available to assist the community in 
        responding to economic distress; and
            ``(2) assisting the community in accessing 
        available Federal assistance and ensuring that such 
        assistance is provided in a targeted, integrated 
        manner.
    ``(c) Interagency Community Assistance Working Group.--
            ``(1) In general.--The Secretary shall establish an 
        interagency Community Assistance Working Group, to be 
        chaired by the Secretary or the Secretary's designee, 
        which shall assist the Secretary with the coordination 
        of the Federal response pursuant to subsection (b).
            ``(2) Membership.--The Working Group shall consist 
        of representatives of any Federal department or agency 
        with responsibility for providing economic adjustment 
        assistance, including the Department of Agriculture, 
        the Department of Defense, the Department of Education, 
        the Department of Labor, the Department of Housing and 
        Urban Development, the Department of Health and Human 
        Services, the Small Business Administration, the 
        Department of the Treasury, and any other Federal, 
        State, or regional public department or agency the 
        Secretary determines to be appropriate.

``SEC. 275. GRANTS FOR ELIGIBLE COMMUNITIES.

    ``(a) In General.--The Secretary may award a grant under 
this section to an eligible community to assist the community 
in carrying out any project or program that is included in a 
strategic plan developed by the community under section 276.
    ``(b) Application.--
            ``(1) In general.--An eligible community seeking to 
        receive a grant under this section shall submit a grant 
        application to the Secretary that contains--
                    ``(A) the strategic plan developed by the 
                community under section 276(a)(1)(A) and 
                approved by the Secretary under section 
                276(a)(1)(B); and
                    ``(B) a description of the project or 
                program included in the strategic plan with 
                respect to which the community seeks the grant.
            ``(2) Coordination among grant programs.--If an 
        entity in an eligible community is seeking or plans to 
        seek a Community College and Career Training Grant 
        under section 278 or a Sector Partnership Grant under 
        section 279A while the eligible community is seeking a 
        grant under this section, the eligible community shall 
        include in the grant application a description of how 
        the eligible community will integrate any projects or 
        programs carried out using a grant under this section 
        with any projects or programs that may be carried out 
        using such other grants.
    ``(c) Limitation.--An eligible community may not be awarded 
more than $5,000,000 under this section.
    ``(d) Cost-Sharing.--
            ``(1) Federal share.--The Federal share of a 
        project or program for which a grant is awarded under 
        this section may not exceed 95 percent of the cost of 
        such project or program.
            ``(2) Community share.--The Secretary shall 
        require, as a condition of awarding a grant to an 
        eligible community under this section, that the 
        eligible community contribute not less than an amount 
        equal to 5 percent of the amount of the grant toward 
        the cost of the project or program for which the grant 
        is awarded.
    ``(e) Grants to Small- and Medium-Sized Communities.--The 
Secretary shall give priority to grant applications submitted 
under this section by eligible communities that are small- and 
medium-sized communities.
    ``(f) Annual Report.--Not later than December 15 in each of 
the calendar years 2009 through 2011, the Secretary shall 
submit to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives a 
report--
            ``(1) describing each grant awarded under this 
        section during the preceding fiscal year; and
            ``(2) assessing the impact on the eligible 
        community of each such grant awarded in a fiscal year 
        before the fiscal year referred to in paragraph (1).

``SEC. 276. STRATEGIC PLANS.

    ``(a) In General.--
            ``(1) Development.--An eligible community that 
        intends to apply for a grant under section 275 shall--
                    ``(A) develop a strategic plan for the 
                community's economic adjustment to the impact 
                of trade; and
                    ``(B) submit the plan to the Secretary for 
                evaluation and approval.
            ``(2) Involvement of private and public entities.--
                    ``(A) In general.--To the extent 
                practicable, an eligible community shall 
                consult with entities described in subparagraph 
                (B) in developing a strategic plan under 
                paragraph (1).
                    ``(B) Entities described.--Entities 
                described in this subparagraph are public and 
                private entities within the eligible community, 
                including--
                            ``(i) local, county, or State 
                        government agencies serving the 
                        community;
                            ``(ii) firms, including small- and 
                        medium-sized firms, within the 
                        community;
                            ``(iii) local workforce investment 
                        boards established under section 117 of 
                        the Workforce Investment Act of 1998 
                        (29 U.S.C. 2832);
                            ``(iv) labor organizations, 
                        including State labor federations and 
                        labor-management initiatives, 
                        representing workers in the community; 
                        and
                            ``(v) educational institutions, 
                        local educational agencies, or other 
                        training providers serving the 
                        community.
    ``(b) Contents.--The strategic plan shall, at a minimum, 
contain the following:
            ``(1) A description and analysis of the capacity of 
        the eligible community to achieve economic adjustment 
        to the impact of trade.
            ``(2) An analysis of the economic development 
        challenges and opportunities facing the community as 
        well as the strengths and weaknesses of the economy of 
        the community.
            ``(3) An assessment of the commitment of the 
        eligible community to the strategic plan over the long 
        term and the participation and input of members of the 
        community affected by economic dislocation.
            ``(4) A description of the role and the 
        participation of the entities described in subsection 
        (a)(2)(B) in developing the strategic plan.
            ``(5) A description of the projects to be 
        undertaken by the eligible community under the 
        strategic plan.
            ``(6) A description of how the strategic plan and 
        the projects to be undertaken by the eligible community 
        will facilitate the community's economic adjustment.
            ``(7) A description of the educational and training 
        programs available to workers in the eligible community 
        and the future employment needs of the community.
            ``(8) An assessment of the cost of implementing the 
        strategic plan, the timing of funding required by the 
        eligible community to implement the strategic plan, and 
        the method of financing to be used to implement the 
        strategic plan.
            ``(9) A strategy for continuing the economic 
        adjustment of the eligible community after the 
        completion of the projects described in paragraph (5).
    ``(c) Grants To Develop Strategic Plans.--
            ``(1) In general.--The Secretary, upon receipt of 
        an application from an eligible community, may award a 
        grant to the community to assist the community in 
        developing a strategic plan under subsection (a)(1). A 
        grant awarded under this paragraph shall not exceed 75 
        percent of the cost of developing the strategic plan.
            ``(2) Funds to be used.--Of the funds appropriated 
        pursuant to section 277(c), the Secretary may make 
        available not more than $25,000,000 for each of the 
        fiscal years 2009 and 2010, and $6,250,000 for the 
        period beginning October 1, 2010, and ending December 
        31, 2010, to provide grants to eligible communities 
        under paragraph (1).

``SEC. 277. GENERAL PROVISIONS.

    ``(a) Regulations.--
            ``(1) In general.--The Secretary shall prescribe 
        such regulations as are necessary to carry out the 
        provisions of this subchapter, including--
                    ``(A) establishing specific guidelines for 
                the submission and evaluation of strategic 
                plans under section 276;
                    ``(B) establishing specific guidelines for 
                the submission and evaluation of grant 
                applications under section 275; and
                    ``(C) administering the grant programs 
                established under sections 275 and 276.
            ``(2) Consultations.--The Secretary shall consult 
        with the Committee on Finance of the Senate and the 
        Committee on Ways and Means of the House of 
        Representatives not less than 90 days prior to 
        promulgating any final rule or regulation pursuant to 
        paragraph (1).
    ``(b) Personnel.--The Secretary shall designate such staff 
as may be necessary to carry out the responsibilities described 
in this subchapter.
    ``(c) Authorization of Appropriations.--
            ``(1) In general.--There are authorized to be 
        appropriated to the Secretary $150,000,000 for each of 
        the fiscal years 2009 and 2010, and $37,500,000 for the 
        period beginning October 1, 2010, and ending December 
        31, 2010, to carry out this subchapter.
            ``(2) Availability.--Amounts appropriated pursuant 
        to this subchapter--
                    ``(A) shall be available to provide 
                adjustment assistance to communities that have 
                been approved for assistance pursuant to this 
                chapter on or before December 31, 2010; and
                    ``(B) shall otherwise remain available 
                until expended.
            ``(3) Supplement not supplant.--Funds appropriated 
        pursuant to this subchapter shall be used to supplement 
        and not supplant other Federal, State, and local public 
        funds expended to provide economic development 
        assistance for communities.

  ``Subchapter B--Community College and Career Training Grant Program

``SEC. 278. COMMUNITY COLLEGE AND CAREER TRAINING GRANT PROGRAM.

    ``(a) Grants Authorized.--
            ``(1) In general.--Beginning August 1, 2009, the 
        Secretary may award Community College and Career 
        Training Grants to eligible institutions for the 
        purpose of developing, offering, or improving 
        educational or career training programs for workers 
        eligible for training under section 236.
            ``(2) Limitations.--An eligible institution may not 
        be awarded--
                    ``(A) more than one grant under this 
                section; or
                    ``(B) a grant under this section in excess 
                of $1,000,000.
    ``(b) Definitions.--In this section:
            ``(1) Eligible institution.--The term `eligible 
        institution' means an institution of higher education 
        (as defined in section 102 of the Higher Education Act 
        of 1965 (20 U.S.C. 1002)), but only with respect to a 
        program offered by the institution that can be 
        completed in not more than 2 years.
            ``(2) Secretary.--The term `Secretary' means the 
        Secretary of Labor.
    ``(c) Grant Proposals.--
            ``(1) In general.--An eligible institution seeking 
        to receive a grant under this section shall submit a 
        grant proposal to the Secretary at such time, in such 
        manner, and containing such information as the 
        Secretary may require.
            ``(2) Guidelines.--Not later than June 1, 2009, the 
        Secretary shall--
                    ``(A) promulgate guidelines for the 
                submission of grant proposals under this 
                section; and
                    ``(B) publish and maintain such guidelines 
                on the website of the Department of Labor.
            ``(3) Assistance.--The Secretary shall offer 
        assistance in preparing a grant proposal to any 
        eligible institution that requests such assistance.
            ``(4) General requirements for grant proposals.--
                    ``(A) In general.--A grant proposal 
                submitted to the Secretary under this section 
                shall include a detailed description of--
                            ``(i) the specific project for 
                        which the grant proposal is submitted, 
                        including the manner in which the grant 
                        will be used to develop, offer, or 
                        improve an educational or career 
                        training program that is suited to 
                        workers eligible for training under 
                        section 236;
                            ``(ii) the extent to which the 
                        project for which the grant proposal is 
                        submitted will meet the educational or 
                        career training needs of workers in the 
                        community served by the eligible 
                        institution who are eligible for 
                        training under section 236;
                            ``(iii) the extent to which the 
                        project for which the grant proposal is 
                        submitted fits within any overall 
                        strategic plan developed by an eligible 
                        community under section 276;
                            ``(iv) the extent to which the 
                        project for which the grant proposal is 
                        submitted relates to any project funded 
                        by a Sector Partnership Grant awarded 
                        under section 279A; and
                            ``(v) any previous experience of 
                        the eligible institution in providing 
                        educational or career training programs 
                        to workers eligible for training under 
                        section 236.
                    ``(B) Absence of experience.--The absence 
                of any previous experience in providing 
                educational or career training programs 
                described in subparagraph (A)(v) shall not 
                automatically disqualify an eligible 
                institution from receiving a grant under this 
                section.
            ``(5) Community outreach required.--In order to be 
        considered by the Secretary, a grant proposal submitted 
        by an eligible institution under this section shall--
                    ``(A) demonstrate that the eligible 
                institution--
                            ``(i) reached out to employers, and 
                        other entities described in section 
                        276(a)(2)(B) to identify--
                                    ``(I) any shortcomings in 
                                existing educational and career 
                                training opportunities 
                                available to workers in the 
                                community; and
                                    ``(II) any future 
                                employment opportunities within 
                                the community and the 
                                educational and career training 
                                skills required for workers to 
                                meet the future employment 
                                demand;
                            ``(ii) reached out to other 
                        similarly situated institutions in an 
                        effort to benefit from any best 
                        practices that may be shared with 
                        respect to providing educational or 
                        career training programs to workers 
                        eligible for training under section 
                        236; and
                            ``(iii) reached out to any eligible 
                        partnership in the community that has 
                        sought or received a Sector Partnership 
                        Grant under section 279A to enhance the 
                        effectiveness of each grant and avoid 
                        duplication of efforts; and
                    ``(B) include a detailed description of--
                            ``(i) the extent and outcome of the 
                        outreach conducted under subparagraph 
                        (A);
                            ``(ii) the extent to which the 
                        project for which the grant proposal is 
                        submitted will contribute to meeting 
                        any shortcomings identified under 
                        subparagraph (A)(i)(I) or any 
                        educational or career training needs 
                        identified under subparagraph 
                        (A)(i)(II); and
                            ``(iii) the extent to which 
                        employers, including small- and medium-
                        sized firms within the community, have 
                        demonstrated a commitment to employing 
                        workers who would benefit from the 
                        project for which the grant proposal is 
                        submitted.
    ``(d) Criteria for Award of Grants.--
            ``(1) In general.--Subject to the appropriation of 
        funds, the Secretary shall award a grant under this 
        section based on--
                    ``(A) a determination of the merits of the 
                grant proposal submitted by the eligible 
                institution to develop, offer, or improve 
                educational or career training programs to be 
                made available to workers eligible for training 
                under section 236;
                    ``(B) an evaluation of the likely 
                employment opportunities available to workers 
                who complete an educational or career training 
                program that the eligible institution proposes 
                to develop, offer, or improve; and
                    ``(C) an evaluation of prior demand for 
                training programs by workers eligible for 
                training under section 236 in the community 
                served by the eligible institution, as well as 
                the availability and capacity of existing 
                training programs to meet future demand for 
                training programs.
            ``(2) Priority for certain communities.--In 
        awarding grants under this section, the Secretary shall 
        give priority to an eligible institution that serves a 
        community that the Secretary of Commerce has determined 
        under section 273 is eligible to apply for assistance 
        under subchapter A within the 5-year period preceding 
        the date on which the grant proposal is submitted to 
        the Secretary under this section.
            ``(3) Matching requirements.--A grant awarded under 
        this section may not be used to satisfy any private 
        matching requirement under any other provision of law.
    ``(e) Annual Report.--Not later than December 15 in each of 
the calendar years 2009 through 2011, the Secretary shall 
submit to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives a 
report--
            ``(1) describing each grant awarded under this 
        section during the preceding fiscal year; and
            ``(2) assessing the impact of each award of a grant 
        under this section in a fiscal year preceding the 
        fiscal year referred to in paragraph (1) on workers 
        receiving training under section 236.

``SEC. 279. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) Authorization of Appropriations.--There are 
authorized to be appropriated to the Secretary of Labor 
$40,000,000 for each of the fiscal years 2009 and 2010, and 
$10,000,000 for the period beginning October 1, 2010, and 
ending December 31, 2010, to fund the Community College and 
Career Training Grant Program. Funds appropriated pursuant to 
this section shall remain available until expended.
    ``(b) Supplement Not Supplant.--Funds appropriated pursuant 
to this section shall be used to supplement and not supplant 
other Federal, State, and local public funds expended to 
support community college and career training programs.

   ``Subchapter C--Industry or Sector Partnership Grant Program for 
                     Communities Impacted by Trade

``SEC. 279A. INDUSTRY OR SECTOR PARTNERSHIP GRANT PROGRAM FOR 
                    COMMUNITIES IMPACTED BY TRADE.

    ``(a) Purpose.--The purpose of this subchapter is to 
facilitate efforts by industry or sector partnerships to 
strengthen and revitalize industries and create employment 
opportunities for workers in communities impacted by trade.
    ``(b) Definitions.--In this subchapter:
            ``(1) Community impacted by trade.--The term 
        `community impacted by trade' has the meaning given 
        that term in section 271.
            ``(2) Dislocated worker.--The term `dislocated 
        worker' means a worker who has been totally or 
        partially separated, or is threatened with total or 
        partial separation, from employment in an industry or 
        sector in a community impacted by trade.
            ``(3) Eligible partnership.--The term `eligible 
        partnership' means a voluntary partnership composed of 
        public and private persons, firms, or other entities 
        within a community impacted by trade, that shall 
        include representatives of--
                    ``(A) an industry or sector within the 
                community, including an industry association;
                    ``(B) local, county, or State government;
                    ``(C) multiple firms in the industry or 
                sector, including small- and medium-sized 
                firms, within the community;
                    ``(D) local workforce investment boards 
                established under section 117 of the Workforce 
                Investment Act of 1998 (29 U.S.C. 2832);
                    ``(E) labor organizations, including State 
                labor federations and labor-management 
                initiatives, representing workers in the 
                community; and
                    ``(F) educational institutions, local 
                educational agencies, or other training 
                providers serving the community.
            ``(4) Lead entity.--The term `lead entity' means--
                    ``(A) an entity designated by the eligible 
                partnership to be responsible for submitting a 
                grant proposal under subsection (e) and serving 
                as the eligible partnership's fiscal agent in 
                expending any Sector Partnership Grant awarded 
                under this section; or
                    ``(B) a State agency designated by the 
                Governor of the State to carry out the 
                responsibilities described in subparagraph (A).
            ``(5) Secretary.--The term `Secretary' means the 
        Secretary of Labor.
            ``(6) Targeted industry or sector.--The term 
        `targeted industry or sector' means the industry or 
        sector represented by an eligible partnership.
    ``(c) Sector Partnership Grants Authorized.--Beginning on 
August 1, 2009, and subject to the appropriation of funds, the 
Secretary shall award Sector Partnership Grants to eligible 
partnerships to assist the eligible partnerships in carrying 
out projects, over periods of not more than 3 years, to 
strengthen and revitalize industries and sectors and create 
employment opportunities for dislocated workers.
    ``(d) Use of Sector Partnership Grants.--An eligible 
partnership may use a Sector Partnership Grant to carry out any 
project that the Secretary determines will further the purpose 
of this subchapter, which may include--
            ``(1) identifying the skill needs of the targeted 
        industry or sector and any gaps in the available supply 
        of skilled workers in the community impacted by trade, 
        and developing strategies for filling the gaps, 
        including by--
                    ``(A) developing systems to better link 
                firms in the targeted industry or sector to 
                available skilled workers;
                    ``(B) helping firms in the targeted 
                industry or sector to obtain access to new 
                sources of qualified job applicants;
                    ``(C) retraining dislocated and incumbent 
                workers; or
                    ``(D) facilitating the training of new 
                skilled workers by aligning the instruction 
                provided by local suppliers of education and 
                training services with the needs of the 
                targeted industry or sector;
            ``(2) analyzing the skills and education levels of 
        dislocated and incumbent workers and developing 
        training to address skill gaps that prevent such 
        workers from obtaining jobs in the targeted industry or 
        sector;
            ``(3) helping firms, especially small- and medium-
        sized firms, in the targeted industry or sector 
        increase their productivity and the productivity of 
        their workers;
            ``(4) helping such firms retain incumbent workers;
            ``(5) developing learning consortia of small- and 
        medium-sized firms in the targeted industry or sector 
        with similar training needs to enable the firms to 
        combine their purchases of training services, and 
        thereby lower their training costs;
            ``(6) providing information and outreach activities 
        to firms in the targeted industry or sector regarding 
        the activities of the eligible partnership and other 
        local service suppliers that could assist the firms in 
        meeting needs for skilled workers;
            ``(7) seeking, applying, and disseminating best 
        practices learned from similarly situated communities 
        impacted by trade in the development and implementation 
        of economic growth and revitalization strategies; and
            ``(8) identifying additional public and private 
        resources to support the activities described in this 
        subsection, which may include the option to apply for a 
        community grant under section 275 or a Community 
        College and Career Training Grant under section 278 
        (subject to meeting any additional requirements of 
        those sections).
    ``(e) Grant Proposals.--
            ``(1) In general.--The lead entity of an eligible 
        partnership seeking to receive a Sector Partnership 
        Grant under this section shall submit a grant proposal 
        to the Secretary at such time, in such manner, and 
        containing such information as the Secretary may 
        require.
            ``(2) General requirements of grant proposals.--A 
        grant proposal submitted under paragraph (1) shall, at 
        a minimum--
                    ``(A) identify the members of the eligible 
                partnership;
                    ``(B) identify the targeted industry or 
                sector for which the eligible partnership 
                intends to carry out projects using the Sector 
                Partnership Grant;
                    ``(C) describe the goals that the eligible 
                partnership intends to achieve to promote the 
                targeted industry or sector;
                    ``(D) describe the projects that the 
                eligible partnership will undertake to achieve 
                such goals;
                    ``(E) demonstrate that the eligible 
                partnership has the organizational capacity to 
                carry out the projects described in 
                subparagraph (D);
                    ``(F) explain--
                            ``(i) whether--
                                    ``(I) the community 
                                impacted by trade has sought or 
                                received a community grant 
                                under section 275;
                                    ``(II) an eligible 
                                institution in the community 
                                has sought or received a 
                                Community College and Career 
                                Training Grant under section 
                                278; or
                                    ``(III) any other entity in 
                                the community has received 
                                funds pursuant to any other 
                                federally funded training 
                                project; and
                            ``(ii) how the eligible partnership 
                        will coordinate its use of a Sector 
                        Partnership Grant with the use of such 
                        other grants or funds in order to 
                        enhance the effectiveness of each grant 
                        and any such funds and avoid 
                        duplication of efforts; and
                    ``(G) include performance measures, 
                developed based on the performance measures 
                issued by the Secretary under subsection 
                (g)(2), and a timeline for measuring progress 
                toward achieving the goals described in 
                subparagraph (C).
    ``(f) Award of Grants.--
            ``(1) In general.--Upon application by the lead 
        entity of an eligible partnership, the Secretary may 
        award a Sector Partnership Grant to the eligible 
        partnership to assist the partnership in carrying out 
        any of the projects in the grant proposal that the 
        Secretary determines will further the purposes of this 
        subchapter.
            ``(2) Limitations.--An eligible partnership may not 
        be awarded--
                    ``(A) more than one Sector Partnership 
                Grant; or
                    ``(B) a total grant award under this 
                subchapter in excess of--
                            ``(i) except as provided in clause 
                        (ii), $2,500,000; or
                            ``(ii) in the case of an eligible 
                        partnership located within a community 
                        impacted by trade that is not served by 
                        an institution receiving a Community 
                        College and Career Training Grant under 
                        section 278, $3,000,000.
    ``(g) Administration by the Secretary.--
            ``(1) Technical assistance and oversight.--
                    ``(A) In general.--The Secretary shall 
                provide technical assistance to, and oversight 
                of, the lead entity of an eligible partnership 
                in applying for and administering Sector 
                Partnership Grants awarded under this section.
                    ``(B) Technical assistance.--Technical 
                assistance provided under subparagraph (A) 
                shall include providing conferences and such 
                other methods of collecting and disseminating 
                information on best practices developed by 
                eligible partnerships as the Secretary 
                determines appropriate.
                    ``(C) Grants or contracts for technical 
                assistance.--The Secretary may award a grant or 
                contract to one or more national or State 
                organizations to provide technical assistance 
                to foster the planning, formation, and 
                implementation of eligible partnerships.
            ``(2) Performance measures.--The Secretary shall 
        issue a range of performance measures, with 
        quantifiable benchmarks, and methodologies that 
        eligible partnerships may use to measure progress 
        toward the goals described in subsection (e). In 
        developing such measures, the Secretary shall consider 
        the benefits of the eligible partnership and its 
        activities for workers, firms, industries, and 
        communities.
    ``(h) Reports.--
            ``(1) Progress report.--Not later than 1 year after 
        receiving a Sector Partnership Grant, and 3 years 
        thereafter, the lead entity shall submit to the 
        Secretary, on behalf of the eligible partnership, a 
        report containing--
                    ``(A) a detailed description of the 
                progress made toward achieving the goals 
                described in subsection (e)(2)(C), using the 
                performance measures required under subsection 
                (e)(2)(G);
                    ``(B) a detailed evaluation of the impact 
                of the grant award on workers and employers in 
                the community impacted by trade; and
                    ``(C) a detailed description of all 
                expenditures of funds awarded to the eligible 
                partnership under the Sector Partnership Grant 
                approved by the Secretary under this 
                subchapter.
            ``(2) Annual report.--Not later than December 15 in 
        each of the calendar years 2009 through 2011, the 
        Secretary shall submit to the Committee on Finance of 
        the Senate and the Committee on Ways and Means of the 
        House of Representatives a report--
                    ``(A) describing each Sector Partnership 
                Grant awarded to an eligible partnership during 
                the preceding fiscal year; and
                    ``(B) assessing the impact of each Sector 
                Partnership Grant awarded in a fiscal year 
                preceding the fiscal year referred to in 
                subparagraph (A) on workers and employers in 
                communities impacted by trade.

``SEC. 279B. AUTHORIZATION OF APPROPRIATIONS.

    ``(a) In General.--There are authorized to be appropriated 
to the Secretary of Labor $40,000,000 for each of the fiscal 
years 2009 and 2010, and $10,000,000 for the period beginning 
October 1, 2010, and ending December 31, 2010, to carry out the 
Sector Partnership Grant program under section 279A. Funds 
appropriated pursuant to this section shall remain available 
until expended.
    ``(b) Supplement Not Supplant.--Funds appropriated pursuant 
to this section shall be used to supplement and not supplant 
other Federal, State, and local public funds expended to 
support the economic development of local communities.
    ``(c) Administrative Costs.--The Secretary may retain not 
more than 5 percent of the funds appropriated pursuant to this 
section for each fiscal year to administer the Sector 
Partnership Grant program under section 279A.

                   ``Subchapter D--General Provisions

``SEC. 279C. RULE OF CONSTRUCTION.

    ``Nothing in this chapter prevents a worker from receiving 
trade adjustment assistance under chapter 2 of this title at 
the same time the worker is receiving assistance in any manner 
from--
            ``(1) a community receiving a community grant under 
        subchapter A;
            ``(2) an eligible institution receiving a Community 
        College and Career Training Grant under subchapter B; 
        or
            ``(3) an eligible partnership receiving a Sector 
        Partnership Grant under subchapter C.''.

SEC. 1873. CONFORMING AMENDMENTS.

    (a) Table of Contents.--The table of contents of the Trade 
Act of 1974 is amended by striking the items relating to 
chapter 4 of title II and inserting the following:

        ``Chapter 4--Trade Adjustment Assistance for Communities

       ``Subchapter A--Trade Adjustment Assistance for Communities

``Sec. 271. Definitions.
``Sec. 272. Establishment of trade adjustment assistance for communities 
          program.
``Sec. 273. Eligibility; notification.
``Sec. 274. Technical assistance.
``Sec. 275. Grants for eligible communities.
``Sec. 276. Strategic plans.
``Sec. 277. General provisions.

   ``Subchapter B--Community College and Career Training Grant Program

``Sec. 278. Community college and career training grant program.
``Sec. 279. Authorization of appropriations.

    ``Subchapter C--Industry or Sector Partnership Grant Program for 
                      Communities Impacted by Trade

``Sec. 279A. Industry or sector partnership grant program for 
          communities impacted by trade.
``Sec. 279B. Authorization of appropriations.

                   ``Subchapter D--General Provisions

``Sec. 279C. Rule of construction.''

    (b) Judicial Review.--
            (1) Section 284(a) of the Trade Act of 1974 (19 
        U.S.C. 2395(a)) is amended--
                    (A) by inserting ``or 296'' after ``section 
                293'';
                    (B) by striking ``or any other interested 
                domestic party'' and inserting ``or authorized 
                representative of a community''; and
                    (C) by striking ``section 271'' and 
                inserting ``section 273''.
            (2) Section 1581(d) of title 28, United States 
        Code, is amended--
                    (A) in paragraph (2), by striking ``; and'' 
                and inserting a semicolon;
                    (B) in paragraph (3)--
                            (i) by striking ``271'' and 
                        inserting ``273''; and
                            (ii) by striking the period and 
                        inserting ``; and''; and
                    (C) by adding at the end the following:
            ``(4) any final determination of the Secretary of 
        Agriculture under section 293 or 296 of the Trade Act 
        of 1974 (19 U.S.C. 2401b) with respect to the 
        eligibility of a group of agricultural commodity 
        producers for adjustment assistance under such Act.''.

            PART IV--TRADE ADJUSTMENT ASSISTANCE FOR FARMERS

SEC. 1881. DEFINITIONS.

    Section 291 of the Trade Act of 1974 (19 U.S.C. 2401) is 
amended--
            (1) by amending paragraph (1) to read as follows:
            ``(1) Agricultural commodity.--The term 
        `agricultural commodity' includes--
                    ``(A) any agricultural commodity (including 
                livestock) in its raw or natural state;
                    ``(B) any class of goods within an 
                agricultural commodity; and
                    ``(C) in the case of an agricultural 
                commodity producer described in paragraph 
                (2)(B), wild-caught aquatic species.'';
            (2) by amending paragraph (2) to read as follows:
            ``(2) Agricultural commodity producer.--The term 
        `agricultural commodity producer' means--
                    ``(A) a person that shares in the risk of 
                producing an agricultural commodity and that is 
                entitled to a share of the commodity for 
                marketing, including an operator, a 
                sharecropper, or a person that owns or rents 
                the land on which the commodity is produced; or
                    ``(B) a person that reports gain or loss 
                from the trade or business of fishing on the 
                person's annual Federal income tax return for 
                the taxable year that most closely corresponds 
                to the marketing year with respect to which a 
                petition is filed under section 292.''; and
            (3) by adding at the end the following:
            ``(7) Marketing year.--The term `marketing year' 
        means--
                    ``(A) a marketing year designated by the 
                Secretary with respect to an agricultural 
                commodity; or
                    ``(B) in the case of an agricultural 
                commodity with respect to which the Secretary 
                does not designate a marketing year, a calendar 
                year.''.

SEC. 1882. ELIGIBILITY.

    (a) In General.--Section 292 of the Trade Act of 1974 (19 
U.S.C. 2401a) is amended by striking subsections (c) through 
(e) and inserting the following:
    ``(c) Group Eligibility Requirements.--The Secretary shall 
certify a group of agricultural commodity producers as eligible 
to apply for adjustment assistance under this chapter if the 
Secretary determines that--
            ``(1)(A) the national average price of the 
        agricultural commodity produced by the group during the 
        most recent marketing year for which data are available 
        is less than 85 percent of the average of the national 
        average price for the commodity in the 3 marketing 
        years preceding such marketing year;
            ``(B) the quantity of production of the 
        agricultural commodity produced by the group during 
        such marketing year is less than 85 percent of the 
        average of the quantity of production of the commodity 
        produced by the group in the 3 marketing years 
        preceding such marketing year;
            ``(C) the value of production of the agricultural 
        commodity produced by the group during such marketing 
        year is less than 85 percent of the average value of 
        production of the commodity produced by the group in 
        the 3 marketing years preceding such marketing year; or
            ``(D) the cash receipts for the agricultural 
        commodity produced by the group during such marketing 
        year are less than 85 percent of the average of the 
        cash receipts for the commodity produced by the group 
        in the 3 marketing years preceding such marketing year;
            ``(2) the volume of imports of articles like or 
        directly competitive with the agricultural commodity 
        produced by the group in the marketing year with 
        respect to which the group files the petition increased 
        compared to the average volume of such imports during 
        the 3 marketing years preceding such marketing year; 
        and
            ``(3) the increase in such imports contributed 
        importantly to the decrease in the national average 
        price, quantity of production, or value of production 
        of, or cash receipts for, the agricultural commodity, 
        as described in paragraph (1).
    ``(d) Eligibility of Certain Other Producers.--An 
agricultural commodity producer or group of producers that 
resides outside of the State or region identified in the 
petition filed under subsection (a) may file a request to 
become a party to that petition not later than 15 days after 
the date the notice is published in the Federal Register under 
subsection (a) with respect to that petition.
    ``(e) Treatment of Classes of Goods Within a Commodity.--In 
any case in which there are separate classes of goods within an 
agricultural commodity, the Secretary shall treat each class as 
a separate commodity in determining under subsection (c)--
            ``(1) group eligibility;
            ``(2) the national average price, quantity of 
        production, or value of production, or cash receipts; 
        and
            ``(3) the volume of imports.''.
    (b) Conforming Amendments.--Section 293 of the Trade Act of 
1974 (19 U.S.C. 2401b) is amended--
            (1) in subsection (a), by striking ``section 292 
        (c) or (d), as the case may be,'' and inserting 
        ``section 292(c)''; and
            (2) in subsection (c), by striking ``decline in 
        price for'' and inserting ``decrease in the national 
        average price, quantity of production, or value of 
        production of, or cash receipts for,''.

SEC. 1883. BENEFITS.

    (a) In General.--Section 296 of the Trade Act of 1974 (19 
U.S.C. 2401e) is amended to read as follows:

``SEC. 296. QUALIFYING REQUIREMENTS AND BENEFITS FOR AGRICULTURAL 
                    COMMODITY PRODUCERS.

    ``(a) In General.--
            ``(1) Requirements.--
                    ``(A) In general.--Benefits under this 
                chapter shall be available to an agricultural 
                commodity producer covered by a certification 
                under this chapter who files an application for 
                such benefits not later than 90 days after the 
                date on which the Secretary makes a 
                determination and issues a certification of 
                eligibility under section 293, if the producer 
                submits to the Secretary sufficient information 
                to establish that--
                            ``(i) the producer produced the 
                        agricultural commodity covered by the 
                        application filed under this subsection 
                        in the marketing year with respect to 
                        which the petition is filed and in at 
                        least 1 of the 3 marketing years 
                        preceding that marketing year;
                            ``(ii)(I) the quantity of the 
                        agricultural commodity that was 
                        produced by the producer in the 
                        marketing year with respect to which 
                        the petition is filed has decreased 
                        compared to the most recent marketing 
                        year preceding that marketing year for 
                        which data are available; or
                            ``(II)(aa) the price received for 
                        the agricultural commodity by the 
                        producer during the marketing year with 
                        respect to which the petition is filed 
                        has decreased compared to the average 
                        price for the commodity received by the 
                        producer in the 3 marketing years 
                        preceding that marketing year; or
                            ``(bb) the county level price 
                        maintained by the Secretary for the 
                        agricultural commodity on the date on 
                        which the petition is filed has 
                        decreased compared to the average 
                        county level price for the commodity in 
                        the 3 marketing years preceding the 
                        date on which the petition is filed; 
                        and
                            ``(iii) the producer is not 
                        receiving--
                                    ``(I) cash benefits under 
                                chapter 2 or 3; or
                                    ``(II) benefits based on 
                                the production of an 
                                agricultural commodity covered 
                                by another petition filed under 
                                this chapter.
                    ``(B) Special rule with respect to crops 
                not grown every year.--For purposes of 
                subparagraph (A)(ii)(II)(aa), if a petition is 
                filed with respect to an agricultural commodity 
                that is not produced by the producer every 
                year, an agricultural commodity producer 
                producing that commodity may establish the 
                average price received for the commodity by the 
                producer in the 3 marketing years preceding the 
                year with respect to which the petition is 
                filed by using average price data for the 3 
                most recent marketing years in which the 
                producer produced the commodity and for which 
                data are available.
            ``(2) Limitations based on adjusted gross income.--
                    ``(A) In general.--Notwithstanding any 
                other provision of this chapter, an 
                agricultural commodity producer shall not be 
                eligible for assistance under this chapter in 
                any year in which the average adjusted gross 
                income (as defined in section 1001D(a) of the 
                Food Security Act of 1985 (7 U.S.C. 1308-
                3a(a))) of the producer exceeds the level set 
                forth in subparagraph (A) or (B) of section 
                1001D(b)(1) of the Food Security Act of 1985 (7 
                U.S.C. 1308-3a(b)(1)), whichever is applicable.
                    ``(B) Demonstration of compliance.--An 
                agricultural commodity producer shall provide 
                to the Secretary such information as the 
                Secretary determines necessary to demonstrate 
                that the producer is in compliance with the 
                limitation under subparagraph (A).
                    ``(C) Counter-cyclical and acre payments.--
                The total amount of payments made to an 
                agricultural commodity producer under this 
                chapter during any crop year may not exceed the 
                limitations on payments set forth in 
                subsections (b)(2), (b)(3), (c)(2), and (c)(3) 
                of section 1001 of the Food Security Act of 
                1985 (7 U.S.C. 1308).
    ``(b) Technical Assistance.--
            ``(1) Initial technical assistance.--
                    ``(A) In general.--An agricultural 
                commodity producer that files an application 
                and meets the requirements under subsection 
                (a)(1) shall be entitled to receive initial 
                technical assistance designed to improve the 
                competitiveness of the production and marketing 
                of the agricultural commodity with respect to 
                which the producer was certified under this 
                chapter. Such assistance shall include 
                information regarding--
                            ``(i) improving the yield and 
                        marketing of that agricultural 
                        commodity; and
                            ``(ii) the feasibility and 
                        desirability of substituting one or 
                        more alternative agricultural 
                        commodities for that agricultural 
                        commodity.
                    ``(B) Transportation and subsistence 
                expenses.--
                            ``(i) In general.--The Secretary 
                        may authorize supplemental assistance 
                        necessary to defray reasonable 
                        transportation and subsistence expenses 
                        incurred by an agricultural commodity 
                        producer in connection with initial 
                        technical assistance under subparagraph 
                        (A) if such assistance is provided at 
                        facilities that are not within normal 
                        commuting distance of the regular place 
                        of residence of the producer.
                            ``(ii) Exceptions.--The Secretary 
                        may not authorize payments to an 
                        agricultural commodity producer under 
                        clause (i)--
                                    ``(I) for subsistence 
                                expenses that exceed the lesser 
                                of--
                                            ``(aa) the actual 
                                        per diem expenses for 
                                        subsistence incurred by 
                                        the producer; or
                                            ``(bb) the 
                                        prevailing per diem 
                                        allowance rate 
                                        authorized under 
                                        Federal travel 
                                        regulations; or
                                    ``(II) for travel expenses 
                                that exceed the prevailing 
                                mileage rate authorized under 
                                the Federal travel regulations.
            ``(2) Intensive technical assistance.--A producer 
        that has completed initial technical assistance under 
        paragraph (1) shall be eligible to participate in 
        intensive technical assistance. Such assistance shall 
        consist of--
                    ``(A) a series of courses to further assist 
                the producer in improving the competitiveness 
                of the producer in producing--
                            ``(i) the agricultural commodity 
                        with respect to which the producer was 
                        certified under this chapter; or
                            ``(ii) another agricultural 
                        commodity; and
                    ``(B) assistance in developing an initial 
                business plan based on the courses completed 
                under subparagraph (A).
            ``(3) Initial business plan.--
                    ``(A) Approval by secretary.--The Secretary 
                shall approve an initial business plan 
                developed under paragraph (2)(B) if the plan--
                            ``(i) reflects the skills gained by 
                        the producer through the courses 
                        described in paragraph (2)(A); and
                            ``(ii) demonstrates how the 
                        producer will apply those skills to the 
                        circumstances of the producer.
                    ``(B) Financial assistance for implementing 
                initial business plan.--Upon approval of the 
                producer's initial business plan by the 
                Secretary under subparagraph (A), a producer 
                shall be entitled to an amount not to exceed 
                $4,000 to--
                            ``(i) implement the initial 
                        business plan; or
                            ``(ii) develop a long-term business 
                        adjustment plan under paragraph (4).
            ``(4) Long-term business adjustment plan.--
                    ``(A) In general.--A producer that has 
                completed intensive technical assistance under 
                paragraph (2) and whose initial business plan 
                has been approved under paragraph (3)(A) shall 
                be eligible for, in addition to the amount 
                under subparagraph (C), assistance in 
                developing a long-term business adjustment 
                plan.
                    ``(B) Approval of long-term business 
                adjustment plans.--The Secretary shall approve 
                a long-term business adjustment plan developed 
                under subparagraph (A) if the Secretary 
                determines that the plan--
                            ``(i) includes steps reasonably 
                        calculated to materially contribute to 
                        the economic adjustment of the producer 
                        to changing market conditions;
                            ``(ii) takes into consideration the 
                        interests of the workers employed by 
                        the producer; and
                            ``(iii) demonstrates that the 
                        producer will have sufficient resources 
                        to implement the business plan.
                    ``(C) Plan implementation.--Upon approval 
                of the producer's long-term business adjustment 
                plan under subparagraph (B), a producer shall 
                be entitled to an amount not to exceed $8,000 
                to implement the long-term business adjustment 
                plan.
    ``(c) Maximum Amount of Assistance.--An agricultural 
commodity producer may receive not more than $12,000 under 
paragraphs (3) and (4) of subsection (b) in the 36-month period 
following certification under section 293.
    ``(d) Limitations on Other Assistance.--An agricultural 
commodity producer that receives benefits under this chapter 
(other than initial technical assistance under subsection 
(b)(1)) shall not be eligible for cash benefits under chapter 2 
or 3.''.
    (b) Clerical Amendment.--The table of contents of the Trade 
Act of 1974 is amended by striking the item relating to section 
296 and inserting the following:

``Sec. 296. Qualifying requirements and benefits for agricultural 
          commodity producers.''.

SEC. 1884. REPORT.

    Section 293 of the Trade Act of 1974 (19 U.S.C. 2401b) is 
amended by adding at the end the following:
    ``(d) Report by the Secretary.--Not later than January 30, 
2010, and annually thereafter, the Secretary of Agriculture 
shall submit to the Committee on Finance of the Senate and the 
Committee on Ways and Means of the House of Representatives a 
report containing the following information with respect to 
adjustment assistance provided under this chapter during the 
preceding fiscal year:
            ``(1) A list of the agricultural commodities 
        covered by a certification under this chapter.
            ``(2) The States or regions in which such 
        commodities are produced and the aggregate amount of 
        such commodities produced in each such State or region.
            ``(3) The total number of agricultural commodity 
        producers, by congressional district, receiving 
        benefits under this chapter.
            ``(4) The total number of agricultural commodity 
        producers, by congressional district, receiving 
        technical assistance under this chapter.''.

SEC. 1885. FRAUD AND RECOVERY OF OVERPAYMENTS.

    Section 297(a)(1) of the Trade Act of 1974 (19 U.S.C. 
2401f(a)(1)) is amended by inserting ``or has expended funds 
received under this chapter for a purpose that was not approved 
by the Secretary,'' after ``entitled,''.

SEC. 1886. DETERMINATION OF INCREASES OF IMPORTS FOR CERTAIN FISHERMEN.

    For purposes of chapters 2 and 6 of title II of the Trade 
Act of 1974 (19 U.S.C. 2251 et seq.), in the case of an 
agricultural commodity producer that--
            (1) is a fisherman or aquaculture producer, and
            (2) is otherwise eligible for adjustment assistance 
        under chapter 2 or 6, as the case may be,
the increase in imports of articles like or directly 
competitive with the agricultural commodity produced by such 
producer may be based on imports of wild-caught seafood, farm-
raised seafood, or both.

SEC. 1887. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE FOR FARMERS.

    Section 298(a) of the Trade Act of 1974 (19 U.S.C. 
2401g(a)) is amended by striking ``fiscal years 2003 through 
2007'' and all that follows through the end period and 
inserting ``fiscal years 2009 and 2010, and $22,500,000 for the 
period beginning October 1, 2010, and ending December 31, 2010, 
to carry out the purposes of this chapter, including 
administrative costs, and salaries and expenses of employees of 
the Department of Agriculture.''.

                       PART V--GENERAL PROVISIONS

SEC. 1891. EFFECTIVE DATE.

    (a) In General.--Except as otherwise provided in this 
subtitle, and subsection (b) of this section, this subtitle and 
the amendments made by this subtitle--
            (1) shall take effect upon the expiration of the 
        90-day period beginning on the date of the enactment of 
        this Act; and
            (2) shall apply to--
                    (A) petitions for certification filed under 
                chapter 2, 3, or 6 of title II of the Trade Act 
                of 1974 on or after the effective date 
                described in paragraph (1); and
                    (B) petitions for assistance and proposals 
                for grants filed under chapter 4 of title II of 
                the Trade Act of 1974 on or after such 
                effective date.
    (b) Certifications Made Before Effective Date.--
Notwithstanding subsection (a)--
            (1) a worker shall continue to receive (or be 
        eligible to receive) trade adjustment assistance and 
        other benefits under subchapter B of chapter 2 of title 
        II of the Trade Act of 1974, as in effect on the day 
        before the effective date described in subsection 
        (a)(1), for any week for which the worker meets the 
        eligibility requirements of such chapter 2 as in effect 
        on the day before such effective date, if the worker--
                    (A) is certified as eligible for trade 
                adjustment assistance benefits under such 
                chapter 2 pursuant to a petition filed under 
                section 221 of the Trade Act of 1974 on or 
                before such effective date; and
                    (B) would otherwise be eligible to receive 
                trade adjustment assistance benefits under such 
                chapter as in effect on the day before such 
                effective date;
            (2) a worker shall continue to receive (or be 
        eligible to receive) benefits under section 246(a)(2) 
        of the Trade Act of 1974, as in effect on the day 
        before the effective date described in subsection 
        (a)(1), for such period for which the worker meets the 
        eligibility requirements of section 246 of that Act as 
        in effect on the day before such effective date, if the 
        worker--
                    (A) is certified as eligible for benefits 
                under such section 246 pursuant to a petition 
                filed under section 221 of the Trade Act of 
                1974 on or before such effective date; and
                    (B) would otherwise be eligible to receive 
                benefits under such section 246(a)(2) as in 
                effect on the day before such effective date; 
                and
            (3) a firm shall continue to receive (or be 
        eligible to receive) adjustment assistance under 
        chapter 3 of title II of the Trade Act of 1974, as in 
        effect on the day before the effective date described 
        in subsection (a)(1), for such period for which the 
        firm meets the eligibility requirements of such chapter 
        3 as in effect on the day before such effective date, 
        if the firm--
                    (A) is certified as eligible for benefits 
                under such chapter 3 pursuant to a petition 
                filed under section 251 of the Trade Act of 
                1974 on or before such effective date; and
                    (B) would otherwise be eligible to receive 
                benefits under such chapter 3 as in effect on 
                the day before such effective date.

SEC. 1892. EXTENSION OF TRADE ADJUSTMENT ASSISTANCE PROGRAMS.

    (a) For Workers.--Section 245(a) of the Trade Act of 1974 
(19 U.S.C. 2317(a)) is amended by striking ``December 31, 
2007'' and inserting ``December 31, 2010''.
    (b) Termination.--Section 285 of the Trade Act of 1974 (19 
U.S.C. 2271 note prec.) is amended--
            (1) in subsection (a), by striking ``December 31, 
        2007'' each place it appears and inserting ``December 
        31, 2010''; and
            (2) by amending subsection (b) to read as follows:
    ``(b) Other Assistance.--
            ``(1) Assistance for firms.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), technical assistance and 
                grants may not be provided under chapter 3 
                after December 31, 2010.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), any technical assistance or 
                grant approved under chapter 3 on or before 
                December 31, 2010, may be provided--
                            ``(i) to the extent funds are 
                        available pursuant to such chapter for 
                        such purpose; and
                            ``(ii) to the extent the recipient 
                        of the technical assistance or grant is 
                        otherwise eligible to receive such 
                        technical assistance or grant, as the 
                        case may be.
            ``(2) Farmers.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), technical assistance and 
                financial assistance may not be provided under 
                chapter 6 after December 31, 2010.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), any technical or financial 
                assistance approved under chapter 6 on or 
                before December 31, 2010, may be provided--
                            ``(i) to the extent funds are 
                        available pursuant to such chapter for 
                        such purpose; and
                            ``(ii) to the extent the recipient 
                        of the technical or financial 
                        assistance is otherwise eligible to 
                        receive such technical or financial 
                        assistance, as the case may be.
            ``(3) Assistance for communities.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), technical assistance and 
                grants may not be provided under chapter 4 
                after December 31, 2010.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), any technical assistance or 
                grant approved under chapter 4 on or before 
                December 31, 2010, may be provided--
                            ``(i) to the extent funds are 
                        available pursuant to such chapter for 
                        such purpose; and
                            ``(ii) to the extent the recipient 
                        of the technical assistance or grant is 
                        otherwise eligible to receive such 
                        technical assistance or grant, as the 
                        case may be.''.

SEC. 1893. TERMINATION; RELATED PROVISIONS.

    (a) Sunset.--
            (1) In general.--Subject to paragraph (2), the 
        amendments made by this subtitle to chapters 2, 3, 4, 
        5, and 6 of title II of the Trade Act of 1974 (19 
        U.S.C. 2271 et seq.) shall not apply on or after 
        January 1, 2011.
            (2) Exception.--The amendments made by this 
        subtitle to section 285 of the Trade Act of 1974 shall 
        continue to apply on and after January 1, 2011, with 
        respect to--
                    (A) workers certified as eligible for trade 
                adjustment assistance benefits under chapter 2 
                of title II of that Act pursuant to petitions 
                filed under section 221 of that Act before 
                January 1, 2011;
                    (B) firms certified as eligible for 
                technical assistance or grants under chapter 3 
                of title II of that Act pursuant to petitions 
                filed under section 251 of that Act before 
                January 1, 2011;
                    (C) recipients approved for technical 
                assistance or grants under chapter 4 of title 
                II of that Act pursuant to petitions for 
                assistance or proposals for grants (as the case 
                may be) filed pursuant to such chapter before 
                January 1, 2011; and
                    (D) agricultural commodity producers 
                certified as eligible for technical or 
                financial assistance under chapter 6 of title 
                II of that Act pursuant to petitions filed 
                under section 292 of that Act before January 1, 
                2011.
    (b) Application of Prior Law.--Chapters 2, 3, 4, 5, and 6 
of title II of the Trade Act of 1974 (19 U.S.C. 2271 et seq.) 
shall be applied and administered beginning January 1, 2011, as 
if the amendments made by this subtitle (other than part VI) 
had never been enacted, except that in applying and 
administering such chapters--
            (1) section 245 of that Act shall be applied and 
        administered by substituting ``2011'' for ``2007'';
            (2) section 246(b) of that Act shall be applied and 
        administered by substituting ``December 31, 2011'' for 
        ``the date that is 5 years'' and all that follows 
        through ``State'';
            (3) section 256(b) of that Act shall be applied and 
        administered by substituting ``the 1-year period 
        beginning January 1, 2011'' for ``each of fiscal years 
        2003 through 2007, and $4,000,000 for the 3-month 
        period beginning October 1, 2007'';
            (4) section 298(a) of that Act shall be applied and 
        administered by substituting ``the 1-year period 
        beginning January 1, 2011'' for ``each of the fiscal 
        years'' and all that follows through ``October 1, 
        2007''; and
            (5) subject to subsection (a)(2), section 285 of 
        that Act shall be applied and administered--
                    (A) in subsection (a), by substituting 
                ``2011'' for ``2007'' each place it appears; 
                and
                    (B) by applying and administering 
                subsection (b) as if it read as follows:
    ``(b) Other Assistance.--
            ``(1) Assistance for firms.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), assistance may not be 
                provided under chapter 3 after December 31, 
                2011.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), any assistance approved under 
                chapter 3 on or before December 31, 2011, may 
                be provided--
                            ``(i) to the extent funds are 
                        available pursuant to such chapter for 
                        such purpose; and
                            ``(ii) to the extent the recipient 
                        of the assistance is otherwise eligible 
                        to receive such assistance.
            ``(2) Farmers.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), assistance may not be 
                provided under chapter 6 after December 31, 
                2011.
                    ``(B) Exception.--Notwithstanding 
                subparagraph (A), any assistance approved under 
                chapter 6 on or before December 31, 2011, may 
                be provided--
                            ``(i) to the extent funds are 
                        available pursuant to such chapter for 
                        such purpose; and
                            ``(ii) to the extent the recipient 
                        of the assistance is otherwise eligible 
                        to receive such assistance.''.

SEC. 1894. GOVERNMENT ACCOUNTABILITY OFFICE REPORT.

    Not later than September 30, 2012, the Comptroller General 
of the United States shall prepare and submit to the Committee 
on Finance of the Senate and the Committee on Ways and Means of 
the House of Representatives a comprehensive report on the 
operation and effectiveness of the amendments made by this 
subtitle to chapters 2, 3, 4, and 6 of the Trade Act of 1974.

SEC. 1895. EMERGENCY DESIGNATION.

    Amounts appropriated pursuant to this subtitle are 
designated as an emergency requirement and necessary to meet 
emergency needs pursuant to section 204(a) of S. Con. Res. 21 
(110th Congress) and section 301(b)(2) of S. Con. Res. 70 
(110th Congress), the concurrent resolutions on the budget for 
fiscal years 2008 and 2009.

                  PART VI--HEALTH COVERAGE IMPROVEMENT

SEC. 1899. SHORT TITLE.

    This part may be cited as the ``TAA Health Coverage 
Improvement Act of 2009''.

SEC. 1899A. IMPROVEMENT OF THE AFFORDABILITY OF THE CREDIT.

    (a) Improvement of Affordability.--
            (1) In general.--Section 35(a) of the Internal 
        Revenue Code of 1986 (relating to credit for health 
        insurance costs of eligible individuals) is amended by 
        inserting ``(80 percent in the case of eligible 
        coverage months beginning before January 1, 2011)'' 
        after ``65 percent''.
            (2) Conforming amendment.--Section 7527(b) of such 
        Code (relating to advance payment of credit for health 
        insurance costs of eligible individuals) is amended by 
        inserting ``(80 percent in the case of eligible 
        coverage months beginning before January 1, 2011)'' 
        after ``65 percent''.
    (b) Effective Date.--The amendments made by this section 
shall apply to coverage months beginning on or after the first 
day of the first month beginning 60 days after the date of the 
enactment of this Act.

SEC. 1899B. PAYMENT FOR MONTHLY PREMIUMS PAID PRIOR TO COMMENCEMENT OF 
                    ADVANCE PAYMENTS OF CREDIT.

    (a) Payment for Premiums Due Prior to Commencement of 
Advance Payments of Credit.--Section 7527 of the Internal 
Revenue Code of 1986 (relating to advance payment of credit for 
health insurance costs of eligible individuals) is amended by 
adding at the end the following new subsection:
    ``(e) Payment for Premiums Due Prior to Commencement of 
Advance Payments.--In the case of eligible coverage months 
beginning before January 1, 2011--
            ``(1) In general.--The program established under 
        subsection (a) shall provide that the Secretary shall 
        make 1 or more retroactive payments on behalf of a 
        certified individual in an aggregate amount equal to 80 
        percent of the premiums for coverage of the taxpayer 
        and qualifying family members under qualified health 
        insurance for eligible coverage months (as defined in 
        section 35(b)) occurring prior to the first month for 
        which an advance payment is made on behalf of such 
        individual under subsection (a).
            ``(2) Reduction of payment for amounts received 
        under national emergency grants.--The amount of any 
        payment determined under paragraph (1) shall be reduced 
        by the amount of any payment made to the taxpayer for 
        the purchase of qualified health insurance under a 
        national emergency grant pursuant to section 173(f) of 
        the Workforce Investment Act of 1998 for a taxable year 
        including the eligible coverage months described in 
        paragraph (1).''.
    (b) Effective Date.--The amendments made by this section 
shall apply to coverage months beginning after December 31, 
2008.
    (c) Transitional Rule.--The Secretary of the Treasury shall 
not be required to make any payments under section 7527(e) of 
the Internal Revenue Code of 1986, as added by this section, 
until after the date that is 6 months after the date of the 
enactment of this Act.

SEC. 1899C. TAA RECIPIENTS NOT ENROLLED IN TRAINING PROGRAMS ELIGIBLE 
                    FOR CREDIT.

    (a) In General.--Paragraph (2) of section 35(c) of the 
Internal Revenue Code of 1986 (defining eligible TAA recipient) 
is amended to read as follows:
            ``(2) Eligible taa recipient.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B), the term `eligible TAA 
                recipient' means, with respect to any month, 
                any individual who is receiving for any day of 
                such month a trade readjustment allowance under 
                chapter 2 of title II of the Trade Act of 1974 
                or who would be eligible to receive such 
                allowance if section 231 of such Act were 
                applied without regard to subsection (a)(3)(B) 
                of such section. An individual shall continue 
                to be treated as an eligible TAA recipient 
                during the first month that such individual 
                would otherwise cease to be an eligible TAA 
                recipient by reason of the preceding sentence.
                    ``(B) Special rule.--In the case of any 
                eligible coverage month beginning after the 
                date of the enactment of this paragraph and 
                before January 1, 2011, the term `eligible TAA 
                recipient' means, with respect to any month, 
                any individual who--
                            ``(i) is receiving for any day of 
                        such month a trade readjustment 
                        allowance under chapter 2 of title II 
                        of the Trade Act of 1974,
                            ``(ii) would be eligible to receive 
                        such allowance except that such 
                        individual is in a break in training 
                        provided under a training program 
                        approved under section 236 of such Act 
                        that exceeds the period specified in 
                        section 233(e) of such Act, but is 
                        within the period for receiving such 
                        allowances provided under section 
                        233(a) of such Act, or
                            ``(iii) is receiving unemployment 
                        compensation (as defined in section 
                        85(b)) for any day of such month and 
                        who would be eligible to receive such 
                        allowance for such month if section 231 
                        of such Act were applied without regard 
                        to subsections (a)(3)(B) and (a)(5) 
                        thereof.
                An individual shall continue to be treated as 
                an eligible TAA recipient during the first 
                month that such individual would otherwise 
                cease to be an eligible TAA recipient by reason 
                of the preceding sentence.''.
    (b) Effective Date.--The amendment made by this section 
shall apply to coverage months beginning after the date of the 
enactment of this Act.

SEC. 1899D. TAA PRE-CERTIFICATION PERIOD RULE FOR PURPOSES OF 
                    DETERMINING WHETHER THERE IS A 63-DAY LAPSE IN 
                    CREDITABLE COVERAGE.

    (a) IRC Amendment.--Section 9801(c)(2) of the Internal 
Revenue Code of 1986 (relating to not counting periods before 
significant breaks in creditable coverage) is amended by adding 
at the end the following new subparagraph:
                    ``(D) TAA-eligible individuals.--In the 
                case of plan years beginning before January 1, 
                2011--
                            ``(i) TAA pre-certification period 
                        rule.--In the case of a TAA-eligible 
                        individual, the period beginning on the 
                        date the individual has a TAA-related 
                        loss of coverage and ending on the date 
                        which is 7 days after the date of the 
                        issuance by the Secretary (or by any 
                        person or entity designated by the 
                        Secretary) of a qualified health 
                        insurance costs credit eligibility 
                        certificate for such individual for 
                        purposes of section 7527 shall not be 
                        taken into account in determining the 
                        continuous period under subparagraph 
                        (A).
                            ``(ii) Definitions.--The terms 
                        `TAA-eligible individual' and `TAA-
                        related loss of coverage' have the 
                        meanings given such terms in section 
                        4980B(f)(5)(C)(iv).''.
    (b) ERISA Amendment.--Section 701(c)(2) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1181(c)(2)) 
is amended by adding at the end the following new subparagraph:
                    ``(C) TAA-eligible individuals.--In the 
                case of plan years beginning before January 1, 
                2011--
                            ``(i) TAA pre-certification period 
                        rule.--In the case of a TAA-eligible 
                        individual, the period beginning on the 
                        date the individual has a TAA-related 
                        loss of coverage and ending on the date 
                        that is 7 days after the date of the 
                        issuance by the Secretary (or by any 
                        person or entity designated by the 
                        Secretary) of a qualified health 
                        insurance costs credit eligibility 
                        certificate for such individual for 
                        purposes of section 7527 of the 
                        Internal Revenue Code of 1986 shall not 
                        be taken into account in determining 
                        the continuous period under 
                        subparagraph (A).
                            ``(ii) Definitions.--The terms 
                        `TAA-eligible individual' and `TAA-
                        related loss of coverage' have the 
                        meanings given such terms in section 
                        605(b)(4).''.
    (c) PHSA Amendment.--Section 2701(c)(2) of the Public 
Health Service Act (42 U.S.C. 300gg(c)(2)) is amended by adding 
at the end the following new subparagraph:
                    ``(C) TAA-eligible individuals.--In the 
                case of plan years beginning before January 1, 
                2011--
                            ``(i) TAA pre-certification period 
                        rule.--In the case of a TAA-eligible 
                        individual, the period beginning on the 
                        date the individual has a TAA-related 
                        loss of coverage and ending on the date 
                        that is 7 days after the date of the 
                        issuance by the Secretary (or by any 
                        person or entity designated by the 
                        Secretary) of a qualified health 
                        insurance costs credit eligibility 
                        certificate for such individual for 
                        purposes of section 7527 of the 
                        Internal Revenue Code of 1986 shall not 
                        be taken into account in determining 
                        the continuous period under 
                        subparagraph (A).
                            ``(ii) Definitions.--The terms 
                        `TAA-eligible individual' and `TAA-
                        related loss of coverage' have the 
                        meanings given such terms in section 
                        2205(b)(4).''.
    (d) Effective Date.--The amendments made by this section 
shall apply to plan years beginning after the date of the 
enactment of this Act.

SEC. 1899E. CONTINUED QUALIFICATION OF FAMILY MEMBERS AFTER CERTAIN 
                    EVENTS.

    (a) In General.--Subsection (g) of section 35 of such Code 
is amended by redesignating paragraph (9) as paragraph (10) and 
inserting after paragraph (8) the following new paragraph:
            ``(9) Continued qualification of family members 
        after certain events.--In the case of eligible coverage 
        months beginning before January 1, 2011--
                    ``(A) Medicare eligibility.--In the case of 
                any month which would be an eligible coverage 
                month with respect to an eligible individual 
                but for subsection (f)(2)(A), such month shall 
                be treated as an eligible coverage month with 
                respect to such eligible individual solely for 
                purposes of determining the amount of the 
                credit under this section with respect to any 
                qualifying family members of such individual 
                (and any advance payment of such credit under 
                section 7527). This subparagraph shall only 
                apply with respect to the first 24 months after 
                such eligible individual is first entitled to 
                the benefits described in subsection (f)(2)(A).
                    ``(B) Divorce.--In the case of the 
                finalization of a divorce between an eligible 
                individual and such individual's spouse, such 
                spouse shall be treated as an eligible 
                individual for purposes of this section and 
                section 7527 for a period of 24 months 
                beginning with the date of such finalization, 
                except that the only qualifying family members 
                who may be taken into account with respect to 
                such spouse are those individuals who were 
                qualifying family members immediately before 
                such finalization.
                    ``(C) Death.--In the case of the death of 
                an eligible individual--
                            ``(i) any spouse of such individual 
                        (determined at the time of such death) 
                        shall be treated as an eligible 
                        individual for purposes of this section 
                        and section 7527 for a period of 24 
                        months beginning with the date of such 
                        death, except that the only qualifying 
                        family members who may be taken into 
                        account with respect to such spouse are 
                        those individuals who were qualifying 
                        family members immediately before such 
                        death, and
                            ``(ii) any individual who was a 
                        qualifying family member of the 
                        decedent immediately before such death 
                        (or, in the case of an individual to 
                        whom paragraph (4) applies, the 
                        taxpayer to whom the deduction under 
                        section 151 is allowable) shall be 
                        treated as an eligible individual for 
                        purposes of this section and section 
                        7527 for a period of 24 months 
                        beginning with the date of such death, 
                        except that in determining the amount 
                        of such credit only such qualifying 
                        family member may be taken into 
                        account.''.
    (b) Conforming Amendment.--Section 173(f) of the Workforce 
Investment Act of 1998 (29 U.S.C. 2918(f)) is amended by adding 
at the end the following:
            ``(8) Continued qualification of family members 
        after certain events.--In the case of eligible coverage 
        months beginning before January 1, 2011--
                    ``(A) Medicare eligibility.--In the case of 
                any month which would be an eligible coverage 
                month with respect to an eligible individual 
                but for paragraph (7)(B)(i), such month shall 
                be treated as an eligible coverage month with 
                respect to such eligible individual solely for 
                purposes of determining the eligibility of 
                qualifying family members of such individual 
                under this subsection. This subparagraph shall 
                only apply with respect to the first 24 months 
                after such eligible individual is first 
                entitled to the benefits described in paragraph 
                (7)(B)(i).
                    ``(B) Divorce.--In the case of the 
                finalization of a divorce between an eligible 
                individual and such individual's spouse, such 
                spouse shall be treated as an eligible 
                individual for purposes of this subsection for 
                a period of 24 months beginning with the date 
                of such finalization, except that the only 
                qualifying family members who may be taken into 
                account with respect to such spouse are those 
                individuals who were qualifying family members 
                immediately before such finalization.
                    ``(C) Death.--In the case of the death of 
                an eligible individual--
                            ``(i) any spouse of such individual 
                        (determined at the time of such death) 
                        shall be treated as an eligible 
                        individual for purposes of this 
                        subsection for a period of 24 months 
                        beginning with the date of such death, 
                        except that the only qualifying family 
                        members who may be taken into account 
                        with respect to such spouse are those 
                        individuals who were qualifying family 
                        members immediately before such death, 
                        and
                            ``(ii) any individual who was a 
                        qualifying family member of the 
                        decedent immediately before such death 
                        shall be treated as an eligible 
                        individual for purposes of this 
                        subsection for a period of 24 months 
                        beginning with the date of such death, 
                        except that no qualifying family 
                        members may be taken into account with 
                        respect to such individual.''.
    (c) Effective Date.--The amendments made by this section 
shall apply to months beginning after December 31, 2009.

SEC. 1899F. EXTENSION OF COBRA BENEFITS FOR CERTAIN TAA-ELIGIBLE 
                    INDIVIDUALS AND PBGC RECIPIENTS.

    (a) ERISA Amendments.--Section 602(2)(A) of the Employee 
Retirement Income Security Act of 1974 (29 U.S.C. 1162(2)(A)) 
is amended--
            (1) by moving clause (v) to after clause (iv) and 
        before the flush left sentence beginning with ``In the 
        case of a qualified beneficiary'';
            (2) by striking ``In the case of a qualified 
        beneficiary'' and inserting the following:
                            ``(vi) Special rule for 
                        disability.--In the case of a qualified 
                        beneficiary''; and
            (3) by redesignating clauses (v) and (vi), as 
        amended by paragraphs (1) and (2), as clauses (vii) and 
        (viii), respectively, and by inserting after clause 
        (iv) the following new clauses:
                            ``(v) Special rule for pbgc 
                        recipients.--In the case of a 
                        qualifying event described in section 
                        603(2) with respect to a covered 
                        employee who (as of such qualifying 
                        event) has a nonforfeitable right to a 
                        benefit any portion of which is to be 
                        paid by the Pension Benefit Guaranty 
                        Corporation under title IV, 
                        notwithstanding clause (i) or (ii), the 
                        date of the death of the covered 
                        employee, or in the case of the 
                        surviving spouse or dependent children 
                        of the covered employee, 24 months 
                        after the date of the death of the 
                        covered employee. The preceding 
                        sentence shall not require any period 
                        of coverage to extend beyond December 
                        31, 2010.
                            ``(vi) Special rule for taa-
                        eligible individuals.--In the case of a 
                        qualifying event described in section 
                        603(2) with respect to a covered 
                        employee who is (as of the date that 
                        the period of coverage would, but for 
                        this clause or clause (vii), otherwise 
                        terminate under clause (i) or (ii)) a 
                        TAA-eligible individual (as defined in 
                        section 605(b)(4)(B)), the period of 
                        coverage shall not terminate by reason 
                        of clause (i) or (ii), as the case may 
                        be, before the later of the date 
                        specified in such clause or the date on 
                        which such individual ceases to be such 
                        a TAA-eligible individual. The 
                        preceding sentence shall not require 
                        any period of coverage to extend beyond 
                        December 31, 2010.''.
    (b) IRC Amendments.--Clause (i) of section 4980B(f)(2)(B) 
of the Internal Revenue Code of 1986 is amended--
            (1) by striking ``In the case of a qualified 
        beneficiary'' and inserting the following:
                                    ``(VI) Special rule for 
                                disability.--In the case of a 
                                qualified beneficiary'', and
            (2) by redesignating subclauses (V) and (VI), as 
        amended by paragraph (1), as subclauses (VII) and 
        (VIII), respectively, and by inserting after clause 
        (IV) the following new subclauses:
                                    ``(V) Special rule for pbgc 
                                recipients.--In the case of a 
                                qualifying event described in 
                                paragraph (3)(B) with respect 
                                to a covered employee who (as 
                                of such qualifying event) has a 
                                nonforfeitable right to a 
                                benefit any portion of which is 
                                to be paid by the Pension 
                                Benefit Guaranty Corporation 
                                under title IV of the Employee 
                                Retirement Income Security Act 
                                of 1974, notwithstanding 
                                subclause (I) or (II), the date 
                                of the death of the covered 
                                employee, or in the case of the 
                                surviving spouse or dependent 
                                children of the covered 
                                employee, 24 months after the 
                                date of the death of the 
                                covered employee. The preceding 
                                sentence shall not require any 
                                period of coverage to extend 
                                beyond December 31, 2010.
                                    ``(VI) Special rule for 
                                taa-eligible individuals.--In 
                                the case of a qualifying event 
                                described in paragraph (3)(B) 
                                with respect to a covered 
                                employee who is (as of the date 
                                that the period of coverage 
                                would, but for this subclause 
                                or subclause (VII), otherwise 
                                terminate under subclause (I) 
                                or (II)) a TAA-eligible 
                                individual (as defined in 
                                paragraph (5)(C)(iv)(II)), the 
                                period of coverage shall not 
                                terminate by reason of 
                                subclause (I) or (II), as the 
                                case may be, before the later 
                                of the date specified in such 
                                subclause or the date on which 
                                such individual ceases to be 
                                such a TAA-eligible individual. 
                                The preceding sentence shall 
                                not require any period of 
                                coverage to extend beyond 
                                December 31, 2010.''.
    (c) PHSA Amendments.--Section 2202(2)(A) of the Public 
Health Service Act (42 U.S.C. 300bb-2(2)(A)) is amended--
            (1) by striking ``In the case of a qualified 
        beneficiary'' and inserting the following:
                            ``(v) Special rule for 
                        disability.--In the case of a qualified 
                        beneficiary''; and
            (2) by redesignating clauses (iv) and (v), as 
        amended by paragraph (1), as clauses (v) and (vi), 
        respectively, and by inserting after clause (iii) the 
        following new clause:
                            ``(iv) Special rule for taa-
                        eligible individuals.--In the case of a 
                        qualifying event described in section 
                        2203(2) with respect to a covered 
                        employee who is (as of the date that 
                        the period of coverage would, but for 
                        this clause or clause (v), otherwise 
                        terminate under clause (i) or (ii)) a 
                        TAA-eligible individual (as defined in 
                        section 2205(b)(4)(B)), the period of 
                        coverage shall not terminate by reason 
                        of clause (i) or (ii), as the case may 
                        be, before the later of the date 
                        specified in such clause or the date on 
                        which such individual ceases to be such 
                        a TAA-eligible individual. The 
                        preceding sentence shall not require 
                        any period of coverage to extend beyond 
                        December 31, 2010.''.
    (d) Effective Date.--The amendments made by this section 
shall apply to periods of coverage which would (without regard 
to the amendments made by this section) end on or after the 
date of the enactment of this Act.

SEC. 1899G. ADDITION OF COVERAGE THROUGH VOLUNTARY EMPLOYEES' 
                    BENEFICIARY ASSOCIATIONS.

    (a) In General.--Paragraph (1) of section 35(e) of the 
Internal Revenue Code of 1986 is amended by adding at the end 
the following new subparagraph:
                    ``(K) In the case of eligible coverage 
                months beginning before January 1, 2011, 
                coverage under an employee benefit plan funded 
                by a voluntary employees' beneficiary 
                association (as defined in section 501(c)(9)) 
                established pursuant to an order of a 
                bankruptcy court, or by agreement with an 
                authorized representative, as provided in 
                section 1114 of title 11, United States 
                Code.''.
    (b) Effective Date.--The amendments made by this section 
shall apply to coverage months beginning after the date of the 
enactment of this Act.

SEC. 1899H. NOTICE REQUIREMENTS.

    (a) In General.--Subsection (d) of section 7527 of the 
Internal Revenue Code of 1986 (relating to qualified health 
insurance costs credit eligibility certificate) is amended to 
read as follows:
    ``(d) Qualified Health Insurance Costs Eligibility 
Certificate.--
            ``(1) In general.--For purposes of this section, 
        the term `qualified health insurance costs eligibility 
        certificate' means any written statement that an 
        individual is an eligible individual (as defined in 
        section 35(c)) if such statement provides such 
        information as the Secretary may require for purposes 
        of this section and--
                    ``(A) in the case of an eligible TAA 
                recipient (as defined in section 35(c)(2)) or 
                an eligible alternative TAA recipient (as 
                defined in section 35(c)(3)), is certified by 
                the Secretary of Labor (or by any other person 
                or entity designated by the Secretary), or
                    ``(B) in the case of an eligible PBGC 
                pension recipient (as defined in section 
                35(c)(4)), is certified by the Pension Benefit 
                Guaranty Corporation (or by any other person or 
                entity designated by the Secretary).
            ``(2) Inclusion of certain information.--In the 
        case of any statement described in paragraph (1) which 
        is issued before January 1, 2011, such statement shall 
        not be treated as a qualified health insurance costs 
        credit eligibility certificate unless such statement 
        includes--
                    ``(A) the name, address, and telephone 
                number of the State office or offices 
                responsible for providing the individual with 
                assistance with enrollment in qualified health 
                insurance (as defined in section 35(e)),
                    ``(B) a list of the coverage options that 
                are treated as qualified health insurance (as 
                so defined) by the State in which the 
                individual resides, and
                    ``(C) in the case of a TAA-eligible 
                individual (as defined in section 
                4980B(f)(5)(C)(iv)(II)), a statement informing 
                the individual that the individual has 63 days 
                from the date that is 7 days after the date of 
                the issuance of such certificate to enroll in 
                such insurance without a lapse in creditable 
                coverage (as defined in section 9801(c)).''.
    (b) Effective Date.--The amendment made by this section 
shall apply to certificates issued after the date that is 6 
months after the date of the enactment of this Act.

SEC. 1899I. SURVEY AND REPORT ON ENHANCED HEALTH COVERAGE TAX CREDIT 
                    PROGRAM.

    (a) Survey.--
            (1) In general.--The Secretary of the Treasury 
        shall conduct a biennial survey of eligible individuals 
        (as defined in section 35(c) of the Internal Revenue 
        Code of 1986) relating to the health coverage tax 
        credit under section 35 of the Internal Revenue Code of 
        1986 (hereinafter in this section referred to as the 
        ``health coverage tax credit'').
            (2) Information obtained.--The survey conducted 
        under subsection (a) shall obtain the following 
        information:
                    (A) HCTC participants.--In the case of 
                eligible individuals receiving the health 
                coverage tax credit (including individuals 
                participating in the health coverage tax credit 
                program under section 7527 of such Code, 
                hereinafter in this section referred to as the 
                ``HCTC program'')--
                            (i) demographic information of such 
                        individuals, including income and 
                        education levels,
                            (ii) satisfaction of such 
                        individuals with the enrollment process 
                        in the HCTC program,
                            (iii) satisfaction of such 
                        individuals with available health 
                        coverage options under the credit, 
                        including level of premiums, benefits, 
                        deductibles, cost-sharing requirements, 
                        and the adequacy of provider networks, 
                        and
                            (iv) any other information that the 
                        Secretary determines is appropriate.
                    (B) Non-HCTC participants.--In the case of 
                eligible individuals not receiving the health 
                coverage tax credit--
                            (i) demographic information of each 
                        individual, including income and 
                        education levels,
                            (ii) whether the individual was 
                        aware of the health coverage tax credit 
                        or the HCTC program,
                            (iii) the reasons the individual 
                        has not enrolled in the HCTC program, 
                        including whether such reasons include 
                        the burden of the process of enrollment 
                        and the affordability of coverage,
                            (iv) whether the individual has 
                        health insurance coverage, and, if so, 
                        the source of such coverage, and
                            (v) any other information that the 
                        Secretary determines is appropriate.
            (3) Report.--Not later than December 31 of each 
        year in which a survey is conducted under paragraph (1) 
        (beginning in 2010), the Secretary of the Treasury 
        shall report to the Committee on Finance and the 
        Committee on Health, Education, Labor, and Pensions of 
        the Senate and the Committee on Ways and Means, the 
        Committee on Education and Labor, and the Committee on 
        Energy and Commerce of the House of Representatives the 
        findings of the most recent survey conducted under 
        paragraph (1).
    (b) Report.--Not later than October 1 of each year 
(beginning in 2010), the Secretary of the Treasury (after 
consultation with the Secretary of Health and Human Services, 
and, in the case of the information required under paragraph 
(7), the Secretary of Labor) shall report to the Committee on 
Finance and the Committee on Health, Education, Labor, and 
Pensions of the Senate and the Committee on Ways and Means, the 
Committee on Education and Labor, and the Committee on Energy 
and Commerce of the House of Representatives the following 
information with respect to the most recent taxable year ending 
before such date:
            (1) In each State and nationally--
                    (A) the total number of eligible 
                individuals (as defined in section 35(c) of the 
                Internal Revenue Code of 1986) and the number 
                of eligible individuals receiving the health 
                coverage tax credit,
                    (B) the total number of such eligible 
                individuals who receive an advance payment of 
                the health coverage tax credit through the HCTC 
                program,
                    (C) the average length of the time period 
                of the participation of eligible individuals in 
                the HCTC program, and
                    (D) the total number of participating 
                eligible individuals in the HCTC program who 
                are enrolled in each category of coverage as 
                described in section 35(e)(1) of such Code,
        with respect to each category of eligible individuals 
        described in section 35(c)(1) of such Code.
            (2) In each State and nationally, an analysis of--
                    (A) the range of monthly health insurance 
                premiums, for self-only coverage and for family 
                coverage, for individuals receiving the health 
                coverage tax credit, and
                    (B) the average and median monthly health 
                insurance premiums, for self-only coverage and 
                for family coverage, for individuals receiving 
                the health coverage tax credit,
        with respect to each category of coverage as described 
        in section 35(e)(1) of such Code.
            (3) In each State and nationally, an analysis of 
        the following information with respect to the health 
        insurance coverage of individuals receiving the health 
        coverage tax credit who are enrolled in coverage 
        described in subparagraphs (B) through (H) of section 
        35(e)(1) of such Code:
                    (A) Deductible amounts.
                    (B) Other out-of-pocket cost-sharing 
                amounts.
                    (C) A description of any annual or lifetime 
                limits on coverage or any other significant 
                limits on coverage services, or benefits.
        The information required under this paragraph shall be 
        reported with respect to each category of coverage 
        described in such subparagraphs.
            (4) In each State and nationally, the gender and 
        average age of eligible individuals (as defined in 
        section 35(c) of such Code) who receive the health 
        coverage tax credit, in each category of coverage 
        described in section 35(e)(1) of such Code, with 
        respect to each category of eligible individuals 
        described in such section.
            (5) The steps taken by the Secretary of the 
        Treasury to increase the participation rates in the 
        HCTC program among eligible individuals, including 
        outreach and enrollment activities.
            (6) The cost of administering the HCTC program by 
        function, including the cost of subcontractors, and 
        recommendations on ways to reduce administrative costs, 
        including recommended statutory changes.
            (7) The number of States applying for and receiving 
        national emergency grants under section 173(f) of the 
        Workforce Investment Act of 1998 (29 U.S.C. 2918(f)), 
        the activities funded by such grants on a State-by-
        State basis, and the time necessary for application 
        approval of such grants.

SEC. 1899J. AUTHORIZATION OF APPROPRIATIONS.

    There is authorized to be appropriated $80,000,000 for the 
period of fiscal years 2009 through 2010 to implement the 
amendments made by, and the provisions of, sections 1899 
through 1899I of this part.

SEC. 1899K. EXTENSION OF NATIONAL EMERGENCY GRANTS.

    (a) In General.--Section 173(f) of the Workforce Investment 
Act of 1998 (29 U.S.C. 2918(f)), as amended by this Act, is 
amended--
            (1) by striking paragraph (1) and inserting the 
        following new paragraph:
            ``(1) Use of funds.--
                    ``(A) Health insurance coverage for 
                eligible individuals in order to obtain 
                qualified health insurance that has guaranteed 
                issue and other consumer protections.--Funds 
                made available to a State or entity under 
                paragraph (4)(A) of subsection (a) may be used 
                to provide an eligible individual described in 
                paragraph (4)(C) and such individual's 
                qualifying family members with health insurance 
                coverage for the 3-month period that 
                immediately precedes the first eligible 
                coverage month (as defined in section 35(b) of 
                the Internal Revenue Code of 1986) in which 
                such eligible individual and such individual's 
                qualifying family members are covered by 
                qualified health insurance that meets the 
                requirements described in clauses (i) through 
                (v) of section 35(e)(2)(A) of the Internal 
                Revenue Code of 1986 (or such longer minimum 
                period as is necessary in order for such 
                eligible individual and such individual's 
                qualifying family members to be covered by 
                qualified health insurance that meets such 
                requirements).
                    ``(B) Additional uses.--Funds made 
                available to a State or entity under paragraph 
                (4)(A) of subsection (a) may be used by the 
                State or entity for the following:
                            ``(i) Health insurance coverage.--
                        To assist an eligible individual and 
                        such individual's qualifying family 
                        members with enrolling in health 
                        insurance coverage and qualified health 
                        insurance or paying premiums for such 
                        coverage or insurance.
                            ``(ii) Administrative expenses and 
                        start-up expenses to establish group 
                        health plan coverage options for 
                        qualified health insurance.--To pay the 
                        administrative expenses related to the 
                        enrollment of eligible individuals and 
                        such individuals' qualifying family 
                        members in health insurance coverage 
                        and qualified health insurance, 
                        including--
                                    ``(I) eligibility 
                                verification activities;
                                    ``(II) the notification of 
                                eligible individuals of 
                                available health insurance and 
                                qualified health insurance 
                                options;
                                    ``(III) processing 
                                qualified health insurance 
                                costs credit eligibility 
                                certificates provided for under 
                                section 7527 of the Internal 
                                Revenue Code of 1986;
                                    ``(IV) providing assistance 
                                to eligible individuals in 
                                enrolling in health insurance 
                                coverage and qualified health 
                                insurance;
                                    ``(V) the development or 
                                installation of necessary data 
                                management systems; and
                                    ``(VI) any other expenses 
                                determined appropriate by the 
                                Secretary, including start-up 
                                costs and on going 
                                administrative expenses, in 
                                order for the State to treat 
                                the coverage described in 
                                subparagraphs (C) through (H) 
                                of section 35(e)(1) of the 
                                Internal Revenue Code of 1986 
                                as qualified health insurance 
                                under that section.
                            ``(iii) Outreach.--To pay for 
                        outreach to eligible individuals to 
                        inform such individuals of available 
                        health insurance and qualified health 
                        insurance options, including outreach 
                        consisting of notice to eligible 
                        individuals of such options made 
                        available after the date of enactment 
                        of this clause and direct assistance to 
                        help potentially eligible individuals 
                        and such individual's qualifying family 
                        members qualify and remain eligible for 
                        the credit established under section 35 
                        of the Internal Revenue Code of 1986 
                        and advance payment of such credit 
                        under section 7527 of such Code.
                            ``(iv) Bridge funding.--To assist 
                        potentially eligible individuals to 
                        purchase qualified health insurance 
                        coverage prior to issuance of a 
                        qualified health insurance costs credit 
                        eligibility certificate under section 
                        7527 of the Internal Revenue Code of 
                        1986 and commencement of advance 
                        payment, and receipt of expedited 
                        payment, under subsections (a) and (e), 
                        respectively, of that section.
                    ``(C) Rule of construction.--The inclusion 
                of a permitted use under this paragraph shall 
                not be construed as prohibiting a similar use 
                of funds permitted under subsection (g).''; and
            (2) by striking paragraph (2) and inserting the 
        following new paragraph:
            ``(2) Qualified health insurance.--For purposes of 
        this subsection and subsection (g), the term `qualified 
        health insurance' has the meaning given that term in 
        section 35(e) of the Internal Revenue Code of 1986.''.
    (b) Funding.--Section 174(c)(1) of the Workforce Investment 
Act of 1998 (29 U.S.C. 2919(c)(1)) is amended--
            (1) in the paragraph heading, by striking 
        ``Authorization and appropriation for fiscal year 
        2002'' and inserting ``Appropriations''; and
            (2) by striking subparagraph (A) and inserting the 
        following new subparagraph:
                    ``(A) to carry out subsection (a)(4)(A) of 
                section 173--
                            ``(i) $10,000,000 for fiscal year 
                        2002; and
                            ``(ii) $150,000,000 for the period 
                        of fiscal years 2009 through 2010; 
                        and''.

SEC. 1899L. GAO STUDY AND REPORT.

    (a) Study.--The Comptroller General of the United States 
shall conduct a study regarding the health insurance tax credit 
allowed under section 35 of the Internal Revenue Code of 1986.
    (b) Report.--Not later than March 1, 2010, the Comptroller 
General shall submit a report to Congress regarding the results 
of the study conducted under subsection (a). Such report shall 
include an analysis of--
            (1) the administrative costs--
                    (A) of the Federal Government with respect 
                to such credit and the advance payment of such 
                credit under section 7527 of such Code, and
                    (B) of providers of qualified health 
                insurance with respect to providing such 
                insurance to eligible individuals and their 
                qualifying family members,
            (2) the health status and relative risk status of 
        eligible individuals and qualifying family members 
        covered under such insurance,
            (3) participation in such credit and the advance 
        payment of such credit by eligible individuals and 
        their qualifying family members, including the reasons 
        why such individuals did or did not participate and the 
        effect of the amendments made by this part on such 
        participation, and
            (4) the extent to which eligible individuals and 
        their qualifying family members--
                    (A) obtained health insurance other than 
                qualifying health insurance, or
                    (B) went without health insurance coverage.
    (c) Access to Records.--For purposes of conducting the 
study required under this section, the Comptroller General and 
any of his duly authorized representatives shall have access 
to, and the right to examine and copy, all documents, records, 
and other recorded information--
            (1) within the possession or control of providers 
        of qualified health insurance, and
            (2) determined by the Comptroller General (or any 
        such representative) to be relevant to the study.
The Comptroller General shall not disclose the identity of any 
provider of qualified health insurance or any eligible 
individual in making any information obtained under this 
section available to the public.
    (d) Definitions.--Any term which is defined in section 35 
of the Internal Revenue Code of 1986 shall have the same 
meaning when used in this section.

  TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES

SEC. 2000. SHORT TITLE; TABLE OF CONTENTS OF TITLE.

    (a) Short Title.--This title may be cited as the 
``Assistance for Unemployed Workers and Struggling Families 
Act''.
    (b) Table of Contents of Title.--The table of contents of 
this title is as follows:

   TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES

Sec. 2000. Short title; table of contents of title.


                   Subtitle A--Unemployment Insurance


Sec. 2001. Extension of emergency unemployment compensation program.
Sec. 2002. Increase in unemployment compensation benefits.
Sec. 2003. Special transfers for unemployment compensation 
          modernization.
Sec. 2004. Temporary assistance for states with advances.
Sec. 2005. Full Federal funding of extended unemployment compensation 
          for a limited period.
Sec. 2006. Temporary increase in extended unemployment benefits under 
          the Railroad Unemployment Insurance Act.

            Subtitle B--Assistance for Vulnerable Individuals

Sec. 2101. Emergency fund for TANF program.
Sec. 2102. Extension of TANF supplemental grants.
Sec. 2103. Clarification of authority of States to use TANF funds 
          carried over from prior years to provide TANF benefits and 
          services.
Sec. 2104. Temporary resumption of prior child support law.

      Subtitle C--Economic Recovery Payments to Certain Individuals

Sec. 2201. Economic recovery payment to recipients of social security, 
          supplemental security income, railroad retirement benefits, 
          and veterans disability compensation or pension benefits.
Sec. 2202. Special credit for certain government retirees.

                   Subtitle A--Unemployment Insurance

SEC. 2001. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM.

    (a) In General.--Section 4007 of the Supplemental 
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 
note), as amended by section 4 of the Unemployment Compensation 
Extension Act of 2008 (Public Law 110-449; 122 Stat. 5015), is 
amended--
            (1) by striking ``March 31, 2009'' each place it 
        appears and inserting ``December 31, 2009'';
            (2) in the heading for subsection (b)(2), by 
        striking ``march 31, 2009'' and inserting ``december 
        31, 2009''; and
            (3) in subsection (b)(3), by striking ``August 27, 
        2009'' and inserting ``May 31, 2010''.
    (b) Financing Provisions.--Section 4004 of such Act is 
amended by adding at the end the following:
    ``(e) Transfer of Funds.--Notwithstanding any other 
provision of law, the Secretary of the Treasury shall transfer 
from the general fund of the Treasury (from funds not otherwise 
appropriated)--
            ``(1) to the extended unemployment compensation 
        account (as established by section 905 of the Social 
        Security Act) such sums as the Secretary of Labor 
        estimates to be necessary to make payments to States 
        under this title by reason of the amendments made by 
        section 2001(a) of the Assistance for Unemployed 
        Workers and Struggling Families Act; and
            ``(2) to the employment security administration 
        account (as established by section 901 of the Social 
        Security Act) such sums as the Secretary of Labor 
        estimates to be necessary for purposes of assisting 
        States in meeting administrative costs by reason of the 
        amendments referred to in paragraph (1).
There are appropriated from the general fund of the Treasury, 
without fiscal year limitation, the sums referred to in the 
preceding sentence and such sums shall not be required to be 
repaid.''.

SEC. 2002. INCREASE IN UNEMPLOYMENT COMPENSATION BENEFITS.

    (a) Federal-State Agreements.--Any State which desires to 
do so may enter into and participate in an agreement under this 
section with the Secretary of Labor (hereinafter in this 
section referred to as the ``Secretary''). Any State which is a 
party to an agreement under this section may, upon providing 30 
days' written notice to the Secretary, terminate such 
agreement.
    (b) Provisions of Agreement.--
            (1) Additional compensation.--Any agreement under 
        this section shall provide that the State agency of the 
        State will make payments of regular compensation to 
        individuals in amounts and to the extent that they 
        would be determined if the State law of the State were 
        applied, with respect to any week for which the 
        individual is (disregarding this section) otherwise 
        entitled under the State law to receive regular 
        compensation, as if such State law had been modified in 
        a manner such that the amount of regular compensation 
        (including dependents' allowances) payable for any week 
        shall be equal to the amount determined under the State 
        law (before the application of this paragraph) plus an 
        additional $25.
            (2) Allowable methods of payment.--Any additional 
        compensation provided for in accordance with paragraph 
        (1) shall be payable either--
                    (A) as an amount which is paid at the same 
                time and in the same manner as any regular 
                compensation otherwise payable for the week 
                involved; or
                    (B) at the option of the State, by payments 
                which are made separately from, but on the same 
                weekly basis as, any regular compensation 
                otherwise payable.
    (c) Nonreduction Rule.--An agreement under this section 
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 manner such 
that--
            (1) the average weekly benefit amount of regular 
        compensation which will be payable during the period of 
        the agreement (determined disregarding any additional 
        amounts attributable to the modification described in 
        subsection (b)(1)) will be less than
            (2) the average weekly benefit amount of regular 
        compensation which would otherwise have been payable 
        during such period under the State law, as in effect on 
        December 31, 2008.
    (d) Payments to States.--
            (1) In general.--
                    (A) Full reimbursement.--There shall be 
                paid to each State which has entered into an 
                agreement under this section an amount equal to 
                100 percent of--
                            (i) the total amount of additional 
                        compensation (as described in 
                        subsection (b)(1)) paid to individuals 
                        by the State pursuant to such 
                        agreement; and
                            (ii) any additional administrative 
                        expenses incurred by the State by 
                        reason of such agreement (as determined 
                        by the Secretary).
                    (B) Terms of payments.--Sums payable to any 
                State by reason of such State's having an 
                agreement under this section 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 section 
                for each calendar month, reduced or increased, 
                as the case may be, by any amount by which the 
                Secretary finds that his 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.
            (2) Certifications.--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 section.
            (3) Appropriation.--There are appropriated from the 
        general fund of the Treasury, without fiscal year 
        limitation, such sums as may be necessary for purposes 
        of this subsection.
    (e) Applicability.--
            (1) In general.--An agreement entered into under 
        this section shall apply to weeks of unemployment--
                    (A) beginning after the date on which such 
                agreement is entered into; and
                    (B) ending before January 1, 2010.
            (2) Transition rule for individuals remaining 
        entitled to regular compensation as of january 1, 
        2010.--In the case of any individual who, as of the 
        date specified in paragraph (1)(B), has not yet 
        exhausted all rights to regular compensation under the 
        State law of a State with respect to a benefit year 
        that began before such date, additional compensation 
        (as described in subsection (b)(1)) shall continue to 
        be payable to such individual for any week beginning on 
        or after such date for which the individual is 
        otherwise eligible for regular compensation with 
        respect to such benefit year.
            (3) Termination.--Notwithstanding any other 
        provision of this subsection, no additional 
        compensation (as described in subsection (b)(1)) shall 
        be payable for any week beginning after June 30, 2010.
    (f) Fraud and Overpayments.--The provisions of section 4005 
of the Supplemental Appropriations Act, 2008 (Public Law 110-
252; 122 Stat. 2356) shall apply with respect to additional 
compensation (as described in subsection (b)(1)) to the same 
extent and in the same manner as in the case of emergency 
unemployment compensation.
    (g) Application to Other Unemployment Benefits.--
            (1) In general.--Each agreement under this section 
        shall include provisions to provide that the purposes 
        of the preceding provisions of this section shall be 
        applied with respect to unemployment benefits described 
        in subsection (i)(3) to the same extent and in the same 
        manner as if those benefits were regular compensation.
            (2) Eligibility and termination rules.--Additional 
        compensation (as described in subsection (b)(1))--
                    (A) shall not be payable, pursuant to this 
                subsection, with respect to any unemployment 
                benefits described in subsection (i)(3) for any 
                week beginning on or after the date specified 
                in subsection (e)(1)(B), except in the case of 
                an individual who was eligible to receive 
                additional compensation (as so described) in 
                connection with any regular compensation or any 
                unemployment benefits described in subsection 
                (i)(3) for any period of unemployment ending 
                before such date; and
                    (B) shall in no event be payable for any 
                week beginning after the date specified in 
                subsection (e)(3).
    (h)  Disregard of Additional Compensation for Purposes of 
Medicaid and SCHIP.--The monthly equivalent of any additional 
compensation paid under this section shall be disregarded in 
considering the amount of income of an individual for any 
purposes under title XIX and title XXI of the Social Security 
Act.
    (i) Definitions.--For purposes of this section--
            (1) the terms ``compensation'', ``regular 
        compensation'', ``benefit year'', ``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);
            (2) the term ``emergency unemployment 
        compensation'' means emergency unemployment 
        compensation under title IV of the Supplemental 
        Appropriations Act, 2008 (Public Law 110-252; 122 Stat. 
        2353); and
            (3) any reference to unemployment benefits 
        described in this paragraph shall be considered to 
        refer to--
                    (A) extended compensation (as defined by 
                section 205 of the Federal-State Extended 
                Unemployment Compensation Act of 1970); and
                    (B) unemployment compensation (as defined 
                by section 85(b) of the Internal Revenue Code 
                of 1986) provided under any program 
                administered by a State under an agreement with 
                the Secretary.

SEC. 2003. SPECIAL TRANSFERS FOR UNEMPLOYMENT COMPENSATION 
                    MODERNIZATION.

    (a) In General.--Section 903 of the Social Security Act (42 
U.S.C. 1103) is amended by adding at the end the following:

     ``Special Transfers in Fiscal Years 2009, 2010, and 2011 for 
                             Modernization

    ``(f)(1)(A) In addition to any other amounts, the Secretary 
of Labor shall provide for the making of unemployment 
compensation modernization incentive payments (hereinafter 
`incentive payments') to the accounts of the States in the 
Unemployment Trust Fund, by transfer from amounts reserved for 
that purpose in the Federal unemployment account, in accordance 
with succeeding provisions of this subsection.
    ``(B) The maximum incentive payment allowable under this 
subsection with respect to any State shall, as determined by 
the Secretary of Labor, be equal to the amount obtained by 
multiplying $7,000,000,000 by the same ratio as would apply 
under subsection (a)(2)(B) for purposes of determining such 
State's share of any excess amount (as described in subsection 
(a)(1)) that would have been subject to transfer to State 
accounts, as of October 1, 2008, under the provisions of 
subsection (a).
    ``(C) Of the maximum incentive payment determined under 
subparagraph (B) with respect to a State--
            ``(i) one-third shall be transferred to the account 
        of such State upon a certification under paragraph 
        (4)(B) that the State law of such State meets the 
        requirements of paragraph (2); and
            ``(ii) the remainder shall be transferred to the 
        account of such State upon a certification under 
        paragraph (4)(B) that the State law of such State meets 
        the requirements of paragraph (3).
    ``(2) The State law of a State meets the requirements of 
this paragraph if such State law--
            ``(A) uses a base period that includes the most 
        recently completed calendar quarter before the start of 
        the benefit year for purposes of determining 
        eligibility for unemployment compensation; or
            ``(B) provides that, in the case of an individual 
        who would not otherwise be eligible for unemployment 
        compensation under the State law because of the use of 
        a base period that does not include the most recently 
        completed calendar quarter before the start of the 
        benefit year, eligibility shall be determined using a 
        base period that includes such calendar quarter.
    ``(3) The State law of a State meets the requirements of 
this paragraph if such State law includes provisions to carry 
out at least 2 of the following subparagraphs:
            ``(A) An individual shall not be denied regular 
        unemployment compensation under any State law 
        provisions relating to availability for work, active 
        search for work, or refusal to accept work, solely 
        because such individual is seeking only part-time work 
        (as defined by the Secretary of Labor), except that the 
        State law provisions carrying out this subparagraph may 
        exclude an individual if a majority of the weeks of 
        work in such individual's base period do not include 
        part-time work (as so defined).
            ``(B) An individual shall not be disqualified from 
        regular unemployment compensation for separating from 
        employment if that separation is for any compelling 
        family reason. For purposes of this subparagraph, the 
        term `compelling family reason' means the following:
                    ``(i) Domestic violence, verified by such 
                reasonable and confidential documentation as 
                the State law may require, which causes the 
                individual reasonably to believe that such 
                individual's continued employment would 
                jeopardize the safety of the individual or of 
                any member of the individual's immediate family 
                (as defined by the Secretary of Labor).
                    ``(ii) The illness or disability of a 
                member of the individual's immediate family (as 
                those terms are defined by the Secretary of 
                Labor).
                    ``(iii) The need for the individual to 
                accompany such individual's spouse--
                            ``(I) to a place from which it is 
                        impractical for such individual to 
                        commute; and
                            ``(II) due to a change in location 
                        of the spouse's employment.
            ``(C)(i) Weekly unemployment compensation is 
        payable under this subparagraph to any individual who 
        is unemployed (as determined under the State 
        unemployment compensation law), has exhausted all 
        rights to regular unemployment compensation under the 
        State law, and is enrolled and making satisfactory 
        progress in a State-approved training program or in a 
        job training program authorized under the Workforce 
        Investment Act of 1998, except that such compensation 
        is not required to be paid to an individual who is 
        receiving similar stipends or other training allowances 
        for non-training costs.
            ``(ii) Each State-approved training program or job 
        training program referred to in clause (i) shall 
        prepare individuals who have been separated from a 
        declining occupation, or who have been involuntarily 
        and indefinitely separated from employment as a result 
        of a permanent reduction of operations at the 
        individual's place of employment, for entry into a 
        high-demand occupation.
            ``(iii) The amount of unemployment compensation 
        payable under this subparagraph to an individual for a 
        week of unemployment shall be equal to--
                    ``(I) the individual's average weekly 
                benefit amount (including dependents' 
                allowances) for the most recent benefit year, 
                less
                    ``(II) any deductible income, as determined 
                under State law.
        The total amount of unemployment compensation payable 
        under this subparagraph to any individual shall be 
        equal to at least 26 times the individual's average 
        weekly benefit amount (including dependents' 
        allowances) for the most recent benefit year.
            ``(D) Dependents' allowances are provided, in the 
        case of any individual who is entitled to receive 
        regular unemployment compensation and who has any 
        dependents (as defined by State law), in an amount 
        equal to at least $15 per dependent per week, subject 
        to any aggregate limitation on such allowances which 
        the State law may establish (but which aggregate 
        limitation on the total allowance for dependents paid 
        to an individual may not be less than $50 for each week 
        of unemployment or 50 percent of the individual's 
        weekly benefit amount for the benefit year, whichever 
        is less), except that a State law may provide for a 
        reasonable reduction in the amount of any such 
        allowance for a week of less than total unemployment.
    ``(4)(A) Any State seeking an incentive payment under this 
subsection shall submit an application therefor at such time, 
in such manner, and complete with such information as the 
Secretary of Labor may within 60 days after the date of the 
enactment of this subsection prescribe (whether by regulation 
or otherwise), including information relating to compliance 
with the requirements of paragraph (2) or (3), as well as how 
the State intends to use the incentive payment to improve or 
strengthen the State's unemployment compensation program. The 
Secretary of Labor shall, within 30 days after receiving a 
complete application, notify the State agency of the State of 
the Secretary's findings with respect to the requirements of 
paragraph (2) or (3) (or both).
    ``(B)(i) If the Secretary of Labor finds that the State law 
provisions (disregarding any State law provisions which are not 
then currently in effect as permanent law or which are subject 
to discontinuation) meet the requirements of paragraph (2) or 
(3), as the case may be, the Secretary of Labor shall thereupon 
make a certification to that effect to the Secretary of the 
Treasury, together with a certification as to the amount of the 
incentive payment to be transferred to the State account 
pursuant to that finding. The Secretary of the Treasury shall 
make the appropriate transfer within 7 days after receiving 
such certification.
    ``(ii) For purposes of clause (i), State law provisions 
which are to take effect within 12 months after the date of 
their certification under this subparagraph shall be considered 
to be in effect as of the date of such certification.
    ``(C)(i) No certification of compliance with the 
requirements of paragraph (2) or (3) may be made with respect 
to any State whose State law is not otherwise eligible for 
certification under section 303 or approvable under section 
3304 of the Federal Unemployment Tax Act.
    ``(ii) No certification of compliance with the requirements 
of paragraph (3) may be made with respect to any State whose 
State law is not in compliance with the requirements of 
paragraph (2).
    ``(iii) No application under subparagraph (A) may be 
considered if submitted before the date of the enactment of 
this subsection or after the latest date necessary (as 
specified by the Secretary of Labor) to ensure that all 
incentive payments under this subsection are made before 
October 1, 2011.
    ``(5)(A) Except as provided in subparagraph (B), any amount 
transferred to the account of a State under this subsection may 
be used by such State only in the payment of cash benefits to 
individuals with respect to their unemployment (including for 
dependents' allowances and for unemployment compensation under 
paragraph (3)(C)), exclusive of expenses of administration.
    ``(B) A State may, 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), use any 
amount transferred to the account of such State under this 
subsection for the administration of its unemployment 
compensation law and public employment offices.
    ``(6) Out of any money in the Federal unemployment account 
not otherwise appropriated, the Secretary of the Treasury shall 
reserve $7,000,000,000 for incentive payments under this 
subsection. Any amount so reserved shall not be taken into 
account for purposes of any determination under section 902, 
910, or 1203 of the amount in the Federal unemployment account 
as of any given time. Any amount so reserved for which the 
Secretary of the Treasury has not received a certification 
under paragraph (4)(B) by the deadline described in paragraph 
(4)(C)(iii) shall, upon the close of fiscal year 2011, become 
unrestricted as to use as part of the Federal unemployment 
account.
    ``(7) For purposes of this subsection, the terms `benefit 
year', `base period', 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).

       ``Special Transfer in Fiscal Year 2009 for Administration

    ``(g)(1) In addition to any other amounts, the Secretary of 
the Treasury shall transfer from the employment security 
administration account to the account of each State in the 
Unemployment Trust Fund, within 30 days after the date of the 
enactment of this subsection, 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 the amount obtained by multiplying 
$500,000,000 by the same ratio as determined under subsection 
(f)(1)(B) with respect to such State.
    ``(3) Any amount transferred to the account of a State as a 
result of the enactment of this subsection may be used by the 
State agency of such State only in the payment of expenses 
incurred by it for--
            ``(A) the administration of the provisions of its 
        State law carrying out the purposes of subsection 
        (f)(2) or any subparagraph of subsection (f)(3);
            ``(B) improved outreach to individuals who might be 
        eligible for regular unemployment compensation by 
        virtue of any provisions of the State law which are 
        described in subparagraph (A);
            ``(C) the improvement of unemployment benefit and 
        unemployment tax operations, including responding to 
        increased demand for unemployment compensation; and
            ``(D) staff-assisted reemployment services for 
        unemployment compensation claimants.''.
    (b) Regulations.--The Secretary of Labor may prescribe any 
regulations, operating instructions, or other guidance 
necessary to carry out the amendment made by subsection (a).

SEC. 2004. TEMPORARY ASSISTANCE FOR STATES WITH ADVANCES.

    Section 1202(b) of the Social Security Act (42 U.S.C. 
1322(b)) is amended by adding at the end the following new 
paragraph:
    ``(10)(A) With respect to the period beginning on the date 
of enactment of this paragraph and ending on December 31, 
2010--
            ``(i) any interest payment otherwise due from a 
        State under this subsection during such period shall be 
        deemed to have been made by the State; and
            ``(ii) no interest shall accrue during such period 
        on any advance or advances made under section 1201 to a 
        State.
    ``(B) The provisions of subparagraph (A) shall have no 
effect on the requirement for interest payments under this 
subsection after the period described in such subparagraph or 
on the accrual of interest under this subsection after such 
period.''.

SEC. 2005. FULL FEDERAL FUNDING OF EXTENDED UNEMPLOYMENT COMPENSATION 
                    FOR A LIMITED PERIOD.

    (a) In General.--In the case of sharable extended 
compensation and sharable regular compensation paid for weeks 
of unemployment beginning after the date of the enactment of 
this section and before January 1, 2010, section 204(a)(1) of 
the Federal-State Extended Unemployment Compensation Act of 
1970 (26 U.S.C. 3304 note) shall be applied by substituting 
``100 percent of'' for ``one-half of''.
    (b) Special Rule.--At the option of a State, for any weeks 
of unemployment beginning after the date of the enactment of 
this section and before January 1, 2010, an individual's 
eligibility period (as described in section 203(c) of the 
Federal-State Extended Unemployment Compensation Act of 1970) 
shall, for purposes of any determination of eligibility for 
extended compensation under the State law of such State, be 
considered to include any week which begins--
            (1) after the date as of which such individual 
        exhausts all rights to emergency unemployment 
        compensation; and
            (2) during an extended benefit period that began on 
        or before the date described in paragraph (1).
    (c) Limited Extension.--In the case of an individual who 
receives extended compensation with respect to 1 or more weeks 
of unemployment beginning after the date of the enactment of 
this Act and before January 1, 2010, the provisions of 
subsections (a) and (b) shall, at the option of a State, be 
applied by substituting ``ending before June 1, 2010'' for 
``before January 1, 2010''.
    (d) Extension of Temporary Federal Matching for the First 
Week of Extended Benefits for States With No Waiting Week.--
            (1) In general.--Section 5 of the Unemployment 
        Compensation Extension Act of 2008 (Public Law 110-449) 
        is amended by striking ``December 8, 2009'' and 
        inserting ``May 30, 2010''.
            (2) Effective date.--The amendment made by 
        paragraph (1) shall take effect as if included in the 
        enactment of the Unemployment Compensation Extension 
        Act of 2008 (Public Law 110-449).
    (e) Definitions.--For purposes of this section--
            (1) the terms ``sharable extended compensation'' 
        and ``sharable regular compensation'' have the 
        respective meanings given such terms under section 204 
        of the Federal-State Extended Unemployment Compensation 
        Act of 1970;
            (2) the terms ``extended compensation'', ``State'', 
        ``State law'', and ``week'' have the respective 
        meanings given such terms under section 205 of the 
        Federal-State Extended Unemployment Compensation Act of 
        1970;
            (3) the term ``emergency unemployment 
        compensation'' means benefits payable to individuals 
        under title IV of the Supplemental Appropriations Act, 
        2008 with respect to their unemployment; and
            (4) the term ``extended benefit period'' means an 
        extended benefit period as determined in accordance 
        with applicable provisions of the Federal-State 
        Extended Unemployment Compensation Act of 1970.
    (f) Regulations.--The Secretary of Labor may prescribe any 
operating instructions or regulations necessary to carry out 
this section.

SEC. 2006. TEMPORARY INCREASE IN EXTENDED UNEMPLOYMENT BENEFITS UNDER 
                    THE RAILROAD UNEMPLOYMENT INSURANCE ACT.

    (a) In General.--Section 2(c)(2) of the Railroad 
Unemployment Insurance Act (45 U.S.C. 352(c)(2)) is amended by 
adding at the end the following:
                    ``(D) Temporary increase in extended 
                unemployment benefits.--
                            ``(i) Employees with 10 or more 
                        years of service.--Subject to clause 
                        (iii), in the case of an employee who 
                        has 10 or more years of service (as so 
                        defined), with respect to extended 
                        unemployment benefits--
                                    ``(I) subparagraph (A) 
                                shall be applied by 
                                substituting `130 days of 
                                unemployment' for `65 days of 
                                unemployment'; and
                                    ``(II) subparagraph (B) 
                                shall be applied by inserting 
                                `(or, in the case of 
                                unemployment benefits, 13 
                                consecutive 14-day periods)' 
                                after `7 consecutive 14-day 
                                periods'.
                            ``(ii) Employees with less than 10 
                        years of service.--Subject to clause 
                        (iii), in the case of an employee who 
                        has less than 10 years of service (as 
                        so defined), with respect to extended 
                        unemployment benefits, this paragraph 
                        shall apply to such an employee in the 
                        same manner as this paragraph would 
                        apply to an employee described in 
                        clause (i) if such clause had not been 
                        enacted.
                            ``(iii) Application.--The 
                        provisions of clauses (i) and (ii) 
                        shall apply to an employee who received 
                        normal benefits for days of 
                        unemployment under this Act during the 
                        period beginning July 1, 2008, and 
                        ending on June 30, 2009, except that no 
                        extended benefit period under this 
                        paragraph shall begin after December 
                        31, 2009. Notwithstanding the preceding 
                        sentence, no benefits shall be payable 
                        under this subparagraph and clauses (i) 
                        and (ii) shall no longer be applicable 
                        upon the exhaustion of the funds 
                        appropriated under clause (iv) for 
                        payment of benefits under this 
                        subparagraph.
                            ``(iv) Appropriation.--Out of any 
                        funds in the Treasury not otherwise 
                        appropriated, there are appropriated 
                        $20,000,000 to cover the cost of 
                        additional extended unemployment 
                        benefits provided under this 
                        subparagraph, to remain available until 
                        expended.''.
    (b) Funding for Administration.--Out of any funds in the 
Treasury not otherwise appropriated, there are appropriated to 
the Railroad Retirement Board $80,000 to cover the 
administrative expenses associated with the payment of 
additional extended unemployment benefits under section 
2(c)(2)(D) of the Railroad Unemployment Insurance Act, as added 
by subsection (a), to remain available until expended.

           Subtitle B--Assistance for Vulnerable Individuals

SEC. 2101. EMERGENCY FUND FOR TANF PROGRAM.

    (a) Temporary Fund.--
            (1) In general.--Section 403 of the Social Security 
        Act (42 U.S.C. 603) is amended by adding at the end the 
        following:
    ``(c) Emergency Fund.--
            ``(1) Establishment.--There is established in the 
        Treasury of the United States a fund which shall be 
        known as the `Emergency Contingency Fund for State 
        Temporary Assistance for Needy Families Programs' (in 
        this subsection referred to as the `Emergency Fund').
            ``(2) Deposits into fund.--
                    ``(A) In general.--Out of any money in the 
                Treasury of the United States not otherwise 
                appropriated, there are appropriated for fiscal 
                year 2009, $5,000,000,000 for payment to the 
                Emergency Fund.
                    ``(B) Availability and use of funds.--The 
                amounts appropriated to the Emergency Fund 
                under subparagraph (A) shall remain available 
                through fiscal year 2010 and shall be used to 
                make grants to States in each of fiscal years 
                2009 and 2010 in accordance with the 
                requirements of paragraph (3).
                    ``(C) Limitation.--In no case may the 
                Secretary make a grant from the Emergency Fund 
                for a fiscal year after fiscal year 2010.
            ``(3) Grants.--
                    ``(A) Grant related to caseload 
                increases.--
                            ``(i) In general.--For each 
                        calendar quarter in fiscal year 2009 or 
                        2010, the Secretary shall make a grant 
                        from the Emergency Fund to each State 
                        that--
                                    ``(I) requests a grant 
                                under this subparagraph for the 
                                quarter; and
                                    ``(II) meets the 
                                requirement of clause (ii) for 
                                the quarter.
                            ``(ii) Caseload increase 
                        requirement.--A State meets the 
                        requirement of this clause for a 
                        quarter if the average monthly 
                        assistance caseload of the State for 
                        the quarter exceeds the average monthly 
                        assistance caseload of the State for 
                        the corresponding quarter in the 
                        emergency fund base year of the State.
                            ``(iii) Amount of grant.--Subject 
                        to paragraph (5), the amount of the 
                        grant to be made to a State under this 
                        subparagraph for a quarter shall be an 
                        amount equal to 80 percent of the 
                        amount (if any) by which the total 
                        expenditures of the State for basic 
                        assistance (as defined by the 
                        Secretary) in the quarter, whether 
                        under the State program funded under 
                        this part or as qualified State 
                        expenditures, exceeds the total 
                        expenditures of the State for such 
                        assistance for the corresponding 
                        quarter in the emergency fund base year 
                        of the State.
                    ``(B) Grant related to increased 
                expenditures for non-recurrent short term 
                benefits.--
                            ``(i) In general.--For each 
                        calendar quarter in fiscal year 2009 or 
                        2010, the Secretary shall make a grant 
                        from the Emergency Fund to each State 
                        that--
                                    ``(I) requests a grant 
                                under this subparagraph for the 
                                quarter; and
                                    ``(II) meets the 
                                requirement of clause (ii) for 
                                the quarter.
                            ``(ii) Non-recurrent short term 
                        expenditure requirement.--A State meets 
                        the requirement of this clause for a 
                        quarter if the total expenditures of 
                        the State for non-recurrent short term 
                        benefits in the quarter, whether under 
                        the State program funded under this 
                        part or as qualified State 
                        expenditures, exceeds the total 
                        expenditures of the State for non-
                        recurrent short term benefits in the 
                        corresponding quarter in the emergency 
                        fund base year of the State.
                            ``(iii) Amount of grant.--Subject 
                        to paragraph (5), the amount of the 
                        grant to be made to a State under this 
                        subparagraph for a quarter shall be an 
                        amount equal to 80 percent of the 
                        excess described in clause (ii).
                    ``(C) Grant related to increased 
                expenditures for subsidized employment.--
                            ``(i) In general.--For each 
                        calendar quarter in fiscal year 2009 or 
                        2010, the Secretary shall make a grant 
                        from the Emergency Fund to each State 
                        that--
                                    ``(I) requests a grant 
                                under this subparagraph for the 
                                quarter; and
                                    ``(II) meets the 
                                requirement of clause (ii) for 
                                the quarter.
                            ``(ii) Subsidized employment 
                        expenditure requirement.--A State meets 
                        the requirement of this clause for a 
                        quarter if the total expenditures of 
                        the State for subsidized employment in 
                        the quarter, whether under the State 
                        program funded under this part or as 
                        qualified State expenditures, exceeds 
                        the total such expenditures of the 
                        State in the corresponding quarter in 
                        the emergency fund base year of the 
                        State.
                            ``(iii) Amount of grant.--Subject 
                        to paragraph (5), the amount of the 
                        grant to be made to a State under this 
                        subparagraph for a quarter shall be an 
                        amount equal to 80 percent of the 
                        excess described in clause (ii).
            ``(4) Authority to make necessary adjustments to 
        data and collect needed data.--In determining the size 
        of the caseload of a State and the expenditures of a 
        State for basic assistance, non-recurrent short-term 
        benefits, and subsidized employment, during any period 
        for which the State requests funds under this 
        subsection, and during the emergency fund base year of 
        the State, the Secretary may make appropriate 
        adjustments to the data, on a State-by-State basis, to 
        ensure that the data are comparable with respect to the 
        groups of families served and the types of aid 
        provided. The Secretary may develop a mechanism for 
        collecting expenditure data, including procedures which 
        allow States to make reasonable estimates, and may set 
        deadlines for making revisions to the data.
            ``(5) Limitation.--The total amount payable to a 
        single State under subsection (b) and this subsection 
        for fiscal years 2009 and 2010 combined shall not 
        exceed 50 percent of the annual State family assistance 
        grant.
            ``(6) Limitations on use of funds.--A State to 
        which an amount is paid under this subsection may use 
        the amount only as authorized by section 404.
            ``(7) Timing of implementation.--The Secretary 
        shall implement this subsection as quickly as 
        reasonably possible, pursuant to appropriate guidance 
        to States.
            ``(8) Application to indian tribes.--This 
        subsection shall apply to an Indian tribe with an 
        approved tribal family assistance plan under section 
        412 in the same manner as this subsection applies to a 
        State.
            ``(9) Definitions.--In this subsection:
                    ``(A) Average monthly assistance caseload 
                defined.--The term `average monthly assistance 
                caseload' means, with respect to a State and a 
                quarter, the number of families receiving 
                assistance during the quarter under the State 
                program funded under this part or as qualified 
                State expenditures, subject to adjustment under 
                paragraph (4).
                    ``(B) Emergency fund base year.--
                            ``(i) In general.--The term 
                        `emergency fund base year' means, with 
                        respect to a State and a category 
                        described in clause (ii), whichever of 
                        fiscal year 2007 or 2008 is the fiscal 
                        year in which the amount described by 
                        the category with respect to the State 
                        is the lesser.
                            ``(ii) Categories described.--The 
                        categories described in this clause are 
                        the following:
                                    ``(I) The average monthly 
                                assistance caseload of the 
                                State.
                                    ``(II) The total 
                                expenditures of the State for 
                                non-recurrent short term 
                                benefits, whether under the 
                                State program funded under this 
                                part or as qualified State 
                                expenditures.
                                    ``(III) The total 
                                expenditures of the State for 
                                subsidized employment, whether 
                                under the State program funded 
                                under this part or as qualified 
                                State expenditures.
                    ``(C) Qualified state expenditures.--The 
                term `qualified State expenditures' has the 
                meaning given the term in section 409(a)(7).''.
            (2) Repeal.--Effective October 1, 2010, subsection 
        (c) of section 403 of the Social Security Act (42 
        U.S.C. 603) (as added by paragraph (1)) is repealed, 
        except that paragraph (9) of such subsection shall 
        remain in effect until October 1, 2011, but only with 
        respect to section 407(b)(3)(A)(i) of such Act.
    (b) Temporary Modification of Caseload Reduction Credit.--
Section 407(b)(3)(A)(i) of such Act (42 U.S.C. 607(b)(3)(A)(i)) 
is amended by inserting ``(or if the immediately preceding 
fiscal year is fiscal year 2008, 2009, or 2010, then, at State 
option, during the emergency fund base year of the State with 
respect to the average monthly assistance caseload of the State 
(within the meaning of section 403(c)(9)), except that, if a 
State elects such option for fiscal year 2008, the emergency 
fund base year of the State with respect to such caseload shall 
be fiscal year 2007))'' before ``under the State''.
    (c) Disregard From Limitation on Total Payments to 
Territories.--Section 1108(a)(2) of the Social Security Act (42 
U.S.C. 1308(a)(2)) is amended by inserting ``403(c)(3),'' after 
``403(a)(5),''.
    (d) Sunset of Other Temporary Provisions.--
            (1) Disregard from limitation on total payments to 
        territories.--Effective October 1, 2010, section 
        1108(a)(2) of the Social Security Act (42 U.S.C. 
        1308(a)(2)) is amended by striking ``403(c)(3),'' (as 
        added by subsection (c)).
            (2) Caseload reduction credit.--Effective October 
        1, 2011, section 407(b)(3)(A)(i) of such Act (42 U.S.C. 
        607(b)(3)(A)(i)) is amended by striking ``(or if the 
        immediately preceding fiscal year is fiscal year 2008, 
        2009, or 2010, then, at State option, during the 
        emergency fund base year of the State with respect to 
        the average monthly assistance caseload of the State 
        (within the meaning of section 403(c)(9)), except that, 
        if a State elects such option for fiscal year 2008, the 
        emergency fund base year of the State with respect to 
        such caseload shall be fiscal year 2007))'' (as added 
        by subsection (b)).

SEC. 2102. EXTENSION OF TANF SUPPLEMENTAL GRANTS.

    (a) Extension Through Fiscal Year 2010.--Section 7101(a) of 
the Deficit Reduction Act of 2005 (Public Law 109-171; 120 
Stat. 135), as amended by section 301(a) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 
110-275), is amended by striking ``fiscal year 2009'' and 
inserting ``fiscal year 2010''.
    (b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the 
Social Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended to 
read as follows:
                            ``(ii) subparagraph (G) shall be 
                        applied as if `fiscal year 2010' were 
                        substituted for `fiscal year 2001'; 
                        and''.

SEC. 2103. CLARIFICATION OF AUTHORITY OF STATES TO USE TANF FUNDS 
                    CARRIED OVER FROM PRIOR YEARS TO PROVIDE TANF 
                    BENEFITS AND SERVICES.

    Section 404(e) of the Social Security Act (42 U.S.C. 
604(e)) is amended to read as follows:
    ``(e) Authority To Carry Over Certain Amounts for Benefits 
or Services or for Future Contingencies.--A State or tribe may 
use a grant made to the State or tribe under this part for any 
fiscal year to provide, without fiscal year limitation, any 
benefit or service that may be provided under the State or 
tribal program funded under this part.''.

SEC. 2104. TEMPORARY RESUMPTION OF PRIOR CHILD SUPPORT LAW.

    During the period that begins on October 1, 2008, and ends 
on September 30, 2010, section 455(a)(1) of the Social Security 
Act (42 U.S.C. 655(a)(1)) shall be applied and administered as 
if the phrase ``from amounts paid to the State under section 
458 or'' does not appear in such section.

     Subtitle C--Economic Recovery Payments to Certain Individuals

SEC. 2201. ECONOMIC RECOVERY PAYMENT TO RECIPIENTS OF SOCIAL SECURITY, 
                    SUPPLEMENTAL SECURITY INCOME, RAILROAD RETIREMENT 
                    BENEFITS, AND VETERANS DISABILITY COMPENSATION OR 
                    PENSION BENEFITS.

    (a) Authority To Make Payments.--
            (1) Eligibility.--
                    (A) In general.--Subject to paragraph 
                (5)(B), the Secretary of the Treasury shall 
                disburse a $250 payment to each individual who, 
                for any month during the 3-month period ending 
                with the month which ends prior to the month 
                that includes the date of the enactment of this 
                Act, is entitled to a benefit payment described 
                in clause (i), (ii), or (iii) of subparagraph 
                (B) or is eligible for a SSI cash benefit 
                described in subparagraph (C).
                    (B) Benefit payment described.--For 
                purposes of subparagraph (A):
                            (i) Title ii benefit.--A benefit 
                        payment described in this clause is a 
                        monthly insurance benefit payable 
                        (without regard to sections 202(j)(1) 
                        and 223(b) of the Social Security Act 
                        (42 U.S.C. 402(j)(1), 423(b)) under--
                                    (I) section 202(a) of such 
                                Act (42 U.S.C. 402(a));
                                    (II) section 202(b) of such 
                                Act (42 U.S.C. 402(b));
                                    (III) section 202(c) of 
                                such Act (42 U.S.C. 402(c));
                                    (IV) section 
                                202(d)(1)(B)(ii) of such Act 
                                (42 U.S.C. 402(d)(1)(B)(ii));
                                    (V) section 202(e) of such 
                                Act (42 U.S.C. 402(e));
                                    (VI) section 202(f) of such 
                                Act (42 U.S.C. 402(f));
                                    (VII) section 202(g) of 
                                such Act (42 U.S.C. 402(g));
                                    (VIII) section 202(h) of 
                                such Act (42 U.S.C. 402(h));
                                    (IX) section 223(a) of such 
                                Act (42 U.S.C. 423(a));
                                    (X) section 227 of such Act 
                                (42 U.S.C. 427); or
                                    (XI) section 228 of such 
                                Act (42 U.S.C. 428).
                            (ii) Railroad retirement benefit.--
                        A benefit payment described in this 
                        clause is a monthly annuity or pension 
                        payment payable (without regard to 
                        section 5(a)(ii) of the Railroad 
                        Retirement Act of 1974 (45 U.S.C. 
                        231d(a)(ii))) under--
                                    (I) section 2(a)(1) of such 
                                Act (45 U.S.C. 231a(a)(1));
                                    (II) section 2(c) of such 
                                Act (45 U.S.C. 231a(c));
                                    (III) section 2(d)(1)(i) of 
                                such Act (45 U.S.C. 
                                231a(d)(1)(i));
                                    (IV) section 2(d)(1)(ii) of 
                                such Act (45 U.S.C. 
                                231a(d)(1)(ii));
                                    (V) section 2(d)(1)(iii)(C) 
                                of such Act to an adult 
                                disabled child (45 U.S.C. 
                                231a(d)(1)(iii)(C));
                                    (VI) section 2(d)(1)(iv) of 
                                such Act (45 U.S.C. 
                                231a(d)(1)(iv));
                                    (VII) section 2(d)(1)(v) of 
                                such Act (45 U.S.C. 
                                231a(d)(1)(v)); or
                                    (VIII) section 7(b)(2) of 
                                such Act (45 U.S.C. 231f(b)(2)) 
                                with respect to any of the 
                                benefit payments described in 
                                clause (i) of this 
                                subparagraph.
                            (iii) Veterans benefit.--A benefit 
                        payment described in this clause is a 
                        compensation or pension payment payable 
                        under--
                                    (I) section 1110, 1117, 
                                1121, 1131, 1141, or 1151 of 
                                title 38, United States Code;
                                    (II) section 1310, 1312, 
                                1313, 1315, 1316, or 1318 of 
                                title 38, United States Code;
                                    (III) section 1513, 1521, 
                                1533, 1536, 1537, 1541, 1542, 
                                or 1562 of title 38, United 
                                States Code; or
                                    (IV) section 1805, 1815, or 
                                1821 of title 38, United States 
                                Code,
                        to a veteran, surviving spouse, child, 
                        or parent as described in paragraph 
                        (2), (3), (4)(A)(ii), or (5) of section 
                        101, title 38, United States Code, who 
                        received that benefit during any month 
                        within the 3 month period ending with 
                        the month which ends prior to the month 
                        that includes the date of the enactment 
                        of this Act.
                    (C) SSI cash benefit described.--A SSI cash 
                benefit described in this subparagraph is a 
                cash benefit payable under section 1611 (other 
                than under subsection (e)(1)(B) of such 
                section) or 1619(a) of the Social Security Act 
                (42 U.S.C. 1382, 1382h).
            (2) Requirement.--A payment shall be made under 
        paragraph (1) only to individuals who reside in 1 of 
        the 50 States, the District of Columbia, Puerto Rico, 
        Guam, the United States Virgin Islands, American Samoa, 
        or the Northern Mariana Islands. For purposes of the 
        preceding sentence, the determination of the 
        individual's residence shall be based on the current 
        address of record under a program specified in 
        paragraph (1).
            (3) No double payments.--An individual shall be 
        paid only 1 payment under this section, regardless of 
        whether the individual is entitled to, or eligible for, 
        more than 1 benefit or cash payment described in 
        paragraph (1).
            (4) Limitation.--A payment under this section shall 
        not be made--
                    (A) in the case of an individual entitled 
                to a benefit specified in paragraph (1)(B)(i) 
                or paragraph (1)(B)(ii)(VIII) if, for the most 
                recent month of such individual's entitlement 
                in the 3-month period described in paragraph 
                (1), such individual's benefit under such 
                paragraph was not payable by reason of 
                subsection (x) or (y) of section 202 the Social 
                Security Act (42 U.S.C. 402) or section 1129A 
                of such Act (42 U.S.C. 1320a-8a);
                    (B) in the case of an individual entitled 
                to a benefit specified in paragraph (1)(B)(iii) 
                if, for the most recent month of such 
                individual's entitlement in the 3 month period 
                described in paragraph (1), such individual's 
                benefit under such paragraph was not payable, 
                or was reduced, by reason of section 1505, 
                5313, or 5313B of title 38, United States Code;
                    (C) in the case of an individual entitled 
                to a benefit specified in paragraph (1)(C) if, 
                for such most recent month, such individual's 
                benefit under such paragraph was not payable by 
                reason of subsection (e)(1)(A) or (e)(4) of 
                section 1611 (42 U.S.C. 1382) or section 1129A 
                of such Act (42 U.S.C. 1320a-8a); or
                    (D) in the case of any individual whose 
                date of death occurs before the date on which 
                the individual is certified under subsection 
                (b) to receive a payment under this section.
            (5) Timing and manner of payments.--
                    (A) In general.--The Secretary of the 
                Treasury shall commence disbursing payments 
                under this section at the earliest practicable 
                date but in no event later than 120 days after 
                the date of enactment of this Act. The 
                Secretary of the Treasury may disburse any 
                payment electronically to an individual in such 
                manner as if such payment was a benefit payment 
                or cash benefit to such individual under the 
                applicable program described in subparagraph 
                (B) or (C) of paragraph (1).
                    (B) Deadline.--No payments shall be 
                disbursed under this section after December 31, 
                2010, regardless of any determinations of 
                entitlement to, or eligibility for, such 
                payments made after such date.
    (b) Identification of Recipients.--The Commissioner of 
Social Security, the Railroad Retirement Board, and the 
Secretary of Veterans Affairs shall certify the individuals 
entitled to receive payments under this section and provide the 
Secretary of the Treasury with the information needed to 
disburse such payments. A certification of an individual shall 
be unaffected by any subsequent determination or 
redetermination of the individual's entitlement to, or 
eligibility for, a benefit specified in subparagraph (B) or (C) 
of subsection (a)(1).
    (c) Treatment of Payments.--
            (1) Payment to be disregarded for purposes of all 
        federal and federally assisted programs.--A payment 
        under subsection (a) shall not be regarded as income 
        and shall not be regarded as a resource for the month 
        of receipt and the following 9 months, for purposes of 
        determining the eligibility of the recipient (or the 
        recipient's spouse or family) for benefits or 
        assistance, or the amount or extent of benefits or 
        assistance, under any Federal program or under any 
        State or local program financed in whole or in part 
        with Federal funds.
            (2) Payment not considered income for purposes of 
        taxation.--A payment under subsection (a) shall not be 
        considered as gross income for purposes of the Internal 
        Revenue Code of 1986.
            (3) Payments protected from assignment.--The 
        provisions of sections 207 and 1631(d)(1) of the Social 
        Security Act (42 U.S.C. 407, 1383(d)(1)), section 14(a) 
        of the Railroad Retirement Act of 1974 (45 U.S.C. 
        231m(a)), and section 5301 of title 38, United States 
        Code, shall apply to any payment made under subsection 
        (a) as if such payment was a benefit payment or cash 
        benefit to such individual under the applicable program 
        described in subparagraph (B) or (C) of subsection 
        (a)(1).
            (4) Payments subject to offset.--Notwithstanding 
        paragraph (3), for purposes of section 3716 of title 
        31, United States Code, any payment made under this 
        section shall not be considered a benefit payment or 
        cash benefit made under the applicable program 
        described in subparagraph (B) or (C) of subsection 
        (a)(1) and all amounts paid shall be subject to offset 
        to collect delinquent debts.
    (d) Payment to Representative Payees and Fiduciaries.--
            (1) In general.--In any case in which an individual 
        who is entitled to a payment under subsection (a) and 
        whose benefit payment or cash benefit described in 
        paragraph (1) of that subsection is paid to a 
        representative payee or fiduciary, the payment under 
        subsection (a) shall be made to the individual's 
        representative payee or fiduciary and the entire 
        payment shall be used only for the benefit of the 
        individual who is entitled to the payment.
            (2) Applicability.--
                    (A) Payment on the basis of a title ii or 
                ssi benefit.--Section 1129(a)(3) of the Social 
                Security Act (42 U.S.C. 1320a-8(a)(3)) shall 
                apply to any payment made on the basis of an 
                entitlement to a benefit specified in paragraph 
                (1)(B)(i) or (1)(C) of subsection (a) in the 
                same manner as such section applies to a 
                payment under title II or XVI of such Act.
                    (B) Payment on the basis of a railroad 
                retirement benefit.--Section 13 of the Railroad 
                Retirement Act (45 U.S.C. 231l) shall apply to 
                any payment made on the basis of an entitlement 
                to a benefit specified in paragraph (1)(B)(ii) 
                of subsection (a) in the same manner as such 
                section applies to a payment under such Act.
                    (C) Payment on the basis of a veterans 
                benefit.--Sections 5502, 6106, and 6108 of 
                title 38, United States Code, shall apply to 
                any payment made on the basis of an entitlement 
                to a benefit specified in paragraph (1)(B)(iii) 
                of subsection (a) in the same manner as those 
                sections apply to a payment under that title.
    (e) Appropriation.--Out of any sums in the Treasury of the 
United States not otherwise appropriated, the following sums 
are appropriated for the period of fiscal years 2009 through 
2011, to remain available until expended, to carry out this 
section:
            (1) For the Secretary of the Treasury, $131,000,000 
        for administrative costs incurred in carrying out this 
        section, section 2202, section 36A of the Internal 
        Revenue Code of 1986 (as added by this Act), and other 
        provisions of this Act or the amendments made by this 
        Act relating to the Internal Revenue Code of 1986.
            (2) For the Commissioner of Social Security--
                    (A) such sums as may be necessary for 
                payments to individuals certified by the 
                Commissioner of Social Security as entitled to 
                receive a payment under this section; and
                    (B) $90,000,000 for the Social Security 
                Administration's Limitation on Administrative 
                Expenses for costs incurred in carrying out 
                this section.
            (3) For the Railroad Retirement Board--
                    (A) such sums as may be necessary for 
                payments to individuals certified by the 
                Railroad Retirement Board as entitled to 
                receive a payment under this section; and
                    (B) $1,400,000 to the Railroad Retirement 
                Board's Limitation on Administration for 
                administrative costs incurred in carrying out 
                this section.
            (4)(A) For the Secretary of Veterans Affairs--
                            (i) such sums as may be necessary 
                        for the Compensation and Pensions 
                        account, for payments to individuals 
                        certified by the Secretary of Veterans 
                        Affairs as entitled to receive a 
                        payment under this section; and
                            (ii) $100,000 for the Information 
                        Systems Technology account and 
                        $7,100,000 for the General Operating 
                        Expenses account for administrative 
                        costs incurred in carrying out this 
                        section.
            (B) The Department of Veterans Affairs Compensation 
        and Pensions account shall hereinafter be available for 
        payments authorized under subsection (a)(1)(A) to 
        individuals entitled to a benefit payment described in 
        subsection (a)(1)(B)(iii).

SEC. 2202. SPECIAL CREDIT FOR CERTAIN GOVERNMENT RETIREES.

    (a) In General.--In the case of an eligible individual, 
there shall be allowed as a credit against the tax imposed by 
subtitle A of the Internal Revenue Code of 1986 for the first 
taxable year beginning in 2009 an amount equal $250 ($500 in 
the case of a joint return where both spouses are eligible 
individuals).
    (b) Eligible Individual.--For purposes of this section--
            (1) In general.--The term ``eligible individual'' 
        means any individual--
                    (A) who receives during the first taxable 
                year beginning in 2009 any amount as a pension 
                or annuity for service performed in the employ 
                of the United States or any State, or any 
                instrumentality thereof, which is not 
                considered employment for purposes of chapter 
                21 of the Internal Revenue Code of 1986, and
                    (B) who does not receive a payment under 
                section 2201 during such taxable year.
            (2) Identification number requirement.--Such term 
        shall not include any individual who does not include 
        on the return of tax for the taxable year--
                    (A) such individual's social security 
                account number, and
                    (B) in the case of a joint return, the 
                social security account number of one of the 
                taxpayers on such return.
        For purposes of the preceding sentence, the social 
        security account number shall not include a TIN (as 
        defined in section 7701(a)(41) of the Internal Revenue 
        Code of 1986) issued by the Internal Revenue Service. 
        Any omission of a correct social security account 
        number required under this subparagraph shall be 
        treated as a mathematical or clerical error for 
        purposes of applying section 6213(g)(2) of such Code to 
        such omission.
    (c) Treatment of Credit.--
            (1) Refundable credit.--
                    (A) In general.--The credit allowed by 
                subsection (a) shall be treated as allowed by 
                subpart C of part IV of subchapter A of chapter 
                1 of the Internal Revenue Code of 1986.
                    (B) Appropriations.--For purposes of 
                section 1324(b)(2) of title 31, United States 
                Code, the credit allowed by subsection (a) 
                shall be treated in the same manner a refund 
                from the credit allowed under section 36A of 
                the Internal Revenue Code of 1986 (as added by 
                this Act).
            (2) Deficiency rules.--For purposes of section 
        6211(b)(4)(A) of the Internal Revenue Code of 1986, the 
        credit allowable by subsection (a) shall be treated in 
        the same manner as the credit allowable under section 
        36A of the Internal Revenue Code of 1986 (as added by 
        this Act).
    (d) Refunds Disregarded in the Administration of Federal 
Programs and Federally Assisted Programs.--Any credit or refund 
allowed or made to any individual by reason of this section 
shall not be taken into account as income and shall not be 
taken into account as resources for the month of receipt and 
the following 2 months, for purposes of determining the 
eligibility of such individual or any other individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or 
local program financed in whole or in part with Federal funds.

            TITLE III--PREMIUM ASSISTANCE FOR COBRA BENEFITS

SEC. 3000. TABLE OF CONTENTS.

    The table of contents of this title is as follows:

            TITLE III--PREMIUM ASSISTANCE FOR COBRA BENEFITS

Sec. 3000. Table of contents.
Sec. 3001. Premium assistance for COBRA benefits.

SEC. 3001. PREMIUM ASSISTANCE FOR COBRA BENEFITS.

    (a) Premium Assistance for COBRA Continuation Coverage for 
Individuals and Their Families.--
            (1) Provision of premium assistance.--
                    (A) Reduction of premiums payable.--In the 
                case of any premium for a period of coverage 
                beginning on or after the date of the enactment 
                of this Act for COBRA continuation coverage 
                with respect to any assistance eligible 
                individual, such individual shall be treated 
                for purposes of any COBRA continuation 
                provision as having paid the amount of such 
                premium if such individual pays (or a person 
                other than such individual's employer pays on 
                behalf of such individual) 35 percent of the 
                amount of such premium (as determined without 
                regard to this subsection).
                    (B) Plan enrollment option.--
                            (i) In general.--Notwithstanding 
                        the COBRA continuation provisions, an 
                        assistance eligible individual may, not 
                        later than 90 days after the date of 
                        notice of the plan enrollment option 
                        described in this subparagraph, elect 
                        to enroll in coverage under a plan 
                        offered by the employer involved, or 
                        the employee organization involved 
                        (including, for this purpose, a joint 
                        board of trustees of a multiemployer 
                        trust affiliated with one or more 
                        multiemployer plans), that is different 
                        than coverage under the plan in which 
                        such individual was enrolled at the 
                        time the qualifying event occurred, and 
                        such coverage shall be treated as COBRA 
                        continuation coverage for purposes of 
                        the applicable COBRA continuation 
                        coverage provision.
                            (ii) Requirements.--An assistance 
                        eligible individual may elect to enroll 
                        in different coverage as described in 
                        clause (i) only if--
                                    (I) the employer involved 
                                has made a determination that 
                                such employer will permit 
                                assistance eligible individuals 
                                to enroll in different coverage 
                                as provided for this 
                                subparagraph;
                                    (II) the premium for such 
                                different coverage does not 
                                exceed the premium for coverage 
                                in which the individual was 
                                enrolled at the time the 
                                qualifying event occurred;
                                    (III) the different 
                                coverage in which the 
                                individual elects to enroll is 
                                coverage that is also offered 
                                to the active employees of the 
                                employer at the time at which 
                                such election is made; and
                                    (IV) the different coverage 
                                is not--
                                            (aa) coverage that 
                                        provides only dental, 
                                        vision, counseling, or 
                                        referral services (or a 
                                        combination of such 
                                        services);
                                            (bb) a flexible 
                                        spending arrangement 
                                        (as defined in section 
                                        106(c)(2) of the 
                                        Internal Revenue Code 
                                        of 1986); or
                                            (cc) coverage that 
                                        provides coverage for 
                                        services or treatments 
                                        furnished in an on-site 
                                        medical facility 
                                        maintained by the 
                                        employer and that 
                                        consists primarily of 
                                        first-aid services, 
                                        prevention and wellness 
                                        care, or similar care 
                                        (or a combination of 
                                        such care).
                    (C) Premium reimbursement.--For provisions 
                providing the balance of such premium, see 
                section 6432 of the Internal Revenue Code of 
                1986, as added by paragraph (12).
            (2) Limitation of period of premium assistance.--
                    (A) In general.--Paragraph (1)(A) shall not 
                apply with respect to any assistance eligible 
                individual for months of coverage beginning on 
                or after the earlier of--
                            (i) the first date that such 
                        individual is eligible for coverage 
                        under any other group health plan 
                        (other than coverage consisting of only 
                        dental, vision, counseling, or referral 
                        services (or a combination thereof), 
                        coverage under a flexible spending 
                        arrangement (as defined in section 
                        106(c)(2) of the Internal Revenue Code 
                        of 1986), or coverage of treatment that 
                        is furnished in an on-site medical 
                        facility maintained by the employer and 
                        that consists primarily of first-aid 
                        services, prevention and wellness care, 
                        or similar care (or a combination 
                        thereof)) or is eligible for benefits 
                        under title XVIII of the Social 
                        Security Act, or
                            (ii) the earliest of--
                                    (I) the date which is 9 
                                months after the first day of 
                                the first month that paragraph 
                                (1)(A) applies with respect to 
                                such individual,
                                    (II) the date following the 
                                expiration of the maximum 
                                period of continuation coverage 
                                required under the applicable 
                                COBRA continuation coverage 
                                provision, or
                                    (III) the date following 
                                the expiration of the period of 
                                continuation coverage allowed 
                                under paragraph (4)(B)(ii).
                    (B) Timing of eligibility for additional 
                coverage.--For purposes of subparagraph (A)(i), 
                an individual shall not be treated as eligible 
                for coverage under a group health plan before 
                the first date on which such individual could 
                be covered under such plan.
                    (C) Notification requirement.--An 
                assistance eligible individual shall notify in 
                writing the group health plan with respect to 
                which paragraph (1)(A) applies if such 
                paragraph ceases to apply by reason of 
                subparagraph (A)(i). Such notice shall be 
                provided to the group health plan in such time 
                and manner as may be specified by the Secretary 
                of Labor.
            (3) Assistance eligible individual.--For purposes 
        of this section, the term ``assistance eligible 
        individual'' means any qualified beneficiary if--
                    (A) at any time during the period that 
                begins with September 1, 2008, and ends with 
                December 31, 2009, such qualified beneficiary 
                is eligible for COBRA continuation coverage,
                    (B) such qualified beneficiary elects such 
                coverage, and
                    (C) the qualifying event with respect to 
                the COBRA continuation coverage consists of the 
                involuntary termination of the covered 
                employee's employment and occurred during such 
                period.
            (4) Extension of election period and effect on 
        coverage.--
                    (A) In general.--For purposes of applying 
                section 605(a) of the Employee Retirement 
                Income Security Act of 1974, section 
                4980B(f)(5)(A) of the Internal Revenue Code of 
                1986, section 2205(a) of the Public Health 
                Service Act, and section 8905a(c)(2) of title 
                5, United States Code, in the case of an 
                individual who does not have an election of 
                COBRA continuation coverage in effect on the 
                date of the enactment of this Act but who would 
                be an assistance eligible individual if such 
                election were so in effect, such individual may 
                elect the COBRA continuation coverage under the 
                COBRA continuation coverage provisions 
                containing such sections during the period 
                beginning on the date of the enactment of this 
                Act and ending 60 days after the date on which 
                the notification required under paragraph 
                (7)(C) is provided to such individual.
                    (B) Commencement of coverage; no reach-
                back.--Any COBRA continuation coverage elected 
                by a qualified beneficiary during an extended 
                election period under subparagraph (A)--
                            (i) shall commence with the first 
                        period of coverage beginning on or 
                        after the date of the enactment of this 
                        Act, and
                            (ii) shall not extend beyond the 
                        period of COBRA continuation coverage 
                        that would have been required under the 
                        applicable COBRA continuation coverage 
                        provision if the coverage had been 
                        elected as required under such 
                        provision.
                    (C) Preexisting conditions.--With respect 
                to a qualified beneficiary who elects COBRA 
                continuation coverage pursuant to subparagraph 
                (A), the period--
                            (i) beginning on the date of the 
                        qualifying event, and
                            (ii) ending with the beginning of 
                        the period described in subparagraph 
                        (B)(i), shall be disregarded for 
                        purposes of determining the 63-day 
                        periods referred to in section 
                        701(c)(2) of the Employee Retirement 
                        Income Security Act of 1974, section 
                        9801(c)(2) of the Internal Revenue Code 
                        of 1986, and section 2701(c)(2) of the 
                        Public Health Service Act.
            (5) Expedited review of denials of premium 
        assistance.--In any case in which an individual 
        requests treatment as an assistance eligible individual 
        and is denied such treatment by the group health plan, 
        the Secretary of Labor (or the Secretary of Health and 
        Human Services in connection with COBRA continuation 
        coverage which is provided other than pursuant to part 
        6 of subtitle B of title I of the Employee Retirement 
        Income Security Act of 1974), in consultation with the 
        Secretary of the Treasury, shall provide for expedited 
        review of such denial. An individual shall be entitled 
        to such review upon application to such Secretary in 
        such form and manner as shall be provided by such 
        Secretary. Such Secretary shall make a determination 
        regarding such individual's eligibility within 15 
        business days after receipt of such individual's 
        application for review under this paragraph. Either 
        Secretary's determination upon review of the denial 
        shall be de novo and shall be the final determination 
        of such Secretary. A reviewing court shall grant 
        deference to such Secretary's determination. The 
        provisions of this paragraph, paragraphs (1) through 
        (4), and paragraph (7) shall be treated as provisions 
        of title I of the Employee Retirement Income Security 
        Act of 1974 for purposes of part 5 of subtitle B of 
        such title.
            (6) Disregard of subsidies for purposes of federal 
        and state programs.--Notwithstanding any other 
        provision of law, any premium reduction with respect to 
        an assistance eligible individual under this subsection 
        shall not be considered income or resources in 
        determining eligibility for, or the amount of 
        assistance or benefits provided under, any other public 
        benefit provided under Federal law or the law of any 
        State or political subdivision thereof.
            (7) Notices to individuals.--
                    (A) General notice.--
                            (i) In general.--In the case of 
                        notices provided under section 
                        606(a)(4) of the Employee Retirement 
                        Income Security Act of 1974 (29 U.S.C. 
                        1166(4)), section 4980B(f)(6)(D) of the 
                        Internal Revenue Code of 1986, section 
                        2206(4) of the Public Health Service 
                        Act (42 U.S.C. 300bb-6(4)), or section 
                        8905a(f)(2)(A) of title 5, United 
                        States Code, with respect to 
                        individuals who, during the period 
                        described in paragraph (3)(A), become 
                        entitled to elect COBRA continuation 
                        coverage, the requirements of such 
                        sections shall not be treated as met 
                        unless such notices include an 
                        additional notification to the 
                        recipient of--
                                    (I) the availability of 
                                premium reduction with respect 
                                to such coverage under this 
                                subsection, and
                                    (II) the option to enroll 
                                in different coverage if the 
                                employer permits assistance 
                                eligible individuals to elect 
                                enrollment in different 
                                coverage (as described in 
                                paragraph (1)(B)).
                            (ii) Alternative notice.--In the 
                        case of COBRA continuation coverage to 
                        which the notice provision under such 
                        sections does not apply, the Secretary 
                        of Labor, in consultation with the 
                        Secretary of the Treasury and the 
                        Secretary of Health and Human Services, 
                        shall, in consultation with 
                        administrators of the group health 
                        plans (or other entities) that provide 
                        or administer the COBRA continuation 
                        coverage involved, provide rules 
                        requiring the provision of such notice.
                            (iii) Form.--The requirement of the 
                        additional notification under this 
                        subparagraph may be met by amendment of 
                        existing notice forms or by inclusion 
                        of a separate document with the notice 
                        otherwise required.
                    (B) Specific requirements.--Each additional 
                notification under subparagraph (A) shall 
                include--
                            (i) the forms necessary for 
                        establishing eligibility for premium 
                        reduction under this subsection,
                            (ii) the name, address, and 
                        telephone number necessary to contact 
                        the plan administrator and any other 
                        person maintaining relevant information 
                        in connection with such premium 
                        reduction,
                            (iii) a description of the extended 
                        election period provided for in 
                        paragraph (4)(A),
                            (iv) a description of the 
                        obligation of the qualified beneficiary 
                        under paragraph (2)(C) to notify the 
                        plan providing continuation coverage of 
                        eligibility for subsequent coverage 
                        under another group health plan or 
                        eligibility for benefits under title 
                        XVIII of the Social Security Act and 
                        the penalty provided under section 
                        6720C of the Internal Revenue Code of 
                        1986 for failure to so notify the plan,
                            (v) a description, displayed in a 
                        prominent manner, of the qualified 
                        beneficiary's right to a reduced 
                        premium and any conditions on 
                        entitlement to the reduced premium, and
                            (vi) a description of the option of 
                        the qualified beneficiary to enroll in 
                        different coverage if the employer 
                        permits such beneficiary to elect to 
                        enroll in such different coverage under 
                        paragraph (1)(B).
                    (C) Notice in connection with extended 
                election periods.--In the case of any 
                assistance eligible individual (or any 
                individual described in paragraph (4)(A)) who 
                became entitled to elect COBRA continuation 
                coverage before the date of the enactment of 
                this Act, the administrator of the group health 
                plan (or other entity) involved shall provide 
                (within 60 days after the date of enactment of 
                this Act) for the additional notification 
                required to be provided under subparagraph (A) 
                and failure to provide such notice shall be 
                treated as a failure to meet the notice 
                requirements under the applicable COBRA 
                continuation provision.
                    (D) Model notices.--Not later than 30 days 
                after the date of enactment of this Act--
                            (i) the Secretary of Labor, in 
                        consultation with the Secretary of the 
                        Treasury and the Secretary of Health 
                        and Human Services, shall prescribe 
                        models for the additional notification 
                        required under this paragraph (other 
                        than the additional notification 
                        described in clause (ii)), and
                            (ii) in the case of any additional 
                        notification provided pursuant to 
                        subparagraph (A) under section 
                        8905a(f)(2)(A) of title 5, United 
                        States Code, the Office of Personnel 
                        Management shall prescribe a model for 
                        such additional notification.
            (8) Regulations.--The Secretary of the Treasury may 
        prescribe such regulations or other guidance as may be 
        necessary or appropriate to carry out the provisions of 
        this subsection, including the prevention of fraud and 
        abuse under this subsection, except that the Secretary 
        of Labor and the Secretary of Health and Human Services 
        may prescribe such regulations (including interim final 
        regulations) or other guidance as may be necessary or 
        appropriate to carry out the provisions of paragraphs 
        (5), (7), and (9).
            (9) Outreach.--The Secretary of Labor, in 
        consultation with the Secretary of the Treasury and the 
        Secretary of Health and Human Services, shall provide 
        outreach consisting of public education and enrollment 
        assistance relating to premium reduction provided under 
        this subsection. Such outreach shall target employers, 
        group health plan administrators, public assistance 
        programs, States, insurers, and other entities as 
        determined appropriate by such Secretaries. Such 
        outreach shall include an initial focus on those 
        individuals electing continuation coverage who are 
        referred to in paragraph (7)(C). Information on such 
        premium reduction, including enrollment, shall also be 
        made available on websites of the Departments of Labor, 
        Treasury, and Health and Human Services.
            (10) Definitions.--For purposes of this section--
                    (A) Administrator.--The term 
                ``administrator'' has the meaning given such 
                term in section 3(16)(A) of the Employee 
                Retirement Income Security Act of 1974.
                    (B) COBRA continuation coverage.--The term 
                ``COBRA continuation coverage'' means 
                continuation coverage provided pursuant to part 
                6 of subtitle B of title I of the Employee 
                Retirement Income Security Act of 1974 (other 
                than under section 609), title XXII of the 
                Public Health Service Act, section 4980B of the 
                Internal Revenue Code of 1986 (other than 
                subsection (f)(1) of such section insofar as it 
                relates to pediatric vaccines), or section 
                8905a of title 5, United States Code, or under 
                a State program that provides comparable 
                continuation coverage. Such term does not 
                include coverage under a health flexible 
                spending arrangement under a cafeteria plan 
                within the meaning of section 125 of the 
                Internal Revenue Code of 1986.
                    (C) COBRA continuation provision.--The term 
                ``COBRA continuation provision'' means the 
                provisions of law described in subparagraph 
                (B).
                    (D) Covered employee.--The term ``covered 
                employee'' has the meaning given such term in 
                section 607(2) of the Employee Retirement 
                Income Security Act of 1974.
                    (E) Qualified beneficiary.--The term 
                ``qualified beneficiary'' has the meaning given 
                such term in section 607(3) of the Employee 
                Retirement Income Security Act of 1974.
                    (F) Group health plan.--The term ``group 
                health plan'' has the meaning given such term 
                in section 607(1) of the Employee Retirement 
                Income Security Act of 1974.
                    (G) State.--The term ``State'' includes the 
                District of Columbia, the Commonwealth of 
                Puerto Rico, the Virgin Islands, Guam, American 
                Samoa, and the Commonwealth of the Northern 
                Mariana Islands.
                    (H) Period of coverage.--Any reference in 
                this subsection to a period of coverage shall 
                be treated as a reference to a monthly or 
                shorter period of coverage with respect to 
                which premiums are charged with respect to such 
                coverage.
            (11) Reports.--
                    (A) Interim report.--The Secretary of the 
                Treasury shall submit an interim report to the 
                Committee on Education and Labor, the Committee 
                on Ways and Means, and the Committee on Energy 
                and Commerce of the House of Representatives 
                and the Committee on Health, Education, Labor, 
                and Pensions and the Committee on Finance of 
                the Senate regarding the premium reduction 
                provided under this subsection that includes--
                            (i) the number of individuals 
                        provided such assistance as of the date 
                        of the report; and
                            (ii) the total amount of 
                        expenditures incurred (with 
                        administrative expenditures noted 
                        separately) in connection with such 
                        assistance as of the date of the 
                        report.
                    (B) Final report.--As soon as practicable 
                after the last period of COBRA continuation 
                coverage for which premium reduction is 
                provided under this section, the Secretary of 
                the Treasury shall submit a final report to 
                each Committee referred to in subparagraph (A) 
                that includes--
                            (i) the number of individuals 
                        provided premium reduction under this 
                        section;
                            (ii) the average dollar amount 
                        (monthly and annually) of premium 
                        reductions provided to such 
                        individuals; and
                            (iii) the total amount of 
                        expenditures incurred (with 
                        administrative expenditures noted 
                        separately) in connection with premium 
                        reduction under this section.
            (12) COBRA premium assistance.--
                    (A) In general.--Subchapter B of chapter 65 
                of the Internal Revenue Code of 1986, as 
                amended by this Act, is amended by adding at 
                the end the following new section:

``SEC. 6432. COBRA PREMIUM ASSISTANCE.

    ``(a) In General.--The person to whom premiums are payable 
under COBRA continuation coverage shall be reimbursed as 
provided in subsection (c) for the amount of premiums not paid 
by assistance eligible individuals by reason of section 3002(a) 
of the Health Insurance Assistance for the Unemployed Act of 
2009.
    ``(b) Person Entitled to Reimbursement.--For purposes of 
subsection (a), except as otherwise provided by the Secretary, 
the person to whom premiums are payable under COBRA 
continuation coverage shall be treated as being--
            ``(1) in the case of any group health plan which is 
        a multiemployer plan (as defined in section 3(37) of 
        the Employee Retirement Income Security Act of 1974), 
        the plan,
            ``(2) in the case of any group health plan not 
        described in paragraph (1)--
                    ``(A) which is subject to the COBRA 
                continuation provisions contained in--
                            ``(i) the Internal Revenue Code of 
                        1986,
                            ``(ii) the Employee Retirement 
                        Income Security Act of 1974,
                            ``(iii) the Public Health Service 
                        Act, or
                            ``(iv) title 5, United States Code, 
                        or
                    ``(B) under which some or all of the 
                coverage is not provided by insurance,
        the employer maintaining the plan, and
            ``(3) in the case of any group health plan not 
        described in paragraph (1) or (2), the insurer 
        providing the coverage under the group health plan.
    ``(c) Method of Reimbursement.--Except as otherwise 
provided by the Secretary--
            ``(1) Treatment as payment of payroll taxes.--Each 
        person entitled to reimbursement under subsection (a) 
        (and filing a claim for such reimbursement at such time 
        and in such manner as the Secretary may require) shall 
        be treated for purposes of this title and section 
        1324(b)(2) of title 31, United States Code, as having 
        paid to the Secretary, on the date that the assistance 
        eligible individual's premium payment is received, 
        payroll taxes in an amount equal to the portion of such 
        reimbursement which relates to such premium. To the 
        extent that the amount treated as paid under the 
        preceding sentence exceeds the amount of such person's 
        liability for such taxes, the Secretary shall credit or 
        refund such excess in the same manner as if it were an 
        overpayment of such taxes.
            ``(2) Overstatements.--Any overstatement of the 
        reimbursement to which a person is entitled under this 
        section (and any amount paid by the Secretary as a 
        result of such overstatement) shall be treated as an 
        underpayment of payroll taxes by such person and may be 
        assessed and collected by the Secretary in the same 
        manner as payroll taxes.
            ``(3) Reimbursement contingent on payment of 
        remaining premium.--No reimbursement may be made under 
        this section to a person with respect to any assistance 
        eligible individual until after the reduced premium 
        required under section 3002(a)(1)(A) of such Act with 
        respect to such individual has been received.
    ``(d) Definitions.--For purposes of this section--
            ``(1) Payroll taxes.--The term `payroll taxes' 
        means--
                    ``(A) amounts required to be deducted and 
                withheld for the payroll period under section 
                3402 (relating to wage withholding),
                    ``(B) amounts required to be deducted for 
                the payroll period under section 3102 (relating 
                to FICA employee taxes), and
                    ``(C) amounts of the taxes imposed for the 
                payroll period under section 3111 (relating to 
                FICA employer taxes).
            ``(2) Person.--The term `person' includes any 
        governmental entity.
    ``(e) Reporting.--Each person entitled to reimbursement 
under subsection (a) for any period shall submit such reports 
(at such time and in such manner) as the Secretary may require, 
including--
            ``(1) an attestation of involuntary termination of 
        employment for each covered employee on the basis of 
        whose termination entitlement to reimbursement is 
        claimed under subsection (a),
            ``(2) a report of the amount of payroll taxes 
        offset under subsection (a) for the reporting period 
        and the estimated offsets of such taxes for the 
        subsequent reporting period in connection with 
        reimbursements under subsection (a), and
            ``(3) a report containing the TINs of all covered 
        employees, the amount of subsidy reimbursed with 
        respect to each covered employee and qualified 
        beneficiaries, and a designation with respect to each 
        covered employee as to whether the subsidy 
        reimbursement is for coverage of 1 individual or 2 or 
        more individuals.
    ``(f) Regulations.--The Secretary shall issue such 
regulations or other guidance as may be necessary or 
appropriate to carry out this section, including--
            ``(1) the requirement to report information or the 
        establishment of other methods for verifying the 
        correct amounts of reimbursements under this section, 
        and
            ``(2) the application of this section to group 
        health plans that are multiemployer plans (as defined 
        in section 3(37) of the Employee Retirement Income 
        Security Act of 1974).''.
                    (B) Social security trust funds held 
                harmless.--In determining any amount 
                transferred or appropriated to any fund under 
                the Social Security Act, section 6432 of the 
                Internal Revenue Code of 1986 shall not be 
                taken into account.
                    (C) Clerical amendment.--The table of 
                sections for subchapter B of chapter 65 of the 
                Internal Revenue Code of 1986 is amended by 
                adding at the end the following new item:

``Sec. 6432. COBRA premium assistance.''.

                    (D) Effective date.--The amendments made by 
                this paragraph shall apply to premiums to which 
                subsection (a)(1)(A) applies.
                    (E) Special rule.--
                            (i) In general.--In the case of an 
                        assistance eligible individual who 
                        pays, with respect to the first period 
                        of COBRA continuation coverage to which 
                        subsection (a)(1)(A) applies or the 
                        immediately subsequent period, the full 
                        premium amount for such coverage, the 
                        person to whom such payment is payable 
                        shall--
                                    (I) make a reimbursement 
                                payment to such individual for 
                                the amount of such premium paid 
                                in excess of the amount 
                                required to be paid under 
                                subsection (a)(1)(A); or
                                    (II) provide credit to the 
                                individual for such amount in a 
                                manner that reduces one or more 
                                subsequent premium payments 
                                that the individual is required 
                                to pay under such subsection 
                                for the coverage involved.
                            (ii) Reimbursing employer.--A 
                        person to which clause (i) applies 
                        shall be reimbursed as provided for in 
                        section 6432 of the Internal Revenue 
                        Code of 1986 for any payment made, or 
                        credit provided, to the employee under 
                        such clause.
                            (iii) Payment or credits.--Unless 
                        it is reasonable to believe that the 
                        credit for the excess payment in clause 
                        (i)(II) will be used by the assistance 
                        eligible individual within 180 days of 
                        the date on which the person receives 
                        from the individual the payment of the 
                        full premium amount, a person to which 
                        clause (i) applies shall make the 
                        payment required under such clause to 
                        the individual within 60 days of such 
                        payment of the full premium amount. If, 
                        as of any day within the 180-day 
                        period, it is no longer reasonable to 
                        believe that the credit will be used 
                        during that period, payment equal to 
                        the remainder of the credit outstanding 
                        shall be made to the individual within 
                        60 days of such day.
            (13) Penalty for failure to notify health plan of 
        cessation of eligibility for premium assistance.--
                    (A) In general.--Part I of subchapter B of 
                chapter 68 of the Internal Revenue Code of 1986 
                is amended by adding at the end the following 
                new section:

``SEC. 6720C. PENALTY FOR FAILURE TO NOTIFY HEALTH PLAN OF CESSATION OF 
                    ELIGIBILITY FOR COBRA PREMIUM ASSISTANCE.

    ``(a) In General.--Any person required to notify a group 
health plan under section 3002(a)(2)(C)) of the Health 
Insurance Assistance for the Unemployed Act of 2009 who fails 
to make such a notification at such time and in such manner as 
the Secretary of Labor may require shall pay a penalty of 110 
percent of the premium reduction provided under such section 
after termination of eligibility under such subsection.
    ``(b) Reasonable Cause Exception.--No penalty shall be 
imposed under subsection (a) with respect to any failure if it 
is shown that such failure is due to reasonable cause and not 
to willful neglect.''.
                    (B) Clerical amendment.--The table of 
                sections of part I of subchapter B of chapter 
                68 of such Code is amended by adding at the end 
                the following new item:

``Sec. 6720C. Penalty for failure to notify health plan of cessation of 
          eligibility for COBRA premium assistance.''.

                    (C) Effective date.--The amendments made by 
                this paragraph shall apply to failures 
                occurring after the date of the enactment of 
                this Act.
            (14) Coordination with hctc.--
                    (A) In general.--Subsection (g) of section 
                35 of the Internal Revenue Code of 1986 is 
                amended by redesignating paragraph (9) as 
                paragraph (10) and inserting after paragraph 
                (8) the following new paragraph:
            ``(9) COBRA premium assistance.--In the case of an 
        assistance eligible individual who receives premium 
        reduction for COBRA continuation coverage under section 
        3002(a) of the Health Insurance Assistance for the 
        Unemployed Act of 2009 for any month during the taxable 
        year, such individual shall not be treated as an 
        eligible individual, a certified individual, or a 
        qualifying family member for purposes of this section 
        or section 7527 with respect to such month.''.
                    (B) Effective date.--The amendment made by 
                subparagraph (A) shall apply to taxable years 
                ending after the date of the enactment of this 
                Act.
            (15) Exclusion of cobra premium assistance from 
        gross income.--
                    (A) In general.--Part III of subchapter B 
                of chapter 1 of the Internal Revenue Code of 
                1986 is amended by inserting after section 139B 
                the following new section:

``SEC. 139C. COBRA PREMIUM ASSISTANCE.

    ``In the case of an assistance eligible individual (as 
defined in section 3002 of the Health Insurance Assistance for 
the Unemployed Act of 2009), gross income does not include any 
premium reduction provided under subsection (a) of such 
section.''.
                    (B) Clerical amendment.--The table of 
                sections for part III of subchapter B of 
                chapter 1 of such Code is amended by inserting 
                after the item relating to section 139B the 
                following new item:

``Sec. 139C. COBRA premium assistance.''.

                    (C) Effective date.--The amendments made by 
                this paragraph shall apply to taxable years 
                ending after the date of the enactment of this 
                Act.
    (b) Elimination of Premium Subsidy for High-Income 
Individuals.--
            (1) Recapture of subsidy for high-income 
        individuals.--If--
                    (A) premium assistance is provided under 
                this section with respect to any COBRA 
                continuation coverage which covers the 
                taxpayer, the taxpayer's spouse, or any 
                dependent (within the meaning of section 152 of 
                the Internal Revenue Code of 1986, determined 
                without regard to subsections (b)(1), (b)(2), 
                and (d)(1)(B) thereof) of the taxpayer during 
                any portion of the taxable year, and
                    (B) the taxpayer's modified adjusted gross 
                income for such taxable year exceeds $125,000 
                ($250,000 in the case of a joint return),
        then the tax imposed by chapter 1 of such Code with 
        respect to the taxpayer for such taxable year shall be 
        increased by the amount of such assistance.
            (2) Phase-in of recapture.--
                    (A) In general.--In the case of a taxpayer 
                whose modified adjusted gross income for the 
                taxable year does not exceed $145,000 ($290,000 
                in the case of a joint return), the increase in 
                the tax imposed under paragraph (1) shall not 
                exceed the phase-in percentage of such increase 
                (determined without regard to this paragraph).
                    (B) Phase-in percentage.--For purposes of 
                this subsection, the term ``phase-in 
                percentage'' means the ratio (expressed as a 
                percentage) obtained by dividing--
                            (i) the excess of described in 
                        subparagraph (B) of paragraph (1), by
                            (ii) $20,000 ($40,000 in the case 
                        of a joint return).
            (3) Option for high-income individuals to waive 
        assistance and avoid recapture.--Notwithstanding 
        subsection (a)(3), an individual shall not be treated 
        as an assistance eligible individual for purposes of 
        this section and section 6432 of the Internal Revenue 
        Code of 1986 if such individual--
                    (A) makes a permanent election (at such 
                time and in such form and manner as the 
                Secretary of the Treasury may prescribe) to 
                waive the right to the premium assistance 
                provided under this section, and
                    (B) notifies the entity to whom premiums 
                are reimbursed under section 6432(a) of such 
                Code of such election.
            (4) Modified adjusted gross income.--For purposes 
        of this subsection, the term ``modified adjusted gross 
        income'' means the adjusted gross income (as defined in 
        section 62 of the Internal Revenue Code of 1986) of the 
        taxpayer for the taxable year increased by any amount 
        excluded from gross income under section 911, 931, or 
        933 of such Code.
            (5) Credits not allowed against tax, etc.--For 
        purposes determining regular tax liability under 
        section 26(b) of such Code, the increase in tax under 
        this subsection shall not be treated as a tax imposed 
        under chapter 1 of such Code.
            (6) Regulations.--The Secretary of the Treasury 
        shall issue such regulations or other guidance as are 
        necessary or appropriate to carry out this subsection, 
        including requirements that the entity to whom premiums 
        are reimbursed under section 6432(a) of the Internal 
        Revenue Code of 1986 report to the Secretary, and to 
        each assistance eligible individual, the amount of 
        premium assistance provided under subsection (a) with 
        respect to each such individual.
            (7) Effective date.--The provisions of this 
        subsection shall apply to taxable years ending after 
        the date of the enactment of this Act.

    TITLE IV--MEDICARE AND MEDICAID HEALTH INFORMATION TECHNOLOGY; 
                   MISCELLANEOUS MEDICARE PROVISIONS

SEC. 4001. TABLE OF CONTENTS OF TITLE.

    The table of contents of this title is as follows:

     TITLE IV--MEDICARE AND MEDICAID HEALTH INFORMATION TECHNOLOGY; 
                    MISCELLANEOUS MEDICARE PROVISIONS

Sec. 4001. Table of contents of title.

                     Subtitle A--Medicare Incentives

Sec. 4101. Incentives for eligible professionals.
Sec. 4102. Incentives for hospitals.
Sec. 4103. Treatment of payments and savings; implementation funding.
Sec. 4104. Studies and reports on health information technology.

                     Subtitle B--Medicaid Incentives

Sec. 4201. Medicaid provider HIT adoption and operation payments; 
          implementation funding.

              Subtitle C--Miscellaneous Medicare Provisions

Sec. 4301. Moratoria on certain Medicare regulations.
Sec. 4302. Long-term care hospital technical corrections.

                    Subtitle A--Medicare Incentives

SEC. 4101. INCENTIVES FOR ELIGIBLE PROFESSIONALS.

    (a) Incentive Payments.--Section 1848 of the Social 
Security Act (42 U.S.C. 1395w-4) is amended by adding at the 
end the following new subsection:
    ``(o) Incentives for Adoption and Meaningful Use of 
Certified EHR Technology.--
            ``(1) Incentive payments.--
                    ``(A) In general.--
                            ``(i) In general.--Subject to the 
                        succeeding subparagraphs of this 
                        paragraph, with respect to covered 
                        professional services furnished by an 
                        eligible professional during a payment 
                        year (as defined in subparagraph (E)), 
                        if the eligible professional is a 
                        meaningful EHR user (as determined 
                        under paragraph (2)) for the EHR 
                        reporting period with respect to such 
                        year, in addition to the amount 
                        otherwise paid under this part, there 
                        also shall be paid to the eligible 
                        professional (or to an employer or 
                        facility in the cases described in 
                        clause (A) of section 1842(b)(6)), from 
                        the Federal Supplementary Medical 
                        Insurance Trust Fund established under 
                        section 1841 an amount equal to 75 
                        percent of the Secretary's estimate 
                        (based on claims submitted not later 
                        than 2 months after the end of the 
                        payment year) of the allowed charges 
                        under this part for all such covered 
                        professional services furnished by the 
                        eligible professional during such year.
                            ``(ii) No incentive payments with 
                        respect to years after 2016.--No 
                        incentive payments may be made under 
                        this subsection with respect to a year 
                        after 2016.
                    ``(B) Limitations on amounts of incentive 
                payments.--
                            ``(i) In general.--In no case shall 
                        the amount of the incentive payment 
                        provided under this paragraph for an 
                        eligible professional for a payment 
                        year exceed the applicable amount 
                        specified under this subparagraph with 
                        respect to such eligible professional 
                        and such year.
                            ``(ii) Amount.--Subject to clauses 
                        (iii) through (v), the applicable 
                        amount specified in this subparagraph 
                        for an eligible professional is as 
                        follows:
                                    ``(I) For the first payment 
                                year for such professional, 
                                $15,000 (or, if the first 
                                payment year for such eligible 
                                professional is 2011 or 2012, 
                                $18,000).
                                    ``(II) For the second 
                                payment year for such 
                                professional, $12,000.
                                    ``(III) For the third 
                                payment year for such 
                                professional, $8,000.
                                    ``(IV) For the fourth 
                                payment year for such 
                                professional, $4,000.
                                    ``(V) For the fifth payment 
                                year for such professional, 
                                $2,000.
                                    ``(VI) For any succeeding 
                                payment year for such 
                                professional, $0.
                            ``(iii) Phase down for eligible 
                        professionals first adopting ehr after 
                        2013.--If the first payment year for an 
                        eligible professional is after 2013, 
                        then the amount specified in this 
                        subparagraph for a payment year for 
                        such professional is the same as the 
                        amount specified in clause (ii) for 
                        such payment year for an eligible 
                        professional whose first payment year 
                        is 2013.
                            ``(iv) Increase for certain 
                        eligible professionals.--In the case of 
                        an eligible professional who 
                        predominantly furnishes services under 
                        this part in an area that is designated 
                        by the Secretary (under section 
                        332(a)(1)(A) of the Public Health 
                        Service Act) as a health professional 
                        shortage area, the amount that would 
                        otherwise apply for a payment year for 
                        such professional under subclauses (I) 
                        through (V) of clause (ii) shall be 
                        increased by 10 percent. In 
                        implementing the preceding sentence, 
                        the Secretary may, as determined 
                        appropriate, apply provisions of 
                        subsections (m) and (u) of section 1833 
                        in a similar manner as such provisions 
                        apply under such subsection.
                            ``(v) No incentive payment if first 
                        adopting after 2014.--If the first 
                        payment year for an eligible 
                        professional is after 2014 then the 
                        applicable amount specified in this 
                        subparagraph for such professional for 
                        such year and any subsequent year shall 
                        be $0.
                    ``(C) Non-application to hospital-based 
                eligible professionals.--
                            ``(i) In general.--No incentive 
                        payment may be made under this 
                        paragraph in the case of a hospital-
                        based eligible professional.
                            ``(ii) Hospital-based eligible 
                        professional.--For purposes of clause 
                        (i), the term `hospital-based eligible 
                        professional' means, with respect to 
                        covered professional services furnished 
                        by an eligible professional during the 
                        EHR reporting period for a payment 
                        year, an eligible professional, such as 
                        a pathologist, anesthesiologist, or 
                        emergency physician, who furnishes 
                        substantially all of such services in a 
                        hospital setting (whether inpatient or 
                        outpatient) and through the use of the 
                        facilities and equipment, including 
                        qualified electronic health records, of 
                        the hospital. The determination of 
                        whether an eligible professional is a 
                        hospital-based eligible professional 
                        shall be made on the basis of the site 
                        of service (as defined by the 
                        Secretary) and without regard to any 
                        employment or billing arrangement 
                        between the eligible professional and 
                        any other provider.
                    ``(D) Payment.--
                            ``(i) Form of payment.--The payment 
                        under this paragraph may be in the form 
                        of a single consolidated payment or in 
                        the form of such periodic installments 
                        as the Secretary may specify.
                            ``(ii) Coordination of application 
                        of limitation for professionals in 
                        different practices.--In the case of an 
                        eligible professional furnishing 
                        covered professional services in more 
                        than one practice (as specified by the 
                        Secretary), the Secretary shall 
                        establish rules to coordinate the 
                        incentive payments, including the 
                        application of the limitation on 
                        amounts of such incentive payments 
                        under this paragraph, among such 
                        practices.
                            ``(iii) Coordination with 
                        medicaid.--The Secretary shall seek, to 
                        the maximum extent practicable, to 
                        avoid duplicative requirements from 
                        Federal and State governments to 
                        demonstrate meaningful use of certified 
                        EHR technology under this title and 
                        title XIX. The Secretary may also 
                        adjust the reporting periods under such 
                        title and such subsections in order to 
                        carry out this clause.
                    ``(E) Payment year defined.--
                            ``(i) In general.--For purposes of 
                        this subsection, the term `payment 
                        year' means a year beginning with 2011.
                            ``(ii) First, second, etc., payment 
                        year.--The term `first payment year' 
                        means, with respect to covered 
                        professional services furnished by an 
                        eligible professional, the first year 
                        for which an incentive payment is made 
                        for such services under this 
                        subsection. The terms `second payment 
                        year', `third payment year', `fourth 
                        payment year', and `fifth payment year' 
                        mean, with respect to covered 
                        professional services furnished by such 
                        eligible professional, each successive 
                        year immediately following the first 
                        payment year for such professional.
            ``(2) Meaningful ehr user.--
                    ``(A) In general.--For purposes of 
                paragraph (1), an eligible professional shall 
                be treated as a meaningful EHR user for an EHR 
                reporting period for a payment year (or, for 
                purposes of subsection (a)(7), for an EHR 
                reporting period under such subsection for a 
                year) if each of the following requirements is 
                met:
                            ``(i) Meaningful use of certified 
                        ehr technology.--The eligible 
                        professional demonstrates to the 
                        satisfaction of the Secretary, in 
                        accordance with subparagraph (C)(i), 
                        that during such period the 
                        professional is using certified EHR 
                        technology in a meaningful manner, 
                        which shall include the use of 
                        electronic prescribing as determined to 
                        be appropriate by the Secretary.
                            ``(ii) Information exchange.--The 
                        eligible professional demonstrates to 
                        the satisfaction of the Secretary, in 
                        accordance with subparagraph (C)(i), 
                        that during such period such certified 
                        EHR technology is connected in a manner 
                        that provides, in accordance with law 
                        and standards applicable to the 
                        exchange of information, for the 
                        electronic exchange of health 
                        information to improve the quality of 
                        health care, such as promoting care 
                        coordination.
                            ``(iii) Reporting on measures using 
                        ehr.--Subject to subparagraph (B)(ii) 
                        and using such certified EHR 
                        technology, the eligible professional 
                        submits information for such period, in 
                        a form and manner specified by the 
                        Secretary, on such clinical quality 
                        measures and such other measures as 
                        selected by the Secretary under 
                        subparagraph (B)(i).
                The Secretary may provide for the use of 
                alternative means for meeting the requirements 
                of clauses (i), (ii), and (iii) in the case of 
                an eligible professional furnishing covered 
                professional services in a group practice (as 
                defined by the Secretary). The Secretary shall 
                seek to improve the use of electronic health 
                records and health care quality over time by 
                requiring more stringent measures of meaningful 
                use selected under this paragraph.
                    ``(B) Reporting on measures.--
                            ``(i) Selection.--The Secretary 
                        shall select measures for purposes of 
                        subparagraph (A)(iii) but only 
                        consistent with the following:
                                    ``(I) The Secretary shall 
                                provide preference to clinical 
                                quality measures that have been 
                                endorsed by the entity with a 
                                contract with the Secretary 
                                under section 1890(a).
                                    ``(II) Prior to any measure 
                                being selected under this 
                                subparagraph, the Secretary 
                                shall publish in the Federal 
                                Register such measure and 
                                provide for a period of public 
                                comment on such measure.
                            ``(ii) Limitation.--The Secretary 
                        may not require the electronic 
                        reporting of information on clinical 
                        quality measures under subparagraph 
                        (A)(iii) unless the Secretary has the 
                        capacity to accept the information 
                        electronically, which may be on a pilot 
                        basis.
                            ``(iii) Coordination of reporting 
                        of information.--In selecting such 
                        measures, and in establishing the form 
                        and manner for reporting measures under 
                        subparagraph (A)(iii), the Secretary 
                        shall seek to avoid redundant or 
                        duplicative reporting otherwise 
                        required, including reporting under 
                        subsection (k)(2)(C).
                    ``(C) Demonstration of meaningful use of 
                certified ehr technology and information 
                exchange.--
                            ``(i) In general.--A professional 
                        may satisfy the demonstration 
                        requirement of clauses (i) and (ii) of 
                        subparagraph (A) through means 
                        specified by the Secretary, which may 
                        include--
                                    ``(I) an attestation;
                                    ``(II) the submission of 
                                claims with appropriate coding 
                                (such as a code indicating that 
                                a patient encounter was 
                                documented using certified EHR 
                                technology);
                                    ``(III) a survey response;
                                    ``(IV) reporting under 
                                subparagraph (A)(iii); and
                                    ``(V) other means specified 
                                by the Secretary.
                            ``(ii) Use of part d data.--
                        Notwithstanding sections 1860D-
                        15(d)(2)(B) and 1860D-15(f)(2), the 
                        Secretary may use data regarding drug 
                        claims submitted for purposes of 
                        section 1860D-15 that are necessary for 
                        purposes of subparagraph (A).
            ``(3) Application.--
                    ``(A) Physician reporting system rules.--
                Paragraphs (5), (6), and (8) of subsection (k) 
                shall apply for purposes of this subsection in 
                the same manner as they apply for purposes of 
                such subsection.
                    ``(B) Coordination with other payments.--
                The provisions of this subsection shall not be 
                taken into account in applying the provisions 
                of subsection (m) of this section and of 
                section 1833(m) and any payment under such 
                provisions shall not be taken into account in 
                computing allowable charges under this 
                subsection.
                    ``(C) Limitations on review.--There shall 
                be no administrative or judicial review under 
                section 1869, section 1878, or otherwise, of--
                            ``(i) the methodology and standards 
                        for determining payment amounts under 
                        this subsection and payment adjustments 
                        under subsection (a)(7)(A), including 
                        the limitation under paragraph (1)(B) 
                        and coordination under clauses (ii) and 
                        (iii) of paragraph (1)(D);
                            ``(ii) the methodology and 
                        standards for determining a meaningful 
                        EHR user under paragraph (2), including 
                        selection of measures under paragraph 
                        (2)(B), specification of the means of 
                        demonstrating meaningful EHR use under 
                        paragraph (2)(C), and the hardship 
                        exception under subsection (a)(7)(B);
                            ``(iii) the methodology and 
                        standards for determining a hospital-
                        based eligible professional under 
                        paragraph (1)(C); and
                            ``(iv) the specification of 
                        reporting periods under paragraph (5) 
                        and the selection of the form of 
                        payment under paragraph (1)(D)(i).
                    ``(D) Posting on website.--The Secretary 
                shall post on the Internet website of the 
                Centers for Medicare & Medicaid Services, in an 
                easily understandable format, a list of the 
                names, business addresses, and business phone 
                numbers of the eligible professionals who are 
                meaningful EHR users and, as determined 
                appropriate by the Secretary, of group 
                practices receiving incentive payments under 
                paragraph (1).
            ``(4) Certified ehr technology defined.--For 
        purposes of this section, the term `certified EHR 
        technology' means a qualified electronic health record 
        (as defined in section 3000(13) of the Public Health 
        Service Act) that is certified pursuant to section 
        3001(c)(5) of such Act as meeting standards adopted 
        under section 3004 of such Act that are applicable to 
        the type of record involved (as determined by the 
        Secretary, such as an ambulatory electronic health 
        record for office-based physicians or an inpatient 
        hospital electronic health record for hospitals).
            ``(5) Definitions.--For purposes of this 
        subsection:
                    ``(A) Covered professional services.--The 
                term `covered professional services' has the 
                meaning given such term in subsection (k)(3).
                    ``(B) EHR reporting period.--The term `EHR 
                reporting period' means, with respect to a 
                payment year, any period (or periods) as 
                specified by the Secretary.
                    ``(C) Eligible professional.--The term 
                `eligible professional' means a physician, as 
                defined in section 1861(r).''.
    (b) Incentive Payment Adjustment.--Section 1848(a) of the 
Social Security Act (42 U.S.C. 1395w-4(a)) is amended by adding 
at the end the following new paragraph:
            ``(7) Incentives for meaningful use of certified 
        ehr technology.--
                    ``(A) Adjustment.--
                            ``(i) In general.--Subject to 
                        subparagraphs (B) and (D), with respect 
                        to covered professional services 
                        furnished by an eligible professional 
                        during 2015 or any subsequent payment 
                        year, if the eligible professional is 
                        not a meaningful EHR user (as 
                        determined under subsection (o)(2)) for 
                        an EHR reporting period for the year, 
                        the fee schedule amount for such 
                        services furnished by such professional 
                        during the year (including the fee 
                        schedule amount for purposes of 
                        determining a payment based on such 
                        amount) shall be equal to the 
                        applicable percent of the fee schedule 
                        amount that would otherwise apply to 
                        such services under this subsection 
                        (determined after application of 
                        paragraph (3) but without regard to 
                        this paragraph).
                            ``(ii) Applicable percent.--Subject 
                        to clause (iii), for purposes of clause 
                        (i), the term `applicable percent' 
                        means--
                                    ``(I) for 2015, 99 percent 
                                (or, in the case of an eligible 
                                professional who was subject to 
                                the application of the payment 
                                adjustment under section 
                                1848(a)(5) for 2014, 98 
                                percent);
                                    ``(II) for 2016, 98 
                                percent; and
                                    ``(III) for 2017 and each 
                                subsequent year, 97 percent.
                            ``(iii) Authority to decrease 
                        applicable percentage for 2018 and 
                        subsequent years.--For 2018 and each 
                        subsequent year, if the Secretary finds 
                        that the proportion of eligible 
                        professionals who are meaningful EHR 
                        users (as determined under subsection 
                        (o)(2)) is less than 75 percent, the 
                        applicable percent shall be decreased 
                        by 1 percentage point from the 
                        applicable percent in the preceding 
                        year, but in no case shall the 
                        applicable percent be less than 95 
                        percent.
                    ``(B) Significant hardship exception.--The 
                Secretary may, on a case-by-case basis, exempt 
                an eligible professional from the application 
                of the payment adjustment under subparagraph 
                (A) if the Secretary determines, subject to 
                annual renewal, that compliance with the 
                requirement for being a meaningful EHR user 
                would result in a significant hardship, such as 
                in the case of an eligible professional who 
                practices in a rural area without sufficient 
                Internet access. In no case may an eligible 
                professional be granted an exemption under this 
                subparagraph for more than 5 years.
                    ``(C) Application of physician reporting 
                system rules.--Paragraphs (5), (6), and (8) of 
                subsection (k) shall apply for purposes of this 
                paragraph in the same manner as they apply for 
                purposes of such subsection.
                    ``(D) Non-application to hospital-based 
                eligible professionals.--No payment adjustment 
                may be made under subparagraph (A) in the case 
                of hospital-based eligible professionals (as 
                defined in subsection (o)(1)(C)(ii)).
                    ``(E) Definitions.--For purposes of this 
                paragraph:
                            ``(i) Covered professional 
                        services.--The term `covered 
                        professional services' has the meaning 
                        given such term in subsection (k)(3).
                            ``(ii) EHR reporting period.--The 
                        term `EHR reporting period' means, with 
                        respect to a year, a period (or 
                        periods) specified by the Secretary.
                            ``(iii) Eligible professional.--The 
                        term `eligible professional' means a 
                        physician, as defined in section 
                        1861(r).''.
    (c) Application to Certain MA-Affiliated Eligible 
Professionals.--Section 1853 of the Social Security Act (42 
U.S.C. 1395w-23) is amended by adding at the end the following 
new subsection:
    ``(l) Application of Eligible Professional Incentives for 
Certain MA Organizations for Adoption and Meaningful Use of 
Certified EHR Technology.--
            ``(1) In general.--Subject to paragraphs (3) and 
        (4), in the case of a qualifying MA organization, the 
        provisions of sections 1848(o) and 1848(a)(7) shall 
        apply with respect to eligible professionals described 
        in paragraph (2) of the organization who the 
        organization attests under paragraph (6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible professionals under such sections. 
        Incentive payments under paragraph (3) shall be made to 
        and payment adjustments under paragraph (4) shall apply 
        to such qualifying organizations.
            ``(2) Eligible professional described.--With 
        respect to a qualifying MA organization, an eligible 
        professional described in this paragraph is an eligible 
        professional (as defined for purposes of section 
        1848(o)) who--
                    ``(A)(i) is employed by the organization; 
                or
                    ``(ii)(I) is employed by, or is a partner 
                of, an entity that through contract with the 
                organization furnishes at least 80 percent of 
                the entity's Medicare patient care services to 
                enrollees of such organization; and
                    ``(II) furnishes at least 80 percent of the 
                professional services of the eligible 
                professional covered under this title to 
                enrollees of the organization; and
                    ``(B) furnishes, on average, at least 20 
                hours per week of patient care services.
            ``(3) Eligible professional incentive payments.--
                    ``(A) In general.--In applying section 
                1848(o) under paragraph (1), instead of the 
                additional payment amount under section 
                1848(o)(1)(A) and subject to subparagraph (B), 
                the Secretary may substitute an amount 
                determined by the Secretary to the extent 
                feasible and practical to be similar to the 
                estimated amount in the aggregate that would be 
                payable if payment for services furnished by 
                such professionals was payable under part B 
                instead of this part.
                    ``(B) Avoiding duplication of payments.--
                            ``(i) In general.--In the case of 
                        an eligible professional described in 
                        paragraph (2)--
                                    ``(I) that is eligible for 
                                the maximum incentive payment 
                                under section 1848(o)(1)(A) for 
                                the same payment period, the 
                                payment incentive shall be made 
                                only under such section and not 
                                under this subsection; and
                                    ``(II) that is eligible for 
                                less than such maximum 
                                incentive payment for the same 
                                payment period, the payment 
                                incentive shall be made only 
                                under this subsection and not 
                                under section 1848(o)(1)(A).
                            ``(ii) Methods.--In the case of an 
                        eligible professional described in 
                        paragraph (2) who is eligible for an 
                        incentive payment under section 
                        1848(o)(1)(A) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                    ``(I) to ensure that 
                                duplicate payments are not made 
                                with respect to an eligible 
                                professional both under this 
                                subsection and under section 
                                1848(o)(1)(A); and
                                    ``(II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
                    ``(C) Fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals.--In applying section 
                1848(o)(1)(B)(ii) under subparagraph (A), in 
                accordance with rules specified by the 
                Secretary, a qualifying MA organization shall 
                specify a year (not earlier than 2011) that 
                shall be treated as the first payment year for 
                all eligible professionals with respect to such 
                organization.
            ``(4) Payment adjustment.--
                    ``(A) In general.--In applying section 
                1848(a)(7) under paragraph (1), instead of the 
                payment adjustment being an applicable percent 
                of the fee schedule amount for a year under 
                such section, subject to subparagraph (D), the 
                payment adjustment under paragraph (1) shall be 
                equal to the percent specified in subparagraph 
                (B) for such year of the payment amount 
                otherwise provided under this section for such 
                year.
                    ``(B) Specified percent.--The percent 
                specified under this subparagraph for a year is 
                100 percent minus a number of percentage points 
                equal to the product of--
                            ``(i) the number of percentage 
                        points by which the applicable percent 
                        (under section 1848(a)(7)(A)(ii)) for 
                        the year is less than 100 percent; and
                            ``(ii) the Medicare physician 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                    ``(C) Medicare physician expenditure 
                proportion.--The Medicare physician expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for physicians' 
                services.
                    ``(D) Application of payment adjustment.--
                In the case that a qualifying MA organization 
                attests that not all eligible professionals of 
                the organization are meaningful EHR users with 
                respect to a year, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on the proportion of all such eligible 
                professionals of the organization that are not 
                meaningful EHR users for such year.
            ``(5) Qualifying ma organization defined.--In this 
        subsection and subsection (m), the term `qualifying MA 
        organization' means a Medicare Advantage organization 
        that is organized as a health maintenance organization 
        (as defined in section 2791(b)(3) of the Public Health 
        Service Act).
            ``(6) Meaningful ehr user attestation.--For 
        purposes of this subsection and subsection (m), a 
        qualifying MA organization shall submit an attestation, 
        in a form and manner specified by the Secretary which 
        may include the submission of such attestation as part 
        of submission of the initial bid under section 
        1854(a)(1)(A)(iv), identifying--
                    ``(A) whether each eligible professional 
                described in paragraph (2), with respect to 
                such organization is a meaningful EHR user (as 
                defined in section 1848(o)(2)) for a year 
                specified by the Secretary; and
                    ``(B) whether each eligible hospital 
                described in subsection (m)(1), with respect to 
                such organization, is a meaningful EHR user (as 
                defined in section 1886(n)(3)) for an 
                applicable period specified by the Secretary.
            ``(7) Posting on website.--The Secretary shall post 
        on the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format, 
        a list of the names, business addresses, and business 
        phone numbers of--
                    ``(A) each qualifying MA organization 
                receiving an incentive payment under this 
                subsection for eligible professionals of the 
                organization; and
                    ``(B) the eligible professionals of such 
                organization for which such incentive payment 
                is based.
            ``(8) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                    ``(A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B) and the specification of rules 
                for the fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals under paragraph (3)(C);
                    ``(B) the methodology and standards for 
                determining eligible professionals under 
                paragraph (2); and
                    ``(C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1848(o)(2), including specification of the 
                means of demonstrating meaningful EHR use under 
                section 1848(o)(3)(C) and selection of measures 
                under section 1848(o)(3)(B).''.
    (d) Study and Report Relating to MA Organizations.--
            (1) Study.--The Secretary of Health and Human 
        Services shall conduct a study on the extent to which 
        and manner in which payment incentives and adjustments 
        (such as under sections 1848(o) and 1848(a)(7) of the 
        Social Security Act) could be made available to 
        professionals, as defined in 1861(r), who are not 
        eligible for HIT incentive payments under section 
        1848(o) and receive payments for Medicare patient 
        services nearly-exclusively through contractual 
        arrangements with one or more Medicare Advantage 
        organizations, or an intermediary organization or 
        organizations with contracts with Medicare Advantage 
        organizations. Such study shall assess approaches for 
        measuring meaningful use of qualified EHR technology 
        among such professionals and mechanisms for delivering 
        incentives and adjustments to those professionals, 
        including through incentive payments and adjustments 
        through Medicare Advantage organizations or 
        intermediary organizations.
            (2) Report.--Not later than 120 days after the date 
        of the enactment of this Act, the Secretary of Health 
        and Human Services shall submit to Congress a report on 
        the findings and the conclusions of the study conducted 
        under paragraph (1), together with recommendations for 
        such legislation and administrative action as the 
        Secretary determines appropriate.
    (e) Conforming Amendments.--Section 1853 of the Social 
Security Act (42 U.S.C. 1395w-23) is amended--
            (1) in subsection (a)(1)(A), by striking ``and 
        (i)'' and inserting ``(i), and (l)'';
            (2) in subsection (c)--
                    (A) in paragraph (1)(D)(i), by striking 
                ``section 1886(h)'' and inserting ``sections 
                1848(o) and 1886(h)''; and
                    (B) in paragraph (6)(A), by inserting after 
                ``under part B,'' the following: ``excluding 
                expenditures attributable to subsections (a)(7) 
                and (o) of section 1848,''; and
            (3) in subsection (f), by inserting ``and for 
        payments under subsection (l)'' after ``with the 
        organization''.
    (f) Conforming Amendments to E-Prescribing.--
            (1) Section 1848(a)(5)(A) of the Social Security 
        Act (42 U.S.C. 1395w-4(a)(5)(A)) is amended--
                    (A) in clause (i), by striking ``or any 
                subsequent year'' and inserting ``, 2013 or 
                2014''; and
                    (B) in clause (ii), by striking ``and each 
                subsequent year''.
            (2) Section 1848(m)(2) of such Act (42 U.S.C. 
        1395w-4(m)(2)) is amended--
                    (A) in subparagraph (A), by striking ``For 
                2009'' and inserting ``Subject to subparagraph 
                (D), for 2009''; and
                    (B) by adding at the end the following new 
                subparagraph:
                    ``(D) Limitation with respect to ehr 
                incentive payments.--The provisions of this 
                paragraph shall not apply to an eligible 
                professional (or, in the case of a group 
                practice under paragraph (3)(C), to the group 
                practice) if, for the EHR reporting period the 
                eligible professional (or group practice) 
                receives an incentive payment under subsection 
                (o)(1)(A) with respect to a certified EHR 
                technology (as defined in subsection (o)(4)) 
                that has the capability of electronic 
                prescribing.''.

SEC. 4102. INCENTIVES FOR HOSPITALS.

    (a) Incentive Payment.--
            (1) In general.--Section 1886 of the Social 
        Security Act (42 U.S.C. 1395ww) is amended by adding at 
        the end the following new subsection:
    ``(n) Incentives for Adoption and Meaningful Use of 
Certified EHR Technology.--
            ``(1) In general.--Subject to the succeeding 
        provisions of this subsection, with respect to 
        inpatient hospital services furnished by an eligible 
        hospital during a payment year (as defined in paragraph 
        (2)(G)), if the eligible hospital is a meaningful EHR 
        user (as determined under paragraph (3)) for the EHR 
        reporting period with respect to such year, in addition 
        to the amount otherwise paid under this section, there 
        also shall be paid to the eligible hospital, from the 
        Federal Hospital Insurance Trust Fund established under 
        section 1817, an amount equal to the applicable amount 
        specified in paragraph (2)(A) for the hospital for such 
        payment year.
            ``(2) Payment amount.--
                    ``(A) In general.--Subject to the 
                succeeding subparagraphs of this paragraph, the 
                applicable amount specified in this 
                subparagraph for an eligible hospital for a 
                payment year is equal to the product of the 
                following:
                            ``(i) Initial amount.--The sum of--
                                    ``(I) the base amount 
                                specified in subparagraph (B); 
                                plus
                                    ``(II) the discharge 
                                related amount specified in 
                                subparagraph (C) for a 12-month 
                                period selected by the 
                                Secretary with respect to such 
                                payment year.
                            ``(ii) Medicare share.--The 
                        Medicare share as specified in 
                        subparagraph (D) for the eligible 
                        hospital for a period selected by the 
                        Secretary with respect to such payment 
                        year.
                            ``(iii) Transition factor.--The 
                        transition factor specified in 
                        subparagraph (E) for the eligible 
                        hospital for the payment year.
                    ``(B) Base amount.--The base amount 
                specified in this subparagraph is $2,000,000.
                    ``(C) Discharge related amount.--The 
                discharge related amount specified in this 
                subparagraph for a 12-month period selected by 
                the Secretary shall be determined as the sum of 
                the amount, estimated based upon total 
                discharges for the eligible hospital 
                (regardless of any source of payment) for the 
                period, for each discharge up to the 23,000th 
                discharge as follows:
                            ``(i) For the first through 1,149th 
                        discharge, $0.
                            ``(ii) For the 1,150th through the 
                        23,000th discharge, $200.
                            ``(iii) For any discharge greater 
                        than the 23,000th, $0.
                    ``(D) Medicare share.--The Medicare share 
                specified under this subparagraph for an 
                eligible hospital for a period selected by the 
                Secretary for a payment year is equal to the 
                fraction--
                            ``(i) the numerator of which is the 
                        sum (for such period and with respect 
                        to the eligible hospital) of--
                                    ``(I) the estimated number 
                                of inpatient-bed-days (as 
                                established by the Secretary) 
                                which are attributable to 
                                individuals with respect to 
                                whom payment may be made under 
                                part A; and
                                    ``(II) the estimated number 
                                of inpatient-bed-days (as so 
                                established) which are 
                                attributable to individuals who 
                                are enrolled with a Medicare 
                                Advantage organization under 
                                part C; and
                            ``(ii) the denominator of which is 
                        the product of--
                                    ``(I) the estimated total 
                                number of inpatient-bed-days 
                                with respect to the eligible 
                                hospital during such period; 
                                and
                                    ``(II) the estimated total 
                                amount of the eligible 
                                hospital's charges during such 
                                period, not including any 
                                charges that are attributable 
                                to charity care (as such term 
                                is used for purposes of 
                                hospital cost reporting under 
                                this title), divided by the 
                                estimated total amount of the 
                                hospital's charges during such 
                                period.
                Insofar as the Secretary determines that data 
                are not available on charity care necessary to 
                calculate the portion of the formula specified 
                in clause (ii)(II), the Secretary shall use 
                data on uncompensated care and may adjust such 
                data so as to be an appropriate proxy for 
                charity care including a downward adjustment to 
                eliminate bad debt data from uncompensated care 
                data. In the absence of the data necessary, 
                with respect to a hospital, for the Secretary 
                to compute the amount described in clause 
                (ii)(II), the amount under such clause shall be 
                deemed to be 1. In the absence of data, with 
                respect to a hospital, necessary to compute the 
                amount described in clause (i)(II), the amount 
                under such clause shall be deemed to be 0.
                    ``(E) Transition factor specified.--
                            ``(i) In general.--Subject to 
                        clause (ii), the transition factor 
                        specified in this subparagraph for an 
                        eligible hospital for a payment year is 
                        as follows:
                                    ``(I) For the first payment 
                                year for such hospital, 1.
                                    ``(II) For the second 
                                payment year for such hospital, 
                                \3/4\.
                                    ``(III) For the third 
                                payment year for such hospital, 
                                \1/2\.
                                    ``(IV) For the fourth 
                                payment year for such hospital, 
                                \1/4\.
                                    ``(V) For any succeeding 
                                payment year for such hospital, 
                                0.
                            ``(ii) Phase down for eligible 
                        hospitals first adopting ehr after 
                        2013.--If the first payment year for an 
                        eligible hospital is after 2013, then 
                        the transition factor specified in this 
                        subparagraph for a payment year for 
                        such hospital is the same as the amount 
                        specified in clause (i) for such 
                        payment year for an eligible hospital 
                        for which the first payment year is 
                        2013. If the first payment year for an 
                        eligible hospital is after 2015 then 
                        the transition factor specified in this 
                        subparagraph for such hospital and for 
                        such year and any subsequent year shall 
                        be 0.
                    ``(F) Form of payment.--The payment under 
                this subsection for a payment year may be in 
                the form of a single consolidated payment or in 
                the form of such periodic installments as the 
                Secretary may specify.
                    ``(G) Payment year defined.--
                            ``(i) In general.--For purposes of 
                        this subsection, the term `payment 
                        year' means a fiscal year beginning 
                        with fiscal year 2011.
                            ``(ii) First, second, etc. payment 
                        year.--The term `first payment year' 
                        means, with respect to inpatient 
                        hospital services furnished by an 
                        eligible hospital, the first fiscal 
                        year for which an incentive payment is 
                        made for such services under this 
                        subsection. The terms `second payment 
                        year', `third payment year', and 
                        `fourth payment year' mean, with 
                        respect to an eligible hospital, each 
                        successive year immediately following 
                        the first payment year for that 
                        hospital.
            ``(3) Meaningful ehr user.--
                    ``(A) In general.--For purposes of 
                paragraph (1), an eligible hospital shall be 
                treated as a meaningful EHR user for an EHR 
                reporting period for a payment year (or, for 
                purposes of subsection (b)(3)(B)(ix), for an 
                EHR reporting period under such subsection for 
                a fiscal year) if each of the following 
                requirements are met:
                            ``(i) Meaningful use of certified 
                        ehr technology.--The eligible hospital 
                        demonstrates to the satisfaction of the 
                        Secretary, in accordance with 
                        subparagraph (C)(i), that during such 
                        period the hospital is using certified 
                        EHR technology in a meaningful manner.
                            ``(ii) Information exchange.--The 
                        eligible hospital demonstrates to the 
                        satisfaction of the Secretary, in 
                        accordance with subparagraph (C)(i), 
                        that during such period such certified 
                        EHR technology is connected in a manner 
                        that provides, in accordance with law 
                        and standards applicable to the 
                        exchange of information, for the 
                        electronic exchange of health 
                        information to improve the quality of 
                        health care, such as promoting care 
                        coordination.
                            ``(iii) Reporting on measures using 
                        ehr.--Subject to subparagraph (B)(ii) 
                        and using such certified EHR 
                        technology, the eligible hospital 
                        submits information for such period, in 
                        a form and manner specified by the 
                        Secretary, on such clinical quality 
                        measures and such other measures as 
                        selected by the Secretary under 
                        subparagraph (B)(i).
                The Secretary shall seek to improve the use of 
                electronic health records and health care 
                quality over time by requiring more stringent 
                measures of meaningful use selected under this 
                paragraph.
                    ``(B) Reporting on measures.--
                            ``(i) Selection.--The Secretary 
                        shall select measures for purposes of 
                        subparagraph (A)(iii) but only 
                        consistent with the following:
                                    ``(I) The Secretary shall 
                                provide preference to clinical 
                                quality measures that have been 
                                selected for purposes of 
                                applying subsection 
                                (b)(3)(B)(viii) or that have 
                                been endorsed by the entity 
                                with a contract with the 
                                Secretary under section 
                                1890(a).
                                    ``(II) Prior to any measure 
                                (other than a clinical quality 
                                measure that has been selected 
                                for purposes of applying 
                                subsection (b)(3)(B)(viii)) 
                                being selected under this 
                                subparagraph, the Secretary 
                                shall publish in the Federal 
                                Register such measure and 
                                provide for a period of public 
                                comment on such measure.
                            ``(ii) Limitations.--The Secretary 
                        may not require the electronic 
                        reporting of information on clinical 
                        quality measures under subparagraph 
                        (A)(iii) unless the Secretary has the 
                        capacity to accept the information 
                        electronically, which may be on a pilot 
                        basis.
                            ``(iii) Coordination of reporting 
                        of information.--In selecting such 
                        measures, and in establishing the form 
                        and manner for reporting measures under 
                        subparagraph (A)(iii), the Secretary 
                        shall seek to avoid redundant or 
                        duplicative reporting with reporting 
                        otherwise required, including reporting 
                        under subsection (b)(3)(B)(viii).
                    ``(C) Demonstration of meaningful use of 
                certified ehr technology and information 
                exchange.--
                            ``(i) In general.--An eligible 
                        hospital may satisfy the demonstration 
                        requirement of clauses (i) and (ii) of 
                        subparagraph (A) through means 
                        specified by the Secretary, which may 
                        include--
                                    ``(I) an attestation;
                                    ``(II) the submission of 
                                claims with appropriate coding 
                                (such as a code indicating that 
                                inpatient care was documented 
                                using certified EHR 
                                technology);
                                    ``(III) a survey response;
                                    ``(IV) reporting under 
                                subparagraph (A)(iii); and
                                    ``(V) other means specified 
                                by the Secretary.
                            ``(ii) Use of part d data.--
                        Notwithstanding sections 1860D-
                        15(d)(2)(B) and 1860D-15(f)(2), the 
                        Secretary may use data regarding drug 
                        claims submitted for purposes of 
                        section 1860D-15 that are necessary for 
                        purposes of subparagraph (A).
            ``(4) Application.--
                    ``(A) Limitations on review.--There shall 
                be no administrative or judicial review under 
                section 1869, section 1878, or otherwise, of--
                            ``(i) the methodology and standards 
                        for determining payment amounts under 
                        this subsection and payment adjustments 
                        under subsection (b)(3)(B)(ix), 
                        including selection of periods under 
                        paragraph (2) for determining, and 
                        making estimates or using proxies of, 
                        discharges under paragraph (2)(C) and 
                        inpatient-bed-days, hospital charges, 
                        charity charges, and Medicare share 
                        under paragraph (2)(D);
                            ``(ii) the methodology and 
                        standards for determining a meaningful 
                        EHR user under paragraph (3), including 
                        selection of measures under paragraph 
                        (3)(B), specification of the means of 
                        demonstrating meaningful EHR use under 
                        paragraph (3)(C), and the hardship 
                        exception under subsection 
                        (b)(3)(B)(ix)(II); and
                            ``(iii) the specification of EHR 
                        reporting periods under paragraph 
                        (6)(B) and the selection of the form of 
                        payment under paragraph (2)(F).
                    ``(B) Posting on website.--The Secretary 
                shall post on the Internet website of the 
                Centers for Medicare & Medicaid Services, in an 
                easily understandable format, a list of the 
                names of the eligible hospitals that are 
                meaningful EHR users under this subsection or 
                subsection (b)(3)(B)(ix) (and a list of the 
                names of critical access hospitals to which 
                paragraph (3) or (4) of section 1814(l) 
                applies), and other relevant data as determined 
                appropriate by the Secretary. The Secretary 
                shall ensure that an eligible hospital (or 
                critical access hospital) has the opportunity 
                to review the other relevant data that are to 
                be made public with respect to the hospital (or 
                critical access hospital) prior to such data 
                being made public.
            ``(5) Certified ehr technology defined.--The term 
        `certified EHR technology' has the meaning given such 
        term in section 1848(o)(4).
            ``(6) Definitions.--For purposes of this 
        subsection:
                    ``(A) EHR reporting period.--The term `EHR 
                reporting period' means, with respect to a 
                payment year, any period (or periods) as 
                specified by the Secretary.
                    ``(B) Eligible hospital.--The term 
                `eligible hospital' means a subsection (d) 
                hospital.''.
            (2) Critical access hospitals.--Section 1814(l) of 
        the Social Security Act (42 U.S.C. 1395f(l)) is 
        amended--
                    (A) in paragraph (1), by striking 
                ``paragraph (2)'' and inserting ``the 
                subsequent paragraphs of this subsection''; and
                    (B) by adding at the end the following new 
                paragraph:
    ``(3)(A) The following rules shall apply in determining 
payment and reasonable costs under paragraph (1) for costs 
described in subparagraph (C) for a critical access hospital 
that would be a meaningful EHR user (as would be determined 
under paragraph (3) of section 1886(n)) for an EHR reporting 
period for a cost reporting period beginning during a payment 
year if such critical access hospital was treated as an 
eligible hospital under such section:
            ``(i) The Secretary shall compute reasonable costs 
        by expensing such costs in a single payment year and 
        not depreciating such costs over a period of years (and 
        shall include as costs with respect to cost reporting 
        periods beginning during a payment year costs from 
        previous cost reporting periods to the extent they have 
        not been fully depreciated as of the period involved).
            ``(ii) There shall be substituted for the Medicare 
        share that would otherwise be applied under paragraph 
        (1) a percent (not to exceed 100 percent) equal to the 
        sum of--
                    ``(I) the Medicare share (as would be 
                specified under paragraph (2)(D) of section 
                1886(n)) for such critical access hospital if 
                such critical access hospital was treated as an 
                eligible hospital under such section; and
                    ``(II) 20 percentage points.
    ``(B) The payment under this paragraph with respect to a 
critical access hospital shall be paid through a prompt interim 
payment (subject to reconciliation) after submission and review 
of such information (as specified by the Secretary) necessary 
to make such payment, including information necessary to apply 
this paragraph. In no case may payment under this paragraph be 
made with respect to a cost reporting period beginning during a 
payment year after 2015 and in no case may a critical access 
hospital receive payment under this paragraph with respect to 
more than 4 consecutive payment years.
    ``(C) The costs described in this subparagraph are costs 
for the purchase of certified EHR technology to which purchase 
depreciation (excluding interest) would apply if payment was 
made under paragraph (1) and not under this paragraph.
    ``(D) For purposes of this paragraph, paragraph (4), and 
paragraph (5), the terms `certified EHR technology', `eligible 
hospital', `EHR reporting period', and `payment year' have the 
meanings given such terms in sections 1886(n).''.
    (b) Incentive Market Basket Adjustment.--
            (1) In general.--Section 1886(b)(3)(B) of the 
        Social Security Act (42 U.S.C. 1395ww(b)(3)(B)) is 
        amended--
                    (A) in clause (viii)(I), by inserting 
                ``(or, beginning with fiscal year 2015, by one-
                quarter)'' after ``2.0 percentage points''; and
                    (B) by adding at the end the following new 
                clause:
    ``(ix)(I) For purposes of clause (i) for fiscal year 2015 
and each subsequent fiscal year, in the case of an eligible 
hospital (as defined in subsection (n)(6)(A)) that is not a 
meaningful EHR user (as defined in subsection (n)(3)) for an 
EHR reporting period for such fiscal year, three-quarters of 
the applicable percentage increase otherwise applicable under 
clause (i) for such fiscal year shall be reduced by 33\1/3\ 
percent for fiscal year 2015, 66\2/3\ percent for fiscal year 
2016, and 100 percent for fiscal year 2017 and each subsequent 
fiscal year. Such reduction shall apply only with respect to 
the fiscal year involved and the Secretary shall not take into 
account such reduction in computing the applicable percentage 
increase under clause (i) for a subsequent fiscal year.
    ``(II) The Secretary may, on a case-by-case basis, exempt a 
subsection (d) hospital from the application of subclause (I) 
with respect to a fiscal year if the Secretary determines, 
subject to annual renewal, that requiring such hospital to be a 
meaningful EHR user during such fiscal year would result in a 
significant hardship, such as in the case of a hospital in a 
rural area without sufficient Internet access. In no case may a 
hospital be granted an exemption under this subclause for more 
than 5 years.
    ``(III) For fiscal year 2015 and each subsequent fiscal 
year, a State in which hospitals are paid for services under 
section 1814(b)(3) shall adjust the payments to each subsection 
(d) hospital in the State that is not a meaningful EHR user (as 
defined in subsection (n)(3)) in a manner that is designed to 
result in an aggregate reduction in payments to hospitals in 
the State that is equivalent to the aggregate reduction that 
would have occurred if payments had been reduced to each 
subsection (d) hospital in the State in a manner comparable to 
the reduction under the previous provisions of this clause. The 
State shall report to the Secretary the methodology it will use 
to make the payment adjustment under the previous sentence.
    ``(IV) For purposes of this clause, the term `EHR reporting 
period' means, with respect to a fiscal year, any period (or 
periods) as specified by the Secretary.''.
            (2) Critical access hospitals.--Section 1814(l) of 
        the Social Security Act (42 U.S.C. 1395f(l)), as 
        amended by subsection (a)(2), is further amended by 
        adding at the end the following new paragraphs:
    ``(4)(A) Subject to subparagraph (C), for cost reporting 
periods beginning in fiscal year 2015 or a subsequent fiscal 
year, in the case of a critical access hospital that is not a 
meaningful EHR user (as would be determined under paragraph (3) 
of section 1886(n) if such critical access hospital was treated 
as an eligible hospital under such section) for an EHR 
reporting period with respect to such fiscal year, paragraph 
(1) shall be applied by substituting the applicable percent 
under subparagraph (B) for the percent described in such 
paragraph (1).
    ``(B) The percent described in this subparagraph is--
            ``(i) for fiscal year 2015, 100.66 percent;
            ``(ii) for fiscal year 2016, 100.33 percent; and
            ``(iii) for fiscal year 2017 and each subsequent 
        fiscal year, 100 percent.
    ``(C) The provisions of subclause (II) of section 
1886(b)(3)(B)(ix) shall apply with respect to subparagraph (A) 
for a critical access hospital with respect to a cost reporting 
period beginning in a fiscal year in the same manner as such 
subclause applies with respect to subclause (I) of such section 
for a subsection (d) hospital with respect to such fiscal year.
    ``(5) There shall be no administrative or judicial review 
under section 1869, section 1878, or otherwise, of--
            ``(A) the methodology and standards for determining 
        the amount of payment and reasonable cost under 
        paragraph (3) and payment adjustments under paragraph 
        (4), including selection of periods under section 
        1886(n)(2) for determining, and making estimates or 
        using proxies of, inpatient-bed-days, hospital charges, 
        charity charges, and Medicare share under subparagraph 
        (D) of section 1886(n)(2);
            ``(B) the methodology and standards for determining 
        a meaningful EHR user under section 1886(n)(3) as would 
        apply if the hospital was treated as an eligible 
        hospital under section 1886(n), and the hardship 
        exception under paragraph (4)(C);
            ``(C) the specification of EHR reporting periods 
        under section 1886(n)(6)(B) as applied under paragraphs 
        (3) and (4); and
            ``(D) the identification of costs for purposes of 
        paragraph (3)(C).''.
    (c) Application to Certain MA-Affiliated Eligible 
Hospitals.--Section 1853 of the Social Security Act (42 U.S.C. 
1395w-23), as amended by section 4101(c), is further amended by 
adding at the end the following new subsection:
    ``(m) Application of Eligible Hospital Incentives for 
Certain MA Organizations for Adoption and Meaningful Use of 
Certified EHR Technology.--
            ``(1) Application.--Subject to paragraphs (3) and 
        (4), in the case of a qualifying MA organization, the 
        provisions of sections 1886(n) and 1886(b)(3)(B)(ix) 
        shall apply with respect to eligible hospitals 
        described in paragraph (2) of the organization which 
        the organization attests under subsection (l)(6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible hospitals under such sections. Incentive 
        payments under paragraph (3) shall be made to and 
        payment adjustments under paragraph (4) shall apply to 
        such qualifying organizations.
            ``(2) Eligible hospital described.--With respect to 
        a qualifying MA organization, an eligible hospital 
        described in this paragraph is an eligible hospital (as 
        defined in section 1886(n)(6)(A)) that is under common 
        corporate governance with such organization and serves 
        individuals enrolled under an MA plan offered by such 
        organization.
            ``(3) Eligible hospital incentive payments.--
                    ``(A) In general.--In applying section 
                1886(n)(2) under paragraph (1), instead of the 
                additional payment amount under section 
                1886(n)(2), there shall be substituted an 
                amount determined by the Secretary to be 
                similar to the estimated amount in the 
                aggregate that would be payable if payment for 
                services furnished by such hospitals was 
                payable under part A instead of this part. In 
                implementing the previous sentence, the 
                Secretary--
                            ``(i) shall, insofar as data to 
                        determine the discharge related amount 
                        under section 1886(n)(2)(C) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        discharge related amount as the 
                        Secretary determines appropriate; and
                            ``(ii) shall, insofar as data to 
                        determine the medicare share described 
                        in section 1886(n)(2)(D) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        share, which data and methodology may 
                        include use of the inpatient-bed-days 
                        (or discharges) with respect to an 
                        eligible hospital during the 
                        appropriate period which are 
                        attributable to both individuals for 
                        whom payment may be made under part A 
                        or individuals enrolled in an MA plan 
                        under a Medicare Advantage organization 
                        under this part as a proportion of the 
                        estimated total number of patient-bed-
                        days (or discharges) with respect to 
                        such hospital during such period.
                    ``(B) Avoiding duplication of payments.--
                            ``(i) In general.--In the case of a 
                        hospital that for a payment year is an 
                        eligible hospital described in 
                        paragraph (2) and for which at least 
                        one-third of their discharges (or bed-
                        days) of Medicare patients for the year 
                        are covered under part A, payment for 
                        the payment year shall be made only 
                        under section 1886(n) and not under 
                        this subsection.
                            ``(ii) Methods.--In the case of a 
                        hospital that is an eligible hospital 
                        described in paragraph (2) and also is 
                        eligible for an incentive payment under 
                        section 1886(n) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                    ``(I) to ensure that 
                                duplicate payments are not made 
                                with respect to an eligible 
                                hospital both under this 
                                subsection and under section 
                                1886(n); and
                                    ``(II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
            ``(4) Payment adjustment.--
                    ``(A) Subject to paragraph (3), in the case 
                of a qualifying MA organization (as defined in 
                section 1853(l)(5)), if, according to the 
                attestation of the organization submitted under 
                subsection (l)(6) for an applicable period, one 
                or more eligible hospitals (as defined in 
                section 1886(n)(6)(A)) that are under common 
                corporate governance with such organization and 
                that serve individuals enrolled under a plan 
                offered by such organization are not meaningful 
                EHR users (as defined in section 1886(n)(3)) 
                with respect to a period, the payment amount 
                payable under this section for such 
                organization for such period shall be the 
                percent specified in subparagraph (B) for such 
                period of the payment amount otherwise provided 
                under this section for such period.
                    ``(B) Specified percent.--The percent 
                specified under this subparagraph for a year is 
                100 percent minus a number of percentage points 
                equal to the product of--
                            ``(i) the number of the percentage 
                        point reduction effected under section 
                        1886(b)(3)(B)(ix)(I) for the period; 
                        and
                            ``(ii) the Medicare hospital 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                    ``(C) Medicare hospital expenditure 
                proportion.--The Medicare hospital expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for inpatient 
                hospital services.
                    ``(D) Application of payment adjustment.--
                In the case that a qualifying MA organization 
                attests that not all eligible hospitals are 
                meaningful EHR users with respect to an 
                applicable period, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on a methodology specified by the 
                Secretary, taking into account the proportion 
                of such eligible hospitals, or discharges from 
                such hospitals, that are not meaningful EHR 
                users for such period.
            ``(5) Posting on website.--The Secretary shall post 
        on the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format--
                    ``(A) a list of the names, business 
                addresses, and business phone numbers of each 
                qualifying MA organization receiving an 
                incentive payment under this subsection for 
                eligible hospitals described in paragraph (2); 
                and
                    ``(B) a list of the names of the eligible 
                hospitals for which such incentive payment is 
                based.
            ``(6) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                    ``(A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B);
                    ``(B) the methodology and standards for 
                determining eligible hospitals under paragraph 
                (2); and
                    ``(C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1886(n)(3), including specification of the 
                means of demonstrating meaningful EHR use under 
                subparagraph (C) of such section and selection 
                of measures under subparagraph (B) of such 
                section.''.
    (d) Conforming Amendments.--
            (1) Section 1814(b) of the Social Security Act (42 
        U.S.C. 1395f(b)) is amended--
                    (A) in paragraph (3), in the matter 
                preceding subparagraph (A), by inserting ``, 
                subject to section 1886(d)(3)(B)(ix)(III),'' 
                after ``then''; and
                    (B) by adding at the end the following: 
                ``For purposes of applying paragraph (3), there 
                shall be taken into account incentive payments, 
                and payment adjustments under subsection 
                (b)(3)(B)(ix) or (n) of section 1886.''.
            (2) Section 1851(i)(1) of the Social Security Act 
        (42 U.S.C. 1395w-21(i)(1)) is amended by striking ``and 
        1886(h)(3)(D)'' and inserting ``1886(h)(3)(D), and 
        1853(m)''.
            (3) Section 1853 of the Social Security Act (42 
        U.S.C. 1395w-23), as amended by section 4101(d), is 
        amended--
                    (A) in subsection (c)--
                            (i) in paragraph (1)(D)(i), by 
                        striking ``1848(o)'' and inserting ``, 
                        1848(o), and 1886(n)''; and
                            (ii) in paragraph (6)(A), by 
                        inserting ``and subsections 
                        (b)(3)(B)(ix) and (n) of section 1886'' 
                        after ``section 1848''; and
                    (B) in subsection (f), by inserting ``and 
                subsection (m)'' after ``under subsection 
                (l)''.

SEC. 4103. TREATMENT OF PAYMENTS AND SAVINGS; IMPLEMENTATION FUNDING.

    (a) Premium Hold Harmless.--
            (1) In general.--Section 1839(a)(1) of the Social 
        Security Act (42 U.S.C. 1395r(a)(1)) is amended by 
        adding at the end the following: ``In applying this 
        paragraph there shall not be taken into account 
        additional payments under section 1848(o) and section 
        1853(l)(3) and the Government contribution under 
        section 1844(a)(3).''.
            (2) Payment.--Section 1844(a) of such Act (42 
        U.S.C. 1395w(a)) is amended--
                    (A) in paragraph (2), by striking the 
                period at the end and inserting ``; plus''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(3) a Government contribution equal to the amount 
        of payment incentives payable under sections 1848(o) 
        and 1853(l)(3).''.
    (b) Medicare Improvement Fund.--Section 1898 of the Social 
Security Act (42 U.S.C. 1395iii), as added by section 7002(a) 
of the Supplemental Appropriations Act, 2008 (Public Law 110-
252) and as amended by section 188(a)(2) of the Medicare 
Improvements for Patients and Providers Act of 2008 (Public Law 
110-275; 122 Stat. 2589) and by section 6 of the QI Program 
Supplemental Funding Act of 2008, is amended--
            (1) in subsection (a)--
                    (A) by inserting ``medicare'' before ``fee-
                for-service''; and
                    (B) by inserting before the period at the 
                end the following: ``including, but not limited 
                to, an increase in the conversion factor under 
                section 1848(d) to address, in whole or in 
                part, any projected shortfall in the conversion 
                factor for 2014 relative to the conversion 
                factor for 2008 and adjustments to payments for 
                items and services furnished by providers of 
                services and suppliers under such original 
                medicare fee-for-service program''; and
            (2) in subsection (b)--
                    (A) in paragraph (1), by striking ``during 
                fiscal year 2014,'' and all that follows and 
                inserting the following: ``during--
                    ``(A) fiscal year 2014, $22,290,000,000; 
                and
                    ``(B) fiscal year 2020 and each subsequent 
                fiscal year, the Secretary's estimate, as of 
                July 1 of the fiscal year, of the aggregate 
                reduction in expenditures under this title 
                during the preceding fiscal year directly 
                resulting from the reduction in payment amounts 
                under sections 1848(a)(7), 1853(l)(4), 
                1853(m)(4), and 1886(b)(3)(B)(ix).''; and
                    (B) by adding at the end the following new 
                paragraph:
            ``(4) No effect on payments in subsequent years.--
        In the case that expenditures from the Fund are applied 
        to, or otherwise affect, a payment rate for an item or 
        service under this title for a year, the payment rate 
        for such item or service shall be computed for a 
        subsequent year as if such application or effect had 
        never occurred.''.
    (c) Implementation Funding.--In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Secretary of Health 
and Human Services for the Center for Medicare & Medicaid 
Services Program Management Account, $100,000,000 for each of 
fiscal years 2009 through 2015 and $45,000,000 for fiscal year 
2016, which shall be available for purposes of carrying out the 
provisions of (and amendments made by) this subtitle. Amounts 
appropriated under this subsection for a fiscal year shall be 
available until expended.

SEC. 4104. STUDIES AND REPORTS ON HEALTH INFORMATION TECHNOLOGY.

    (a) Study and Report on Application of EHR Payment 
Incentives for Providers Not Receiving Other Incentive 
Payments.--
            (1) Study.--
                    (A) In general.--The Secretary of Health 
                and Human Services shall conduct a study to 
                determine the extent to which and manner in 
                which payment incentives (such as under title 
                XVIII or XIX of the Social Security Act) and 
                other funding for purposes of implementing and 
                using certified EHR technology (as defined in 
                section 1848(o)(4) of the Social Security Act, 
                as added by section 4101(a)) should be made 
                available to health care providers who are 
                receiving minimal or no payment incentives or 
                other funding under this Act, under title XIII 
                of division A, under title XVIII or XIX of such 
                Act, or otherwise, for such purposes.
                    (B) Details of study.--Such study shall 
                include an examination of--
                            (i) the adoption rates of certified 
                        EHR technology by such health care 
                        providers;
                            (ii) the clinical utility of such 
                        technology by such health care 
                        providers;
                            (iii) whether the services 
                        furnished by such health care providers 
                        are appropriate for or would benefit 
                        from the use of such technology;
                            (iv) the extent to which such 
                        health care providers work in settings 
                        that might otherwise receive an 
                        incentive payment or other funding 
                        under this Act, under title XIII of 
                        division A, under title XVIII or XIX of 
                        the Social Security Act, or otherwise;
                            (v) the potential costs and the 
                        potential benefits of making payment 
                        incentives and other funding available 
                        to such health care providers; and
                            (vi) any other issues the Secretary 
                        deems to be appropriate.
            (2) Report.--Not later than June 30, 2010, the 
        Secretary shall submit to Congress a report on the 
        findings and conclusions of the study conducted under 
        paragraph (1).
    (b) Study and Report on Availability of Open Source Health 
Information Technology Systems.--
            (1) Study.--
                    (A) In general.--The Secretary of Health 
                and Human Services shall, in consultation with 
                the Under Secretary for Health of the Veterans 
                Health Administration, the Director of the 
                Indian Health Service, the Secretary of 
                Defense, the Director of the Agency for 
                Healthcare Research and Quality, the 
                Administrator of the Health Resources and 
                Services Administration, and the Chairman of 
                the Federal Communications Commission, conduct 
                a study on--
                            (i) the current availability of 
                        open source health information 
                        technology systems to Federal safety 
                        net providers (including small, rural 
                        providers);
                            (ii) the total cost of ownership of 
                        such systems in comparison to the cost 
                        of proprietary commercial products 
                        available;
                            (iii) the ability of such systems 
                        to respond to the needs of, and be 
                        applied to, various populations 
                        (including children and disabled 
                        individuals); and
                            (iv) the capacity of such systems 
                        to facilitate interoperability.
                    (B) Considerations.--In conducting the 
                study under subparagraph (A), the Secretary of 
                Health and Human Services shall take into 
                account the circumstances of smaller health 
                care providers, health care providers located 
                in rural or other medically underserved areas, 
                and safety net providers that deliver a 
                significant level of health care to uninsured 
                individuals, Medicaid beneficiaries, SCHIP 
                beneficiaries, and other vulnerable 
                individuals.
            (2) Report.--Not later than October 1, 2010, the 
        Secretary of Health and Human Services shall submit to 
        Congress a report on the findings and the conclusions 
        of the study conducted under paragraph (1), together 
        with recommendations for such legislation and 
        administrative action as the Secretary determines 
        appropriate.

                    Subtitle B--Medicaid Incentives

SEC. 4201. MEDICAID PROVIDER HIT ADOPTION AND OPERATION PAYMENTS; 
                    IMPLEMENTATION FUNDING.

    (a) In General.--Section 1903 of the Social Security Act 
(42 U.S.C. 1396b) is amended--
            (1) in subsection (a)(3)--
                    (A) by striking ``and'' at the end of 
                subparagraph (D);
                    (B) by striking ``plus'' at the end of 
                subparagraph (E) and inserting ``and''; and
                    (C) by adding at the end the following new 
                subparagraph:
                    ``(F)(i) 100 percent of so much of the sums 
                expended during such quarter as are 
                attributable to payments to Medicaid providers 
                described in subsection (t)(1) to encourage the 
                adoption and use of certified EHR technology; 
                and
                    ``(ii) 90 percent of so much of the sums 
                expended during such quarter as are 
                attributable to payments for reasonable 
                administrative expenses related to the 
                administration of payments described in clause 
                (i) if the State meets the condition described 
                in subsection (t)(9); plus''; and
            (2) by inserting after subsection (s) the following 
        new subsection:
    ``(t)(1) For purposes of subsection (a)(3)(F), the payments 
described in this paragraph to encourage the adoption and use 
of certified EHR technology are payments made by the State in 
accordance with this subsection--
            ``(A) to Medicaid providers described in paragraph 
        (2)(A) not in excess of 85 percent of net average 
        allowable costs (as defined in paragraph (3)(E)) for 
        certified EHR technology (and support services 
        including maintenance and training that is for, or is 
        necessary for the adoption and operation of, such 
        technology) with respect to such providers; and
            ``(B) to Medicaid providers described in paragraph 
        (2)(B) not in excess of the maximum amount permitted 
        under paragraph (5) for the provider involved.
    ``(2) In this subsection and subsection (a)(3)(F), the term 
`Medicaid provider' means--
            ``(A) an eligible professional (as defined in 
        paragraph (3)(B))--
                    ``(i) who is not hospital-based and has at 
                least 30 percent of the professional's patient 
                volume (as estimated in accordance with a 
                methodology established by the Secretary) 
                attributable to individuals who are receiving 
                medical assistance under this title;
                    ``(ii) who is not described in clause (i), 
                who is a pediatrician, who is not hospital-
                based, and who has at least 20 percent of the 
                professional's patient volume (as estimated in 
                accordance with a methodology established by 
                the Secretary) attributable to individuals who 
                are receiving medical assistance under this 
                title; and
                    ``(iii) who practices predominantly in a 
                Federally qualified health center or rural 
                health clinic and has at least 30 percent of 
                the professional's patient volume (as estimated 
                in accordance with a methodology established by 
                the Secretary) attributable to needy 
                individuals (as defined in paragraph (3)(F)); 
                and
            ``(B)(i) a children's hospital, or
            ``(ii) an acute-care hospital that is not described 
        in clause (i) and that has at least 10 percent of the 
        hospital's patient volume (as estimated in accordance 
        with a methodology established by the Secretary) 
        attributable to individuals who are receiving medical 
        assistance under this title.
An eligible professional shall not qualify as a Medicaid 
provider under this subsection unless any right to payment 
under sections 1848(o) and 1853(l) with respect to the eligible 
professional has been waived in a manner specified by the 
Secretary. For purposes of calculating patient volume under 
subparagraph (A)(iii), insofar as it is related to 
uncompensated care, the Secretary may require the adjustment of 
such uncompensated care data so that it would be an appropriate 
proxy for charity care, including a downward adjustment to 
eliminate bad debt data from uncompensated care. In applying 
subparagraphs (A) and (B)(ii), the methodology established by 
the Secretary for patient volume shall include individuals 
enrolled in a Medicaid managed care plan (under section 1903(m) 
or section 1932).
    ``(3) In this subsection and subsection (a)(3)(F):
            ``(A) The term `certified EHR technology' means a 
        qualified electronic health record (as defined in 
        3000(13) of the Public Health Service Act) that is 
        certified pursuant to section 3001(c)(5) of such Act as 
        meeting standards adopted under section 3004 of such 
        Act that are applicable to the type of record involved 
        (as determined by the Secretary, such as an ambulatory 
        electronic health record for office-based physicians or 
        an inpatient hospital electronic health record for 
        hospitals).
            ``(B) The term `eligible professional' means a--
                    ``(i) physician;
                    ``(ii) dentist;
                    ``(iii) certified nurse mid-wife;
                    ``(iv) nurse practitioner; and
                    ``(v) physician assistant insofar as the 
                assistant is practicing in a rural health 
                clinic that is led by a physician assistant or 
                is practicing in a Federally qualified health 
                center that is so led.
            ``(C) The term `average allowable costs' means, 
        with respect to certified EHR technology of Medicaid 
        providers described in paragraph (2)(A) for--
                    ``(i) the first year of payment with 
                respect to such a provider, the average costs 
                for the purchase and initial implementation or 
                upgrade of such technology (and support 
                services including training that is for, or is 
                necessary for the adoption and initial 
                operation of, such technology) for such 
                providers, as determined by the Secretary based 
                upon studies conducted under paragraph (4)(C); 
                and
                    ``(ii) a subsequent year of payment with 
                respect to such a provider, the average costs 
                not described in clause (i) relating to the 
                operation, maintenance, and use of such 
                technology for such providers, as determined by 
                the Secretary based upon studies conducted 
                under paragraph (4)(C).
            ``(D) The term `hospital-based' means, with respect 
        to an eligible professional, a professional (such as a 
        pathologist, anesthesiologist, or emergency physician) 
        who furnishes substantially all of the individual's 
        professional services in a hospital setting (whether 
        inpatient or outpatient) and through the use of the 
        facilities and equipment, including qualified 
        electronic health records, of the hospital. The 
        determination of whether an eligible professional is a 
        hospital-based eligible professional shall be made on 
        the basis of the site of service (as defined by the 
        Secretary) and without regard to any employment or 
        billing arrangement between the eligible professional 
        and any other provider.
            ``(E) The term `net average allowable costs' means, 
        with respect to a Medicaid provider described in 
        paragraph (2)(A), average allowable costs reduced by 
        any payment that is made to such Medicaid provider from 
        any other source (other than under this subsection or 
        by a State or local government) that is directly 
        attributable to payment for certified EHR technology or 
        support services described in subparagraph (C).
            ``(F) The term `needy individual' means, with 
        respect to a Medicaid provider, an individual--
                    ``(i) who is receiving assistance under 
                this title;
                    ``(ii) who is receiving assistance under 
                title XXI;
                    ``(iii) who is furnished uncompensated care 
                by the provider; or
                    ``(iv) for whom charges are reduced by the 
                provider on a sliding scale basis based on an 
                individual's ability to pay.
    ``(4)(A) With respect to a Medicaid provider described in 
paragraph (2)(A), subject to subparagraph (B), in no case 
shall--
                    ``(i) the net average allowable costs under 
                this subsection for the first year of payment 
                (which may not be later than 2016), which is 
                intended to cover the costs described in 
                paragraph (3)(C)(i), exceed $25,000 (or such 
                lesser amount as the Secretary determines based 
                on studies conducted under subparagraph (C));
                    ``(ii) the net average allowable costs 
                under this subsection for a subsequent year of 
                payment, which is intended to cover costs 
                described in paragraph (3)(C)(ii), exceed 
                $10,000; and
                    ``(iii) payments be made for costs 
                described in clause (ii) after 2021 or over a 
                period of longer than 5 years.
    ``(B) In the case of Medicaid provider described in 
paragraph (2)(A)(ii), the dollar amounts specified in 
subparagraph (A) shall be \2/3\ of the dollar amounts otherwise 
specified.
    ``(C) For the purposes of determining average allowable 
costs under this subsection, the Secretary shall study the 
average costs to Medicaid providers described in paragraph 
(2)(A) of purchase and initial implementation and upgrade of 
certified EHR technology described in paragraph (3)(C)(i) and 
the average costs to such providers of operations, maintenance, 
and use of such technology described in paragraph (3)(C)(ii). 
In determining such costs for such providers, the Secretary may 
utilize studies of such amounts submitted by States.
    ``(5)(A) In no case shall the payments described in 
paragraph (1)(B) with respect to a Medicaid provider described 
in paragraph (2)(B) exceed--
            ``(i) in the aggregate the product of--
                            ``(I) the overall hospital EHR 
                        amount for the provider computed under 
                        subparagraph (B); and
                            ``(II) the Medicaid share for such 
                        provider computed under subparagraph 
                        (C);
            ``(ii) in any year 50 percent of the product 
        described in clause (i); and
            ``(iii) in any 2-year period 90 percent of such 
        product.
    ``(B) For purposes of this paragraph, the overall hospital 
EHR amount, with respect to a Medicaid provider, is the sum of 
the applicable amounts specified in section 1886(n)(2)(A) for 
such provider for the first 4 payment years (as estimated by 
the Secretary) determined as if the Medicare share specified in 
clause (ii) of such section were 1. The Secretary shall 
establish, in consultation with the State, the overall hospital 
EHR amount for each such Medicaid provider eligible for 
payments under paragraph (1)(B). For purposes of this 
subparagraph in computing the amounts under section 
1886(n)(2)(C) for payment years after the first payment year, 
the Secretary shall assume that in subsequent payment years 
discharges increase at the average annual rate of growth of the 
most recent 3 years for which discharge data are available per 
year.
    ``(C) The Medicaid share computed under this subparagraph, 
for a Medicaid provider for a period specified by the 
Secretary, shall be calculated in the same manner as the 
Medicare share under section 1886(n)(2)(D) for such a hospital 
and period, except that there shall be substituted for the 
numerator under clause (i) of such section the amount that is 
equal to the number of inpatient-bed-days (as established by 
the Secretary) which are attributable to individuals who are 
receiving medical assistance under this title and who are not 
described in section 1886(n)(2)(D)(i). In computing inpatient-
bed-days under the previous sentence, the Secretary shall take 
into account inpatient-bed-days attributable to inpatient-bed-
days that are paid for individuals enrolled in a Medicaid 
managed care plan (under section 1903(m) or section 1932).
    ``(D) In no case may the payments described in paragraph 
(1)(B) with respect to a Medicaid provider described in 
paragraph (2)(B) be paid--
            ``(i) for any year beginning after 2016 unless the 
        provider has been provided payment under paragraph 
        (1)(B) for the previous year; and
            ``(ii) over a period of more than 6 years of 
        payment.
    ``(6) Payments described in paragraph (1) are not in 
accordance with this subsection unless the following 
requirements are met:
            ``(A)(i) The State provides assurances satisfactory 
        to the Secretary that amounts received under subsection 
        (a)(3)(F) with respect to payments to a Medicaid 
        provider are paid, subject to clause (ii), directly to 
        such provider (or to an employer or facility to which 
        such provider has assigned payments) without any 
        deduction or rebate.
            ``(ii) Amounts described in clause (i) may also be 
        paid to an entity promoting the adoption of certified 
        EHR technology, as designated by the State, if 
        participation in such a payment arrangement is 
        voluntary for the eligible professional involved and if 
        such entity does not retain more than 5 percent of such 
        payments for costs not related to certified EHR 
        technology (and support services including maintenance 
        and training) that is for, or is necessary for the 
        operation of, such technology.
            ``(B) A Medicaid provider described in paragraph 
        (2)(A) is responsible for payment of the remaining 15 
        percent of the net average allowable cost.
            ``(C)(i) Subject to clause (ii), with respect to 
        payments to a Medicaid provider--
                    ``(I) for the first year of payment to the 
                Medicaid provider under this subsection, the 
                Medicaid provider demonstrates that it is 
                engaged in efforts to adopt, implement, or 
                upgrade certified EHR technology; and
                    ``(II) for a year of payment, other than 
                the first year of payment to the Medicaid 
                provider under this subsection, the Medicaid 
                provider demonstrates meaningful use of 
                certified EHR technology through a means that 
                is approved by the State and acceptable to the 
                Secretary, and that may be based upon the 
                methodologies applied under section 1848(o) or 
                1886(n).
            ``(ii) In the case of a Medicaid provider who has 
        completed adopting, implementing, or upgrading such 
        technology prior to the first year of payment to the 
        Medicaid provider under this subsection, clause (i)(I) 
        shall not apply and clause (i)(II) shall apply to each 
        year of payment to the Medicaid provider under this 
        subsection, including the first year of payment.
            ``(D) To the extent specified by the Secretary, the 
        certified EHR technology is compatible with State or 
        Federal administrative management systems.
For purposes of subparagraph (B), a Medicaid provider described 
in paragraph (2)(A) may accept payments for the costs described 
in such subparagraph from a State or local government. For 
purposes of subparagraph (C), in establishing the means 
described in such subparagraph, which may include clinical 
quality reporting to the State, the State shall ensure that 
populations with unique needs, such as children, are 
appropriately addressed.
    ``(7) With respect to Medicaid providers described in 
paragraph (2)(A), the Secretary shall ensure coordination of 
payment with respect to such providers under sections 1848(o) 
and 1853(l) and under this subsection to assure no duplication 
of funding. Such coordination shall include, to the extent 
practicable, a data matching process between State Medicaid 
agencies and the Centers for Medicare & Medicaid Services using 
national provider identifiers. For such purposes, the Secretary 
may require the submission of such data relating to payments to 
such Medicaid providers as the Secretary may specify.
    ``(8) In carrying out paragraph (6)(C), the State and 
Secretary shall seek, to the maximum extent practicable, to 
avoid duplicative requirements from Federal and State 
governments to demonstrate meaningful use of certified EHR 
technology under this title and title XVIII. In doing so, the 
Secretary may deem satisfaction of requirements for such 
meaningful use for a payment year under title XVIII to be 
sufficient to qualify as meaningful use under this subsection. 
The Secretary may also specify the reporting periods under this 
subsection in order to carry out this paragraph.
    ``(9) In order to be provided Federal financial 
participation under subsection (a)(3)(F)(ii), a State must 
demonstrate to the satisfaction of the Secretary, that the 
State--
            ``(A) is using the funds provided for the purposes 
        of administering payments under this subsection, 
        including tracking of meaningful use by Medicaid 
        providers;
            ``(B) is conducting adequate oversight of the 
        program under this subsection, including routine 
        tracking of meaningful use attestations and reporting 
        mechanisms; and
            ``(C) is pursuing initiatives to encourage the 
        adoption of certified EHR technology to promote health 
        care quality and the exchange of health care 
        information under this title, subject to applicable 
        laws and regulations governing such exchange.
    ``(10) The Secretary shall periodically submit reports to 
the Committee on Energy and Commerce of the House of 
Representatives and the Committee on Finance of the Senate on 
status, progress, and oversight of payments described in 
paragraph (1), including steps taken to carry out paragraph 
(7). Such reports shall also describe the extent of adoption of 
certified EHR technology among Medicaid providers resulting 
from the provisions of this subsection and any improvements in 
health outcomes, clinical quality, or efficiency resulting from 
such adoption.''.
    (b) Implementation Funding.--In addition to funds otherwise 
available, out of any funds in the Treasury not otherwise 
appropriated, there are appropriated to the Secretary of Health 
and Human Services for the Centers for Medicare & Medicaid 
Services Program Management Account, $40,000,000 for each of 
fiscal years 2009 through 2015 and $20,000,000 for fiscal year 
2016, which shall be available for purposes of carrying out the 
provisions of (and the amendments made by) this section. 
Amounts appropriated under this subsection for a fiscal year 
shall be available until expended.

             Subtitle C--Miscellaneous Medicare Provisions

SEC. 4301. MORATORIA ON CERTAIN MEDICARE REGULATIONS.

    (a) Delay in Phase Out of Medicare Hospice Budget 
Neutrality Adjustment Factor During Fiscal Year 2009.--
Notwithstanding any other provision of law, including the final 
rule published on August 8, 2008, 73 Federal Register 46464 et 
seq., relating to Medicare Program; Hospice Wage Index for 
Fiscal Year 2009, the Secretary of Health and Human Services 
shall not phase out or eliminate the budget neutrality 
adjustment factor in the Medicare hospice wage index before 
October 1, 2009, and the Secretary shall recompute and apply 
the final Medicare hospice wage index for fiscal year 2009 as 
if there had been no reduction in the budget neutrality 
adjustment factor.
    (b) Non-Application of Phased-Out Indirect Medical 
Education (IME) Adjustment Factor for Fiscal Year 2009.--
            (1) In general.--Section 412.322 of title 42, Code 
        of Federal Regulations, shall be applied without regard 
        to paragraph (c) of such section, and the Secretary of 
        Health and Human Services shall recompute payments for 
        discharges occurring on or after October 1, 2008, as if 
        such paragraph had never been in effect.
            (2) No effect on subsequent years.--Nothing in 
        paragraph (1) shall be construed as having any effect 
        on the application of paragraph (d) of section 412.322 
        of title 42, Code of Federal Regulations.
    (c) Funding for Implementation.--In addition to funds 
otherwise available, for purposes of implementing the 
provisions of subsections (a) and (b), including costs incurred 
in reprocessing claims in carrying out such provisions, the 
Secretary of Health and Human Services shall provide for the 
transfer from the Federal Hospital Insurance Trust Fund 
established under section 1817 of the Social Security Act (42 
U.S.C. 1395i) to the Centers for Medicare & Medicaid Services 
Program Management Account of $2,000,000 for fiscal year 2009.

SEC. 4302. LONG-TERM CARE HOSPITAL TECHNICAL CORRECTIONS.

    (a) Payment.--Subsection (c) of section 114 of the 
Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public Law 
110-173) is amended--
            (1) in paragraph (1)--
                    (A) by amending the heading to read as 
                follows: ``Delay in application of 25 percent 
                patient threshold payment adjustment'';
                    (B) by striking ``the date of the enactment 
                of this Act'' and inserting ``July 1, 2007,''; 
                and
                    (C) in subparagraph (A), by inserting ``or 
                to a long-term care hospital, or satellite 
                facility, that as of December 29, 2007, was co-
                located with an entity that is a provider-
                based, off-campus location of a subsection (d) 
                hospital which did not provide services payable 
                under section 1886(d) of the Social Security 
                Act at the off-campus location'' after 
                ``freestanding long-term care hospitals''; and
            (2) in paragraph (2)--
                    (A) in subparagraph (B)(ii), by inserting 
                ``or that is described in section 
                412.22(h)(3)(i) of such title'' before the 
                period; and
                    (B) in subparagraph (C), by striking ``the 
                date of the enactment of this Act'' and 
                inserting ``October 1, 2007 (or July 1, 2007, 
                in the case of a satellite facility described 
                in section 412.22(h)(3)(i) of title 42, Code of 
                Federal Regulations)''.
    (b) Moratorium.--Subsection (d)(3)(A) of such section is 
amended by striking ``if the hospital or facility'' and 
inserting ``if the hospital or facility obtained a certificate 
of need for an increase in beds that is in a State for which 
such certificate of need is required and that was issued on or 
after April 1, 2005, and before December 29, 2007, or if the 
hospital or facility''.
    (c) Effective Date.--The amendments made by this section 
shall be effective and apply as if included in the enactment of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110-173).

                      TITLE V--STATE FISCAL RELIEF

SEC. 5000. PURPOSES; TABLE OF CONTENTS.

    (a) Purposes.--The purposes of this title are as follows:
            (1) To provide fiscal relief to States in a period 
        of economic downturn.
            (2) To protect and maintain State Medicaid programs 
        during a period of economic downturn, including by 
        helping to avert cuts to provider payment rates and 
        benefits or services, and to prevent constrictions of 
        income eligibility requirements for such programs, but 
        not to promote increases in such requirements.
    (b) Table of Contents.--The table of contents for this 
title is as follows:

                      TITLE V--STATE FISCAL RELIEF

Sec. 5000. Purposes; table of contents.
Sec. 5001. Temporary increase of Medicaid FMAP.
Sec. 5002. Temporary increase in DSH allotments during recession.
Sec. 5003. Extension of moratoria on certain Medicaid final regulations.
Sec. 5004. Extension of transitional medical assistance (TMA).
Sec. 5005. Extension of the qualifying individual (QI) program.
Sec. 5006. Protections for Indians under Medicaid and CHIP.
Sec. 5007. Funding for oversight and implementation.
Sec. 5008. GAO study and report regarding State needs during periods of 
          national economic downturn.

SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP.

    (a) Permitting Maintenance of FMAP.--Subject to subsections 
(e), (f), and (g), if the FMAP determined without regard to 
this section for a State for--
            (1) fiscal year 2009 is less than the FMAP as so 
        determined for fiscal year 2008, the FMAP for the State 
        for fiscal year 2008 shall be substituted for the 
        State's FMAP for fiscal year 2009, before the 
        application of this section;
            (2) fiscal year 2010 is less than the FMAP as so 
        determined for fiscal year 2008 or fiscal year 2009 
        (after the application of paragraph (1)), the greater 
        of such FMAP for the State for fiscal year 2008 or 
        fiscal year 2009 shall be substituted for the State's 
        FMAP for fiscal year 2010, before the application of 
        this section; and
            (3) fiscal year 2011 is less than the FMAP as so 
        determined for fiscal year 2008, fiscal year 2009 
        (after the application of paragraph (1)), or fiscal 
        year 2010 (after the application of paragraph (2)), the 
        greatest of such FMAP for the State for fiscal year 
        2008, fiscal year 2009, or fiscal year 2010 shall be 
        substituted for the State's FMAP for fiscal year 2011, 
        before the application of this section, but only for 
        the first calendar quarter in fiscal year 2011.
    (b) General 6.2 Percentage Point Increase.--
            (1) In general.--Subject to subsections (e), (f), 
        and (g) and paragraph (2), for each State for calendar 
        quarters during the recession adjustment period (as 
        defined in subsection (h)(3)), the FMAP (after the 
        application of subsection (a)) shall be increased 
        (without regard to any limitation otherwise specified 
        in section 1905(b) of the Social Security Act (42 
        U.S.C. 1396d(b))) by 6.2 percentage points.
            (2) Special election for territories.--In the case 
        of a State that is not one of the 50 States or the 
        District of Columbia, paragraph (1) shall only apply if 
        the State makes a one-time election, in a form and 
        manner specified by the Secretary and for the entire 
        recession adjustment period, to apply the increase in 
        FMAP under paragraph (1) and a 15 percent increase 
        under subsection (d) instead of applying a 30 percent 
        increase under subsection (d).
    (c) Additional Relief Based on Increase in Unemployment.--
            (1) In general.--Subject to subsections (e), (f), 
        and (g), if a State is a qualifying State under 
        paragraph (2) for a calendar quarter occurring during 
        the recession adjustment period, the FMAP for the State 
        shall be further increased by the number of percentage 
        points equal to the product of--
                    (A) the State percentage applicable for the 
                State under section 1905(b) of the Social 
                Security Act (42 U.S.C. 1396d(b)) after the 
                application of subsection (a) and after the 
                application of \1/2\ of the increase under 
                subsection (b); and
                    (B) the applicable percent determined in 
                paragraph (3) for the calendar quarter (or, if 
                greater, for a previous such calendar quarter).
            (2) Qualifying criteria.--
                    (A) In general.--For purposes of paragraph 
                (1), a State qualifies for additional relief 
                under this subsection for a calendar quarter 
                occurring during the recession adjustment 
                period if the State is 1 of the 50 States or 
                the District of Columbia and the State 
                satisfies any of the following criteria for the 
                quarter:
                            (i) The State unemployment increase 
                        percentage (as defined in paragraph 
                        (4)) for the quarter is at least 1.5 
                        percentage points but less than 2.5 
                        percentage points.
                            (ii) The State unemployment 
                        increase percentage for the quarter is 
                        at least 2.5 percentage points but less 
                        than 3.5 percentage points.
                            (iii) The State unemployment 
                        increase percentage for the quarter is 
                        at least 3.5 percentage points.
                    (B) Maintenance of status.--If a State 
                qualifies for additional relief under this 
                subsection for a calendar quarter, it shall be 
                deemed to have qualified for such relief for 
                each subsequent calendar quarter ending before 
                July 1, 2010.
            (3) Applicable percent.--
                    (A) In general.--For purposes of paragraph 
                (1), subject to subparagraph (B), the 
                applicable percent is--
                            (i) 5.5 percent, if the State 
                        satisfies the criteria described in 
                        paragraph (2)(A)(i) for the calendar 
                        quarter;
                            (ii) 8.5 percent if the State 
                        satisfies the criteria described in 
                        paragraph (2)(A)(ii) for the calendar 
                        quarter; and
                            (iii) 11.5 percent if the State 
                        satisfies the criteria described in 
                        paragraph (2)(A)(iii) for the calendar 
                        quarter.
                    (B) Maintenance of higher applicable 
                percent.--
                            (i) Hold harmless period.--If the 
                        percent applied to a State under 
                        subparagraph (A) for any calendar 
                        quarter in the recession adjustment 
                        period beginning on or after January 1, 
                        2009, and ending before July 1, 2010, 
                        (determined without regard to this 
                        subparagraph) is less than the percent 
                        applied for the preceding quarter (as 
                        so determined), the higher applicable 
                        percent shall continue in effect for 
                        each subsequent calendar quarter ending 
                        before July 1, 2010.
                            (ii) Notice of lower applicable 
                        percent.--The Secretary shall notify a 
                        State at least 60 days prior to 
                        applying any lower applicable percent 
                        to the State under this paragraph.
            (4) Computation of state unemployment increase 
        percentage.--
                    (A) In general.--In this subsection, the 
                ``State unemployment increase percentage'' for 
                a State for a calendar quarter is equal to the 
                number of percentage points (if any) by which--
                            (i) the average monthly 
                        unemployment rate for the State for 
                        months in the most recent previous 3-
                        consecutive-month period for which data 
                        are available, subject to subparagraph 
                        (C); exceeds
                            (ii) the lowest average monthly 
                        unemployment rate for the State for any 
                        3-consecutive-month period preceding 
                        the period described in clause (i) and 
                        beginning on or after January 1, 2006.
                    (B) Average monthly unemployment rate 
                defined.--In this paragraph, the term ``average 
                monthly unemployment rate'' means the average 
                of the monthly number unemployed, divided by 
                the average of the monthly civilian labor 
                force, seasonally adjusted, as determined based 
                on the most recent monthly publications of the 
                Bureau of Labor Statistics of the Department of 
                Labor.
                    (C) Special rule.--With respect to--
                            (i) the first 2 calendar quarters 
                        of the recession adjustment period, the 
                        most recent previous 3-consecutive-
                        month period described in subparagraph 
                        (A)(i) shall be the 3-consecutive-month 
                        period beginning with October 2008; and
                            (ii) the last 2 calendar quarters 
                        of the recession adjustment period, the 
                        most recent previous 3-consecutive-
                        month period described in such 
                        subparagraph shall be the 3-
                        consecutive-month period beginning with 
                        December 2009, or, if it results in a 
                        higher applicable percent under 
                        paragraph (3), the 3-consecutive-month 
                        period beginning with January 2010.
    (d) Increase in Cap on Medicaid Payments to Territories.--
Subject to subsections (f) and (g), with respect to entire 
fiscal years occurring during the recession adjustment period 
and with respect to fiscal years only a portion of which occurs 
during such period (and in proportion to the portion of the 
fiscal year that occurs during such period), the amounts 
otherwise determined for Puerto Rico, the Virgin Islands, Guam, 
the Northern Mariana Islands, and American Samoa under 
subsections (f) and (g) of section 1108 of the Social Security 
Act (42 6 U.S.C. 1308) shall each be increased by 30 percent 
(or, in the case of an election under subsection (b)(2), 15 
percent). In the case of such an election by a territory, 
subsection (a)(1) of such section shall be applied without 
regard to any increase in payment made to the territory under 
part E of title IV of such Act that is attributable to the 
increase in FMAP effected under subsection (b) for the 
territory.
    (e) Scope of Application.--The increases in the FMAP for a 
State under this section shall apply for purposes of title XIX 
of the Social Security Act and shall not apply with respect 
to--
            (1) disproportionate share hospital payments 
        described in section 1923 of such Act (42 U.S.C. 1396r-
        4);
            (2) payments under title IV of such Act (42 U.S.C. 
        601 et seq.) (except that the increases under 
        subsections (a) and (b) shall apply to payments under 
        part E of title IV of such Act (42 U.S.C. 670 et seq.) 
        and, for purposes of the application of this section to 
        the District of Columbia, payments under such part 
        shall be deemed to be made on the basis of the FMAP 
        applied with respect to such District for purposes of 
        title XIX and as increased under subsection (b));
            (3) payments under title XXI of such Act (42 U.S.C. 
        1397aa et seq.);
            (4) any payments under title XIX of such Act that 
        are based on the enhanced FMAP described in section 
        2105(b) of such Act (42 U.S.C. 1397ee(b)); or
            (5) any payments under title XIX of such Act that 
        are attributable to expenditures for medical assistance 
        provided to individuals made eligible under a State 
        plan under title XIX of the Social Security Act 
        (including under any waiver under such title or under 
        section 1115 of such Act (42 U.S.C. 1315)) because of 
        income standards (expressed as a percentage of the 
        poverty line) for eligibility for medical assistance 
        that are higher than the income standards (as so 
        expressed) for such eligibility as in effect on July 1, 
        2008, (including as such standards were proposed to be 
        in effect under a State law enacted but not effective 
        as of such date or a State plan amendment or waiver 
        request under title XIX of such Act that was pending 
        approval on such date).
    (f) State Ineligibility; Limitation; Special Rules.--
            (1) Maintenance of eligibility requirements.--
                    (A) In general.--Subject to subparagraphs 
                (B) and (C), a State is not eligible for an 
                increase in its FMAP under subsection (a), (b), 
                or (c), or an increase in a cap amount under 
                subsection (d), if eligibility standards, 
                methodologies, or procedures under its State 
                plan under title XIX of the Social Security Act 
                (including any waiver under such title or under 
                section 1115 of such Act (42 U.S.C. 1315)) are 
                more restrictive than the eligibility 
                standards, methodologies, or procedures, 
                respectively, under such plan (or waiver) as in 
                effect on July 1, 2008.
                    (B) State reinstatement of eligibility 
                permitted.--Subject to subparagraph (C), a 
                State that has restricted eligibility 
                standards, methodologies, or procedures under 
                its State plan under title XIX of the Social 
                Security Act (including any waiver under such 
                title or under section 1115 of such Act (42 
                U.S.C. 1315)) after July 1, 2008, is no longer 
                ineligible under subparagraph (A) beginning 
                with the first calendar quarter in which the 
                State has reinstated eligibility standards, 
                methodologies, or procedures that are no more 
                restrictive than the eligibility standards, 
                methodologies, or procedures, respectively, 
                under such plan (or waiver) as in effect on 
                July 1, 2008.
                    (C) Special rules.--A State shall not be 
                ineligible under subparagraph (A)--
                            (i) for the calendar quarters 
                        before July 1, 2009, on the basis of a 
                        restriction that was applied after July 
                        1, 2008, and before the date of the 
                        enactment of this Act, if the State 
                        prior to July 1, 2009, has reinstated 
                        eligibility standards, methodologies, 
                        or procedures that are no more 
                        restrictive than the eligibility 
                        standards, methodologies, or 
                        procedures, respectively, under such 
                        plan (or waiver) as in effect on July 
                        1, 2008; or
                            (ii) on the basis of a restriction 
                        that was directed to be made under 
                        State law as in effect on July 1, 2008, 
                        and would have been in effect as of 
                        such date, but for a delay in the 
                        effective date of a waiver under 
                        section 1115 of such Act with respect 
                        to such restriction.
            (2) Compliance with prompt pay requirements.--
                    (A) Application to practitioners.--
                            (i) In general.--Subject to the 
                        succeeding provisions of this 
                        subparagraph, no State shall be 
                        eligible for an increased FMAP rate as 
                        provided under this section for any 
                        claim received by a State from a 
                        practitioner subject to the terms of 
                        section 1902(a)(37)(A) of the Social 
                        Security Act (42 U.S.C. 
                        1396a(a)(37)(A)) for such days during 
                        any period in which that State has 
                        failed to pay claims in accordance with 
                        such section as applied under title XIX 
                        of such Act.
                            (ii) Reporting requirement.--Each 
                        State shall report to the Secretary, on 
                        a quarterly basis, its compliance with 
                        the requirements of clause (i) as such 
                        requirements pertain to claims made for 
                        covered services during each month of 
                        the preceding quarter.
                            (iii) Waiver authority.--The 
                        Secretary may waive the application of 
                        clause (i) to a State, or the reporting 
                        requirement imposed under clause (ii), 
                        during any period in which there are 
                        exigent circumstances, including 
                        natural disasters, that prevent the 
                        timely processing of claims or the 
                        submission of such a report.
                            (iv) Application to claims.--
                        Clauses (i) and (ii) shall only apply 
                        to claims made for covered services 
                        after the date of enactment of this 
                        Act.
                    (B) Application to nursing facilities and 
                hospitals.--
                            (i) In general.--Subject to clause 
                        (ii), the provisions of subparagraph 
                        (A) shall apply with respect to a 
                        nursing facility or hospital, insofar 
                        as it is paid under title XIX of the 
                        Social Security Act on the basis of 
                        submission of claims, in the same or 
                        similar manner (but within the same 
                        timeframe) as such provisions apply to 
                        practitioners described in such 
                        subparagraph.
                            (ii) Grace period.--Notwithstanding 
                        clause (i), no period of ineligibility 
                        shall be imposed against a State prior 
                        to June 1, 2009, on the basis of the 
                        State failing to pay a claim in 
                        accordance with such clause.
            (3) State's application toward rainy day fund.--A 
        State is not eligible for an increase in its FMAP under 
        subsection (b) or (c), or an increase in a cap amount 
        under subsection (d), if any amounts attributable 
        (directly or indirectly) to such increase are deposited 
        or credited into any reserve or rainy day fund of the 
        State.
            (4) No waiver authority.--Except as provided in 
        paragraph (2)(A)(iii), the Secretary may not waive the 
        application of this subsection or subsection (g) under 
        section 1115 of the Social Security Act or otherwise.
            (5) Limitation of fmap to 100 percent.--In no case 
        shall an increase in FMAP under this section result in 
        an FMAP that exceeds 100 percent.
            (6) Treatment of certain expenditures.--With 
        respect to expenditures described in section 
        2105(a)(1)(B) of the Social Security Act (42 U.S.C. 
        1397ee(a)(1)(B)), as in effect before April 1, 2009, 
        that are made during the period beginning on October 1, 
        2008, and ending on March 31, 2009, any additional 
        Federal funds that are paid to a State as a result of 
        this section that are attributable to such expenditures 
        shall not be counted against any allotment under 
        section 2104 of such Act (42 U.S.C. 1397dd).
    (g) Requirements.--
            (1) State reports.--Each State that is paid 
        additional Federal funds as a result of this section 
        shall, not later than September 30, 2011, submit a 
        report to the Secretary, in such form and such manner 
        as the Secretary shall determine, regarding how the 
        additional Federal funds were expended.
            (2) Additional requirement for certain states.--In 
        the case of a State that requires political 
        subdivisions within the State to contribute toward the 
        non-Federal share of expenditures under the State 
        Medicaid plan required under section 1902(a)(2) of the 
        Social Security Act (42 U.S.C. 1396a(a)(2)), the State 
        is not eligible for an increase in its FMAP under 
        subsection (b) or (c), or an increase in a cap amount 
        under subsection (d), if it requires that such 
        political subdivisions pay for quarters during the 
        recession adjustment period a greater percentage of the 
        non-Federal share of such expenditures, or a greater 
        percentage of the non-Federal share of payments under 
        section 1923, than the respective percentage that would 
        have been required by the State under such plan on 
        September 30, 2008, prior to application of this 
        section.
    (h) Definitions.--In this section, except as otherwise 
provided:
            (1) FMAP.--The term ``FMAP'' means the Federal 
        medical assistance percentage, as defined in section 
        1905(b) of the Social Security Act (42 U.S.C. 
        1396d(b)), as determined without regard to this section 
        except as otherwise specified.
            (2) Poverty line.--The term ``poverty line'' has 
        the meaning given such term in section 673(2) of the 
        Community Services Block Grant Act (42 U.S.C. 9902(2)), 
        including any revision required by such section.
            (3) Recession adjustment period.--The term 
        ``recession adjustment period'' means the period 
        beginning on October 1, 2008, and ending on December 
        31, 2010.
            (4) Secretary.--The term ``Secretary'' means the 
        Secretary of Health and Human Services.
            (5) State.--The term ``State'' has the meaning 
        given such term in section 1101(a)(1) of the Social 
        Security Act (42 U.S.C. 1301(a)(1)) for purposes of 
        title XIX of the Social Security Act (42 U.S.C. 1396 et 
        seq.).
    (i) Sunset.--This section shall not apply to items and 
services furnished after the end of the recession adjustment 
period.
    (j) Limitation on FMAP Change.--The increase in FMAP 
effected under section 614 of the Children's Health Insurance 
Program Reauthorization Act of 2009 shall not apply in the 
computation of the enhanced FMAP under title XXI or XIX of the 
Social Security Act for any period (notwithstanding subsection 
(i)).

SEC. 5002. TEMPORARY INCREASE IN DSH ALLOTMENTS DURING RECESSION.

    Section 1923(f)(3) of the Social Security Act (42 U.S.C. 
1396r-4(f)(3)) is amended--
            (1) in subparagraph (A), by striking ``paragraph 
        (6)'' and inserting ``paragraph (6) and subparagraph 
        (E)''; and
            (2) by adding at the end the following new 
        subparagraph:
                    ``(E) Temporary increase in allotments 
                during recession.--
                            ``(i) In general.--Subject to 
                        clause (ii), the DSH allotment for any 
                        State--
                                    ``(I) for fiscal year 2009 
                                is equal to 102.5 percent of 
                                the DSH allotment that would be 
                                determined under this paragraph 
                                for the State for fiscal year 
                                2009 without application of 
                                this subparagraph, 
                                notwithstanding subparagraphs 
                                (B) and (C);
                                    ``(II) for fiscal year 2010 
                                is equal to 102.5 percent of 
                                the DSH allotment for the State 
                                for fiscal year 2009, as 
                                determined under subclause (I); 
                                and
                                    ``(III) for each succeeding 
                                fiscal year is equal to the DSH 
                                allotment for the State under 
                                this paragraph determined 
                                without applying subclauses (I) 
                                and (II).
                            ``(ii) Application.--Clause (i) 
                        shall not apply to a State for a year 
                        in the case that the DSH allotment for 
                        such State for such year under this 
                        paragraph determined without applying 
                        clause (i) would grow higher than the 
                        DSH allotment specified under clause 
                        (i) for the State for such year.''.

SEC. 5003. EXTENSION OF MORATORIA ON CERTAIN MEDICAID FINAL 
                    REGULATIONS.

    (a) Final Regulations Relating to Optional Case Management 
Services and Allowable Provider Taxes.--Section 7001(a)(3)(A) 
of the Supplemental Appropriations Act, 2008 (Public Law 110-
252) is amended by striking ``April 1, 2009'' and inserting 
``July 1, 2009''.
    (b) Final Regulation Relating to School-Based 
Administration and School-Based Transportation.--Section 206 of 
the Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
Law 110-173), as amended by section 7001(a)(2) of the 
Supplemental Appropriations Act, 2008 (Public Law 110-252), is 
amended by inserting ``(July 1, 2009, in the case of the final 
regulation relating to school-based administration and school-
based transportation)'' after ``April 1, 2009,''.
    (c) Final Regulation Relating to Outpatient Hospital 
Facility Services.--Notwithstanding any other provision of law, 
with respect to expenditures for services furnished during the 
period beginning on December 8, 2008, and ending on June 30, 
2009, the Secretary of Health and Human Services shall not take 
any action (through promulgation of regulation, issuance of 
regulatory guidance, use of Federal payment audit procedures, 
or other administrative action, policy, or practice, including 
a Medical Assistance Manual transmittal or letter to State 
Medicaid directors) to implement the final regulation relating 
to clarification of the definition of outpatient hospital 
facility services under the Medicaid program published on 
November 7, 2008 (73 Federal Register 66187).
    (d) Sense of Congress.--It is the sense of Congress that 
the Secretary of Health and Human Services should not 
promulgate as final regulations any of the following proposed 
Medicaid regulations:
            (1) Cost limits for certain providers.--The 
        proposed regulation published on January 18, 2007, (72 
        Federal Register 2236) (and the purported final 
        regulation published on May 29, 2007 (72 Federal 
        Register 29748) and determined by the United States 
        District Court for the District of Columbia to have 
        been ``improperly promulgated'', Alameda County Medical 
        Center, et al., v. Leavitt, et al., Civil Action No. 
        08-0422, Mem. at 4 (D.D.C. May 23, 2008)).
            (2) Payments for graduate medical education.--The 
        proposed regulation published on May 23, 2007 (72 
        Federal Register 28930).
            (3) Rehabilitative services.--The proposed 
        regulation published on August 13, 2007 (72 Federal 
        Register 45201).

SEC. 5004. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA).

    (a) 18-Month Extension.--
            (1) In general.--Sections 1902(e)(1)(B) and 1925(f) 
        of the Social Security Act (42 U.S.C. 1396a(e)(1)(B), 
        1396r-6(f)) are each amended by striking ``September 
        30, 2003'' and inserting ``December 31, 2010''.
            (2) Effective date.--The amendments made by this 
        subsection shall take effect on July 1, 2009.
    (b) State Option of Initial 12-Month Eligibility.--Section 
1925 of the Social Security Act (42 U.S.C. 1396r-6) is 
amended--
            (1) in subsection (a)(1), by inserting ``but 
        subject to paragraph (5)'' after ``Notwithstanding any 
        other provision of this title'';
            (2) by adding at the end of subsection (a) the 
        following:
            ``(5) Option of 12-month initial eligibility 
        period.--A State may elect to treat any reference in 
        this subsection to a 6-month period (or 6 months) as a 
        reference to a 12-month period (or 12 months). In the 
        case of such an election, subsection (b) shall not 
        apply.''; and
            (3) in subsection (b)(1), by inserting ``but 
        subject to subsection (a)(5)'' after ``Notwithstanding 
        any other provision of this title''.
    (c) Removal of Requirement for Previous Receipt of Medical 
Assistance.--Section 1925(a)(1) of such Act (42 U.S.C. 1396r-
6(a)(1)), as amended by subsection (b)(1), is further amended--
            (1) by inserting ``subparagraph (B) and'' before 
        ``paragraph (5)'';
            (2) by redesignating the matter after 
        ``Requirement.--'' as a subparagraph (A) with the 
        heading ``In general.--'' and with the same indentation 
        as subparagraph (B) (as added by paragraph (3)); and
            (3) by adding at the end the following:
                    ``(B) State option to waive requirement for 
                3 months before receipt of medical 
                assistance.--A State may, at its option, elect 
                also to apply subparagraph (A) in the case of a 
                family that was receiving such aid for fewer 
                than three months or that had applied for and 
                was eligible for such aid for fewer than 3 
                months during the 6 immediately preceding 
                months described in such subparagraph.''.
    (d) CMS Report on Enrollment and Participation Rates Under 
TMA.--Section 1925 of such Act (42 U.S.C. 1396r-6), as amended 
by this section, is further amended by adding at the end the 
following new subsection:
    ``(g) Collection and Reporting of Participation 
Information.--
            ``(1) Collection of information from states.--Each 
        State shall collect and submit to the Secretary (and 
        make publicly available), in a format specified by the 
        Secretary, information on average monthly enrollment 
        and average monthly participation rates for adults and 
        children under this section and of the number and 
        percentage of children who become ineligible for 
        medical assistance under this section whose medical 
        assistance is continued under another eligibility 
        category or who are enrolled under the State's child 
        health plan under title XXI. Such information shall be 
        submitted at the same time and frequency in which other 
        enrollment information under this title is submitted to 
        the Secretary.
            ``(2) Annual reports to congress.--Using the 
        information submitted under paragraph (1), the 
        Secretary shall submit to Congress annual reports 
        concerning enrollment and participation rates described 
        in such paragraph.''.
    (e) Effective Date.--The amendments made by subsections (b) 
through (d) shall take effect on July 1, 2009.

SEC. 5005. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) PROGRAM.

    (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social 
Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by 
striking ``December 2009'' and inserting ``December 2010''.
    (b) Extending Total Amount Available for Allocation.--
Section 1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended--
            (1) in paragraph (2)--
                    (A) by striking ``and'' at the end of 
                subparagraph (K);
                    (B) in subparagraph (L), by striking the 
                period at the end and inserting a semicolon; 
                and
                    (C) by adding at the end the following new 
                subparagraphs:
                    ``(M) for the period that begins on January 
                1, 2010, and ends on September 30, 2010, the 
                total allocation amount is $412,500,000; and
                    ``(N) for the period that begins on October 
                1, 2010, and ends on December 31, 2010, the 
                total allocation amount is $150,000,000.''; and
            (2) in paragraph (3), in the matter preceding 
        subparagraph (A), by striking ``or (L)'' and inserting 
        ``(L), or (N)''.

SEC. 5006. PROTECTIONS FOR INDIANS UNDER MEDICAID AND CHIP.

    (a) Premiums and Cost Sharing Protection Under Medicaid.--
            (1) In general.--Section 1916 of the Social 
        Security Act (42 U.S.C. 1396o) is amended--
                    (A) in subsection (a), in the matter 
                preceding paragraph (1), by striking ``and 
                (i)'' and inserting ``, (i), and (j)''; and
                    (B) by adding at the end the following new 
                subsection:
    ``(j) No Premiums or Cost Sharing for Indians Furnished 
Items or Services Directly by Indian Health Programs or Through 
Referral Under Contract Health Services.--
            ``(1) No cost sharing for items or services 
        furnished to indians through indian health programs.--
                    ``(A) In general.--No enrollment fee, 
                premium, or similar charge, and no deduction, 
                copayment, cost sharing, or similar charge 
                shall be imposed against an Indian who is 
                furnished an item or service directly by the 
                Indian Health Service, an Indian Tribe, Tribal 
                Organization, or Urban Indian Organization or 
                through referral under contract health services 
                for which payment may be made under this title.
                    ``(B) No reduction in amount of payment to 
                indian health providers.--Payment due under 
                this title to the Indian Health Service, an 
                Indian Tribe, Tribal Organization, or Urban 
                Indian Organization, or a health care provider 
                through referral under contract health services 
                for the furnishing of an item or service to an 
                Indian who is eligible for assistance under 
                such title, may not be reduced by the amount of 
                any enrollment fee, premium, or similar charge, 
                or any deduction, copayment, cost sharing, or 
                similar charge that would be due from the 
                Indian but for the operation of subparagraph 
                (A).
            ``(2) Rule of construction.--Nothing in this 
        subsection shall be construed as restricting the 
        application of any other limitations on the imposition 
        of premiums or cost sharing that may apply to an 
        individual receiving medical assistance under this 
        title who is an Indian.''.
            (2) Conforming amendment.--Section 1916A(b)(3) of 
        such Act (42 U.S.C. 1396o-1(b)(3)) is amended--
                    (A) in subparagraph (A), by adding at the 
                end the following new clause:
                            ``(vii) An Indian who is furnished 
                        an item or service directly by the 
                        Indian Health Service, an Indian Tribe, 
                        Tribal Organization or Urban Indian 
                        Organization or through referral under 
                        contract health services.''; and
                    (B) in subparagraph (B), by adding at the 
                end the following new clause:
                            ``(x) Items and services furnished 
                        to an Indian directly by the Indian 
                        Health Service, an Indian Tribe, Tribal 
                        Organization or Urban Indian 
                        Organization or through referral under 
                        contract health services.''.
    (b) Treatment of Certain Property From Resources for 
Medicaid and CHIP Eligibility.--
            (1) Medicaid.--Section 1902 of the Social Security 
        Act (42 U.S.C. 1396a), as amended by sections 203(c) 
        and 211(a)(1)(A)(ii) of the Children's Health Insurance 
        Program Reauthorization Act of 2009 (Public Law 111-3), 
        is amended by adding at the end the following new 
        subsection:
    ``(ff) Notwithstanding any other requirement of this title 
or any other provision of Federal or State law, a State shall 
disregard the following property from resources for purposes of 
determining the eligibility of an individual who is an Indian 
for medical assistance under this title:
            ``(1) Property, including real property and 
        improvements, that is held in trust, subject to Federal 
        restrictions, or otherwise under the supervision of the 
        Secretary of the Interior, located on a reservation, 
        including any federally recognized Indian Tribe's 
        reservation, pueblo, or colony, including former 
        reservations in Oklahoma, Alaska Native regions 
        established by the Alaska Native Claims Settlement Act, 
        and Indian allotments on or near a reservation as 
        designated and approved by the Bureau of Indian Affairs 
        of the Department of the Interior.
            ``(2) For any federally recognized Tribe not 
        described in paragraph (1), property located within the 
        most recent boundaries of a prior Federal reservation.
            ``(3) Ownership interests in rents, leases, 
        royalties, or usage rights related to natural resources 
        (including extraction of natural resources or 
        harvesting of timber, other plants and plant products, 
        animals, fish, and shellfish) resulting from the 
        exercise of federally protected rights.
            ``(4) Ownership interests in or usage rights to 
        items not covered by paragraphs (1) through (3) that 
        have unique religious, spiritual, traditional, or 
        cultural significance or rights that support 
        subsistence or a traditional lifestyle according to 
        applicable tribal law or custom.''.
            (2) Application to chip.--Section 2107(e)(1) of 
        such Act (42 U.S.C. 1397gg(e)(1)), as amended by 
        sections 203(a)(2), 203(d)(2), 214(b), 501(d)(2), and 
        503(a)(1) of the Children's Health Insurance Program 
        Reauthorization Act of 2009 (Public Law 111-3), is 
        amended--
                    (A) by redesignating subparagraphs (C) 
                through (I), as subparagraphs (D) through (J), 
                respectively; and
                    (B) by inserting after subparagraph (B), 
                the following new subparagraph:
                    ``(C) Section 1902(ff) (relating to 
                disregard of certain property for purposes of 
                making eligibility determinations).''.
    (c) Continuation of Current Law Protections of Certain 
Indian Property From Medicaid Estate Recovery.--Section 
1917(b)(3) of the Social Security Act (42 U.S.C. 1396p(b)(3)) 
is amended--
            (1) by inserting ``(A)'' after ``(3)''; and
            (2) by adding at the end the following new 
        subparagraph:
                    ``(B) The standards specified by the 
                Secretary under subparagraph (A) shall require 
                that the procedures established by the State 
                agency under subparagraph (A) exempt income, 
                resources, and property that are exempt from 
                the application of this subsection as of April 
                1, 2003, under manual instructions issued to 
                carry out this subsection (as in effect on such 
                date) because of the Federal responsibility for 
                Indian Tribes and Alaska Native Villages. 
                Nothing in this subparagraph shall be construed 
                as preventing the Secretary from providing 
                additional estate recovery exemptions under 
                this title for Indians.''.
    (d) Rules Applicable Under Medicaid and CHIP to Managed 
Care Entities With Respect to Indian Enrollees and Indian 
Health Care Providers and Indian Managed Care Entities.--
            (1) In general.--Section 1932 of the Social 
        Security Act (42 U.S.C. 1396u-2) is amended by adding 
        at the end the following new subsection:
    ``(h) Special Rules With Respect to Indian Enrollees, 
Indian Health Care Providers, and Indian Managed Care 
Entities.--
            ``(1) Enrollee option to select an indian health 
        care provider as primary care provider.--In the case of 
        a non-Indian Medicaid managed care entity that--
                    ``(A) has an Indian enrolled with the 
                entity; and
                    ``(B) has an Indian health care provider 
                that is participating as a primary care 
                provider within the network of the entity,
        insofar as the Indian is otherwise eligible to receive 
        services from such Indian health care provider and the 
        Indian health care provider has the capacity to provide 
        primary care services to such Indian, the contract with 
        the entity under section 1903(m) or under section 
        1905(t)(3) shall require, as a condition of receiving 
        payment under such contract, that the Indian shall be 
        allowed to choose such Indian health care provider as 
        the Indian's primary care provider under the entity.
            ``(2) Assurance of payment to indian health care 
        providers for provision of covered services.--Each 
        contract with a managed care entity under section 
        1903(m) or under section 1905(t)(3) shall require any 
        such entity, as a condition of receiving payment under 
        such contract, to satisfy the following requirements:
                    ``(A) Demonstration of access to indian 
                health care providers and application of 
                alternative payment arrangements.--Subject to 
                subparagraph (C), to--
                            ``(i) demonstrate that the number 
                        of Indian health care providers that 
                        are participating providers with 
                        respect to such entity are sufficient 
                        to ensure timely access to covered 
                        Medicaid managed care services for 
                        those Indian enrollees who are eligible 
                        to receive services from such 
                        providers; and
                            ``(ii) agree to pay Indian health 
                        care providers, whether such providers 
                        are participating or nonparticipating 
                        providers with respect to the entity, 
                        for covered Medicaid managed care 
                        services provided to those Indian 
                        enrollees who are eligible to receive 
                        services from such providers at a rate 
                        equal to the rate negotiated between 
                        such entity and the provider involved 
                        or, if such a rate has not been 
                        negotiated, at a rate that is not less 
                        than the level and amount of payment 
                        which the entity would make for the 
                        services if the services were furnished 
                        by a participating provider which is 
                        not an Indian health care provider.
                The Secretary shall establish procedures for 
                applying the requirements of clause (i) in 
                States where there are no or few Indian health 
                providers.
                    ``(B) Prompt payment.--To agree to make 
                prompt payment (consistent with rule for prompt 
                payment of providers under section 1932(f)) to 
                Indian health care providers that are 
                participating providers with respect to such 
                entity or, in the case of an entity to which 
                subparagraph (A)(ii) or (C) applies, that the 
                entity is required to pay in accordance with 
                that subparagraph.
                    ``(C) Application of special payment 
                requirements for federally-qualified health 
                centers and for services provided by certain 
                indian health care providers.--
                            ``(i) Federally-qualified health 
                        centers.--
                                    ``(I) Managed care entity 
                                payment requirement.--To agree 
                                to pay any Indian health care 
                                provider that is a federally-
                                qualified health center under 
                                this title but not a 
                                participating provider with 
                                respect to the entity, for the 
                                provision of covered Medicaid 
                                managed care services by such 
                                provider to an Indian enrollee 
                                of the entity at a rate equal 
                                to the amount of payment that 
                                the entity would pay a 
                                federally-qualified health 
                                center that is a participating 
                                provider with respect to the 
                                entity but is not an Indian 
                                health care provider for such 
                                services.
                                    ``(II) Continued 
                                application of state 
                                requirement to make 
                                supplemental payment.--Nothing 
                                in subclause (I) or 
                                subparagraph (A) or (B) shall 
                                be construed as waiving the 
                                application of section 
                                1902(bb)(5) regarding the State 
                                plan requirement to make any 
                                supplemental payment due under 
                                such section to a federally-
                                qualified health center for 
                                services furnished by such 
                                center to an enrollee of a 
                                managed care entity (regardless 
                                of whether the federally-
                                qualified health center is or 
                                is not a participating provider 
                                with the entity).
                            ``(ii) Payment rate for services 
                        provided by certain indian health care 
                        providers.--If the amount paid by a 
                        managed care entity to an Indian health 
                        care provider that is not a federally-
                        qualified health center for services 
                        provided by the provider to an Indian 
                        enrollee with the managed care entity 
                        is less than the rate that applies to 
                        the provision of such services by the 
                        provider under the State plan, the plan 
                        shall provide for payment to the Indian 
                        health care provider, whether the 
                        provider is a participating or 
                        nonparticipating provider with respect 
                        to the entity, of the difference 
                        between such applicable rate and the 
                        amount paid by the managed care entity 
                        to the provider for such services.
                    ``(D) Construction.--Nothing in this 
                paragraph shall be construed as waiving the 
                application of section 1902(a)(30)(A) (relating 
                to application of standards to assure that 
                payments are consistent with efficiency, 
                economy, and quality of care).
            ``(3) Special rule for enrollment for indian 
        managed care entities.--Regarding the application of a 
        Medicaid managed care program to Indian Medicaid 
        managed care entities, an Indian Medicaid managed care 
        entity may restrict enrollment under such program to 
        Indians in the same manner as Indian Health Programs 
        may restrict the delivery of services to Indians.
            ``(4) Definitions.--For purposes of this 
        subsection:
                    ``(A) Indian health care provider.--The 
                term `Indian health care provider' means an 
                Indian Health Program or an Urban Indian 
                Organization.
                    ``(B) Indian medicaid managed care 
                entity.--The term `Indian Medicaid managed care 
                entity' means a managed care entity that is 
                controlled (within the meaning of the last 
                sentence of section 1903(m)(1)(C)) by the 
                Indian Health Service, a Tribe, Tribal 
                Organization, or Urban Indian Organization, or 
                a consortium, which may be composed of 1 or 
                more Tribes, Tribal Organizations, or Urban 
                Indian Organizations, and which also may 
                include the Service.
                    ``(C) Non-indian medicaid managed care 
                entity.--The term `non-Indian Medicaid managed 
                care entity' means a managed care entity that 
                is not an Indian Medicaid managed care entity.
                    ``(D) Covered medicaid managed care 
                services.--The term `covered Medicaid managed 
                care services' means, with respect to an 
                individual enrolled with a managed care entity, 
                items and services for which benefits are 
                available with respect to the individual under 
                the contract between the entity and the State 
                involved.
                    ``(E) Medicaid managed care program.--The 
                term `Medicaid managed care program' means a 
                program under sections 1903(m), 1905(t), and 
                1932 and includes a managed care program 
                operating under a waiver under section 1915(b) 
                or 1115 or otherwise.''.
            (2) Application to chip.--Section 2107(e)(1) of 
        such Act (42 U.S.C. 1397gg(1)), as amended by 
        subsection (b)(2), is amended--
                    (A) by redesignating subparagraph (J) as 
                subparagraph (K); and
                    (B) by inserting after subparagraph (I) the 
                following new subparagraph:
                    ``(J) Subsections (a)(2)(C) and (h) of 
                section 1932.''.
    (e) Consultation on Medicaid, CHIP, and Other Health Care 
Programs Funded Under the Social Security Act Involving Indian 
Health Programs and Urban Indian Organizations.--
            (1) Consultation with tribal technical advisory 
        group (ttag).--The Secretary of Health and Human 
        Services shall maintain within the Centers for Medicaid 
        & Medicare Services (CMS) a Tribal Technical Advisory 
        Group (TTAG), which was first established in accordance 
        with requirements of the charter dated September 30, 
        2003, and the Secretary of Health and Human Services 
        shall include in such Group a representative of a 
        national urban Indian health organization and a 
        representative of the Indian Health Service. The 
        inclusion of a representative of a national urban 
        Indian health organization in such Group shall not 
        affect the nonapplication of the Federal Advisory 
        Committee Act (5 U.S.C. App.) to such Group.
            (2) Solicitation of advice under medicaid and 
        chip.--
                    (A) Medicaid state plan amendment.--Section 
                1902(a) of the Social Security Act (42 U.S.C. 
                1396a(a)), as amended by section 501(d)(1) of 
                the Children's Health Insurance Program 
                Reauthorization Act of 2009 (Public Law 111-3), 
                (42 U.S.C. 1396a(a)) is amended--
                            (i) in paragraph (71), by striking 
                        ``and'' at the end;
                            (ii) in paragraph (72), by striking 
                        the period at the end and inserting ``; 
                        and''; and
                            (iii) by inserting after paragraph 
                        (72), the following new paragraph:
            ``(73) in the case of any State in which 1 or more 
        Indian Health Programs or Urban Indian Organizations 
        furnishes health care services, provide for a process 
        under which the State seeks advice on a regular, 
        ongoing basis from designees of such Indian Health 
        Programs and Urban Indian Organizations on matters 
        relating to the application of this title that are 
        likely to have a direct effect on such Indian Health 
        Programs and Urban Indian Organizations and that--
                    ``(A) shall include solicitation of advice 
                prior to submission of any plan amendments, 
                waiver requests, and proposals for 
                demonstration projects likely to have a direct 
                effect on Indians, Indian Health Programs, or 
                Urban Indian Organizations; and
                    ``(B) may include appointment of an 
                advisory committee and of a designee of such 
                Indian Health Programs and Urban Indian 
                Organizations to the medical care advisory 
                committee advising the State on its State plan 
                under this title.''.
                    (B) Application to chip.--Section 
                2107(e)(1) of such Act (42 U.S.C. 1397gg(1)), 
                as amended by subsections (b)(2) and (d) (2), 
                is amended--
                            (i) by redesignating subparagraphs 
                        (B), (C), (D), (E), (F), (G), (H), (I), 
                        (J), and (K) as subparagraphs (D), (F), 
                        (B), (E), (G), (I), (H), (J), (K), and 
                        (L), respectively;
                            (ii) by moving such subparagraphs 
                        so as to appear in alphabetical order; 
                        and
                            (iii) by inserting after 
                        subparagraph (B) (as so redesiganted 
                        and moved) the following new 
                        subparagraph:
                    ``(C) Section 1902(a)(73) (relating to 
                requiring certain States to seek advice from 
                designees of Indian Health Programs and Urban 
                Indian Organizations).''.
            (3) Rule of construction.--Nothing in the 
        amendments made by this subsection shall be construed 
        as superseding existing advisory committees, working 
        groups, guidance, or other advisory procedures 
        established by the Secretary of Health and Human 
        Services or by any State with respect to the provision 
        of health care to Indians.
    (f) Effective Date.--The amendments made by this section 
shall take effect on July 1, 2009.

SEC. 5007. FUNDING FOR OVERSIGHT AND IMPLEMENTATION.

    (a) Oversight.--For purposes of ensuring the proper 
expenditure of Federal funds under title XIX of the Social 
Security Act (42 U.S.C. 1396 et seq.), there is appropriated to 
the Office of the Inspector General of the Department of Health 
and Human Services, out of any money in the Treasury not 
otherwise appropriated and without further appropriation, 
$31,250,000 for fiscal year 2009, which shall remain available 
for expenditure until September 30, 2011, and shall be in 
addition to any other amounts appropriated or made available to 
such Office for such purposes.
    (b) Implementation of Increased FMAP.--For purposes of 
carrying out section 5001, there is appropriated to the 
Secretary of Health and Human Services, out of any money in the 
Treasury not otherwise appropriated and without further 
appropriation, $5,000,000 for fiscal year 2009, which shall 
remain available for expenditure until September 30, 2011, and 
shall be in addition to any other amounts appropriated or made 
available to such Secretary for such purposes.

SEC. 5008. GAO STUDY AND REPORT REGARDING STATE NEEDS DURING PERIODS OF 
                    NATIONAL ECONOMIC DOWNTURN.

    (a) In General.--The Comptroller General of the United 
States shall study the period of national economic downturn in 
effect on the date of enactment of this Act, as well as 
previous periods of national economic downturn since 1974, for 
the purpose of developing recommendations for addressing the 
needs of States during such periods. As part of such analysis, 
the Comptroller General shall study the past and projected 
effects of temporary increases in the Federal medical 
assistance percentage under the Medicaid program with respect 
to such periods.
    (b) Report.--Not later than April 1, 2011, the Comptroller 
General of the United States shall submit a report to the 
appropriate committees of Congress on the results of the study 
conducted under paragraph (1). Such report shall include the 
following:
            (1) Such recommendations as the Comptroller General 
        determines appropriate for modifying the national 
        economic downturn assistance formula for temporary 
        adjustment of the Federal medical assistance percentage 
        under Medicaid (also referred to as a ``countercyclical 
        FMAP'') described in GAO report number GAO-07-97 to 
        improve the effectiveness of the application of such 
        percentage in addressing the needs of States during 
        periods of national economic downturn, including 
        recommendations for--
                    (A) improvements to the factors that would 
                begin and end the application of such 
                percentage;
                    (B) how the determination of the amount of 
                such percentage could be adjusted to address 
                State and regional economic variations during 
                such periods; and
                    (C) how the determination of the amount of 
                such percentage could be adjusted to be more 
                responsive to actual Medicaid costs incurred by 
                States during such periods.
            (2) An analysis of the impact on States during such 
        periods of--
                    (A) declines in private health benefits 
                coverage;
                    (B) declines in State revenues; and
                    (C) caseload maintenance and growth under 
                Medicaid, the Children's Health Insurance 
                Program, or any other publicly-funded programs 
                to provide health benefits coverage for State 
                residents.
            (3) Identification of, and recommendations for 
        addressing, the effects on States of any other specific 
        economic indicators that the Comptroller General 
        determines appropriate.

          TITLE VI--BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM

SEC. 6000. TABLE OF CONTENTS.

    The table of contents of this title is as follows:

          TITLE VI--BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM

Sec. 6000. Table of contents.
Sec. 6001. Broadband Technology Opportunities Program.

SEC. 6001. BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM.

    (a) The Assistant Secretary of Commerce for Communications 
and Information (Assistant Secretary), in consultation with the 
Federal Communications Commission (Commission), shall establish 
a national broadband service development and expansion program 
in conjunction with the technology opportunities program, which 
shall be referred to as the Broadband Technology Opportunities 
Program. The Assistant Secretary shall ensure that the program 
complements and enhances and does not conflict with other 
Federal broadband initiatives and programs.
    (b) The purposes of the program are to--
            (1) provide access to broadband service to 
        consumers residing in unserved areas of the United 
        States;
            (2) provide improved access to broadband service to 
        consumers residing in underserved areas of the United 
        States;
            (3) provide broadband education, awareness, 
        training, access, equipment, and support to--
                    (A) schools, libraries, medical and 
                healthcare providers, community colleges and 
                other institutions of higher education, and 
                other community support organizations and 
                entities to facilitate greater use of broadband 
                service by or through these organizations;
                    (B) organizations and agencies that provide 
                outreach, access, equipment, and support 
                services to facilitate greater use of broadband 
                service by low-income, unemployed, aged, and 
                otherwise vulnerable populations; and
                    (C) job-creating strategic facilities 
                located within a State-designated economic 
                zone, Economic Development District designated 
                by the Department of Commerce, Renewal 
                Community or Empowerment Zone designated by the 
                Department of Housing and Urban Development, or 
                Enterprise Community designated by the 
                Department of Agriculture;
            (4) improve access to, and use of, broadband 
        service by public safety agencies; and
            (5) stimulate the demand for broadband, economic 
        growth, and job creation.
    (c) The Assistant Secretary may consult a State, the 
District of Columbia, or territory or possession of the United 
States with respect to--
            (1) the identification of areas described in 
        subsection (b)(1) or (2) located in that State; and
            (2) the allocation of grant funds within that State 
        for projects in or affecting the State.
    (d) The Assistant Secretary shall--
            (1) establish and implement the grant program as 
        expeditiously as practicable;
            (2) ensure that all awards are made before the end 
        of fiscal year 2010;
            (3) seek such assurances as may be necessary or 
        appropriate from grantees under the program that they 
        will substantially complete projects supported by the 
        program in accordance with project timelines, not to 
        exceed 2 years following an award; and
            (4) report on the status of the program to the 
        Committees on Appropriations of the House of 
        Representatives and the Senate, the Committee on Energy 
        and Commerce of the House of Representatives, and the 
        Committee on Commerce, Science, and Transportation of 
        the Senate, every 90 days.
    (e) To be eligible for a grant under the program, an 
applicant shall--
            (1)(A) be a State or political subdivision thereof, 
        the District of Columbia, a territory or possession of 
        the United States, an Indian tribe (as defined in 
        section 4 of the Indian Self-Determination and 
        Education Assistance Act (25 U.S.C. 450(b)) or native 
        Hawaiian organization;
                    (B) a nonprofit--
                            (i) foundation,
                            (ii) corporation,
                            (iii) institution, or
                            (iv) association; or
                    (C) any other entity, including a broadband 
                service or infrastructure provider, that the 
                Assistant Secretary finds by rule to be in the 
                public interest. In establishing such rule, the 
                Assistant Secretary shall to the extent 
                practicable promote the purposes of this 
                section in a technologically neutral manner;
            (2) submit an application, at such time, in such 
        form, and containing such information as the Assistant 
        Secretary may require;
            (3) provide a detailed explanation of how any 
        amount received under the program will be used to carry 
        out the purposes of this section in an efficient and 
        expeditious manner, including a showing that the 
        project would not have been implemented during the 
        grant period without Federal grant assistance;
            (4) demonstrate, to the satisfaction of the 
        Assistant Secretary, that it is capable of carrying out 
        the project or function to which the application 
        relates in a competent manner in compliance with all 
        applicable Federal, State, and local laws;
            (5) demonstrate, to the satisfaction of the 
        Assistant Secretary, that it will appropriate (if the 
        applicant is a State or local government agency) or 
        otherwise unconditionally obligate, from non-Federal 
        sources, funds required to meet the requirements of 
        subsection (f);
            (6) disclose to the Assistant Secretary the source 
        and amount of other Federal or State funding sources 
        from which the applicant receives, or has applied for, 
        funding for activities or projects to which the 
        application relates; and
            (7) provide such assurances and procedures as the 
        Assistant Secretary may require to ensure that grant 
        funds are used and accounted for in an appropriate 
        manner.
    (f) The Federal share of any project may not exceed 80 
percent, except that the Assistant Secretary may increase the 
Federal share of a project above 80 percent if--
            (1) the applicant petitions the Assistant Secretary 
        for a waiver; and
            (2) the Assistant Secretary determines that the 
        petition demonstrates financial need.
    (g) The Assistant Secretary may make competitive grants 
under the program to--
            (1) acquire equipment, instrumentation, networking 
        capability, hardware and software, digital network 
        technology, and infrastructure for broadband services;
            (2) construct and deploy broadband service related 
        infrastructure;
            (3) ensure access to broadband service by community 
        anchor institutions;
            (4) facilitate access to broadband service by low-
        income, unemployed, aged, and otherwise vulnerable 
        populations in order to provide educational and 
        employment opportunities to members of such 
        populations;
            (5) construct and deploy broadband facilities that 
        improve public safety broadband communications 
        services; and
            (6) undertake such other projects and activities as 
        the Assistant Secretary finds to be consistent with the 
        purposes for which the program is established.
    (h) The Assistant Secretary, in awarding grants under this 
section, shall, to the extent practical--
            (1) award not less than 1 grant in each State;
            (2) consider whether an application to deploy 
        infrastructure in an area--
                    (A) will, if approved, increase the 
                affordability of, and subscribership to, 
                service to the greatest population of users in 
                the area;
                    (B) will, if approved, provide the greatest 
                broadband speed possible to the greatest 
                population of users in the area;
                    (C) will, if approved, enhance service for 
                health care delivery, education, or children to 
                the greatest population of users in the area; 
                and
                    (D) will, if approved, not result in unjust 
                enrichment as a result of support for non-
                recurring costs through another Federal program 
                for service in the area; and
            (3) consider whether the applicant is a socially 
        and economically disadvantaged small business concern 
        as defined under section 8(a) of the Small Business Act 
        (15 U.S.C. 637).
    (i) The Assistant Secretary--
            (1) shall require any entity receiving a grant 
        pursuant to this section to report quarterly, in a 
        format specified by the Assistant Secretary, on such 
        entity's use of the assistance and progress fulfilling 
        the objectives for which such funds were granted, and 
        the Assistant Secretary shall make these reports 
        available to the public;
            (2) may establish additional reporting and 
        information requirements for any recipient of any 
        assistance made available pursuant to this section;
            (3) shall establish appropriate mechanisms to 
        ensure appropriate use and compliance with all terms of 
        any use of funds made available pursuant to this 
        section;
            (4) may, in addition to other authority under 
        applicable law, deobligate awards to grantees that 
        demonstrate an insufficient level of performance, or 
        wasteful or fraudulent spending, as defined in advance 
        by the Assistant Secretary, and award these funds 
        competitively to new or existing applicants consistent 
        with this section; and
            (5) shall create and maintain a fully searchable 
        database, accessible on the Internet at no cost to the 
        public, that contains at least a list of each entity 
        that has applied for a grant under this section, a 
        description of each application, the status of each 
        such application, the name of each entity receiving 
        funds made available pursuant to this section, the 
        purpose for which such entity is receiving such funds, 
        each quarterly report submitted by the entity pursuant 
        to this section, and such other information sufficient 
        to allow the public to understand and monitor grants 
        awarded under the program.
    (j) Concurrent with the issuance of the Request for 
Proposal for grant applications pursuant to this section, the 
Assistant Secretary shall, in coordination with the Commission, 
publish the non-discrimination and network interconnection 
obligations that shall be contractual conditions of grants 
awarded under this section, including, at a minimum, adherence 
to the principles contained in the Commission's broadband 
policy statement (FCC 05-15, adopted August 5, 2005).
    (k)(1) Not later than 1 year after the date of enactment of 
this section, the Commission shall submit to the Committee on 
Energy and Commerce of the House of Representatives and the 
Committee on Commerce, Science, and Transportation of the 
Senate, a report containing a national broadband plan.
            (2) The national broadband plan required by this 
        section shall seek to ensure that all people of the 
        United States have access to broadband capability and 
        shall establish benchmarks for meeting that goal. The 
        plan shall also include--
                    (A) an analysis of the most effective and 
                efficient mechanisms for ensuring broadband 
                access by all people of the United States;
                    (B) a detailed strategy for achieving 
                affordability of such service and maximum 
                utilization of broadband infrastructure and 
                service by the public;
                    (C) an evaluation of the status of 
                deployment of broadband service, including 
                progress of projects supported by the grants 
                made pursuant to this section; and
                    (D) a plan for use of broadband 
                infrastructure and services in advancing 
                consumer welfare, civic participation, public 
                safety and homeland security, community 
                development, health care delivery, energy 
                independence and efficiency, education, worker 
                training, private sector investment, 
                entrepreneurial activity, job creation and 
                economic growth, and other national purposes.
            (3) In developing the plan, the Commission shall 
        have access to data provided to other Government 
        agencies under the Broadband Data Improvement Act (47 
        U.S.C. 1301 note).
    (l) The Assistant Secretary shall develop and maintain a 
comprehensive nationwide inventory map of existing broadband 
service capability and availability in the United States that 
depicts the geographic extent to which broadband service 
capability is deployed and available from a commercial provider 
or public provider throughout each State. Not later than 2 
years after the date of the enactment of this Act, the 
Assistant Secretary shall make the broadband inventory map 
developed and maintained pursuant to this section accessible by 
the public on a World Wide Web site of the National 
Telecommunications and Information Administration in a form 
that is interactive and searchable.
    (m) The Assistant Secretary shall have the authority to 
prescribe such rules as are necessary to carry out the purposes 
of this section.

              TITLE VII--LIMITS ON EXECUTIVE COMPENSATION

SEC. 7000. TABLE OF CONTENTS.

    The table of contents of this title is as follows:

               TITLE VII--LIMITS ON EXECUTIVE COMPENSATION

Sec. 7000. Table of contents.
Sec. 7001. Executive compensation and corporate governance.
Sec. 7002. Applicability with respect to loan modifications.

SEC. 7001. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

    Section 111 of the Emergency Economic Stabilization Act of 
2008 (12 U.S.C. 5221) is amended to read as follows:

``SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE GOVERNANCE.

    ``(a) Definitions.--For purposes of this section, the 
following definitions shall apply:
            ``(1) Senior executive officer.--The term `senior 
        executive officer' means an individual who is 1 of the 
        top 5 most highly paid executives of a public company, 
        whose compensation is required to be disclosed pursuant 
        to the Securities Exchange Act of 1934, and any 
        regulations issued thereunder, and non-public company 
        counterparts.
            ``(2) Golden parachute payment.--The term `golden 
        parachute payment' means any payment to a senior 
        executive officer for departure from a company for any 
        reason, except for payments for services performed or 
        benefits accrued.
            ``(3) TARP recipient.--The term `TARP recipient' 
        means any entity that has received or will receive 
        financial assistance under the financial assistance 
        provided under the TARP.
            ``(4) Commission.--The term `Commission' means the 
        Securities and Exchange Commission.
            ``(5) Period in which obligation is outstanding; 
        rule of construction.--For purposes of this section, 
        the period in which any obligation arising from 
        financial assistance provided under the TARP remains 
        outstanding does not include any period during which 
        the Federal Government only holds warrants to purchase 
        common stock of the TARP recipient.
    ``(b) Executive Compensation and Corporate Governance.--
            ``(1) Establishment of standards.--During the 
        period in which any obligation arising from financial 
        assistance provided under the TARP remains outstanding, 
        each TARP recipient shall be subject to--
                    ``(A) the standards established by the 
                Secretary under this section; and
                    ``(B) the provisions of section 162(m)(5) 
                of the Internal Revenue Code of 1986, as 
                applicable.
            ``(2) Standards required.--The Secretary shall 
        require each TARP recipient to meet appropriate 
        standards for executive compensation and corporate 
        governance.
            ``(3) Specific requirements.--The standards 
        established under paragraph (2) shall include the 
        following:
                    ``(A) Limits on compensation that exclude 
                incentives for senior executive officers of the 
                TARP recipient to take unnecessary and 
                excessive risks that threaten the value of such 
                recipient during the period in which any 
                obligation arising from financial assistance 
                provided under the TARP remains outstanding.
                    ``(B) A provision for the recovery by such 
                TARP recipient of any bonus, retention award, 
                or incentive compensation paid to a senior 
                executive officer and any of the next 20 most 
                highly-compensated employees of the TARP 
                recipient based on statements of earnings, 
                revenues, gains, or other criteria that are 
                later found to be materially inaccurate.
                    ``(C) A prohibition on such TARP recipient 
                making any golden parachute payment to a senior 
                executive officer or any of the next 5 most 
                highly-compensated employees of the TARP 
                recipient during the period in which any 
                obligation arising from financial assistance 
                provided under the TARP remains outstanding.
                    ``(D)(i) A prohibition on such TARP 
                recipient paying or accruing any bonus, 
                retention award, or incentive compensation 
                during the period in which any obligation 
                arising from financial assistance provided 
                under the TARP remains outstanding, except that 
                any prohibition developed under this paragraph 
                shall not apply to the payment of long-term 
                restricted stock by such TARP recipient, 
                provided that such long-term restricted stock--
                            ``(I) does not fully vest during 
                        the period in which any obligation 
                        arising from financial assistance 
                        provided to that TARP recipient remains 
                        outstanding;
                            ``(II) has a value in an amount 
                        that is not greater than \1/3\ of the 
                        total amount of annual compensation of 
                        the employee receiving the stock; and
                            ``(III) is subject to such other 
                        terms and conditions as the Secretary 
                        may determine is in the public 
                        interest.
                    ``(ii) The prohibition required under 
                clause (i) shall apply as follows:
                            ``(I) For any financial institution 
                        that received financial assistance 
                        provided under the TARP equal to less 
                        than $25,000,000, the prohibition shall 
                        apply only to the most highly 
                        compensated employee of the financial 
                        institution.
                            ``(II) For any financial 
                        institution that received financial 
                        assistance provided under the TARP 
                        equal to at least $25,000,000, but less 
                        than $250,000,000, the prohibition 
                        shall apply to at least the 5 most 
                        highly-compensated employees of the 
                        financial institution, or such higher 
                        number as the Secretary may determine 
                        is in the public interest with respect 
                        to any TARP recipient.
                            ``(III) For any financial 
                        institution that received financial 
                        assistance provided under the TARP 
                        equal to at least $250,000,000, but 
                        less than $500,000,000, the prohibition 
                        shall apply to the senior executive 
                        officers and at least the 10 next most 
                        highly-compensated employees, or such 
                        higher number as the Secretary may 
                        determine is in the public interest 
                        with respect to any TARP recipient.
                            ``(IV) For any financial 
                        institution that received financial 
                        assistance provided under the TARP 
                        equal to $500,000,000 or more, the 
                        prohibition shall apply to the senior 
                        executive officers and at least the 20 
                        next most highly-compensated employees, 
                        or such higher number as the Secretary 
                        may determine is in the public interest 
                        with respect to any TARP recipient.
                    ``(iii) The prohibition required under 
                clause (i) shall not be construed to prohibit 
                any bonus payment required to be paid pursuant 
                to a written employment contract executed on or 
                before February 11, 2009, as such valid 
                employment contracts are determined by the 
                Secretary or the designee of the Secretary.
                    ``(E) A prohibition on any compensation 
                plan that would encourage manipulation of the 
                reported earnings of such TARP recipient to 
                enhance the compensation of any of its 
                employees.
                    ``(F) A requirement for the establishment 
                of a Board Compensation Committee that meets 
                the requirements of subsection (c).
            ``(4) Certification of compliance.--The chief 
        executive officer and chief financial officer (or the 
        equivalents thereof) of each TARP recipient shall 
        provide a written certification of compliance by the 
        TARP recipient with the requirements of this section--
                    ``(A) in the case of a TARP recipient, the 
                securities of which are publicly traded, to the 
                Securities and Exchange Commission, together 
                with annual filings required under the 
                securities laws; and
                    ``(B) in the case of a TARP recipient that 
                is not a publicly traded company, to the 
                Secretary.
    ``(c) Board Compensation Committee.--
            ``(1) Establishment of board required.--Each TARP 
        recipient shall establish a Board Compensation 
        Committee, comprised entirely of independent directors, 
        for the purpose of reviewing employee compensation 
        plans.
            ``(2) Meetings.--The Board Compensation Committee 
        of each TARP recipient shall meet at least semiannually 
        to discuss and evaluate employee compensation plans in 
        light of an assessment of any risk posed to the TARP 
        recipient from such plans.
            ``(3) Compliance by non-sec registrants.--In the 
        case of any TARP recipient, the common or preferred 
        stock of which is not registered pursuant to the 
        Securities Exchange Act of 1934, and that has received 
        $25,000,000 or less of TARP assistance, the duties of 
        the Board Compensation Committee under this subsection 
        shall be carried out by the board of directors of such 
        TARP recipient.
    ``(d) Limitation on Luxury Expenditures.--The board of 
directors of any TARP recipient shall have in place a company-
wide policy regarding excessive or luxury expenditures, as 
identified by the Secretary, which may include excessive 
expenditures on--
            ``(1) entertainment or events;
            ``(2) office and facility renovations;
            ``(3) aviation or other transportation services; or
            ``(4) other activities or events that are not 
        reasonable expenditures for staff development, 
        reasonable performance incentives, or other similar 
        measures conducted in the normal course of the business 
        operations of the TARP recipient.
    ``(e) Shareholder Approval of Executive Compensation.--
            ``(1) Annual shareholder approval of executive 
        compensation.--Any proxy or consent or authorization 
        for an annual or other meeting of the shareholders of 
        any TARP recipient during the period in which any 
        obligation arising from financial assistance provided 
        under the TARP remains outstanding shall permit a 
        separate shareholder vote to approve the compensation 
        of executives, as disclosed pursuant to the 
        compensation disclosure rules of the Commission (which 
        disclosure shall include the compensation discussion 
        and analysis, the compensation tables, and any related 
        material).
            ``(2) Nonbinding vote.--A shareholder vote 
        described in paragraph (1) shall not be binding on the 
        board of directors of a TARP recipient, and may not be 
        construed as overruling a decision by such board, nor 
        to create or imply any additional fiduciary duty by 
        such board, nor shall such vote be construed to 
        restrict or limit the ability of shareholders to make 
        proposals for inclusion in proxy materials related to 
        executive compensation.
            ``(3) Deadline for rulemaking.--Not later than 1 
        year after the date of enactment of the American 
        Recovery and Reinvestment Act of 2009, the Commission 
        shall issue any final rules and regulations required by 
        this subsection.
    ``(f) Review of Prior Payments to Executives.--
            ``(1) In general.--The Secretary shall review 
        bonuses, retention awards, and other compensation paid 
        to the senior executive officers and the next 20 most 
        highly-compensated employees of each entity receiving 
        TARP assistance before the date of enactment of the 
        American Recovery and Reinvestment Act of 2009, to 
        determine whether any such payments were inconsistent 
        with the purposes of this section or the TARP or were 
        otherwise contrary to the public interest.
            ``(2) Negotiations for reimbursement.--If the 
        Secretary makes a determination described in paragraph 
        (1), the Secretary shall seek to negotiate with the 
        TARP recipient and the subject employee for appropriate 
        reimbursements to the Federal Government with respect 
        to compensation or bonuses.
    ``(g) No Impediment to Withdrawal by TARP Recipients.--
Subject to consultation with the appropriate Federal banking 
agency (as that term is defined in section 3 of the Federal 
Deposit Insurance Act), if any, the Secretary shall permit a 
TARP recipient to repay any assistance previously provided 
under the TARP to such financial institution, without regard to 
whether the financial institution has replaced such funds from 
any other source or to any waiting period, and when such 
assistance is repaid, the Secretary shall liquidate warrants 
associated with such assistance at the current market price.
    ``(h) Regulations.--The Secretary shall promulgate 
regulations to implement this section.''.

SEC. 7002. APPLICABILITY WITH RESPECT TO LOAN MODIFICATIONS.

    Section 109(a) of the Emergency Economic Stabilization Act 
of 2008 (12 U.S.C. 5219(a)) is amended--
            (1) by striking ``To the extent'' and inserting the 
        following:
            ``(1) In general.--To the extent''; and
            (2) by adding at the end the following:
            ``(2) Waiver of certain provisions in connection 
        with loan modifications.--The Secretary shall not be 
        required to apply executive compensation restrictions 
        under section 111, or to receive warrants or debt 
        instruments under section 113, solely in connection 
        with any loan modification under this section.''.
      And the Senate agreed to the same.

                                   David Obey,
                                   Charles Rangel,
                                   Henry Waxman,
                                 Managers on the Part of the House.

                                   Daniel K. Inouye,
                                    Max Baucus,
                                   Harry Reid,
                                Managers on the Part of the Senate.
       JOINT EXPLANATORY STATEMENT OF THE COMMITTEE OF CONFERENCE

      The managers on the part of the House and Senate at the 
conference on the disagreeing votes of the two Houses on the 
amendment of the Senate to the bill (H.R. 1), a bill making 
supplemental appropriations for job preservation and creation, 
infrastructure investment, energy efficiency and science, 
assistance to the unemployed, and State and local fiscal 
stabilization, for the fiscal year ending September 30, 2009, 
and for other purposes, submit the following joint statement to 
the House and Senate in explanation of the effect of the action 
agreed upon by the managers and recommended in the accompanying 
conference report.
      The Senate amendment to the text deleted the entire House 
bill after the enacting clause and inserted the Senate bill. 
This conference agreement includes a revised bill.
      The conference agreement designates amounts in the Act as 
emergency requirements pursuant to section 204(a) of S. Con. 
Res. 21 (110th Congress) and section 301(b)(2) of S. Con. Res. 
70 (110th Congress), the concurrent resolutions on the budget 
for fiscal years 2008 and 2009. All applicable provisions in 
the Act are designated as an emergency for purposes of pay-as-
you-go principles.

                 DIVISION A--APPROPRIATIONS PROVISIONS

TITLE I--AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, 
                          AND RELATED AGENCIES

                       Department of Agriculture

        AGRICULTURE BUILDINGS AND FACILITIES AND RENTAL PAYMENTS

      The conference agreement provides $24,000,000 for the 
Agriculture Buildings and Facilities and Rental Payments 
account instead of $44,000,000 as proposed by the House. The 
Senate bill contained no such account.
      The conference agreement provides funding to address 
priority maintenance, repair, and modernization investments in 
USDA's headquarter buildings and facilities.

                      Office of Inspector General

      The conference agreement provides $22,500,000 for the 
Office of Inspector General as proposed by both the House and 
Senate.
      The conference agreement provides funding to enhance 
oversight and improve accountability of the use of economic 
recovery funds appropriated to the Department of Agriculture in 
this Act, including $7,500,000 for the U.S. Forest Service.

                     Agricultural Research Service

                        BUILDINGS AND FACILITIES

      The conference agreement provides $176,000,000 for the 
Agricultural Research Service, Buildings and Facilities account 
instead of $209,000,000 as proposed by the House. The Senate 
bill contained no such account.
      The conference agreement provides funding to address 
critical deferred maintenance of the agency's aging laboratory 
and research infrastructure.

                          Farm Service Agency

                         SALARIES AND EXPENSES

      The conference agreement provides $50,000,000 for the 
Farm Service Agency, Salaries and Expenses account instead of 
$245,000,000 as proposed by the House. The Senate bill 
contained no such account.
      The conference agreement provides funding to maintain and 
modernize the information technology system.

                 Natural Resources Conservation Service

               WATERSHED AND FLOOD PREVENTION OPERATIONS

      The conference agreement provides $290,000,000 for the 
Watershed and Flood Prevention Operations program instead of 
$350,000,000 as proposed by the House and $275,000,000 as 
proposed by the Senate.
      Of the total amount, $145,000,000 is for purchasing and 
restoring floodplain easements under the authorities of the 
Emergency Watershed Protection Program. Funding is provided for 
conducting a floodplain restoration enrollment process that 
encompasses multiple regions of the country and that will 
provide the greatest public and environmental benefits.
      The conference agreement provides funding to invest in 
both structural and non-structural watershed infrastructure 
improvements. When considering project applications, the agency 
is directed to prioritize funding for projects that most cost-
effectively provide the greatest public safety, flood 
protection, economic, and environmental benefits.
      With the funds provided, the agency is directed to 
complete existing infrastructure projects that have already 
initiated planning, design, or construction work, as well as 
prioritize funding for projects that are prepared to initiate 
work as soon as possible. The agency is further directed to 
fully fund the cost of completing discrete functional 
components of both structural and non-structural projects 
initiated with the dollars provided in this conference 
agreement.

                    WATERSHED REHABILITATION PROGRAM

      The conference agreement provides $50,000,000 for the 
Watershed Rehabilitation Program as proposed by the House 
instead of $65,000,000 as proposed by the Senate.
      The conference agreement provides funding to rehabilitate 
aging flood control infrastructure. The agency is directed to 
prioritize funding for projects that are at greatest risk of 
failure and present threats to public safety. The agency is 
further directed to prioritize funding for projects that can 
obligate and expend funds both cost effectively and rapidly. 
Finally, the agency is directed to fully fund the cost of 
completing rehabilitation projects initiated with the dollars 
provided in this conference agreement.

                         Rural Housing Service

              RURAL HOUSING INSURANCE FUND PROGRAM ACCOUNT

      The conference agreement provides $200,000,000 in budget 
authority as proposed by the Senate instead of $500,000,000 as 
proposed by the House. The amount of funding provided by the 
conference agreement will support $11,472,000,000 in direct and 
guaranteed single family housing loans under the Rural Housing 
Insurance Fund, of which $1,000,000,000 is for direct single 
family housing loans and $10,472,000,000 is for guaranteed 
single family housing loans.

               RURAL COMMUNITY FACILITIES PROGRAM ACCOUNT

      The conference agreement includes $130,000,000 in budget 
authority for loans and grants for rural community facilities 
instead of $200,000,000 as proposed by the House and 
$127,000,000 as proposed by the Senate.
      The conference agreement provides funding to support 
$1,234,000,000 in loans and grants for essential rural 
community facilities including hospitals, health clinics, 
health and safety vehicles and equipment, public buildings, and 
child and elder care facilities. Of this amount, $1,171,000,000 
is for direct community facility loans and $63,000,000 is for 
community facility grants.

                  Rural Business--Cooperative Service

                     RURAL BUSINESS PROGRAM ACCOUNT

      The conference agreement includes $150,000,000 in budget 
authority for rural business loans and grants as proposed by 
the Senate instead of $100,000,000 as proposed by the House. 
The amount of funding provided by the conference agreement will 
support $3,010,000,000 in rural business loans and grants. Of 
this amount, $2,990,000,000 is for guaranteed business and 
industry loans and $20,000,000 is for rural business enterprise 
grants.

                        Rural Utilities Service

             RURAL WATER AND WASTE DISPOSAL PROGRAM ACCOUNT

      The conference agreement includes $1,380,000,000 in 
budget authority for loans and grants for water and waste 
disposal facilities instead of $1,500,000,000 as proposed by 
the House and $1,375,000,000 as proposed by the Senate. The 
amount of funding provided by the conference agreement will 
support $3,788,000,000 in loans and grants for water and waste 
disposal facilities in rural areas. Of this amount, 
$2,820,000,000 is for direct loans and $968,000,000 is for 
grants.

         DISTANCE LEARNING, TELEMEDICINE, AND BROADBAND PROGRAM

      The conference agreement includes $2,500,000,000 for the 
distance learning, telemedicine, and broadband program instead 
of $2,825,000,000 as proposed by the House and $100,000,000 as 
proposed by the Senate.

                       Food and Nutrition Service

                        CHILD NUTRITION PROGRAMS

      The conference agreement includes $100,000,000 for a 
grant program for National School Lunch Program equipment 
assistance as proposed by the Senate. The House bill contained 
no such account.

SPECIAL SUPPLEMENTAL NUTRITION PROGRAM FOR WOMEN, INFANTS, AND CHILDREN 
                                 (WIC)

      The conference agreement includes $500,000,000 for the 
Special Supplemental Nutrition Program for Women, Infants, and 
Children (WIC) as proposed by the Senate instead of 
$100,000,000 as proposed by the House.
      Of the total amount provided by the conference agreement, 
$400,000,000 is for the program's contingency reserve to ensure 
that the WIC program will have adequate funds to cover 
potential increased participation or food costs as a result of 
economic uncertainty. The conference agreement also provides 
$100,000,000 from the total amount to help state agencies 
implement new management information systems or improve 
existing management information systems for the program.

                      COMMODITY ASSISTANCE PROGRAM

      The conference agreement includes $150,000,000 for the 
Emergency Food Assistance Program for food purchases as 
proposed by both the House and Senate. Of the total amount 
provided by the conference agreement, up to $50,000,000 may be 
used for administrative funding.

                     GENERAL PROVISIONS--THIS TITLE

      SEC. 101. The conference agreement includes language to 
increase the value of benefits provided through the 
Supplemental Nutrition Assistance Program by 13.6 percent. The 
conference agreement also includes $295,000,000 for the cost of 
state administrative expenses and $5,000,000 in administrative 
funding for the Food Distribution Program on Indian 
Reservations.
      SEC. 102. The conference agreement includes language to 
provide for transitional agricultural disaster assistance.
      SEC. 103. The conference agreement includes language to 
carry out the Food, Conservation, and Energy Act of 2008.
      SEC. 104. The conference agreement includes language to 
carry out the rural development loan and grant programs funded 
in this title.
      SEC. 105. The conference agreement includes language to 
specify the use of funds in persistent poverty counties.

       TITLE II--COMMERCE, JUSTICE, SCIENCE, AND RELATED AGENCIES

                         DEPARTMENT OF COMMERCE

      The Department is directed to submit to the House and 
Senate Committees on Appropriations spending plans, signed by 
the Secretary, detailing its intended allocation of funds 
provided in this Act within 60 days of enactment of this Act.

                  Economic Development Administration

                ECONOMIC DEVELOPMENT ASSISTANCE PROGRAMS

      The conference agreement includes $150,000,000 for 
Economic Development Assistance Programs to leverage private 
investment, stimulate employment and increase incomes in 
economically distressed communities. Of the amounts provided, 
$50,000,000 shall be for economic adjustment assistance to help 
communities recover from sudden and severe economic dislocation 
and massive job losses due to corporate restructuring and 
$50,000,000 may be transferred to federally authorized, 
regional economic development commissions.

                          Bureau of the Census

                     PERIODIC CENSUSES AND PROGRAMS

      To ensure a successful 2010 Decennial, the conference 
agreement includes $1,000,000,000 to hire additional personnel, 
provide required training, increase targeted media purchases, 
and improve management of other operational and programmatic 
risks. Of the amounts provided, up to $250,000,000 shall be for 
partnership and outreach efforts to minority communities and 
hard-to-reach populations.

       National Telecommunications and Information Administration

               BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM

      The conference agreement includes $4,700,000,000 for 
NTIA's Broadband Technology Opportunities Program (TOP), to be 
available until September 30, 2010. Funding is provided to 
award competitive grants to accelerate broadband deployment in 
unserved and underserved areas and to strategic institutions 
that are likely to create jobs or provide significant public 
benefits. Of the amounts provided, $350,000,000 shall establish 
the State Broadband Data and Development Grant program, as 
authorized by Public Law 110-385 and for the development and 
maintenance of a national broadband inventory map as authorized 
by division B of this Act. In addition, $200,000,000 shall be 
for competitive grants for expanding public computer center 
capacity; $250,000,000 shall be for competitive grants for 
innovative programs to encourage sustainable broadband 
adoption; and $10,000,000 is to be transferred to the 
Department of Commerce Inspector General for audits and 
oversight of funds provided under this heading, to be available 
until expended.

                DIGITAL-TO-ANALOG CONVERTER BOX PROGRAM

      The conference agreement includes $650,000,000 for 
additional implementation and administration of the digital-to-
analog converter box coupon program, including additional 
coupons to meet new projected demands and consumer support, 
outreach and administration. Of the amounts provided, up to 
$90,000,000 may be used for education and outreach to 
vulnerable populations, including one-on-one assistance for 
converter box installation.

             National Institute of Standards and Technology

             SCIENTIFIC AND TECHNICAL RESEARCH AND SERVICES

      The conference agreement includes $220,000,000 for 
research, competitive grants, additional research fellowships 
and advanced research and measurement equipment and supplies. 
In addition, $20,000,000 is provided by transfer from the 
Health Information Technology (HIT) initiative within this Act. 
For HIT activities, NIST is directed to create and test 
standards related to health security and interoperability in 
conjunction with partners at the Department of Health and Human 
Services.

                  CONSTRUCTION OF RESEARCH FACILITIES

      The conference agreement includes $360,000,000 to address 
NIST's backlog of maintenance and renovation and for 
construction of new facilities and laboratories. Of the amounts 
provided, $180,000,000 shall be for the competitive 
construction grant program for research science buildings, 
including fiscal year 2008 and 2009 competitions.

            National Oceanic and Atmospheric Administration

                  OPERATIONS, RESEARCH, AND FACILITIES

      The conference agreement includes $230,000,000 for NOAA 
operations, research, and facilities to address a backlog of 
research, restoration, navigation, conservation and management 
activities.

               PROCUREMENT, ACQUISITION AND CONSTRUCTION

      The conference agreement includes $600,000,000 for 
construction and repair of NOAA facilities, ships and 
equipment, to improve weather forecasting and to support 
satellite development. Of the amounts provided, $170,000,000 
shall address critical gaps in climate modeling and establish 
climate data records for continuing research into the cause, 
effects and ways to mitigate climate change.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $6,000,000 for the 
Office of Inspector General, to remain available until 
September 30, 2013.

                         DEPARTMENT OF JUSTICE

      The Department is directed to submit to the House and 
Senate Committees on Appropriations a spending plan, signed by 
the Attorney General, detailing its intended allocation of 
funds provided in this Act within 60 days of enactment of this 
Act.

                         General Administration

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $2,000,000 for the 
Office of Inspector General, to be available until September 
30, 2013.

               State and Local Law Enforcement Activities

                    OFFICE ON VIOLENCE AGAINST WOMEN

       VIOLENCE AGAINST WOMEN PREVENTION AND PROSECUTION PROGRAMS

      The conference agreement provides $225,000,000 for 
Violence Against Women Prevention and Prosecution Programs, to 
be available until September 30, 2010, of which $175,000,000 is 
for the STOP Violence Against Women Formula Assistance Program, 
and $50,000,000 is for transitional housing assistance grants. 
No administrative overhead costs shall be deducted from the 
programs funded under this accout.

                       Office of Justice Programs

               STATE AND LOCAL LAW ENFORCEMENT ASSISTANCE

      The conference agreement includes a total of 
$2,765,000,000 for the following state and local law 
enforcement assistance programs, to be available until 
September 30, 2010. No administrative overhead costs shall be 
deducted from the programs funded under this account.
Edward Byrne Memorial Justice Assistance Grants.........  $2,000,000,000
Byrne competitive grants................................     225,000,000
Rural Law Enforcement...................................     125,000,000
Southwest Border/Project Gunrunner......................      40,000,000
Victims Compensation....................................     100,000,000
Tribal Law Enforcement Assistance.......................     225,000,000
Internet Crimes Against Children Task Force.............      50,000,000
                    --------------------------------------------------------
                    ____________________________________________________
    Total...............................................   2,765,000,000
      Byrne-Justice Assistance Grants.--The conference 
agreement provides $2,000,000,000 for Edward Byrne Memorial 
Justice Assistance Grants. This funding is allocated by formula 
to State and local law enforcement agencies to help prevent, 
fight, and prosecute crime.
      Byrne Competitive Grants.--The conference agreement 
provides $225,000,000 for competitive, peer-reviewed grants to 
units of State, local, and tribal government, and to national, 
regional, and local non-profit organizations to prevent crime, 
improve the administration of justice, provide services to 
victims of crime, support critical nurturing and mentoring of 
at-risk children and youth, and for other similar activities.
      Rural Law Enforcement.--The conference agreement provides 
$125,000,000 for grants to combat the persistent problems of 
drug-related crime in rural America. Funds will be available on 
a competitive basis for drug enforcement and other law 
enforcement activities in rural states and rural areas, 
including for the hiring of police officers and for community 
drug prevention and treatment programs.
      Southwest Border/Project Gunrunner.--The conference 
agreement provides $40,000,000 for competitive grants for 
programs that provide assistance and equipment to local law 
enforcement along the Southern border or in High-Intensity Drug 
Trafficking Areas to combat criminal narcotic activity, of 
which $10,000,000 shall be available, by transfer, to the 
Bureau of Alcohol, Tobacco, Firearms, and Explosives for 
Project Gunrunner.
      Victims Compensation.--The conference agreement provides 
$100,000,000 for formula grants to be administered through the 
Justice Department's Office for Victims of Crime to support 
State compensation and assistance programs for victims and 
survivors of domestic violence, sexual assault, child abuse, 
drunk driving, homicide, and other Federal and state crimes.
      Tribal Law Enforcement Assistance.--The conference 
agreement provides $225,000,000 for grants to assist American 
Indian and Alaska Native tribes, to be distributed under the 
guidelines set forth by the Correctional Facilities on Tribal 
Lands program. The Department is directed to coordinate with 
the Bureau of Indian Affairs, and to consider the following in 
the grant approval process: (1) the detention bed space needs 
of an applicant tribe; and (2) the violent crime statistics of 
the tribe.
      Internet Crimes Against Children (ICAC) Task Force 
Program.--The conference agreement provides $50,000,000 to help 
State and local law enforcement agencies enhance investigative 
responses to offenders who use the Internet, online 
communication systems, or other computer technology to sexually 
exploit children.

                  Community Oriented Policing Services

      COPS Hiring Grants.--The conference agreement provides 
$1,000,000,000 for grants to State, local, and tribal 
governments for the hiring of additional law enforcement 
officers, to be available until September 30, 2010. No 
administrative overhead costs shall be deducted from the 
programs funded under this account.

                         SALARIES AND EXPENSES

      The conference agreement provides $10,000,000 for 
management and administrative costs of Department of Justice 
grants funded in this Act.

                                SCIENCE

             National Aeronautics and Space Administration

      NASA is directed to submit to the House and Senate 
Committees on Appropriations a spending plan, signed by the 
Administrator, detailing its intended allocation of funds 
provided in this Act within 60 days of enactment of this Act.

                                SCIENCE

      The conference agreement includes $400,000,000 for 
Science, to remain available until September 30, 2010. Funding 
is included herein to accelerate the development of the tier 1 
set of Earth science climate research missions recommended by 
the National Academies Decadal Survey and to increase the 
agency's supercomputing capabilities.

                              AERONAUTICS

      The conference agreement includes $150,000,000 for 
aeronautics, to remain available until September 30, 2010. 
These funds are available for system-level research, 
development and demonstration activities related to aviation 
safety, environmental impact mitigation and the Next Generation 
Air Transportation System (NextGen).

                              EXPLORATION

      The conference agreement includes $400,000,000 for 
exploration, to remain available until September 30, 2010.

                          CROSS AGENCY SUPPORT

      The conference agreement includes $50,000,000 for cross 
agency support, to remain available until September 30, 2010. 
In allocating these funds, NASA shall give its highest priority 
to restore NASA-owned facilities damaged from hurricanes and 
other natural disasters occurring during calendar year 2008.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $2,000,000 for the 
Office of Inspector General, to remain available until 
September 30, 2013.

                      National Science Foundation

      NSF is directed to submit to the House and Senate 
Committees on Appropriations a spending plan, signed by the 
Director, detailing its intended allocation of funds provided 
in this Act within 60 days of enactment of this Act.

                    RESEARCH AND RELATED ACTIVITIES

      For research and related activities, the conference 
agreement provides a total of $2,500,000,000, to remain 
available until September 30, 2010. Within this amount, 
$300,000,000 shall be available solely for the major research 
instrumentation program and $200,000,000 shall be available for 
activities authorized by title II of Public Law 100-570 for 
academic facilities modernization. In allocating the resources 
provided under this heading, the conferees direct that NSF 
support all research divisions and support advancements in 
supercomputing technology.

                     EDUCATION AND HUMAN RESOURCES

      The conference agreement includes $100,000,000 for 
education and human resources, to remain available until 
September 30, 2010. These funds shall be allocated as follows:
Robert Noyce Scholarship Program........................     $60,000,000
Math and Science Partnerships...........................      25,000,000
Professional Science Master's Programs..................      15,000,000

          MAJOR RESEARCH EQUIPMENT AND FACILITIES CONSTRUCTION

      The conference agreement includes $400,000,000 for major 
research equipment and facilities construction, to remain 
available until September 30, 2010.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $2,000,000 for the 
Office of Inspector General, to remain available until 
September 30, 2013.

                     GENERAL PROVISION--THIS TITLE

      Sec. 201. For COPS Hiring Grants, waives the $75,000 per 
officer cap codified at 42 U.S.C. 3796dd-3(c) and the 25 
percent local match requirement codified at 42 U.S.C. 
3796dd(g).

                           TITLE III--DEFENSE

                         DEPARTMENT OF DEFENSE

              Facility Infrastructure Investments, Defense

      Facilities Sustainment, Restoration and Modernization 
covers expenses associated with maintaining the physical plant 
at Department of Defense posts, camps and stations. The 
conference agreement provides $4,240,000,000 for Facilities 
Sustainment, Restoration and Modernization and directs that 
this funding shall only be available for facilities in the 
United States and its territories. Further, of the funds 
provided, $400,000,000 is for the Defense Health Program as 
described elsewhere in this statement. Of the funds provided in 
Operation and Maintenance, Army, $153,500,000 shall be used for 
barracks renovations. The remainder of the funds provided shall 
be used to invest in energy efficiency projects and to repair 
and modernize Department of Defense facilities. The Secretary 
of Defense shall provide a written report to the congressional 
defense committees no later than 60 days after enactment of 
this Act with a project listing of how these funds will be 
obligated.

   Near Term Energy Efficiency Technology Demonstrations and Research

      The conference agreement provides $75,000,000 for 
Research, Development, Test and Evaluation, Army; $75,000,000 
for Research, Development, Test and Evaluation, Navy; 
$75,000,000 for Research, Development, Test and Evaluation, Air 
Force; and $75,000,000 for Research, Development, Test and 
Evaluation, Defense-Wide only for the funding of research, 
development, test and evaluation projects, including pilot 
projects, demonstrations and energy efficient manufacturing 
enhancements. Funds are for improvements in energy generation 
and efficiency, transmission, regulation, storage, and for use 
on military installations and within operational forces, to 
include research and development of energy from fuel cells, 
wind, solar, and other renewable energy sources to include 
biofuels and bioenergy. The Secretary of Defense is directed to 
provide a report to the congressional defense committees 
detailing the planned use of these funds within 60 days after 
enactment of this Act. Additionally, the Secretary of Defense 
is directed to provide a report on the progress made by this 
effort to the congressional defense committees not later than 
one year after enactment of this Act and an additional report 
not later than two years after enactment of this Act.

                         Defense Health Program

      The conference agreement provides $400,000,000 for 
Facilities Sustainment, Restoration, and Modernization. Of 
these funds, $220,000,000 shall be for the Army, $50,000,000 
shall be for the Navy, and $130,000,000 shall be for the Air 
Force. Funds shall be used to invest in energy efficiency 
projects and to improve, repair and modernize military medical 
facilities in the United States and its territories. The 
Service Surgeons General shall provide written reports to the 
congressional defense committees no later than 60 days after 
enactment of this Act with a project listing of how and when 
these funds will be obligated.

                    Office of the Inspector General

      The conference agreement provides $15,000,000 for the 
Office of the Inspector General to conduct vigorous oversight 
of Department of Defense programs.

                 TITLE IV--ENERGY AND WATER DEVELOPMENT

                      DEPARTMENT OF DEFENSE--CIVIL

                         Department of the Army

                       Corps of Engineers--Civil

                              INTRODUCTION

      The conferees agree to provide an additional 
$4,600,000,000 for the Corps of Engineers as proposed by the 
Senate instead of $4,500,000,000 as proposed by the House. The 
conferees direct the Corps to consider the following criteria 
when allocating funds:
            (a) Programs, projects, or activities that can be 
        obligated/executed quickly;
            (b) Programs, projects, or activities that will 
        result in high, immediate employment;
            (c) Programs, projects, or activities that have 
        little schedule risk;
            (d) Programs, projects, or activities that will be 
        executed by contract or direct hire of temporary labor; 
        and
            (e) Programs, projects, or activities that will 
        complete either a project phase, a project, or will 
        provide a useful service that does not require 
        additional funding.
      Further, the Corps is directed to utilize the criteria 
above to execute authorized projects in order to maximize 
national benefits without regard to the business line amounts 
proposed in the Senate report, except where statutory language 
specifies an amount.

                             INVESTIGATIONS

      The conferees agree to provide an additional $25,000,000 
as proposed by the Senate. The House proposed no funding for 
this account. The conference agreement includes or modifies 
several provisions proposed by the Senate related to 
availability of funds and reprogramming.

                              CONSTRUCTION

      The conferees agree to provide an additional 
$2,000,000,000 as proposed by both the House and the Senate.
      The conference agreement includes a provision proposed by 
the Senate regarding availability of funds for authorized 
environmental infrastructure projects. The House bill included 
no similar provision.
      The conference agreement includes several provisions 
proposed by the House and the Senate regarding limitations on 
reimbursement, annual program and total project cost limits, 
the Inland Waterways Trust Fund, and availability of funds.
      The conference agreement deletes a provision proposed by 
the House directing the prioritization of funds. The Senate 
carried report language addressing prioritization.
      The conference agreement includes a provision proposed by 
the Senate granting the Secretary of the Army unlimited 
reprogramming authority for funds provided under this heading. 
The House bill included no similar provision.
      The conference agreement includes a provision proposed by 
the House requiring specific reports on obligation and 
expenditure of funds provided in this Act. The Senate bill 
included no similar provision.

                   MISSISSIPPI RIVER AND TRIBUTARIES

      The conferees agree to provide an additional $375,000,000 
instead of $250,000,000 as proposed by the House and 
$500,000,000 as proposed by the Senate.
      The conference agreement deletes a provision proposed by 
the House directing the prioritization of funds. The Senate 
carried report language addressing prioritization.
      The conference agreement includes several provisions 
proposed by the House and the Senate regarding total project 
cost limits and availability of funds.
      The conference agreement includes a provision proposed by 
the Senate granting the Secretary of the Army unlimited 
reprogramming authority for funds provided under this heading. 
The House bill included no similar provision.
      The conference agreement includes a provision proposed by 
the House requiring specific reports on obligation and 
expenditure of funds provided in this Act. The Senate bill 
included no similar provision.

                       OPERATION AND MAINTENANCE

      The conferees agree to provide an additional 
$2,075,000,000 instead of $2,225,000,000 as proposed by the 
House and $1,900,000,000 as proposed by the Senate.
      The conference agreement deletes a provision proposed by 
the House directing the prioritization of funds. The Senate 
carried report language addressing prioritization.
      The conference agreement includes several provisions 
proposed by the House and the Senate regarding total project 
cost limits and availability of funds.
      The conference agreement deletes a provision proposed by 
the Senate relating to activities authorized in section 9004 of 
Public Law 110-114. The House bill included no similar 
provision.
      The conference agreement includes a provision proposed by 
the Senate relating to annual project limitations set forth in 
section 9006 of Public Law 110-114. The House bill included no 
similar provision.
      The conference agreement includes a provision proposed by 
the Senate granting the Secretary of the Army unlimited 
reprogramming authority for funds provided under this heading. 
The House bill included no similar provision.
      The conference agreement includes a provision proposed by 
the House requiring specific reports on obligation and 
expenditure of funds provided in this Act. The Senate bill 
included no similar provision.

                           REGULATORY PROGRAM

      The conferees agree to provide an additional $25,000,000 
as proposed by both the House and the Senate.

            FORMERLY UTILIZED SITES REMEDIAL ACTION PROGRAM

      The conferees agree to provide an additional $100,000,000 
as proposed by the Senate. The House proposed no funding for 
this account.
      The conference agreement includes or modifies several 
provisions proposed by the Senate related to availability of 
funds and reprogramming.
      The conference agreement includes a new provision 
requiring specific reports on obligation and expenditure of 
funds provided in this Act.

                 FLOOD CONTROL AND COASTAL EMERGENCIES

      The conferees provide no additional funds, as proposed by 
the House, instead of $50,000,000 as proposed by the Senate.

                         DEPARTMENT OF INTERIOR

                         Bureau of Reclamation

                      WATER AND RELATED RESOURCES

      The conferees agree to provide an additional 
$1,000,000,000 for Water and Related Resources instead of 
$500,000,000 as proposed by the House and $1,400,000,000 as 
proposed by the Senate. The conferees direct the Bureau to 
consider the following criteria when allocating funds:
            (a) Programs, projects, or activities that can be 
        obligated/executed quickly;
            (b) Programs, projects, or activities that will 
        result in high, immediate employment;
            (c) Programs, projects, or activities that have 
        little schedule risk;
            (d) Programs, projects, or activities that will be 
        executed by contract or direct hire of temporary labor; 
        and
            (e) Programs, projects, or activities that will 
        complete either a project phase, a project, or will 
        provide a useful service that does not require 
        additional funding.
      Further, the Bureau is directed to utilize the criteria 
above to execute authorized projects in order to maximize 
national benefits without regard to the amounts proposed in the 
Senate report by purpose, except where statutory language 
specifies an amount.
      The conference agreement includes a provision proposed by 
the House related to expenditures for authorized title XVI 
projects. The Senate bill included a similar provision.
      The conference agreement deletes several provisions 
proposed by the Senate related to the Bureau of Reclamation's 
special fee account; contributed funds; funds advanced under 43 
U.S.C. 397a; and limitations on funding programs, projects or 
activities that receive funding in Acts making appropriations 
for Energy and Water Development. The House bill included no 
similar provisions.
      The conference agreement includes provisions proposed by 
the Senate relating to availability of funds for projects that 
can be completed with funds provided in this Act and the 
availability of funds for authorized activities under the 
Central Utah Project Completion Act, California-Bay Delta 
Restoration Act, and the bureau-wide inspection of canals 
program in urbanized areas. The House bill included no similar 
provisions.
      The conference agreement includes a provision proposed by 
the Senate relating to authorized rural water projects. The 
House bill included a similar provision.
      The conference agreement modifies provisions proposed by 
both the House and the Senate relating to repayment of 
reimbursable activities.
      The conference agreement includes a provision proposed by 
the Senate relating to availability of funds for costs 
associated with supervision, inspection, overhead, engineering 
and design on projects. The House bill included no similar 
provision.
      The conference agreement includes a provision proposed by 
the Senate granting the Secretary of Interior unlimited 
reprogramming authority for funds provided under this heading. 
The House bill included no similar provision.
      The conference agreement includes a new provision 
requiring specific reports on obligation and expenditure of 
funds provided in this Act.

                          DEPARTMENT OF ENERGY

                            Energy Programs

                 ENERGY EFFICIENCY AND RENEWABLE ENERGY

      The conferees agree to provide an additional 
$16,800,000,000 for the Energy Efficiency and Renewable Energy 
program, instead of $18,500,000,000 as proposed by the House 
and $14,398,000,000 as proposed by the Senate. The conference 
agreement includes $2,500,000,000 for applied research, 
development, demonstration and deployment activities to include 
$800,000,000 for projects related to biomass and $400,000,000 
for geothermal activities and projects. Within available funds, 
the conferees direct $50,000,000 for the Department to support 
research to increase the efficiency of information and 
communications technology and improve standards.
      Funds under this heading include $3,200,000,000 for the 
Energy Efficiency and Conservation Block Grant (EECBG) program, 
instead of $3,500,000,000 as proposed by the House and 
$4,200,000,000 as proposed by the Senate. Of the funds provided 
for the EECBG program, $400,000,000 shall be awarded on a 
competitive basis to grant applicants.
      Funds under this heading include $5,000,000,000 for the 
Weatherization Assistance Program, instead of $6,200,000,000 as 
proposed in the House bill. The Senate proposed $2,900,000,000 
in report language.
      Funds under this heading include $3,100,000,000 for the 
State Energy Program, instead of $3,400,000,000 as proposed in 
the House bill. The Senate proposed $500,000,000 in report 
language.
      Funds under this heading include $2,000,000,000 for 
Advanced Battery Manufacturing grants to support the 
manufacturing of advanced vehicle batteries and components, as 
proposed by the Senate, instead of $1,000,000,000 as proposed 
by the House. The conference agreement does not include the 
Advanced Battery Loan Guarantee program as proposed by the 
House. The Senate bill carried no similar provision.
      Funds under this heading include $300,000,000 for the 
Alternative Fueled Vehicles Pilot Grant Program, instead of 
$400,000,000 as proposed in the House bill. The Senate proposed 
$350,000,000 in report language.
      Funds under this heading include $400,000,000 for 
Transportation Electrification, instead of $200,000,000 as 
proposed in the House bill. The Senate proposed $200,000,000 in 
report language.
      Funds under this heading include $300,000,000 for the 
Energy Efficient Appliance Rebate program and the Energy Star 
Program as proposed by the House. The Senate bill carried no 
similar provision.
      The conference agreement includes language proposed by 
both the House and Senate that accelerates the hiring of 
personnel for the Energy Efficiency and Renewable Energy 
program.
      The conference agreement does not include $500,000,000 
for incentives for Energy Recovery of Industrial Waste Heat, as 
proposed by the House. The Senate bill carried no similar 
provision.
      The conference agreement does not include $1,000,000,000 
for grants to Institutional Entities for Energy Sustainability 
and Efficiency as proposed in the House bill. The Senate 
proposed $1,600,000,000 in report language.
      The conference agreement does not include $500,000,000 
for the cost of guaranteed loans to Institutional Entities for 
Energy Sustainability and Efficiency as proposed in the House 
bill. The Senate bill carried no similar provision.

              ELECTRICITY DELIVERY AND ENERGY RELIABILITY

      The conferees agree to provide an additional 
$4,500,000,000 for the Electricity Delivery and Energy 
Reliability program, as proposed by the House and the Senate. 
The conferees provide $100,000,000 within these funds for 
worker training, as proposed by the House and the Senate.
      The conferees include language enabling the Secretary to 
use funds for transmission improvements authorized in any 
subsequent Act, as proposed by the House. The Senate bill 
contained no similar provision.
      The conferees include language proposed by the Senate 
that accelerates the hiring of personnel for the Electricity 
Delivery and Energy Reliability program. The House bill 
contained no similar provision.
      The conference agreement modifies bill language proposed 
by the Senate providing funds to conduct a resource assessment 
of future demand and transmission requirements. The House bill 
contained no similar provision.
      The conference agreement modifies bill language proposed 
by the Senate for technical assistance to the North American 
Electric Reliability Corporation, the regional reliability 
entities, the States, and other transmission owners and 
operators for the formation of interconnection-based 
transmission plans for the Eastern and Western Interconnections 
and ERCOT. The House bill contained no similar provision.
      The conference agreement includes bill language proposed 
by the Senate providing $10,000,000 to implement section 1305 
of Public Law 110-140. The House bill contained no similar 
provision.

                 FOSSIL ENERGY RESEARCH AND DEVELOPMENT

      The conferees agree to provide an additional 
$3,400,000,000 for the Fossil Energy Research and Development 
program, instead of $2,400,000,000 as proposed by the House and 
$4,600,000,000 as proposed by the Senate.
      Funds under this heading include $1,000,000,000 for 
fossil energy research and development programs; $800,000,000 
for additional amounts for the Clean Coal Power Initiative 
Round III Funding Opportunity Announcement; $1,520,000,000 for 
a competitive solicitation for a range of industrial carbon 
capture and energy efficiency improvement projects, including a 
small allocation for innovative concepts for beneficial 
CO2 reuse; $50,000,000 for a competitive 
solicitation for site characterization activities in geologic 
formations; $20,000,000 for geologic sequestration training and 
research grants; and $10,000,000 for program direction funding.
      The conference agreement does not include $2,400,000,000 
for Section 702 of the Energy Independence and Security Act of 
2007, as proposed by the House. The Senate bill contained no 
similar provision.
      The conference agreement deletes several provisions 
proposed by the Senate delineating funding within this account. 
The House bill contained no similar provisions.

                   NON-DEFENSE ENVIRONMENTAL CLEANUP

      The conferees agree to provide an additional $483,000,000 
for the Non-Defense Environmental Cleanup program, as proposed 
by the Senate. The House bill carried no similar provision.

      URANIUM ENRICHMENT DECONTAMINATION AND DECOMMISSIONING FUND

      The conferees agree to provide an additional $390,000,000 
for the Uranium Enrichment Decontamination and Decommissioning 
Fund, as proposed by the Senate. The House bill carried no 
similar provision. Within available funds, $70,000,000 is 
provided for the title X uranium and thorium program.

                                SCIENCE

      The conferees agree to provide an additional 
$1,600,000,000 for the Science program. After taking into 
account the additional $400,000,000 provided for Advanced 
Research Projects Agency--Energy (ARPA-E) in a separate 
account, the funding level for Science is the same as proposed 
by the House, instead of $330,000,000 as proposed by the 
Senate.
      The conference agreement does not include $100,000,000 
for advanced scientific computing as proposed in the House 
bill. The Senate bill carried no similar provision.

               ADVANCED RESEARCH PROJECTS AGENCY--ENERGY

      The conferees agree to provide $400,000,000 for the 
Advanced Research Projects Agency-Energy authorized under 
section 5012 of the America COMPETES Act (42 U.S.C. 16538). 
This funding was provided by the House under ``Science''. The 
Senate bill carried no similar provision.

         TITLE 17--INNOVATIVE TECHNOLOGY LOAN GUARANTEE PROGRAM

      The conference agreement includes $6,000,000,000 for the 
cost of guaranteed loans authorized by section 1705 of the 
Energy Policy Act of 2005, instead of $8,000,000,000 as 
proposed by the House and $9,500,000,000 as proposed by the 
Senate.
      This new loan program would provide loan guarantees for 
renewable technologies and transmission technologies. The 
$6,000,000,000 in appropriated funds is expected to support 
more than $60,000,000,000 in loans for these projects.
      Funds under this heading include $10,000,000 for 
administrative expenses to support the Advanced Technology 
Vehicles Manufacturing Loan program. The House bill and the 
Senate bill included no similar provision.
      The conference agreement does not include a provision 
proposed by the Senate providing $50,000,000,000 in additional 
loan authority for commitments to guarantee loans under section 
1702(b)(2) of the Energy Policy Act of 2005. The House bill 
contained no similar provision.

                    OFFICE OF THE INSPECTOR GENERAL

      The conferees agree to provide an additional $15,000,000 
for the Office of Inspector General, as proposed by the House. 
The Senate bill included a similar provision.

                    ATOMIC ENERGY DEFENSE ACTIVITIES

                National Nuclear Security Administration

                           WEAPONS ACTIVITIES

      The conference agreement does not provide $1,000,000,000 
for the National Nuclear Security Administration, Weapons 
Activities, as proposed by the Senate. The House bill contained 
no similar provision.

               Environmental and Other Defense Activities

                     DEFENSE ENVIRONMENTAL CLEANUP

      The conferees agree to provide an additional 
$5,127,000,000 for the Defense Environmental Cleanup program, 
instead of $500,000,000 as proposed by the House and 
$5,527,000,000 as proposed by the Senate.

Construction, Rehabilitation, Operation, and Maintenance, Western Area 
                          Power Administration

      The conference agreement includes bill language proposed 
by the Senate providing $10,000,000 in non-reimbursable funds 
for construction, rehabilitation, operations, and maintenance 
for the Western Area Power Administration (WAPA). The House 
bill contained no similar provision.
      The conference agreement includes bill language proposed 
by the Senate providing additional staffing levels for the 
WAPA. The House bill contained no similar provision.
      Legislative language is also included in the General 
Provisions of this title providing the WAPA with $3,250,000,000 
in borrowing authority, as proposed by both the House and the 
Senate.

                     GENERAL PROVISIONS--THIS TITLE

      The conference agreement includes a provision proposed by 
both the House and Senate increasing the borrowing authority 
ceiling for the Bonneville Power Administration by 
$3,250,000,000.
      The conference agreement includes a provision proposed by 
the Senate providing the Western Area Power Administration 
$3,250,000,000 in borrowing authority. The House bill contained 
a similar provision.
      The conference agreement modifies a provision proposed by 
the House granting transfer authority to the Secretary of 
Energy under specific circumstances. The Senate bill contained 
no similar provision.
      The conference agreement includes a provision proposed by 
the House making technical corrections to section 543(a) of the 
Energy Independence and Security Act of 2007. The Senate bill 
contained no similar provision.
      The conference agreement modifies a provision proposed by 
the House amending title XIII of the Energy Independence and 
Security Act of 2007 to provide financial support to smart grid 
demonstration projects including those in urban, suburban, 
rural and tribal areas including areas where electric system 
assets are controlled by nonprofit entities and areas where the 
electric system assets are controlled by investor owned 
utilities. The Senate bill contained a similar provision.
      The conference agreement modifies a provision proposed by 
the House amending title XVII of the Energy Independence and 
Security Act of 2007 creating a temporary loan guarantee 
program for the rapid deployment of renewable energy and 
electric power transmission projects. The Senate bill contained 
a similar provision.
      The conference agreement modifies a provision proposed by 
the House expanding the eligibility of low income households 
for the Weatherization Assistance Program and increasing the 
funding assistance level per dwelling unit. The provision also 
provides guidance on effective use of funds. The Senate bill 
contained a similar provision.
      The conference agreement includes a provision proposed by 
the Senate making technical corrections to redesignate two 
paragraphs of the Public Utility Regulatory Policies Act of 
1978. The House bill contained no similar provision.
      The conference agreement includes a provision proposed by 
the House providing the Secretary of Energy further direction 
in completing the 2009 National Electric Transmission 
Congestion Study. The Senate bill contained no similar 
provision.
      The conference agreement includes a provision proposed by 
the House requiring as a condition of receipt of State Energy 
Program grants, a Governor to notify the Secretary of Energy 
that the Governor has obtained certain assurances, regarding 
certain regulatory policies, building code requirements and the 
prioritization of existing state programs. The Senate bill 
contained a similar provision.
      The conference agreement deletes a provision proposed by 
the House waiving per project limitations for grants provided 
under section 399A(f)(2), (3), and (4) of the Energy Policy and 
Conservation Act and establishes that grants shall be available 
for not more than an amount equal to 80 percent of the costs of 
the project for which the grant is provided. The Senate bill 
contained no similar provision.

           TITLE V--FINANCIAL SERVICES AND GENERAL GOVERNMENT

                       DEPARTMENT OF THE TREASURY

           Treasury Inspector General for Tax Administration

                         SALARIES AND EXPENSES

      The conference agreement provides $7,000,000 for 
oversight and audits of the administration of the making work 
pay tax credit and economic recovery payments under the 
American Recovery and Reinvestment Act, as proposed by the 
Senate. The House did not include funds for this account.

   Community Development Financial Institutions Fund Program Account

      The conference agreement provides $100,000,000 for 
qualified applicants under the fiscal year 2009 funding round 
of the Community Development Financial Institutions Fund 
program, instead of no funds as proposed by the House and 
$250,000,000 as proposed by the Senate.

                        Internal Revenue Service

               HEALTH INSURANCE TAX CREDIT ADMINISTRATION

      The conference agreement provides $80,000,000 to cover 
expected additional costs associated with implementation of the 
TAA Health Coverage Improvement Act of 2009.

                          DISTRICT OF COLUMBIA

                            Federal Payments

              FEDERAL PAYMENT TO THE DISTRICT OF COLUMBIA

                       WATER AND SEWER AUTHORITY

      The conference agreement does not provide funding for the 
District of Columbia Water and Sewer Authority, instead of 
$125,000,000 as proposed by the Senate.

                    GENERAL SERVICES ADMINISTRATION

                        Real Property Activities

                         FEDERAL BUILDINGS FUND

                 LIMITATIONS ON AVAILABILITY OF REVENUE

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement provides $5,550,000,000, for the 
Federal Buildings Fund, instead of $7,700,000,000 as proposed 
by the House and $5,548,000,000 as proposed by the Senate. Of 
the amounts provided, the conference agreement includes 
$750,000,000 for Federal buildings and United States 
courthouses, $450,000,000 of which shall be for a new 
headquarters for the Department of Homeland Security; 
$300,000,000 for border stations and land ports of entry; and 
not less than $4,500,000,000 to convert GSA facilities to High-
Performance Green buildings as defined in P.L. 110-140. The 
conference agreement provides $4,000,000 for the Office of 
Federal High-Performance Green Buildings, authorized in the 
Energy Independence and Security Act of 2007. The agreement 
also provides $3,000,000 for a training and apprenticeship 
program for construction, repair and alteration of Federal 
buildings. With any funds in the Act that are used for new 
United States courthouse construction, the conferees advise GSA 
to consider projects for which the design provides courtroom 
space for senior judges for up to 10 years from eligibility for 
senior status, not to exceed one courtroom for every two senior 
judges.

        Energy-Efficient Federal Motor Vehicle Fleet Procurement

      The conference agreement includes $300,000,000 for the 
acquisition of motor vehicles for the Federal fleet as proposed 
by the Senate, instead of $600,000,000 as proposed by the 
House. The conferees expect that the funds provided for Federal 
motor vehicle fleet procurement will help to stimulate the 
market for high-efficiency motor vehicles and will increase the 
fuel efficiency and reduce carbon emissions of the Federal 
motor vehicle fleet. The conferees remain hopeful that 
domestically produced plug-in hybrid-electric vehicles will be 
commercially available in sufficient quantities before 
September 30, 2010, such that these funds could be used to 
acquire this technology for the Federal fleet. Vehicles must be 
replaced on at least a one-for-one basis. Each vehicle 
purchased must have a higher fuel economy, as measured by EPA, 
than the vehicle being replaced and the overall government-
purchased vehicles must have an improved fuel economy at least 
10 percent greater than the vehicles being replaced.

                      Office of Inspector General

      The conference agreement provides $7,000,000 for the 
General Services Administration Office of Inspector General, as 
proposed by the Senate, instead of $15,000,000 as proposed by 
the House. Funds are available through September 30, 2013 for 
oversight and audit of programs, activities, and projects under 
this title.

           RECOVERY ACT ACCOUNTABILITY AND TRANSPARENCY BOARD

      The conference agreement provides $84,000,000 for the 
Recovery Act Accountability and Transparency Board, instead of 
$14,000,000 as provided by the House and $7,000,000 as provided 
by the Senate. Funding will support activities related to 
accountability, transparency, and oversight of spending under 
the Act. Funds may be transferred to support the operations of 
the Recovery Independent Advisory Panel established under 
section 1541 of the Act and for technical and administrative 
services and support provided by the General Services 
Administration. Funds may also be transferred to the Office of 
Management and Budget for coordinating and overseeing the 
implementation of the reporting requirements established under 
section 1526 of the Act. Funds may be transferred not less than 
15 days following the notification of such transfer to the 
Committees on Appropriations of the House of Representatives 
and the Senate.

                     SMALL BUSINESS ADMINISTRATION

                         SALARIES AND EXPENSES

      The conference agreement provides $69,000,000 for 
Salaries and Expenses of the Small Business Administration, 
instead of $84,000,000 as proposed by the Senate. The House did 
not include funds for this account. Of the amount provided, 
$24,000,000 is for marketing, management, and technical 
assistance under the Microloan program, $20,000,000 is for 
improving, streamlining, and automating information technology 
systems related to lender processes and lender oversight, and 
$25,000,000 is for administrative expenses to ensure the 
efficient and effective management of small business programs.

                      Office of Inspector General

      The conference agreement provides $10,000,000 for the 
Office of Inspector General, as proposed by the House and the 
Senate. Funds are made available through September 30, 2013 for 
oversight and audit of programs, activities, and projects under 
this title.

                 Surety Bond Guarantees Revolving Fund

      The conference agreement provides $15,000,000 for the 
Surety Bond Guarantees Revolving Fund, as proposed by the 
Senate. The House did not include funds for this account.

                     Business Loans Program Account

      The conference agreement provides $636,000,000 for the 
Business Loans Program Account, instead of $430,000,000 as 
proposed by the House and $621,000,000 as proposed by the 
Senate. Of this amount, $6,000,000 is for the cost of direct 
loans provided under the Microloan program. The remaining 
$630,000,000 will implement the fee reductions and new loan 
guarantee authorities under sections 501 and 506 of this title.

        Administrative Provisions--Small Business Administration

      Section 501 authorizes temporary fee reductions or 
eliminations in the 7(a) loan guarantee program and the 504 
loan program. The Senate proposed similar language.
      Section 502 authorizes up to a 90 percent Small Business 
Administration guarantee on 7(a) loans. The House proposed 
similar language.
      Section 503 authorizes the establishment of a SBA 
Secondary Market Guarantee Authority to provide a Federal 
guarantee for pools of first lien 504 loans that are to be sold 
to third-party investors. The House proposed similar language.
      Section 504 authorizes SBA to refinance community 
development loans under its 504 program and revises the job 
creation goals of the program. The House and the Senate 
proposed similar language.
      Section 505 simplifies the maximum leverage limits and 
aggregate investment limits required of Small Business 
Investment Companies. The House and the Senate proposed similar 
language.
      Section 506 authorizes the Small Business Administration 
to carry out a program to provide loans on a deferred basis to 
viable small business concerns that have a qualifying small 
business loan and are experiencing immediate financial 
hardship.
      Section 507 requires the Government Accountability Office 
to report to Congress on the implementation of the Small 
Business Administration provisions. The House proposed a 
similar provision.
      Section 508 provides an increase in the surety bond 
maximum amount and modifies size standards. The Senate proposed 
similar language.
      Section 509 establishes a secondary market lending 
authority within the Small Business Administration. The House 
proposed similar language.
      The conference agreement does not include a provision, 
proposed by the House, to establish a new lending and 
refinancing authority within the Small Business Administration.
      The conference agreement does not include a provision, 
proposed by the Senate, regarding the 7(a) loan maximum amount.
      The conference agreement does not include a provision, 
proposed by the Senate, regarding definitions under the heading 
``Small Business Administration'' in this title. The conference 
agreement includes provisions relating to definitions of terms 
within the individual sections.

               TITLE VI--DEPARTMENT OF HOMELAND SECURITY

              Office of the Under Secretary for Management

      The conferees provide $200,000,000 for the Office of the 
Under Secretary for Management instead of $198,000,000 as 
proposed by the Senate and no funding proposed by the House. 
These funds are for planning, design, and construction costs 
necessary to consolidate the Department of Homeland Security 
(DHS) headquarters. DHS estimates that this project will create 
direct employment opportunities for 32,800 people in the 
region, largely within the construction and renovation 
industry. The conferees include bill language as proposed by 
the Senate to require an expenditure plan.

                      Office of Inspector General

      The conferees provide $5,000,000 for the Office of 
Inspector General (OIG) as proposed by the Senate instead of 
$2,000,000 as proposed by the House. Funding is available until 
September 30, 2012. These funds shall be used for oversight and 
audit programs, grants, and projects funded in this Title. The 
OIG estimates that this funding will provide for approximately 
25 temporary federal positions and 40 contractor positions.

                   U.S. Customs and Border Protection

                         SALARIES AND EXPENSES

      The conferees provide $160,000,000 for U.S. Customs and 
Border Protection (CBP) Salaries and Expenses instead of 
$100,000,000 as proposed by the House and $198,000,000 as 
proposed by the Senate. This includes $100,000,000 for the 
procurement and deployment of new or replacement non-intrusive 
inspection (NII) systems, and $60,000,000 for tactical 
communications. DHS estimates that funding for NII systems will 
create 148 new government and private sector jobs, and funding 
for tactical communications will create an estimated 319 
contract positions, as well as manufacturing and systems 
software jobs. The conferees include bill language as proposed 
by the Senate to require an expenditure plan.

        BORDER SECURITY FENCING, INFRASTRUCTURE, AND TECHNOLOGY

      The conferees provide $100,000,000 for Border Security 
Fencing, Infrastructure, and Technology instead of $200,000,000 
as proposed by the Senate and no funding proposed by the House. 
The conferees include bill language as proposed by the Senate 
to require an expenditure plan.

                              CONSTRUCTION

      The conferees provide $420,000,000 for Construction, 
instead of $150,000,000 as proposed by the House and 
$800,000,000 as proposed by the Senate. The conferees include 
bill language as proposed by the Senate to make funding 
available for planning, management, design, alteration, and 
construction of land ports of entry that are owned by U.S. 
Customs and Border Protection. Up to five percent of these 
funds may be used to enhance management and oversight of this 
construction. DHS estimates that this project will create 
employment for 4,584 people in the border communities, largely 
within the construction and renovation industry. The conferees 
include bill language as proposed by the Senate to require an 
expenditure plan.

                U.S. Immigration and Customs Enforcement

                        AUTOMATION MODERNIZATION

      The conferees provide $20,000,000 for Automation 
Modernization instead of $27,800,000 as proposed by the Senate 
and no funding proposed by the House. U.S. Immigration and 
Customs Enforcement has estimated this investment will create 
more than 120 new jobs related to the planning, manufacture, 
programming and installation of this equipment. The conferees 
include bill language as proposed by the Senate to require an 
expenditure plan.

                 Transportation Security Administration

                           AVIATION SECURITY

      The conferees provide $1,000,000,000 for Aviation 
Security as proposed by the Senate instead of $500,000,000 as 
proposed by the House. This funding shall be used to procure 
and install checked baggage explosives detection systems and 
checkpoint explosives detection equipment. The Assistant 
Secretary of the Transportation Security Administration (TSA) 
should prioritize the award of these funds based on risk to 
accelerate the installation at locations with completed design 
plans. Funds must be competitively awarded. TSA estimates that 
this funding will create about 3,537 manufacturing and 
construction jobs as well as a small number of Federal 
positions.
      The conferees include bill language as proposed by the 
Senate to require an expenditure plan. Consistent with 
direction provided previously for fiscal year 2009, if a new 
requirement occurs after the expenditure plan is submitted, TSA 
shall reassess and reallocate these funds after notifying the 
Committees on Appropriations. In addition, TSA shall brief the 
Committees quarterly on these expenditures.

                              Coast Guard

              ACQUISITION, CONSTRUCTION, AND IMPROVEMENTS

      The conferees provide $98,000,000 for Acquisition, 
Construction, and Improvements instead of $450,000,000 as 
proposed by the Senate and no funding proposed by the House. 
This funding cannot be used for pre-acquisition survey, design, 
or construction of a new polar icebreaker. The conferees 
include bill language as proposed by the Senate to require an 
expenditure plan. The Coast Guard estimates that this funding 
will create or preserve at least 435 jobs.

                         ALTERATION OF BRIDGES

      The conferees provide $142,000,000 for Alteration of 
Bridges instead of $150,000,000 as proposed by the House and 
$240,400,000 as proposed by the Senate. The conferees include 
bill language as proposed by the Senate to require an 
expenditure plan. The Coast Guard estimates that this funding 
will create approximately 1,200 jobs.

                  Federal Emergency Management Agency

                        STATE AND LOCAL PROGRAMS

      The conferees provide $300,000,000 for State and Local 
Programs instead of $950,000,000 as proposed by the Senate and 
no funding proposed by the House. Of the amount made available, 
$150,000,000 is for Public Transportation Security Assistance 
and Railroad Security Assistance, including Amtrak security, 
and $150,000,000 is for Port Security Grants. The Secretary 
shall not require a cost share for grants provided for Public 
Transportation Security Assistance and Railroad Security 
Assistance (including Amtrak security). In addition, the bill 
includes a provision waiving the cost-share for Port Security 
Grants funded in this Act.
      The conferees expect funding provided under this heading 
to support nearly 2,900 jobs based on an estimate by the 
Department of Homeland Security. The conferees direct that 
priority be given to construction projects which address the 
most significant risks and can also be completed in a timely 
fashion.

                     FIREFIGHTER ASSISTANCE GRANTS

      The conferees provide $210,000,000 for firefighter 
assistance grants instead of $500,000,000 as proposed by the 
Senate and no funding proposed by the House. As proposed by the 
Senate, funds are provided for modifying, upgrading or 
constructing non-Federal fire stations, not to exceed 
$15,000,000 per grant. The conferees expect this funding to 
support nearly 2,000 jobs based on an estimate by the 
Department of Homeland Security.

            DISASTER ASSISTANCE DIRECT LOAN PROGRAM ACCOUNT

      The conferees include bill language as proposed by the 
Senate allowing loans related to calendar year 2008 disasters 
to exceed $5,000,000 and equal not more than 50 percent of the 
operating budget of local governments if that local government 
has suffered a loss of 25 percent or more in tax revenues. The 
House bill contained no comparable provision.

                       EMERGENCY FOOD AND SHELTER

      The conferees provide $100,000,000 for Emergency Food and 
Shelter as proposed by the Senate instead of $200,000,000 as 
proposed by the House.

                     GENERAL PROVISIONS--THIS TITLE

      Section 601. The conferees include a provision, as 
proposed by the Senate, related to Hurricanes Katrina and Rita 
establishing an arbitration panel under the Federal Emergency 
Management Agency.
      Section 602. The conferees include a provision, as 
proposed by the Senate, regarding the Federal Emergency 
Management Agency's hazard mitigation grant program related to 
Hurricanes Katrina and Rita.
      Section 603. The conferees include a provision, as 
proposed by the House, waiving the cost-share for grants under 
section 34 of the Federal Fire Prevention and Control Act of 
1974 for fiscal years 2009 and 2010.
      Section 604. The conferees include and modify a 
provision, as proposed by the House, related to the procurement 
of apparel and textile products by the Department of Homeland 
Security. This language is modeled after the Berry Amendment 
(10 U.S.C. 2533a), which has required the Department of Defense 
to purchase domestically-manufactured textiles and apparel.

                         PROVISIONS NOT ADOPTED

      The conferees do not include section 1114 of the House 
bill, which relates to the E-Verify program; and sections 7001 
through 7004 of the House bill, which House relate to 
authorization of the Basic Pilot system.

    TITLE VII--DEPARTMENT OF THE INTERIOR, ENVIRONMENT, AND RELATED 
                                AGENCIES

                       DEPARTMENT OF THE INTERIOR

                       Bureau of Land Management

                   MANAGEMENT OF LANDS AND RESOURCES

      The conference agreement provides $125,000,000 for 
management of lands and resources instead of $135,000,000 
proposed by the Senate; there was no House proposal. The 
conference agreement provides flexibility to the agency in 
determining the allocation of this funding among various 
program activities and sub-activities. The conferees encourage 
that selection of individual projects be based on a 
prioritization process which weighs the capacity of proposals 
to create the largest number of jobs in the shortest period of 
time and which creates lasting value for the American public. 
While maximizing jobs, the Bureau should consider projects on 
all Bureau managed lands including deferred maintenance, 
abandoned mine and well site remediation, road and trail 
maintenance, watershed improvement, and high priority habitat 
restoration.

                              CONSTRUCTION

      The conference agreement provides $180,000,000 for 
construction as proposed by the Senate instead of $325,000,000 
proposed by the House. The conference agreement provides 
flexibility to the agency in determining the allocation of this 
funding among various program activities and sub-activities. 
The conferees encourage that selection of individual projects 
be based on a prioritization process which weighs the capacity 
of proposals to create the largest number of jobs in the 
shortest period of time and which creates lasting value for the 
American public. While maximizing jobs, the Bureau should 
consider priority road, bridge, and trail repair or 
decommissioning, critical deferred maintenance projects, 
facilities construction and renovation, and remediation of 
abandoned mine and well sites on all Bureau managed lands.

                        WILDLAND FIRE MANAGEMENT

      The conference agreement provides $15,000,000 for 
wildland fire management as proposed by the Senate; there was 
no House proposal. The funds should be used for high priority 
hazardous fuels reduction projects on Federal lands.

                United States Fish and Wildlife Service

                          RESOURCE MANAGEMENT

      The conference agreement provides $165,000,000 for 
resource management, as proposed by the Senate; there was no 
House proposal for this account. The conference agreement 
provides flexibility to the agency in determining the 
allocation of this funding among various program activities and 
sub-activities. The conferees encourage that selection of 
individual projects be based on a prioritization process which 
weighs the capacity of proposals to create the largest number 
of jobs in the shortest period of time and which creates 
lasting value for the American public. While maximizing jobs, 
the Service should consider priority critical deferred 
maintenance and capital improvement projects, trail 
maintenance, and habitat restoration on National Wildlife 
Refuges, National Fish Hatcheries, and other Service 
properties.

                              CONSTRUCTION

      The conference agreement provides $115,000,000 for 
construction instead of $110,000,000 as proposed by the Senate 
and $300,000,000 as proposed by the House. The conference 
agreement provides flexibility to the agency in determining the 
allocation of this funding among various program activities and 
sub-activities. The conferees encourage that selection of 
individual projects be based on a prioritization process which 
weighs the capacity of proposals to create the largest number 
of jobs in the shortest period of time and which creates 
lasting value for the American public. While maximizing jobs, 
the Service should consider priority construction, 
reconstruction and repair, critical deferred maintenance and 
capital improvement projects, road maintenance, energy 
conservation projects and habitat restoration on National 
Wildlife Refuges, National Fish Hatcheries and other Service 
properties.

                         National Park Service

                 OPERATION OF THE NATIONAL PARK SYSTEM

      Appropriates $146,000,000 for operation of the national 
park system instead of $158,000,000, as proposed by the Senate. 
The House bill included all National Park Service funding under 
the construction account. Eligible projects to be funded within 
this account include but are not limited to repair and 
rehabilitation of facilities and other infrastructure, trail 
maintenance projects and other critical infrastructure needs. 
The conference agreement provides flexibility to the agency in 
determining the allocation of this funding among various 
program activities and sub-activities. The conferees encourage 
that selection of individual projects by the National Park 
Service be based on a prioritization process which weighs the 
capacity of proposals to create the largest number of jobs in 
the shortest period of time and which creates lasting value for 
the Park System and its visitors.

                          CENTENNIAL CHALLENGE

      No funds are included for the Centennial Challenge 
program in the conference agreement. The House bill included 
$100,000,000 for this program. No funding was included by the 
Senate.

                       HISTORIC PRESERVATION FUND

      $15,000,000 has been included for historic preservation 
grants for historically black colleges and universities as 
authorized by the Historic Preservation Fund Act, as amended. 
Projects will be selected competitively but the agreement 
waives matching requirements for grants made with these funds. 
The House bill included $15,000,000 for this activity under the 
``Construction'' account. The Senate bill did not fund this 
program.

                              CONSTRUCTION

      Appropriates $589,000,000 for Construction as proposed by 
the Senate instead of $1,700,000,000 as proposed by the House. 
Eligible projects include but are not limited to major facility 
construction, road maintenance, abandoned mine cleanup, 
equipment replacement, and preservation and rehabilitation of 
historic assets. The conference agreement provides flexibility 
to the agency in determining the allocation of this funding 
among various program activities and sub-activities. The 
conferees encourage that selection of individual projects by 
the National Park Service be based on a prioritization process 
which weighs the capacity of proposals to create the largest 
number of jobs in the shortest period of time and which creates 
lasting value for the Park System and its visitors. Funding for 
historically black colleges and universities has been provided 
under the Historic Preservation Fund account.

                    United States Geological Survey

                 SURVEYS, INVESTIGATIONS, AND RESEARCH

      The conference agreement provides $140,000,000 for 
Surveys, Investigations and Research instead of $135,000,000 
proposed by the Senate and $200,000,000 proposed by the House. 
The Survey should consider a wide variety of activities, 
including repair, construction and restoration of facilities; 
equipment replacement and upgrades including stream gages, 
seismic and volcano monitoring systems; national map 
activities; and other critical deferred maintenance and 
improvement projects which can maximize jobs and provide 
lasting improvement to our Nation's science capacity.

                        Bureau of Indian Affairs

                      OPERATION OF INDIAN PROGRAMS

      The conference agreement includes $40,000,000 for the 
operation of Indian programs as proposed by the Senate; there 
was no House proposal for this account. While maximizing jobs, 
the Bureau should fund workforce development and training 
programs and the housing improvement program.

                              CONSTRUCTION

      The conference agreement provides $450,000,000 for 
construction instead of $522,000,000 as proposed by the Senate 
and $500,000,000 as proposed by the House. The conference 
agreement provides flexibility to the agency in determining the 
allocation of this funding among various program activities and 
sub-activities. The conferees encourage that selection of 
individual projects be based on a prioritization process which 
weighs the capacity of proposals to create the largest number 
of jobs in the shortest period of time and which creates 
lasting value for the American public. While maximizing jobs, 
the Bureau should consider priority critical facility 
improvement and repair, repair and restoration of roads, school 
replacement, school improvement and repair and detention center 
maintenance and repair.

                     INDIAN GUARANTEED LOAN PROGRAM

      The conference agreement includes $10,000,000 for 
construction as proposed by the Senate; there was no House 
proposal for this account.

                          Departmental Offices

                            Insular Affairs

                       ASSISTANCE TO TERRITORIES

      The conference agreement provides no funding for 
Assistance to Territories as proposed by the House instead of 
$62,000,000 proposed the Senate. The managers note that the 
territories receive funding under many of the infrastructure 
programs elsewhere in this bill.

                      Office of Inspector General

                         SALARIES AND EXPENSES

      The conference agreement provides $15,000,000 for the 
Office of Inspector General as proposed by the Senate in this 
title and as proposed by the House as part of Title I, section 
1107. In order to provide adequate oversight of the Department 
of the Interior, these funds are available through September 
30, 2012.

                        Department-Wide Programs

                    CENTRAL HAZARDOUS MATERIALS FUND

      The conference agreement does not provide funding for the 
central hazardous materials fund as proposed by the House 
instead of $20,000,000 proposed by the Senate.

                    Environmental Protection Agency

      The amended bill includes $7,220,000,000 for the 
Environmental Protection Agency instead of $9,420,000,000 as 
proposed by the House and $7,200,000,000 as proposed by the 
Senate. For each account, the amended bill includes provisions 
to fund the Agency's program oversight and management costs. 
The Conferees have included an Administrative Provision which 
makes available until September 30, 2011 the funds provided for 
Agency program management and oversight and allows funds 
appropriated in the State and Tribal Assistance Grants account 
for that purpose to be transferred to the Environmental 
Programs and Management account, as needed.

                      OFFICE OF INSPECTOR GENERAL

      The amended bill provides $20,000,000 for the Office of 
Inspector General account, as proposed by the House and instead 
of unspecified amounts included in each administrative set 
aside by the Senate. These funds are available until September 
30, 2012.

                     HAZARDOUS SUBSTANCE SUPERFUND

      The amended bill provides $600,000,000 for the Hazardous 
Substance Superfund as proposed by the Senate and instead of 
$800,000,000 as proposed by the House. The funds are limited to 
the Superfund Remedial program, as proposed by the House. The 
bill allows the Administrator to retain up to 3 percent of the 
funds for program management and oversight. The Administrator 
is directed to coordinate oversight activities with the 
Inspector General.

          LEAKING UNDERGROUND STORAGE TANK TRUST FUND PROGRAM

      The amended bill provides $200,000,000 for the Leaking 
Underground Storage Tank Trust Fund Account as proposed by both 
the House and the Senate. The funds are provided for clean up 
of leaking underground storage tanks as authorized by section 
9003(h) of the Solid Waste Disposal Act. The bill allows the 
Administrator to retain up to 1.5 percent of the funds for 
program management and oversight. To expedite use of these 
funds, the bill waives the state matching requirements in 
section 9003(h)(7)(B) of the Solid Waste Disposal Act.

                   STATE AND TRIBAL ASSISTANCE GRANTS

                     (INCLUDING TRANSFERS OF FUNDS)

      The amended bill provides $6,400,000,000 for the State 
and Tribal Assistance Grants account as proposed by the Senate 
and instead of $8,400,000,000 as proposed by the House. The 
amended bill includes the following program funding levels and 
directives:
      Clean Water and Drinking Water State Revolving Funds: The 
amended bill provides $4,000,000,000 for the Clean Water State 
Revolving Funds and $2,000,000,000 for the Drinking Water State 
Revolving Funds. To provide for the Agency's management and 
oversight of these programs, the bill allows the Administrator 
to retain up to 1 percent of the combined total provided for 
the Revolving Funds and provides transfer authority to the 
Environmental Programs and Management account as needed. To 
expedite use of the funds, the bill waives the mandatory 20 
percent State and District of Columbia matching requirements 
for both Revolving Funds.
      To ensure that the funds appropriated herein for the 
Revolving Funds are used expeditiously to create jobs, the 
Conferees have included two important provisions. First, the 
Administrator is directed to reallocate Revolving Fund monies 
where projects are not under contract or construction within 12 
months of the date of enactment. Second, bill language directs 
priority funding to projects on State priority lists that are 
ready to proceed to construction within 12 months of enactment.
      The bill includes language to require that not less than 
50 percent of the capitalization grants each State receives be 
used to provide assistance for additional subsidization in the 
form of forgiveness of principal, negative interest loans, or 
grants, or any combination of these. This provision provides 
relief to communities by requiring a greater Federal share for 
local clean and drinking water projects and provides 
flexibility for States to reach communities that would 
otherwise not have the resources to repay a loan with interest. 
The Conferees expect EPA to strongly encourage the States to 
maximize the use of additional subsidies and to work with the 
States to ensure expedited award of grants under the additional 
subsidy provisions. The Conferees also expect the States to 
continue implementation of their base loan programs funded 
through the annual appropriations bill. The bill does not 
include language proposed by the House that would require a 
specific amount for communities that meet affordability 
criteria set by the Governor. However, the Conferees expect the 
States to target, as much as possible, the additional 
subsidized monies to communities that could not otherwise 
afford an SRF loan.
      The bill requires not less than 20 percent of each 
Revolving Fund be available for projects to address to green 
infrastructure, water and/or energy efficiency, innovative 
water quality improvements, decentralized wastewater treatment, 
stormwater runoff mitigation, and water conservation. The bill 
allows States to use less than 20 percent for these types of 
projects only if the States lack sufficient applications. 
Further, the States must certify to the Agency that they lack 
sufficient, eligible applications for these types of projects 
prior to using funds for conventional projects.
      Consistent with the annual appropriations bill, the 
Conferees have increased the tribal set-aside from the Clean 
Water State Revolving Funds up to 1.5 percent of the total 
amount appropriated. Language has also been included to allow 
EPA to transfer to the Indian Health Service up to 4 percent of 
the tribal set-aside amount in each Revolving Fund for 
administration and management of the projects in Indian 
country. This amount is consistent with the amount allowed by 
law for the States to manage their capitalization grants.
      Language also has been included to prohibit the use of 
both Revolving Funds for the purchase of land or easements and 
to prohibit other set asides under section 1452(k) of the Safe 
Drinking Water Act that do not directly create jobs. To ensure 
that funds are used to create jobs, the bill also limits the 
use of the Revolving Funds to buy, refinance or restructure 
debt incurred prior to October 1, 2008.
      Brownfields Projects: The amended bill provides 
$100,000,000 for Brownfields projects, as proposed by the both 
House and the Senate. The funds are provided to implement 
section 104(k) of the Comprehensive Environmental Response, 
Compensation, and Liability Act (CERCLA), as proposed by the 
House. The bill allows the Administrator to retain up to 3.5 
percent of the funds for program management and oversight, with 
transfer authority to the Environmental Programs and Management 
account as needed. Bill language also waives the cost share 
requirements under section 104(k)(9)(B)(iii) of CERCLA.
      Diesel Emission Reduction Act (DERA) Grants: The amended 
bill provides $300,000,000 for DERA grants as proposed by both 
the House and the Senate. The bill allows the Administrator to 
retain up to 2 percent of the funds for program management and 
oversight, with transfer authority to the Environmental 
Programs and Management account as needed. The amended bill 
does not include language proposed by the Senate to waive the 
statutory limitation on State funds. Instead, the Conferees 
have included language to waive the State Grant and Loan 
Program matching incentive provisions of DERA. The Conferees 
expect the DERA funds provided here to be used on projects that 
spur job creation, while achieving direct, measurable 
reductions in diesel emissions.
      Competitive Grants: The Conferees expect the Agency to 
award both the Brownfields and DERA funds in an expeditious 
manner, consistent with fair and open competition. To ensure 
the additional goal of creating jobs as quickly as possible, 
the Agency may make awards for meritorious and quality 
proposals submitted under competitions that were initiated 
within the past 18 months.

       ADMINISTRATIVE PROVISIONS, ENVIRONMENTAL PROTECTION AGENCY

                     (INCLUDING TRANSFERS OF FUNDS)

      The amended bill includes language that makes set-asides 
for program management and oversight available through 
September 30, 2011. It also allows the funds provided for this 
purpose in the State and Tribal Assistance Grants account to be 
transferred to the Environmental Programs and Management 
account, as needed.

                       DEPARTMENT OF AGRICULTURE

                             Forest Service

                  CAPITAL IMPROVEMENT AND MAINTENANCE

      The conference agreement provides $650,000,000 for 
Capital Improvement and Maintenance as proposed by both the 
House and the Senate. The conference agreement provides 
flexibility to the agency in determining the allocation of this 
funding among various program activities and sub-activities. 
The conferees encourage that selection of individual projects 
be based on a prioritization process which weighs the capacity 
of proposals to create the largest number of jobs in the 
shortest period of time and which creates lasting value for the 
American public. While maximizing jobs, the Service should 
consider projects involving reconstruction, capital 
improvement, decommissioning, and maintenance of forest roads, 
bridges and trails; alternative energy technologies, and 
deferred maintenance at Federal facilities; and remediation of 
abandoned mine sites, and other related critical habitat, 
forest improvement and watershed enhancement projects.

                        WILDLAND FIRE MANAGEMENT

      The conference agreement provides $500,000,000 for 
Wildland Fire Management instead of $485,000,000 proposed by 
the Senate and $850,000,000 proposed by the House. This 
includes $250,000,000 for hazardous fuels reduction, forest 
health protection, rehabilitation and hazard mitigation 
activities on Federal lands and $250,000,000 for cooperative 
activities to benefit State and private lands. The conference 
agreement provides flexibility to the Service to allocate funds 
among existing State and private assistance programs to choose 
programs that provide the maximum public benefit. The Conferees 
encourage the Service to select individual projects based on a 
prioritization process which weighs the capacity of proposals 
to create the largest number of jobs in the shortest period of 
time and to create lasting value for the American public. The 
bill allows the Service to use up to $50,000,000 to make 
competitive grants for the purpose of creating incentives for 
increased use of biomass from federal and non-federal forested 
lands. To better address current economic conditions at the 
state and local level, funds provided for State and private 
forestry activities shall not be subject to matching or cost 
share requirements.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

                         Indian Health Service

                         INDIAN HEALTH SERVICES

      The conference agreement includes $85,000,000 for Indian 
Health Services instead of $135,000,000 as proposed by the 
Senate; the House had no proposal for this account. The funding 
is for Health Information Technology for infrastructure 
development and deployment.

                        INDIAN HEALTH FACILITIES

      The conference agreement includes $415,000,000 for Indian 
Health Facilities instead of $410,000,000 as proposed by the 
Senate and $550,000,000 as proposed by the House. Within this 
amount, $100,000,000 is for maintenance and improvement, 
$68,000,000 is for sanitation facilities construction, 
$227,000,000 is for health care facilities construction, and 
$20,000,000 is for equipment.
      The Indian Health Service is directed to use the funding 
provided for health care facilities construction to complete 
ongoing high priority facilities construction projects.
      The agreement includes language proposed by the Senate 
that exempts the funds provided in this bill for the purchase 
of medical equipment from spending caps carried in the annual 
appropriation bill in order to provide the maximum flexibility 
to the Service in meeting the highest priority needs of the 
tribes.
      Funds are provided for the Department of Health and Human 
Services (HHS) under title VIII (Labor, Health and Human 
Services, and Education) of this Act for the purpose of 
providing oversight capability over all HHS programs, including 
the Indian Health Service.

                         OTHER RELATED AGENCIES

                        Smithsonian Institution

                           FACILITIES CAPITAL

      $25,000,000 is included in the bill for the Smithsonian 
Institution. The House bill included $150,000,000 for the 
Smithsonian and the Senate bill included $75,000,000.

             NATIONAL FOUNDATION ON THE ARTS AND HUMANITIES

                    National Endowment for the Arts

                       GRANTS AND ADMINISTRATION

      The conference agreement includes a total of $50,000,000 
for the National Endowment for the Arts as proposed by the 
House. No funds were included in the Senate bill for this 
purpose.

                     GENERAL PROVISIONS--TITLE VII

               Interior, Environment and Related Agencies

      Sec. 701. The agreement includes language proposed by the 
Senate requiring that agencies receiving funding in the 
Interior and Environment sections of this Act submit a general 
spending plan for these appropriations to the Committees on 
Appropriations within 30 days of enactment and that they submit 
detailed project level information within 90 days of enactment. 
The Conferees further direct that the agencies submit bi-annual 
progress reports on implementation of the provisions of this 
Act under their jurisdiction.
      Sec. 702. Modifies language proposed by the Senate 
requiring that the Secretaries of Interior and Agriculture 
utilize the Public Lands Corps, the Youth Conservation Corps, 
the Job Corps and the Student Conservation Corps where 
practicable. The House bill did not include a similar 
provision.
      Sec. 703. Includes a new general provision not included 
in either the House or Senate bills providing limited transfer 
authority to move not to exceed 10 percent of funds from one 
appropriation to another if such move will increase the number 
of jobs created or the speed with which projects can be 
undertaken. Transfers are limited to accounts within a 
particular agency.
      Administrative and support costs: The Conferees have 
agreed that, except where otherwise provided in the bill or 
this accompanying statement, amounts for administrative and 
support costs associated with the implementation of title VII 
activities of this Act shall not exceed five percent of any 
specific appropriation. The conferees note that this amount is 
a cap and encourage agencies to balance carefully the goal of 
proper management and fiscal prudence when setting funding 
levels for administrative support. In staffing up to handle the 
increased, but temporary, workloads associated with funding 
provided in the bill, it is important that the agencies limit 
the permanent expansion of their workforces and utilize 
temporary, term or contract personnel as much as possible.

   TITLE VIII--DEPARTMENTS OF LABOR, HEALTH AND HUMAN SERVICES, AND 
                    EDUCATION, AND RELATED AGENCIES

                          DEPARTMENT OF LABOR

                 Employment and Training Administration

                    TRAINING AND EMPLOYMENT SERVICES

      The conference agreement includes $3,950,000,000 for 
Workforce Investment Act programs, instead of $4,000,000,000 as 
proposed by the House and $3,250,000,000 as proposed by the 
Senate.
      Within this amount, $2,950,000,000 is provided for 
formula grants to the States for training and employment 
services. These funds are to be allotted to States within 30 
days of enactment. Since these funds will be made available 
during program year 2008, they shall remain available to the 
States only as long as the other funds allotted in that program 
year. The conferees intend for these funds to be spent quickly 
and effectively. To facilitate increased training of 
individuals for high-demand occupations, the conference 
agreement modifies language proposed by the Senate to provide 
the authority for local workforce investment boards to contract 
with institutions of higher education and other eligible 
training providers as long as that authority is not used to 
limit customer choice.
      Within the State formula grant programs, $500,000,000 is 
provided for services for adults. The conference agreement 
includes language proposed by the Senate to ensure that 
supportive services and needs-related payments are available to 
support the employment and training needs of priority 
populations, including recipients of public assistance and 
other low-income individuals.
      For youth services, $1,200,000,000 is provided. The 
conferees are particularly interested in these funds being used 
to create summer employment opportunities for youth and 
language applying the work readiness performance indicator to 
such summer jobs is included as an appropriate measure for 
those activities. Year-round youth activities are also 
envisioned and the age of eligibility for youth services 
provided with the additional funds is extended through age 24 
to allow local programs to reach young adults who have become 
disconnected from both education and the labor market.
      For dislocated worker services $1,250,000,000 is 
provided. The conferees urge the Secretary to provide guidance 
on how States and local workforce areas can establish policies 
that assure that supportive services and needs-related payments 
that may be necessary for an individual's participation in job 
training are a part of the dislocated worker service strategy.
      The conferees believe that the Department should 
integrate reporting on the expenditure of these additional 
formula funds into its regular reporting system, including the 
provision of needs-related payments and supportive services, 
the number of individuals from priority service populations 
participating in employment and training activities, and the 
number of youth engaged in summer employment programs. The 
conferees strongly urge the Department to establish appropriate 
procedures for monitoring the execution of priority of service 
provisions.
      The conference agreement also includes $200,000,000 for 
the dislocated worker assistance national reserve, as proposed 
by the Senate, instead of $500,000,000 as proposed by the 
House. These funds will allow the Secretary of Labor to award 
national emergency grants to respond to plant closings, mass 
layoffs and other worker dislocations. The funds in the 
national reserve are also available for dislocated worker 
activities for the outlying areas, consistent with the 
provisions of the Workforce Investment Act.
      The conference agreement includes $50,000,000 for the 
YouthBuild program, as proposed by the House, instead of 
$100,000,000 as proposed by the Senate. These funds will allow 
for expanded services for at-risk youth, who gain education and 
occupational credentials while constructing or rehabilitating 
affordable housing. The conference agreement includes language 
to allow YouthBuild grantees to serve individuals who have 
dropped out of school and reenrolled in an alternative school, 
if that reenrollment is part of a sequential service strategy.
      The conference agreement includes $750,000,000 for a 
program of competitive grants for worker training and placement 
in high growth and emerging industry sectors, as proposed by 
the House, rather than $250,000,000 for a similar program 
proposed by the Senate. Within the amount provided, 
$500,000,000 is designated for projects that prepare workers 
for careers in energy efficiency and renewable energy as 
described in the Green Jobs Act of 2007. Priority consideration 
for the balance of funds shall be given to projects that 
prepare workers for careers in the health care sector, which 
continues to grow despite the economic downturn. The conferees 
believe that training for wireless and broadband deployment is 
an eligible activity for grants for high growth and emerging 
industry sectors, along with advanced manufacturing and other 
high demand industry sectors identified by local workforce 
areas. In carrying out the program of competitive grants for 
worker training and placement in high growth and emerging 
industry sectors, the conferees expect the Department to use a 
limited portion of the program funds for technical assistance 
and related research.

            COMMUNITY SERVICE EMPLOYMENT FOR OLDER AMERICANS

      The conference agreement includes $120,000,000 for the 
Community Service Employment for Older Americans program, as 
proposed by both the House and the Senate. The economic 
recovery funds are to be distributed to current grantees to 
support additional employment opportunities for low income 
seniors. The wages paid to these low-income seniors will 
provide a direct stimulus to the economies of local 
communities, which will also benefit from the community service 
work performed by participants. The conference agreement 
includes language to allow for the recapture and reobligation 
of such funds, as proposed by the Senate and as authorized 
under Title V of the Older Americans Act.

     STATE UNEMPLOYMENT INSURANCE AND EMPLOYMENT SERVICE OPERATIONS

      The conference agreement includes $400,000,000, as 
proposed by the Senate, instead of $500,000,000 as proposed by 
the House. Within this amount, $250,000,000 is designated for 
reemployment services to connect unemployment insurance 
claimants to employment and training opportunities that will 
facilitate their reentry to employment. The funds provided will 
be distributed by the existing Wagner-Peyser formula, as 
proposed by the Senate, rather than under an alternative 
formula proposed by the House.

                        Departmental Management

                         SALARIES AND EXPENSES

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $80,000,000 within the 
Departmental Management account for worker protection, 
oversight, and coordination activities, as proposed by the 
House. The Senate provided funds for this and other purposes 
through a set-aside of funds available to the Department rather 
than through a direct appropriation. The conference agreement 
modifies language providing the Secretary of Labor with the 
ability to transfer such funds to a number of Department of 
Labor agencies which have responsibility for enforcement of 
worker protection laws that apply to the infrastructure 
investments in this economic recovery bill, and for oversight 
and coordination of recovery activities, including those 
provided for unemployment insurance.

                          OFFICE OF JOB CORPS

      The conference agreement includes $250,000,000 for the 
Office of Job Corps, rather than $300,000,000 as proposed by 
the House and $160,000,000 as proposed by the Senate. The funds 
will support construction and modernization of a network of 
residential facilities serving at-risk youth. The funds will 
allow the Office of Job Corps to move forward on a number of 
ready-to-go rehabilitation and construction projects, including 
those where competitions have already been concluded. The 
conference agreement modifies language proposed by the House to 
allow funds to be used in support of multi-year arrangements 
where such arrangement will result in construction that can 
commence within 120 days of enactment. A portion of the funds 
are available for the operational needs of the Job Corps 
program, including activities to provide additional training 
for careers in the energy efficiency, renewable energy, and 
environmental protection industries.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $6,000,000 for the 
Department of Labor Office of Inspector General, as proposed by 
the House, rather than $3,000,000 as proposed by the Senate. 
These funds will be available through September 30, 2012 to 
support oversight and audit of Department of Labor programs, 
grants, and projects funded in this Act.

                DEPARTMENT OF HEALTH AND HUMAN SERVICES

              Health Resources and Services Administration

                     HEALTH RESOURCES AND SERVICES

      The conference agreement includes $2,500,000,000 for 
health resources and services instead of $2,188,000,000 as 
proposed by the House and $1,958,000,000 as proposed by the 
Senate.
      The conference agreement includes $500,000,000 for 
services provided at community health centers as proposed by 
the House. The Senate did not provide similar funding. These 
funds are to be used to support new sites and service areas, to 
increase services at existing sites, and to provide 
supplemental payments for spikes in uninsured populations. 
Grants for new sites and service areas are to be two years in 
length as startup is phased in. The conferees encourage the 
Health Resources and Services Administration (HRSA) to consider 
supporting currently unfunded but approved community health 
center applications.
      The agreement also includes $1,500,000,000 for 
construction, renovation and equipment, and for the acquisition 
of health information technology systems, for community health 
centers, including health center controlled networks receiving 
operating grants under section 330 of the Public Health Service 
(``PHS'') Act, notwithstanding the limitation in section 
330(e)(3). The House proposed $1,000,000,000 for this activity, 
while the Senate proposed $1,870,000,000.
      No funding is provided for a competitive lease 
procurement to renovate or replace the headquarters building 
for the Public Health Service. The House and Senate proposed 
$88,000,000 for this purpose.
      The conference agreement provides $500,000,000 for health 
professions training programs instead of $600,000,000 as 
proposed by the House. Within this total, $300,000,000 is 
allocated for National Health Service Corps (NHSC) recruitment 
and field activities, with $75,000,000 available through 
September 30, 2011 for extending service contracts and the 
recapture and reallocation of funds in the event that a 
participant fails to fulfill his or her term of service. Twenty 
percent of the NHSC funding shall be used for field operations.
      The remaining $200,000,000 is allocated for all the 
disciplines trained through the primary care medicine and 
dentistry program, the public health and preventive medicine 
program, the scholarship and loan repayment programs authorized 
in Title VII (Health Professions) and Title VIII (Nurse 
Training) of the PHS Act, and grants to training programs for 
equipment. Funds may also be used to foster cross-State 
licensing agreements for healthcare specialists.
      The conference agreement provides that up to 0.5 percent 
of the funds provided in this account may be used for 
administration. HRSA is required to provide an operating plan 
to the Committees on Appropriations of the House of 
Representatives and the Senate within 90 days of enactment of 
this Act describing activities to be supported and timelines 
for expenditure, as well as a report every six months on actual 
obligations and expenditures.

               Centers for Disease Control and Prevention

                DISEASE CONTROL, RESEARCH, AND TRAINING

      The conference agreement does not include funding for 
building and facilities at the Centers for Disease Control and 
Prevention (CDC). The House proposed $462,000,000 and the 
Senate proposed $412,000,000 for this activity.

                     National Institutes of Health

      The conference agreement provides $10,000,000,000 for the 
National Institutes of Health (NIH) as proposed by the Senate 
instead of $3,500,000,000 as proposed by the House. The 
components of this total are as follows:

                 NATIONAL CENTER FOR RESEARCH RESOURCES

      The conference agreement includes $1,300,000,000 for the 
National Center for Research Resources (NCRR) instead of 
$1,500,000,000 as proposed by the House and $300,000,000 as 
proposed by the Senate. Bill language identifies $1,000,000,000 
of this total for competitive awards for the construction and 
renovation of extramural research facilities. The conference 
agreement also provides $300,000,000 for the acquisition of 
shared instrumentation and other capital research equipment. 
The conference agreement includes bill language proposed by the 
House for extramural facilities relating to waiver of non-
Federal match requirements, primate centers, and limitation on 
the term of Federal interest. The conference agreement includes 
language proposed by the House mandating several reporting 
requirements on the use of the funds. The conferees expect that 
NCRR will give priority to those applications that are expected 
to generate demonstrable energy-saving or beneficial 
environmental effects.

                         OFFICE OF THE DIRECTOR

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement provides $8,200,000,000 for the 
Office of the Director instead of $1,500,000,000 as proposed by 
the House and $9,200,000,000 as proposed by the Senate. Of this 
amount, $7,400,000,000 is designated for transfer to Institutes 
and Centers and to the Common Fund instead of $7,850,000,000 as 
proposed by the Senate. The conference agreement adopts the 
Senate guidance that, to the extent possible, the $800,000,000 
retained in the Office of the Director shall be used for 
purposes that can be completed within two years; priority shall 
be placed on short-term grants that focus on specific 
scientific challenges, new research that expands the scope of 
ongoing projects, and research on public and international 
health priorities. Bill language is included to permit the 
Director of NIH to use $400,000,000 of the funds provided in 
this account for the flexible research authority authorized in 
section 215 of Division G of P.L. 110-161.
      The funds available to NIH can be used to enhance central 
research support activities, such as equipment for the clinical 
center or intramural activities, centralized information 
support systems, and other related activities as determined by 
the Director. The conferees intend that NIH take advantage of 
scientific opportunities using any funding mechanisms and 
authorities at the agency's disposal that maximize scientific 
and health benefit. The conferees include bill language 
indicating that the funds provided in this Act to NIH are not 
subject to Small Business Innovation Research and Small 
Business Technology Transfer set-aside requirements.

                        BUILDINGS AND FACILITIES

      The conference agreement provides $500,000,000 for 
Buildings and Facilities as proposed by the House and the 
Senate. Bill language permits funding to be used for 
construction as well as renovation, as proposed by the Senate. 
The House language permitted only renovation. These funds are 
to be used to construct, improve, and repair NIH buildings and 
facilities, including projects identified in the Master Plan 
for Building 10.

               Agency for Healthcare Research and Quality

                    HEALTHCARE RESEARCH AND QUALITY

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $1,100,000,000 for 
comparative effectiveness research, which is the same level as 
proposed by both the House and the Senate. The conference 
agreement uses the term, ``comparative effectiveness 
research'', as proposed by the House and deletes without 
prejudice the term ``clinical'', which was included by the 
Senate. Within the total, $300,000,000 shall be administered by 
the Agency for Healthcare Research and Quality (AHRQ), 
$400,000,000 shall be transferred to the National Institutes of 
Health (NIH), and $400,000,000 shall be allocated at the 
discretion of the Secretary of Health and Human Services.
      The conferees do not intend for the comparative 
effectiveness research funding included in the conference 
agreement to be used to mandate coverage, reimbursement, or 
other policies for any public or private payer. The funding in 
the conference agreement shall be used to conduct or support 
research to evaluate and compare the clinical outcomes, 
effectiveness, risk, and benefits of two or more medical 
treatments and services that address a particular medical 
condition. Further, the conferees recognize that a ``one-size-
fits-all'' approach to patient treatment is not the most 
medically appropriate solution to treating various conditions 
and include language to ensure that subpopulations are 
considered when research is conducted or supported with the 
funds provided in the conference agreement.

                Administration for Children and Families

                   LOW-INCOME HOME ENERGY ASSISTANCE

      The conference agreement does not include funding for the 
Low-Income Home Energy Assistance Program proposed by the 
House. The Senate did not provide funding for this program.

   PAYMENTS TO STATES FOR THE CHILD CARE AND DEVELOPMENT BLOCK GRANT

      The conference agreement includes $2,000,000,000 for the 
Child Care and Development Block Grant, as proposed by both the 
House and Senate. The conference agreement adopts the Senate 
language to make the entire amount available upon enactment, 
instead of the House language to divide the amount by fiscal 
year. The conference agreement also adopts the Senate proposal 
to set aside $255,186,000 of these funds for quality 
improvement activities, of which $93,587,000 shall be for 
activities to improve the quality of infant and toddler care.

                      SOCIAL SERVICES BLOCK GRANT

      The conference agreement does not include funding for the 
Social Services Block Grant proposed by the Senate. The House 
did not provide funding for this program.

                CHILDREN AND FAMILIES SERVICES PROGRAMS

      The conference agreement includes $3,150,000,000 for 
Children and Families Services Programs, instead of 
$3,200,000,000 as proposed by the House and $1,250,000,000 as 
proposed by the Senate. The conference agreement adopts the 
Senate language to make the entire amount available upon 
enactment, instead of the House language to divide the amount 
by fiscal year.
      Within the total provided for Children and Families 
Services Programs, $1,000,000,000 is provided for Head Start as 
proposed by the House, instead of $500,000,000 as proposed by 
the Senate. The Head Start funds shall be allocated according 
to the current statutory formula. The conferees expect the 
Department of Health and Human Services (HHS) to work with Head 
Start grantees in order to manage these resources in order to 
sustain fiscal year 2009 awards through fiscal year 2010.
      The conference agreement also provides $1,100,000,000 for 
Early Head Start as proposed by the House, instead of 
$550,000,000 as proposed by the Senate. These funds will be 
awarded on a competitive basis. The conferees expect HHS to 
manage these resources in order to sustain fiscal year 2009 
awards through fiscal year 2010. The conferees intend for 
regional and American Indian and Alaska Native Early Head Start 
programs and Migrant and Seasonal Head Start programs to 
benefit from the Early Head Start funds, taking into 
consideration the needs of the communities served by such 
programs. The conferees remind the Secretary of the authority 
to temporarily increase or waive the limit on the Federal share 
of a Head Start or Early Head Start grant under the 
circumstances described in the authorizing statute and support 
the Secretary's exercise of that authority where appropriate.
      Within the total provided for Children and Families 
Services Programs, $1,000,000,000 is provided for the Community 
Services Block Grant (CSBG), as proposed by the House, instead 
of $200,000,000 as proposed by the Senate. The conference 
agreement adopts the Senate language to make the entire amount 
available upon enactment, instead of the House language to 
divide the amount by fiscal year. The agreement includes bill 
language requiring States to reserve 1 percent of their 
allocation for benefit coordination services and to distribute 
the remaining funds directly to local eligible entities. It 
also permits States to increase the income eligibility ceiling 
from 125 percent to 200 percent of the Federal poverty level 
for services furnished under the CSBG Act during fiscal years 
2009 and 2010, as proposed by the House. The Senate did not 
propose similar language.
      Within the total provided for Children and Families 
Services Programs, $50,000,000 is provided under section 1110 
of the Social Security Act to establish a new initiative to 
award capacity-building grants directly to nonprofit 
organizations, instead of $100,000,000 for the Compassion 
Capital Fund as proposed by the House. The Senate did not 
propose funds for this purpose in this account. The conferees 
intend that this program will expand the delivery of social 
services to individuals and communities affected by the 
economic downturn. The conferees expect that grantees have 
clear and measurable goals, and must be able to evaluate the 
success of their program.

                        Administration on Aging

                        AGING SERVICES PROGRAMS

      The conference agreement includes $100,000,000 for senior 
meals programs as proposed by the Senate, instead of 
$200,000,000 as proposed by the House. Within this amount, 
$65,000,000 is provided for Congregate Nutrition Services and 
$32,000,000 is provided for Home-Delivered Nutrition Services 
under Title III of the Older Americans Act of 1965, and 
$3,000,000 is provided for Native American nutrition services 
under Title VI of such Act. The conference agreement adopts the 
Senate proposal that makes all of these funds available upon 
enactment.

                        Office of the Secretary

  OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION TECHNOLOGY

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $2,000,000,000 for this 
activity, as proposed by the House. The Senate provided 
$3,000,000,000. The conferees include bill language creating a 
0.25 percent set-aside of the funds provided for the Office of 
the National Coordinator for Health Information Technology for 
management and oversight activities. The House proposed similar 
language. Within the funds provided, the conferees appropriate 
$300,000,000 to support regional or sub-national efforts toward 
health information exchange. The conferees include bill 
language proposed by the House regarding certain operating plan 
requirements for the Office of the National Coordinator.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $17,000,000 for the 
Office of Inspector General instead of $19,000,000 as proposed 
by both the House and Senate. These funds are available until 
September 30, 2012 as proposed by the Senate instead of 
September 30, 2013 as proposed by the House.

            PUBLIC HEALTH AND SOCIAL SERVICES EMERGENCY FUND

      The conference agreement includes $50,000,000 for the 
Public Health and Social Services Emergency Fund (PHSSEF), 
instead of $900,000,000 as proposed by the House. The Senate 
did not propose funding for PHSSEF. Funding is provided to 
improve information technology security at the Department of 
Health and Human Services as proposed by the House--the Senate 
did not propose funding for this activity. As proposed by the 
Senate, the conference agreement does not include funding for 
pandemic influenza preparedness and biomedical advanced 
research and development. The House proposed $420,000,000 for 
pandemic influenza and $430,000,000 for biomedical advanced 
research and development.

                      PREVENTION AND WELLNESS FUND

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $1,000,000,000 for the 
Prevention and Wellness Fund, instead of $3,000,000,000 as 
proposed by the House. The Senate did not propose funding for a 
Prevention and Wellness Fund. As proposed by the House, up to 
0.5 percent of the funds provided may be used for management 
and oversight expenses. Additionally, the conference agreement 
includes language proposed by the House that funding may be 
transferred to other appropriation accounts of the Department 
of Health and Human Services (HHS), as determined by the 
Secretary of HHS to be appropriate.
      Within the total, the conference agreement includes 
$300,000,000 to be transferred to the Centers for Disease 
Control and Prevention (CDC) to carry out the section 317 
immunization program rather than $954,000,000 as proposed by 
the House. The Senate did not propose funding for this 
activity.
      Also within the total, the conference agreement includes 
$50,000,000 to be provided to States for carrying out 
activities to implement healthcare-associated infections (HAI) 
reduction strategies. The House proposed $150,000,000 for 
similar HAI prevention activities. The Senate did not propose 
funding for similar activities.
      Also within the total, the conference agreement includes 
$650,000,000 to carry out evidence-based clinical and 
community-based prevention and wellness strategies authorized 
by the Public Health Service Act, as determined by the 
Secretary, that deliver specific, measurable health outcomes 
that address chronic disease rates. The House proposed 
$500,000,000 for similar activities. The Senate did not propose 
funding for similar activities.

                        DEPARTMENT OF EDUCATION

                    Education for the Disadvantaged

      The conference agreement includes $13,000,000,000 for the 
Education for the Disadvantaged account, as proposed by the 
House. The Senate proposed $12,400,000,000 for this account. 
The total conference agreement includes $10,000,000,000 for 
title I formula grants and $3,000,000,000 for School 
Improvement grants. Both the House and the Senate proposed 
$11,000,000,000 for title I formula grants, but the House 
proposed $2,000,000,000 for School Improvement grants, and the 
Senate proposed $1,400,000,000.
      The conferees intend that these funds should be available 
during school years 2009-2010 and 2010-2011 to help school 
districts mitigate the effect of the recent reduction in local 
revenues and State support for education.
      The conferees specify that within the total provided for 
title I formula grants, $5,000,000,000 shall be allocated 
through the targeted formula and the same amount should be 
allocated through the education finance incentive grant 
formula. This language was proposed by the House and the 
Senate.
      The conferees expect States to use some of the funding 
provided for early childhood programs and activities, as 
proposed by the Senate. The House did not propose similar 
language.
      The conferees direct the Department to encourage States 
to use 40 percent of their School Improvement allocation for 
middle and high schools, as proposed by the Senate. The House 
did not propose similar language.
      Each school district that receives this funding shall 
report to its State educational agency, a school-by-school 
listing of per pupil expenditures, from State and local 
services, during the 2008-2009 academic year, no later than 
December 1, 2009 as proposed by the Senate. Further, the 
conferees require each State to compile and submit this 
information to the Secretary no later than March 1, 2010.

                               Impact Aid

      The conference agreement includes $100,000,000 for the 
Impact Aid account, as proposed by the House. The Senate did 
not propose funding for this account.
      The conferees modify current law, exclusively for the 
purposes of the American Recovery and Reinvestment Act, to 
allow for greater participation of school districts impacted by 
both students whose parents are associated with the military 
and students residing on tribal lands, and to allow funding to 
be better targeted to districts that have ``shovel ready'' 
facility projects, including those that address health and 
safety and ADA compliance issues, among other things.

                      School Improvement Programs

      The conference agreement includes $720,000,000 for the 
School Improvement Programs account, instead of the 
$1,066,000,000 as proposed by the House and $1,070,000,000 as 
proposed by the Senate. Within the total, the conference 
agreement includes $650,000,000 for the Enhancing Education 
through Technology program. Both the House and Senate proposed 
$1,000,000,000 for this program. The conference agreement also 
includes $70,000,000 for Education for the Homeless Children 
and Youth program, which is the same amount proposed by the 
Senate. The House proposed $66,000,000 for this program.
      The conferees intend that these funds should be available 
during school years 2009-2010 and 2010-2011 to help school 
districts mitigate the effect of the recent reduction in local 
revenues and State support for education.
      The amount provided for the Education for Homeless 
Children and Youth programs reflects the conferees' 
understanding of the impact the economic crisis has had on this 
group of disadvantaged students, and their commitment to 
helping mitigate the effects. The Secretary shall provide each 
State a grant that is proportionate to the number of homeless 
students identified as such during the 2007-2008 academic year 
relative to the number of homeless children nationally during 
the same year. States shall award subgrants to local 
educational agencies on a competitive basis, or using a formula 
based on the number of homeless students identified in each 
school district in the State. This language was proposed by the 
Senate; the House did not propose similar language.

                       Innovation and Improvement

      The conference agreement includes $200,000,000 for the 
Innovation and Improvement account, instead of the $225,000,000 
proposed by the House. The Senate did not propose any money for 
this account. All of the funding provided is for the Teacher 
Incentive Fund (TIF) program.
      The conferees require the Institute for Education 
Sciences to conduct a rigorous national evaluation of TIF to 
assess the impact of performance-based teacher and principal 
compensation systems. This language was proposed by the House; 
the Senate did not propose similar language.
      The conferees specify that these funds must be expended 
as directed in the 5th, 6th, and 7th provisos under the 
``Innovation and Improvement'' account in the Department of 
Education Appropriations Act, 2008. This language was proposed 
by the House; the Senate did not propose similar language.
      The conferees provide that 1 percent of the total 
appropriation shall be for management and oversight of the 
Teacher Incentive Fund. This language was proposed by the 
House; the Senate did not propose similar language.
      The conference agreement does not provide funding for the 
Credit Enhancement for Charter Schools program.

                           Special Education

      The conference agreement includes $12,200,000,000 for the 
Special Education account, instead of $13,600,000,000 as 
proposed by the House and $13,500,000,000 as proposed by the 
Senate. Within the total, the conference agreement includes 
$11,300,000,000 for section 611 of part B, $400,000,000 for 
section 619 of part B, and $500,000,000 for part C of IDEA. The 
House proposed $13,000,000,000 for section 611 and $600,000,000 
for part C, whereas the Senate proposed the same amount for 
section 611 and $500,000,000 for part C.
      The conferees intend that these funds should be available 
during school years 2009-2010 and 2010-2011 to help school 
districts mitigate the effect of the recent reduction in local 
revenues and State support for education.
      Within the amount provided for part C of IDEA, the 
Secretary is required to reserve the amount needed for grants 
under section 643(e), and allocate any remaining funds in 
accordance with section 643(c) of IDEA as specified by both the 
House and Senate.
      The conferees provide that the amount set aside for the 
Department of the Interior transfer for Native Americans shall 
be equal to the lesser amount available during fiscal year 
2008, increased by inflation or the percentage increase in the 
funds appropriated under section 611(i) (Secretary of the 
Interior). This language was proposed by the Senate, the House 
did not propose similar language.

            Rehabilitation Services and Disability Research

      The conference agreement includes $680,000,000 for the 
Rehabilitation Services and Disability Research account as 
opposed to $700,000,000 as proposed by the House and 
$610,000,000 as proposed by the Senate. Within the total 
provided, $540,000,000 is available for Vocational 
Rehabilitation State Grants, as opposed to $500,000,000 
proposed by the House and the Senate. The conferees include 
$140,000,000 for Independent Living programs. The House 
proposed $200,000,000 for Independent Living programs, whereas 
the Senate proposed $110,000,000 for Independent Living 
programs. Specifically, of the $140,000,000 available for 
Independent Living programs, the funding is allocated as 
follows: $18,200,000 for State Grants; $87,500,000 for 
Independent Living Centers; and $34,300,000 for Services for 
Older Blind Individuals.

                      Student Financial Assistance

      The conference agreement includes $15,840,000,000 for the 
Student Financial Assistance account as opposed to 
$16,126,000,000 as proposed by the House and $13,930,000,000 as 
proposed by the Senate. Within the total provided, 
$15,640,000,000 shall be available for Pell Grants, and 
$200,000,000 shall be available for Work-Study. The House 
proposed $15,636,000,000 for Pell Grants and $490,000,000 for 
Work-Study; whereas the Senate proposed $13,869,000,000 for 
Pell Grants and no money for Work-Study.
      The conference agreement does not provide funding for 
Perkins Loans.
      The conference agreement specifies that funding is 
available to support a $4,860 maximum Pell Grant award for the 
2009-2010 award year, as specified in the House bill. With the 
additional $490 in mandatory funding, combined with the 
increase in the fiscal year 2009 omnibus, the maximum Pell 
Grant award will be $5,350. This language was proposed by the 
House; the Senate did not propose similar language.

                       Student Aid Administration

      The conference agreement includes $60,000,000 for the 
Student Aid Administration account, as opposed to the 
$50,000,000 as proposed by the House and $0 as proposed by the 
Senate.

                            Higher Education

      The conference agreement includes $100,000,000 for the 
Higher Education account, the same amount proposed by the 
House. The Senate proposed $50,000,000.

                    Institute of Education Sciences

      The conference agreement includes $250,000,000 for the 
Institute of Education Sciences account, as proposed by the 
House. The Senate did not propose any funding for this program. 
Within this total, up to $5,000,000 may be used for State data 
coordinator and for awards to public or private organizations 
or agencies to improve data coordination, as proposed by the 
House.

                        Departmental Management

                    OFFICE OF THE INSPECTOR GENERAL

      The conference agreement includes $14,000,000 for the 
Office of the Inspector General, as proposed by the House and 
the Senate.

                            RELATED AGENCIES

            Corportation for National and Community Service

                           OPERATING EXPENSES

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $160,000,000 for the 
operating expenses of the programs administered by the 
Corporation for National and Community Service (CNCS), which is 
the same level as proposed by both the House and the Senate. 
The conference agreement includes language, as proposed by the 
Senate, permitting funds to be used to provide adjustments to 
awards for which the Chief Executive Officer of CNCS determines 
that a waiver of the Federal share limitation is warranted.
      Within the total provided for Operating Expenses, the 
conference agreement includes the following amounts:
            (1) $89,000,000 shall be used to make additional 
        awards to existing AmeriCorps State and national 
        grantees and to provide adjustments to awards made 
        prior to September 30, 2010 for which the Chief 
        Executive Officer of the CNCS determines that a waiver 
        is warranted the--House proposed similar language with 
        regard to the existing grantees and the Senate proposed 
        similar waiver language;
            (2) $6,000,000 shall be transferred to CNCS 
        ``Salaries and Expenses'' for necessary expenses 
        relating to information technology upgrades, of which 
        up to $800,000 may be used to administer the funds 
        provided for CNCS programs--the House proposed similar 
        language with regard to management and oversight of 
        funds and the Senate proposed similar language with 
        regard to information technology upgrades;
            (3) not less than $65,000,000, as proposed by the 
        Senate, for the AmeriCorps Volunteers in Service to 
        America (VISTA) program--the House did not propose 
        similar language; and,
            (4) up to 20 percent of the funding provided for 
        AmeriCorps State and National grants may be used for 
        national direct grants.
      The conference agreement does not include the funding 
set-asides proposed by the Senate for the National Civilian 
Community Corps, one-time supplement grants to State 
commissions, or national service research activities. The House 
did not propose similar language.

                      Office of Inspector General

      The conference agreement includes $1,000,000 for the 
Office of Inspector General, which is the same level as that 
proposed by both the House and Senate.

                         NATIONAL SERVICE TRUST

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $40,000,000 for the 
National Service Trust (Trust), to be available until expended, 
which is the same level as that proposed by both the House and 
the Senate. The conference agreement includes language that 
allows funds appropriated for the Trust to be invested without 
regard to apportionment requirements. Additionally, bill 
language is included allowing for funds to be transferred to 
the Trust from the Operating Expenses account upon 
determination that such transfer is necessary to support the 
activities of national service participants and after notice is 
transmitted to the Committees on Appropriations of the House of 
Representatives and the Senate.

                     Social Security Administration

                 LIMITATION ON ADMINISTRATIVE EXPENSES

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $1,000,000,000 for the 
Social Security Administration (SSA), instead of $900,000,000 
as proposed by the House and $890,000,000 as proposed by the 
Senate. Funds are provided for both infrastructure improvements 
and critical agency operations.
      Within the amount provided, $500,000,000 is provided for 
a replacement of the SSA National Computer Center (NCC), which 
is nearly 30 years old and will soon be unable to support the 
critical systems necessary to SSA's mission. Funds may also be 
used for the technology costs associated with the new center. 
Language proposed by both the House and Senate is modified to 
provide for critical oversight of the site selection, 
construction and operation of the NCC, and the Committees on 
Appropriations of the House and the Senate expect regular 
updates on the progress on site selection and key construction 
milestones prior to solicitations of bids for these activities.
      Within the amount provided, $500,000,000 is provided for 
processing disability and retirement workloads, including 
information technology acquisitions and research in support of 
such activities. These additional funds will allow SSA to 
process a growing workload of claims in a timely manner and to 
accelerate activities to reduce the backlog of disability 
claims. As the largest repository of electronic medical images 
in the world, SSA has a vital interest in exploring how health 
information technology can be integrated into the disability 
process through the widespread adoption of electronic medical 
records.  The funds provided for agency operations therefore 
include resources for SSA health information technology 
research and activities to facilitate the adoption of 
electronic medical records in disability claims.

                      Office of Inspector General

      The conference agreement includes $2,000,000 for the 
Social Security Administration Office of Inspector General, as 
proposed by the House, rather than $3,000,000 as proposed by 
the Senate. These funds will be available through September 30, 
2012 to support oversight and audit of Social Security 
Administration activities funded in this Act.

                     GENERAL PROVISIONS--THIS TITLE

     ADMINISTRATION AND OVERSIGHT OF DEPARTMENT OF LABOR ACTIVITIES

      The conference agreement includes a provision similar to 
one proposed by the Senate that provides that up to 1 percent 
of the funds made available to the Department of Labor in this 
title may be used for the administration, management, and 
oversight of the programs, grants, and activities funded by 
such appropriation, including the evaluation of the use of such 
funds, subject to the provision of an operating plan. The House 
bill contained a set-aside for similar purposes.

                           MINIMUM WAGE STUDY

      The conference agreement includes a modification of a 
provision proposed by the Senate, requiring the Government 
Accountability Office (GAO) to conduct a study to assess the 
impact of minimum wage increases that have occurred, and are 
scheduled to occur, in American Samoa and the Commonwealth of 
Northern Mariana Islands. To provide sufficient economic 
information for this study, additional Federal agency economic 
data collection in the U.S. territories is required.

  FEDERAL COORDINATING COUNCIL FOR COMPARATIVE EFFECTIVENESS RESEARCH

      The conference agreement includes a general provision 
establishing a Federal Coordinating Council for Comparative 
Effectiveness Research (Council), as proposed by the House. The 
Senate language proposed a similar Council, but included the 
word, ``Clinical'', in the title and throughout the bill 
language. The conference agreement includes language to clarify 
that the purpose of the Council is to reduce duplication of 
comparative effectiveness research activities within the 
Federal government. Duties of the Council are to (1) foster 
coordination of comparative effectiveness and related health 
services research conducted or supported by the Federal 
government; and (2) advise the President and Congress on 
strategies with respect to the infrastructure needs of 
comparative effectiveness research and organizational 
expenditures.
      Additionally, the conference agreement includes language 
that nothing shall be construed to permit the Council to 
mandate coverage, reimbursement, or other policies for any 
public or private payer. Further, the conference agreement 
includes language to clarify that none of the reports submitted 
or recommendations made by the Council shall be construed as 
mandates or clinical guidelines for payment, coverage, or 
treatment.

                   GRANTS FOR IMPACT AID CONSTRUCTION

      The conference agreement authorizes Impact Aid 
construction payments. Neither the House nor Senate included 
this provision.

                         MANDATORY PELL GRANTS

      The conference agreement provides $1,474,000,000 for the 
mandatory part of the Pell Grant program, as proposed by the 
House. The Senate did not propose any funding for this program.
      The additional funding will enable the mandatory add-on 
to be provided in both award years 2009-2010 and 2010-2011, for 
a total maximum Pell Grant award of $5,350 in award year 2009-
2010.

                PROMPT ALLOCATION OF FUNDS FOR EDUCATION

      The conference agreement includes a provision enabling 
the Department of Education to quickly disperse funds provided 
under this Act. Neither the House nor Senate included this 
provision.

                      TITLE IX--LEGISLATIVE BRANCH

                    Government Accountability Office

                         SALARIES AND EXPENSES

      The conference agreement provides $25,000,000 as proposed 
by the House instead of $20,000,000 as proposed by the Senate 
for the Government Accountability Office to hire temporary 
personnel and obtain contract services to support the agency's 
oversight responsibilities under this Act.

                     GENERAL PROVISIONS--THIS TITLE

      Section 901. Charges the Government Accountability Office 
(GAO) with bimonthly reviews and reporting on selected States 
and localities' use of funds provided in this Act. These 
reports are to be posted on the Internet and linked to the 
website established under this Act by the Recovery 
Accountability and Transparency Board. GAO is authorized to 
examine any records related to the obligation and use of funds 
made available in this Act.
      Section 902. Provides GAO authority to examine records 
related to contracts awarded under this Act and to interview 
relevant employees.

          TITLE X--MILITARY CONSTRUCTION AND VETERANS AFFAIRS

      Job creation.--The conferees note that the Associated 
General Contractors of America estimates that each 
$1,000,000,000 in non-residential construction spending will 
create or sustain 28,500 jobs. Based on this estimate and data 
provided by the Department of Defense and the Department of 
Veterans Affairs, the conferees estimate that the construction 
funds and other programs in this title will create or sustain 
97,200 jobs.

                         DEPARTMENT OF DEFENSE

                      Military Construction, Army

      The conferees agree to provide $180,000,000, instead of 
$920,000,000 as proposed by the House and $637,875,000 as 
proposed by the Senate. Within the amount, the conferees agree 
to provide $80,000,000 for child development centers and 
$100,000,000 for warrior transition complexes.

              Military Construction, Navy and Marine Corps

      The conferees agree to provide $280,000,000, instead of 
$350,000,000 as proposed by the House and $990,092,000 as 
proposed by the Senate. Within the amount, the conferees agree 
to provide $100,000,000 for troop housing, $80,000,000 for 
child development centers, and $100,000,000 for energy 
conservation and alternative energy projects.

                    Military Construction, Air Force

      The conferees agree to provide $180,000,000, instead of 
$280,000,000 as proposed by the House and $871,332,000 as 
proposed by the Senate. Within the amount, the conferees agree 
to provide $100,000,000 for troop housing and $80,000,000 for 
child development centers.

                  Military Construction, Defense-Wide

      The conferees agree to provide $1,450,000,000, instead of 
$3,750,000,000 as proposed by the House and $118,560,000 as 
proposed by the Senate. Within the amount, the conferees agree 
to provide $1,330,000,000 for the construction of hospitals and 
$120,000,000 for the Energy Conservation Investment Program.

               Military Construction, Army National Guard

      The conferees agree to provide $50,000,000, instead of 
$140,000,000 as proposed by the House and $150,000,000 as 
proposed by the Senate.

               Military Construction, Air National Guard

      The conferees agree to provide $50,000,000, instead of 
$70,000,000 as proposed by the House and $110,000,000 as 
proposed by the Senate.

                  Military Construction, Army Reserve

      The conferees agree to provide no funds as proposed by 
the Senate, instead of $100,000,000 as proposed by the House.

                  Military Construction, Navy Reserve

      The conferees agree to provide no funds as proposed by 
the Senate, instead of $30,000,000 as proposed by the House.

                Military Construction, Air Force Reserve

      The conferees agree to provide no funds as proposed by 
the Senate, instead of $60,000,000 as proposed by the House.

                   Family Housing Construction, Army

      The conferees agree to provide $34,507,000, instead of no 
funds as proposed by the House and $34,570,000 as proposed by 
the Senate.

             Family Housing Operation and Maintenance, Army

      The conferees agree to provide $3,932,000 as proposed by 
the Senate, instead of no funds as proposed by the House.

                 Family Housing Construction, Air Force

      The conferees agree to provide $80,100,000 as proposed by 
the Senate, instead of no funds as proposed by the House.

          Family Housing Operation and Maintenance, Air Force

      The conferees agree to provide $16,461,000 as proposed by 
the Senate, instead of no funds as proposed by the House.

                       Homeowners Assistance Fund

      The conferees agree to provide $555,000,000, instead of 
no funds as proposed by the House and $410,973,000 as proposed 
by the Senate.

            Department of Defense Base Closure Account 1990

      The conferees agree to provide no funds as proposed by 
the Senate, instead of $300,000,000 as proposed by the House.

                        Administrative Provision

      The conferees agree to include a provision (Sec. 1001) as 
proposed by the Senate, with technical changes, providing for a 
temporary expansion of homeowners assistance to respond to the 
foreclosure and credit crisis.

                     DEPARTMENT OF VETERANS AFFAIRS

                     Veterans Health Administration

                     MEDICAL SUPPORT AND COMPLIANCE

      The conferees agree to provide no funds as proposed by 
the House, instead of $5,000,000 as proposed by the Senate.

                           MEDICAL FACILITIES

      The conferees agree to provide $1,000,000,000, instead of 
$950,000,000 as proposed by the House and $1,370,459,000 as 
proposed by the Senate.

                    National Cemetery Administration

      The conferees agree to provide $50,000,000 as proposed by 
the House, instead of $64,961,000 as proposed by the Senate.

                      Departmental Administration

                       GENERAL OPERATING EXPENSES

      The conferees agree to provide $150,000,000 for a 
temporary increase in claims processing staff, instead of no 
funds as proposed by the House and $1,125,000 as proposed by 
the Senate for contract administration.

                     INFORMATION TECHNOLOGY SYSTEMS

      The conferees agree to provide $50,000,000 for the 
Veterans Benefits Administration, instead of no funds as 
proposed by the House and $195,000,000 as proposed by the 
Senate.

                      OFFICE OF INSPECTOR GENERAL

      The conferees agree to provide $1,000,000 as proposed by 
the House, instead of $4,400,000 as proposed by the Senate.

                      CONSTRUCTION, MAJOR PROJECTS

      The conferees agree to provide no funds as proposed by 
the House, instead of $1,105,333,000 as proposed by the Senate.

                      CONSTRUCTION, MINOR PROJECTS

      The conferees agree to provide no funds as proposed by 
the House, instead of $939,836,000 as proposed by the Senate.

       GRANTS FOR CONSTRUCTION OF STATE EXTENDED CARE FACILITIES

      The conferees agree to provide $150,000,000, instead of 
no funds as proposed by the House and $257,986,000 as proposed 
by the Senate.

                        Administrative Provision

      The conferees agree to include a provision (Sec. 1002) 
authorizing the Filipino Veterans Equity Compensation Fund.

                      DEPARTMENT OF DEFENSE--CIVIL

                       Cemeterial Expenses, Army

                         SALARIES AND EXPENSES

      The conferees agree to provide no funds as proposed by 
the House, instead of $60,300,000 as proposed by the Senate.

       TITLE XI--STATE, FOREIGN OPERATIONS, AND RELATED PROGRAMS

                          DEPARTMENT OF STATE

                   Administration of Foreign Affairs

                    DIPLOMATIC AND CONSULAR PROGRAMS

      The conference agreement includes $90,000,000 for urgent 
domestic facilities requirements for passport and training 
functions, the same amount as proposed by the Senate. The House 
did not include any funds for this purpose. Funds under the 
heading are available for obligation through September 30, 
2010.
      The Department of State estimates that these investments 
will create up to 655 jobs in the United States and improve the 
operational and training capabilities of the Department. The 
conference agreement includes funds to expand passport 
agencies, to continue design and begin construction of a 
consolidated security training facility, and to enlarge 
domestic facilities to accommodate increased language training 
requirements for diplomatic and development personnel. The 
conferees direct that funds made available for a consolidated 
security training facility should be obligated in accordance 
with United States General Services Administration procedures.
      The conference agreement requires the Secretary of State 
to submit to the Committees on Appropriations a detailed 
spending plan for funds made available under the heading not 
later than 90 days after enactment of this Act. For passport 
agencies, the spending plan is to be developed in consultation 
with the Department of Homeland Security and the General 
Services Administration to coordinate and/or co-locate such 
agencies with other Federal facilities, to the extent feasible. 
Funds provided shall be subject to the regular notification 
procedures of the Committees on Appropriations.

                        CAPITAL INVESTMENT FUND

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $290,000,000 for 
immediate information technology security and upgrades to 
support mission-critical operations, instead of $276,000,000 as 
proposed by the House and $228,000,000 as proposed by the 
Senate. Funds under the heading are available for obligation 
through September 30, 2010.
      Within the funds made available under the heading, the 
conference agreement directs that up to $38,000,000 shall be 
transferred to, and merged with, funds made available under the 
heading ``Capital Investment Fund'' of the United States Agency 
for International Development (USAID) for immediate information 
technology investments. The conferees direct that the Inspector 
General of USAID allocate sufficient resources to conduct 
oversight of the transferred funds.
      The Department of State and USAID estimate that these 
investments will create at least 400 jobs in the United States 
and improve the security, efficiency, and capability of 
Department of State and USAID information technology systems. 
These investments will address the critical requirement of 
establishing back-up information management facilities in the 
United States to protect the systems from mission failures, 
enhance cyber-security, and secure immediate hardware and 
software upgrades.
      The conference agreement includes language requiring the 
Secretary of State and the USAID Administrator to coordinate 
information technology systems, where appropriate, in order to 
increase efficiencies and eliminate redundancies. Such 
coordination should factor in the costs, service requirements, 
and program needs of both agencies and should include efforts 
to co-locate backup information management facilities and 
improve cyber-security.
      The conference agreement requires the Secretary of State 
and the USAID Administrator to submit to the Committees on 
Appropriations, not later than 90 days after enactment of this 
Act, a detailed spending plan for funds made available under 
the heading. Funds provided shall be subject to the regular 
notification procedures of the Committees on Appropriations.

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement includes $2,000,000 for the 
Office of Inspector General to conduct oversight of the funds 
made available to the Department of State by this Act, instead 
of $1,500,000 as proposed by the Senate. The House bill did not 
include a separate appropriation for this purpose. Funds 
provided are available for obligation through September 30, 
2010.

                       International Commissions

 INTERNATIONAL BOUNDARY AND WATER COMMISSION, UNITED STATES AND MEXICO 
                              CONSTRUCTION

                     (INCLUDING TRANSFER OF FUNDS)

      The conference agreement includes $220,000,000 for 
immediate repair and rehabilitation requirements in the water 
quantity program, instead of $224,000,000 as proposed by the 
House and Senate. Funds are available for obligation through 
September 30, 2010.
      These funds will be used for immediate infrastructure 
upgrades along 506 miles of flood control levees to 
rehabilitate the following projects identified by the 
International Boundary and Water Commission--United States and 
Mexico in their fiscal year 2009 budget request as unfunded 
needs: Rio Grande Flood Control System; Safety of Dams; 
Colorado Boundary; and Capacity Preservation. The Department of 
State estimates that these investments will create 305 jobs in 
the United States.
      Within the amount provided, the conference agreement 
provides that up to $2,000,000 may be transferred to, and 
merged with, funds made available under the heading ``Salaries 
and Expenses'' of the Commission. The conference agreement also 
requires the Secretary of State to submit to the Committees on 
Appropriations, not later than 90 days after enactment of this 
Act, a detailed spending plan for funds made available under 
the heading. Funds provided shall be subject to the regular 
notification procedures of the Committees on Appropriations.

           UNITED STATES AGENCY FOR INTERNATIONAL DEVELOPMENT

                  Funds Appropriated to the President

                        CAPITAL INVESTMENT FUND

      The conference agreement does not include a direct 
appropriation under this heading of $58,000,000 as proposed by 
the Senate. Instead, the agreement directs the transfer to 
USAID of up to $38,000,000, from funds made available in this 
Act under the heading ``Capital Investment Fund'' of the 
Department of State, for immediate information technology 
investments. The House bill did not include funds for this 
purpose. Funds transferred are subject to the regular 
notification procedures of the Committees on Appropriations.

   OPERATING EXPENSES OF THE UNITED STATES AGENCY FOR INTERNATIONAL 
                              DEVELOPMENT

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement does not include $500,000 under 
this heading, as proposed by the Senate. The Office of 
Inspector General of the United States Agency for International 
Development is directed to conduct oversight of the funds 
transferred in this Act to USAID from within available funds.

   TITLE XII--TRANSPORTATION AND HOUSING AND URBAN DEVELOPMENT, AND 
                            RELATED AGENCIES

                      DEPARTMENT OF TRANSPORTATION

                        Office of the Secretary

SUPPLEMENTAL DISCRETIONARY GRANTS FOR A NATIONAL SURFACE TRANSPORTATION 
                                 SYSTEM

      The conference agreement provides $1,500,000,000 instead 
of $5,500,000,000 as proposed by the Senate. The House did not 
include a similar provision. Funds will be used to award grants 
on a competitive basis for projects across all surface 
transportation modes that will have a significant impact on the 
Nation, a metropolitan area or a region. Provisions require the 
Secretary to ensure an equitable geographic distribution of 
funds and an appropriate balance in addressing the needs of 
urban and rural communities.

                    Federal Aviation Administration

           SUPPLEMENTAL FUNDING FOR FACILITIES AND EQUIPMENT

      The conference agreement includes $200,000,000 as 
proposed by the Senate. The House did not include a similar 
provision. Within the funds provided, $50,000,000 is included 
to upgrade the Federal Aviation Administration's (FAA) power 
systems; $50,000,000 is included to modernize aging en route 
air traffic control centers; $80,000,000 to replace air traffic 
control towers and TRACONs; and, $20,000,000 is included to 
install airport lighting, navigation and landing equipment.

                       GRANTS-IN-AID FOR AIRPORTS

      The conference agreement provides $1,100,000,000 as 
proposed by the Senate instead of $3,000,000,000 as proposed by 
the House. Funds will be used by the Federal Aviation 
Administration to provide discretionary airport grants to 
repair and improve critical infrastructure at our nation's 
airports. These investments will serve to provide important 
safety and capacity benefits.

                     Federal Highway Administration

                   HIGHWAY INFRASTRUCTURE INVESTMENT

      The conference agreement provides $27,500,000,000, 
instead of $30,000,000,000 as proposed by the House and 
$27,060,000,000 as proposed by the Senate. Funds are 
distributed by formula, with a portion of the funds within each 
State being suballocated by population areas. Set asides are 
also provided for: management and oversight; Indian reservation 
roads; park roads and parkways; forest highways; refuge roads; 
ferry boats; on-the-job training programs focused on 
minorities, women, and the socially and economically 
disadvantaged; a bonding assistance program for minority and 
disadvantaged businesses; Puerto Rico and the territories; and 
environmentally friendly transportation enhancements.

                    Federal Railroad Administration

    CAPITAL ASSISTANCE FOR HIGH SPEED RAIL CORRIDORS AND INTERCITY 
                         PASSENGER RAIL SERVICE

      The conference agreement provides $8,000,000,000 instead 
of $300,000,000 as proposed by the House and $2,250,000,000 as 
proposed by the Senate. The conferees appropriated funds for 
purposes outlined in both the Capital Assistance to States and 
the High Speed Passenger Rail program under a combined heading. 
The conferees have provided the Secretary flexibility in 
allocating resources between the programs to advance the goal 
of deploying intercity high speed rail systems in the United 
States. The Capital Assistance to States program first received 
funding in fiscal year 2008. The High Speed Passenger Rail 
program is a new initiative recently authorized under the 
Passenger Rail Investment and Improvement Act of 2008.

     CAPITAL GRANTS TO THE NATIONAL RAILROAD PASSENGER CORPORATION

      The conference agreement provides $1,300,000,000 instead 
of $800,000,000 as proposed by the House and $850,000,000 as 
proposed by the Senate. Of the total funds appropriated, the 
conferees provide $450,000,000 for capital grants for security 
improvements to include life safety improvements. The conferees 
also provide that no more than 60% of the remaining funds shall 
be spent for capital improvements on the Northeast Corridor.

                     Federal Transit Administration

                       TRANSIT CAPITAL ASSISTANCE

      The conference agreement provides $6,900,000,000 instead 
of $8,400,000,000 as proposed by the Senate and $7,500,000,000 
as proposed by the House. Within the total amount, 80 percent 
of the funds shall be provided through the Federal Transit 
Administration's (FTA) urbanized formula; 10 percent shall be 
provided through FTA's rural formula; and 10 percent shall be 
provided through FTA's growing states and high density formula. 
In addition, the conference agreement provides 2.5 percent of 
the rural funds for tribal transit needs and includes 
$100,000,000 (instead of $200,000,000 as proposed by the 
Senate) for discretionary grants to public transit agencies for 
capital investments that will assist in reducing the energy 
consumption or greenhouse gas emissions of their public transit 
agencies.

                FIXED GUIDEWAY INFRASTRUCTURE INVESTMENT

      The conference agreement provides $750,000,000 instead of 
$2,000,000,000 as proposed by the House. The Senate did not 
include a similar provision. These funds will be distributed 
through an existing authorized formula for capital projects to 
modernize or improve existing fixed guideway systems, including 
purchase and rehabilitation of rolling stock, track, equipment 
and facilities. It is estimated that the state-of-good-repair 
capital backlog for existing fixed guideway systems is nearly 
$50 billion.

                       CAPITAL INVESTMENT GRANTS

      The conference agreement provides $750,000,000 instead of 
$2,500,000,000 as proposed by the House. The Senate did not 
include a similar provision. The funds will be distributed on a 
discretionary basis for New Starts and Small Starts projects 
that are already in construction or are nearly ready to begin 
construction.

                        Maritime Administration

         SUPPLEMENTAL GRANTS FOR ASSISTANCE TO SMALL SHIPYARDS

      The conference agreement provides $100,000,000 for grants 
to small shipyards as proposed by the Senate. The House did not 
include a similar provision.

                      Office of Inspector General

                         SALARIES AND EXPENSES

      The conference agreement provides $20,000,000 as proposed 
by the House and the Senate.

            GENERAL PROVISION--DEPARTMENT OF TRANSPORTATION

      Section 1201 ensures continued State investment in 
certain identified programs for which the State receives 
funding in this Act and requires grant recipients to report 
regularly on the use of those funds as proposed by the House. 
The Senate did not include a similar provision.
      The conference agreement does not include a provision as 
proposed by the Senate which extends the Federal Transit 
Administration's contingent commitment authority.

              DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

                       Public and Indian Housing

                      PUBLIC HOUSING CAPITAL FUND

      The conference agreement provides $4,000,000,000, instead 
of $5,000,000,000 as proposed by both the House and the Senate. 
This funding will assist public housing authorities in 
rehabilitating and retrofitting public housing units, including 
increasing the energy efficiency of units and making critical 
safety repairs. Of the funding provided, $3,000,000,000 will be 
distributed to public housing authorities through the existing 
formula and $1,000,000,000 will be awarded through a 
competitive process.

                  NATIVE AMERICAN HOUSING BLOCK GRANTS

      The conference agreement provides $510,000,000, as 
proposed by the Senate, instead of $500,000,000, as proposed by 
the House. This funding will rehabilitate and improve energy 
efficiency in housing units maintained by Native American 
housing programs. Half of the funding will be distributed by 
formula and half will be competitively awarded to projects that 
can be started quickly.

                   Community Planning and Development

                       COMMUNITY DEVELOPMENT FUND

      The conference agreement provides $3,000,000,000, of 
which $1,000,000,000 is appropriated for the Community 
Development Block Grant program and $2,000,000,000 is available 
for the Neighborhood Stabilization Program. This funding is 
provided instead of the $5,190,000,000 proposed by the House. 
Funding was not provided in the Senate. The Neighborhood 
Stabilization Program funding will assist states, local 
governments, and nonprofits in the purchase and rehabilitation 
of foreclosed, vacant properties in order to create more 
affordable housing and reduce neighborhood blight.

                  HOME INVESTMENT PARTNERSHIPS PROGRAM

      The conference agreement provides $2,250,000,000, as 
proposed by the Senate, instead of $1,500,000,000, as proposed 
by the House. Funds are provided to coordinate with the Low 
Income Housing Tax Credit to fill financing gaps caused by the 
collapse of the tax credit market and to jumpstart stalled 
housing development projects, thereby creating jobs.

        SELF-HELP AND ASSISTED HOMEOWNERSHIP OPPORTUNITY PROGRAM

      The conference agreement does not provide funding for 
this account. The House proposed $10,000,000 for this account, 
but the Senate did not propose funding under this heading.

                      HOMELESSNESS PREVENTION FUND

      The conference agreement provides $1,500,000,000, as 
proposed by both the House and the Senate. Funding will provide 
short term rental assistance, housing relocation, and 
stabilization services for families who may become homeless due 
to the economic crisis. Funds are distributed by formula.
      The conference agreement directs the Secretary of HUD to 
submit a report to the House and Senate Committees on 
Appropriations one year after enactment of the Act that details 
how the funding provided in this account has been used to 
alleviate the effects of the Nation's current economic 
recession and prevent homelessness.

                            Housing Programs

  ASSISTED HOUSING STABILITY AND ENERGY AND GREEN RETROFIT INVESTMENTS

      The conference agreement provides $2,250,000,000 as 
proposed by the Senate instead of $2,500,000,000 as proposed by 
the House. Of this amount, $2,000,000,000 will provide full-
year payments to landlords participating in the Section 8 
Project-Based program, and $250,000,000 will support a program 
to upgrade HUD sponsored low-income housing to increase energy 
efficiency, including new insulation, windows, and furnaces.

            Office of Lead Hazard Control and Healthy Homes

      The conference agreement provides $100,000,000, as 
proposed by both the House and the Senate. Funding is provided 
for competitive grants to local governments and nonprofit 
organizations to remove lead-based paint hazards in low-income 
housing. Projects that were highly rated in 2008 competitions 
but were not funded due to constrained resources will be the 
focus of these resources, thereby ensuring that the funds are 
spent quickly and effectively.

                     Management and Administration

                      OFFICE OF INSPECTOR GENERAL

      The conference agreement provides $15,000,000 as proposed 
by the House and Senate. This funding will assist the IG in 
monitoring the use of these funds to ensure that funding 
provided in this bill is used in an effective and efficient 
manner.

    GENERAL PROVISIONS--DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT

      Section 1202 raises the Federal Housing Administration 
(FHA) loan limits for calendar year 2009 to the level set in 
calendar year 2008, as proposed by the House.
      Section 1203 raises the Government Sponsored Enterprise 
(GSE) conforming loan limit for calendar year 2009, as proposed 
by the House.
      Section 1204 raises the Home Equity Conversion Mortgage 
(HECM) loan limit for calendar year 2009, as proposed by the 
House.
      The conference agreement does not include a provision as 
proposed by the Senate regarding changes to the Hope for 
Homeowners program.

               TITLE XIII--HEALTH INFORMATION TECHNOLOGY

Health Information Technology.....................................     1
    Short Title; Table of Contents of Title. (House bill Sec. 
      4001; Senate bill Sec. 1301; Conference agreement Sec. 
      13001)......................................................     1
Subtitle A--Promotion of Health Information Technology............     1
    Part I--Improving Health Care Quality, Safety, and Efficiency.     1
        ONCHIT; Standards Development and Adoption. (House bill 
          Sec. 4101; Senate bill Sec. 13101; Conference agreement 
          Sec. 13101).............................................     1
          Sec. 3000. Definitions..................................     1
          Sec. 3001. Office of the National Coordinator for Health 
           Information Technology.................................     1
          Sec. 3002. HIT Policy Committee.........................     1
          Sec. 3003. HIT Standards Committee......................     1
          Sec. 3004. Process for Adoption of endorsed 
           Recommendations; Adoption of Initial Set of Standards, 
           Implementation Specifications, and Certification 
           Criteria...............................................     1
          Sec. 3005. Application and Use of Adopted Standards and 
           Implementation Specifications by Federal Agencies......     1
          Sec. 3006. Voluntary Application and Use of Adopted 
           Standards and Implementation Specifications by Private 
           Entities...............................................     1
          Sec. 3007. Federal Health Information Technology........     1
          Sec. 3008. Transitions..................................     1
          Sec. 3009. Relation to HIPAA Privacy and Security Law...     1
          Sec. 3010. Authorization for Appropriations.............     1
        Technical Amendment. (House bill Sec. 4102; Senate bill 
          Sec. 13102; Conference agreement Sec. 13102)............     1
    Part II--Application and Use of Adopted Health Information 
      Technology Standards; Reports...............................     1
        Coordination of Federal Activities with Adopted Standards 
          and Implementation Specifications. (House bill Sec. 
          4111; Senate bill Sec. 13111; Conference agreement Sec. 
          13111)..................................................     1
        Application to Private Entities. (House bill Sec. 4112; 
          Senate bill Sec. 13112; Conference agreement Sec. 13112)     1
        Study and Reports. (House bill Sec. 4113; Senate bill Sec. 
          1313; Conference agreement Sec. 13113)..................     1
Subtitle B--Testing of Health Information Technology..............     1
    National Institute for Standards and Technology Testing. 
      (House bill Sec. 4201; Senate bill Sec. 13201; Conference 
      agreement Sec. 13201).......................................     1
    Research and Development Programs. (House bill Sec. 4202; 
      Senate bill Sec. 13202; Conference agreement Sec. 13202)....     1
Subtitle C--Incentives for the Use of Health Information 
    Technology....................................................     1
    Part I--Grants and Loans Funding..............................     1
        Grant, Loan, and Demonstration Programs. (House bill Sec. 
          4301; Senate bill Sec. 13301; Conference agreement Sec. 
          13301)..................................................     1
          Sec. 3011. Immediate Funding to Strengthen the Health 
           Information Technology Infrastructure..................     1
          Sec. 3012. Health Information Technology Implementation 
           Assistance.............................................     1
          Sec. 3013. State Grants to Promote Health Information 
           Technology.............................................     1
          Sec. 3104. Competitive Grants to States and Indian 
           Tribes for the Development of Loan Programs to 
           Facilitate the Widespread Adoption of Certified EHR 
           Technology.............................................     1
          Sec. 3015. Demonstration Program to Integrate 
           Information Technology into Clinical Education.........     1
          Sec. 3016. Information Technology Professionals in 
           Health Care............................................     1
          Sec. 3017. General Grant and Loan Provision.............     1
          Sec. 3018. Authorization for Appropriations.............     1
Subtitle D--Privacy...............................................     1
        Definitions. (House bill Sec. 4400; Senate bill Sec. 
          13400; Conference agreement Sec. 13400).................     1
    Part I--Improved Privacy Provisions and Security Provisions...     1
        Application of Security Provisions and Penalties to 
          Business Associates of Covered Entities; Annual Guidance 
          on Security Provisions. (House bill Sec. 4401; Senate 
          bill Sec. 13401; Conference agreement Sec. 13401).......     1
        Notification in the Case of Breach. (House bill Sec. 4402; 
          Senate bill Sec. 13402; Conference agreement Sec. 13402)     1
        Education on Health Information Privacy. (House bill Sec. 
          4403; Senate bill Sec. 13403; Conference agreement Sec. 
          13403)..................................................     1
        Application of Privacy Provisions and Penalties to 
          Business Associates of Covered Entities. (House bill 
          Sec. 4404; Senate bill Sec. 13404; Conference agreement 
          Sec. 13404).............................................     1
        Restrictions on Certain Disclosures and Sales of Health 
          Information; Accounting of Certain Protected Health 
          Information Disclosures; Access to Certain Information 
          in Electronic Format. (House bill Sec. 4405; Senate bill 
          Sec. 13405; Conference agreement Sec. 13405)............     1
        Conditions of Certain Contracts as Part of Health Care 
          Operations. (House bill sec. 4406; Senate bill Sec. 
          13406; Conference agreement Sec. 13406).................     1
        Temporary Breach Notification Requirement for Vendors or 
          Personal Health Records and Other Non-HIPAA Covered 
          Entities. (House bill Sec. 4407; Senate bill Sec. 13407; 
          Conference agreement Sec. 13407)........................     1
        Business Associate Contracts Required for Certain 
          Entities. (House bill Sec. 4408; Senate bill Sec. 13408; 
          Conference agreement Sec. 13408)........................     1
        Clarification of Application of Wrongful Disclosures 
          Criminal Penalties. (House bill Sec. 4409; Senate bill 
          Sec. 13409; Conference agreement Sec. 13409.............     1
        Improved Enforcement. (House bill Sec. 4410; Senate bill 
          Sec. 13410; Conference agreement Sec. 13410.............     1
        Audits. (House bill Sec. 4411; Senate bill Sec. 13411; 
          Conference agreement Sec. 13411)........................     1
        Special Rule for Information to Reduce Medication Errors 
          and Improve Patient Safety. (House bill Sec. 4412)......     1
    Part II--Relationship to Other Laws; Regulatory References; 
      Effective Date; Reports.....................................     1
        Relationship to Other Laws. (House bill Sec. 4421; Senate 
          bill Sec. 13421; Conference agreement Sec. 13421).......     1
        Regulatory References. (House bill Sec. 4422; Senate bill 
          Sec. 13422; Conference agreement Sec. 13422)............     1
        Effective Date. (House bill Sec. 4423; Senate bill Sec. 
          13423; Conference agreement Sec. 13423).................     1
        Studies, Reports, Guidance. (House bill Sec. 4424; Senate 
          bill Sec. 13424; Conference agreement Sec. 13424).......     1

                     Health Information Technology

Short Title; Table of Contents of Title. (House bill Sec. 4001; Senate 
        bill Sec. 13101; Conference agreement Sec. 13001)
      This provision specifies that the title may be cited as 
the ``Health Information Technology for Economic and Clinical 
Health Act'' or the ``HITECH Act.''

         Subtitle A--Promotion of Health Information Technology

     PART I--IMPROVING HEALTH CARE QUALITY, SAFETY, AND EFFICIENCY

ONCHIT; Standards Development and Adoption. (House bill Sec. 4101; 
        Senate bill Sec. 13101; Conference agreement Sec. 13101)
Current Law
      There are no existing statutory provisions regarding the 
current Office of the National Coordinator for Health 
Information Technology (ONCHIT) within the Department of Health 
and Human Services (HHS). ONCHIT was created by Executive Order 
13335, signed by the President on April 27, 2004. The National 
Coordinator was instructed to develop, maintain, and direct a 
strategic plan to guide the nationwide implementation of 
interoperable health information technology (HIT) in the public 
and private health care sectors. In 2005, the Secretary created 
the American Health Information Community (AHIC), a public-
private advisory body, to make recommendations to the Secretary 
on how to accelerate the development and adoption of 
interoperable HIT using a market-driven approach. The AHIC 
charter required it to provide the Secretary with 
recommendations to create a successor entity based in the 
private sector. AHIC Successor, Inc. was established in July 
2008 to transition AHIC's accomplishments into a new public-
private partnership. That partnership, the National eHealth 
Collaborative (NeHC), was launched on January 8, 2009.
      ONCHIT awarded a contract to the American National 
Standards Institute (ANSI) to establish a public-private 
collaborative, known as the Healthcare Information Technology 
Standards Panel (HITSP), to harmonize existing HIT standards 
and identify and establish standards to fill gaps. To date, the 
Secretary has recognized over 100 harmonized standards, 
including many that allow interoperability of electronic health 
records (EHRs). To ensure that these standards are incorporated 
into products, a second contract was awarded to the 
Certification Commission for Healthcare Information Technology 
(CCHIT), a private, nonprofit organization created by HIT 
industry associations, which establishes criteria for 
certifying products that use recognized standards. CCHIT has 
certified over 150 ambulatory and inpatient EHR products.
House Bill
      The House bill would establish in the Public Health 
Service Act (PHSA; 42 USC 201 et seq.) a new Title XXX--Health 
Information Technology and Quality, comprising the following 
sections.
      Sec. 3000. Definitions. The House bill defines the 
following terms: certified EHR technology, enterprise 
integration, health care provider, health information, health 
information technology, health plan, HIT Policy Committee, HIT 
Standards Committee, individually identifiable health 
information, laboratory, National Coordinator, pharmacist, 
qualified electronic health record, and state.
      Sec. 3001. Office of the National Coordinator for Health 
Information Technology. The House bill would establish within 
HHS the Office of the National Coordinator for Health 
Information Technology (ONCHIT). The National Coordinator would 
be appointed by the Secretary and report directly to the 
Secretary. The National Coordinator would be charged with the 
following duties. First, the National Coordinator would be 
required to review and determine whether to endorse standards 
recommended by the HIT Standards Committee (described below). 
Second, the National Coordinator would be responsible for 
coordinating HIT policy and programs within HHS and with those 
of other federal agencies and would be a leading member in the 
establishment of the HIT Policy Committee and the HIT Standards 
Committee and act as a liaison among these Committees and the 
federal government. Third, the National Coordinator would be 
required to update the Federal Health IT Strategic Plan 
(developed as of June 3, 2008) to include specific objectives, 
milestones, and metrics with respect to the electronic exchange 
and use of health information, the utilization of an EHR for 
each person in the United States by 2014, and the incorporation 
of privacy and security protections for the electronic exchange 
of an individual's health information, among other things. The 
plan would include measurable outcome goals and the National 
Coordinator would be required to republish the plan, including 
all updates. Fourth, the National Coordinator would maintain 
and update a website to post relevant information about the 
work related to efforts to promote a nationwide health 
information technology infrastructure. Fifth, the National 
Coordinator would be required, in consultation with the 
National Institute of Standards and Technology (NIST), to 
develop a program for the voluntary certification of HIT as 
being in compliance with applicable certification criteria 
adopted by the Secretary. Sixth, the National Coordination 
would have to prepare several reports, including a report on 
any additional funding or authority needed to evaluate and 
develop standards for a nationwide health information 
technology infrastructure; a report on lessons learned from HIT 
implementation by major public and private health care systems; 
a report on the benefits and costs of the electronic use and 
exchange of health information; an assessment of the impact of 
HIT on communities with health disparities and in areas that 
serve uninsured, underinsured, and medically underserved 
individuals; and an estimate of the public and private 
resources needed annually to achieve utilization of an EHR for 
each person in the United States by 2014. Seventh, the National 
Coordinator would be required to establish a national 
governance mechanism for the national health information 
network. Finally, the National Coordinator would be permitted 
to accept or request federal detailees and would be required, 
within 12 months of enactment, to appoint a Chief Privacy 
Officer of the Office of the National Coordinator to advise the 
National Coordinator on privacy, security, and data 
stewardship.
      Sec. 3002. HIT Policy Committee. The House bill would 
establish an HIT Policy committee to make policy 
recommendations to the National Coordinator relating to the 
implementation of a nationwide health information technology 
infrastructure. The duties of the HIT Policy Committee would 
include providing recommendations on a policy framework for the 
development and adoption of a nationwide health information 
technology infrastructure, recommending areas in which 
standards are needed for the electronic exchange and use of 
health information, and recommending an order of priority for 
the development of such standards. The Committee would be 
required to provide recommendations in six areas: (1) 
technologies that protect the privacy and security of 
electronic health information; (2) a nationwide HIT 
infrastructure that enables electronic information exchange; 
(3) nationwide adoption of certified EHRs; (4) EHR technologies 
that allow for an accounting of disclosures; (5) using EHRs to 
improve health care quality; and (6) encryption technologies 
that render individually identifiable health information 
unusable, unreadable, and indecipherable to unauthorized 
individuals. The bill describes other areas that the committee 
might consider, including using HIT to reduce medical errors, 
and telemedicine. The membership of the HIT Policy Committee 
would reflect (at least) providers, ancillary healthcare 
workers, consumers, purchasers, health plans, technology 
vendors, researchers, relevant federal agencies, and 
individuals with technical expertise on health care quality and 
privacy and security. The National Coordinator must ensure that 
the Committee's recommendations are considered in the 
development of policies, and the Secretary would be required to 
publish all of the Committee's recommendations in the Federal 
Register and post them on a website. The provisions of the 
Federal Advisory Committee Act, other than section 14, would 
apply to the HIT Policy Committee.
      Sec. 3003. HIT Standards Committee. The House bill would 
establish an HIT Standards Committee to recommend to the 
National Coordinator standards, implementation specifications, 
and certification criteria for the electronic exchange of 
health information. Duties of the HIT Standards Committee would 
include the development and pilot testing of standards, and 
serving as a forum for the participation of a broad range of 
stakeholders to provide input on the development, 
harmonization, and recognition of standards. Not later than 90 
days after enactment, the HIT Standards Committee would outline 
(and annually update) a schedule for assessing the policy 
recommendations developed by the HIT Policy Committee, and this 
schedule would be published in the Federal Register. In 
addition, the Committee would be required to conduct open 
public meetings and develop a process to allow for public 
comment on this schedule. The membership of the HIT Standards 
Committee would reflect (at least) providers, ancillary 
healthcare workers, consumers, purchasers, health plans, 
technology vendors, researchers, relevant federal agencies, and 
individuals with technical expertise on health care quality and 
privacy and security. The National Coordinator would be 
required to ensure that the Committee's recommendations are 
considered in the development of policies; the Secretary would 
be authorized to provide financial assistance to Committee 
members that are non-profit or consumer advocacy groups in 
order to defray costs associated with participating in the 
Committee's activities, and the Committee would be required to 
publish all its recommendations in the Federal Register and 
post them on a website. The provisions of the Federal Advisory 
Committee Act, other than section 14, would apply to the HIT 
Standards Committee.
      Sec. 3004. Process for Adoption of endorsed 
Recommendations; Adoption of Initial Set of Standards, 
Implementation Specifications, and Certification Criteria. The 
House bill would require the Secretary, within 90 days of 
receiving from the National Coordinator a recommendation for 
HIT standards, implementation specifications, or certification 
criteria, to determine in consultation with representatives of 
other relevant federal agencies, whether or not to propose 
adoption of such standards, implementation specifications, or 
certification criteria. Adoption would be accomplished through 
regulation, whereas a decision by the Secretary not to adopt 
would have to be conveyed in writing to the National 
Coordinator and the HIT Standard Committee. The Secretary would 
be required to adopt, through rulemaking, an initial set of 
standards by December 31, 2009.
      Sec. 3005. Application and Use of Adopted Standards and 
Implementation Specifications by Federal Agencies. The House 
bill refers to Section 4111 (see below) for the requirements 
relating to the application and use of adopted standards by 
federal agencies.
      Sec. 3006. Voluntary Application and Use of Adopted 
Standards and Implementation Specifications by Private 
Entities. The House bill would make the application and use of 
adopted standards voluntary for private entities.
      Sec. 3007. Federal Health Information Technology. The 
House bill would require the National Coordinator to support 
the development, routine updating and provision of qualified 
EHR technology unless the Secretary determined that the needs 
and demands of providers are being substantially and adequately 
met through the marketplace. The National Coordinator would be 
permitted to charge a nominal fee to providers for the adoption 
of this health information technology system.
      Sec. 3008. Transitions. The House bill would provide for 
the transfer of all functions, personnel, assets, liabilities, 
and administrative actions of the existing ONCHIT, created 
under Executive Order 13335, to the new ONCHIT established by 
this Act. Similarly, all functions, personnel, assets, 
liabilities applicable to AHIC Successor, Inc., now operating 
as the National eHealth Collaborative (NeHC), would be 
transferred to the HIT Policy Committee or the HIT Standards 
Committee, as appropriate. Nothing in the bill would require 
the creation of a new entity to the extent that the existing 
ONCHIT is consistent with the provision of Section 3001. 
Similarly, nothing in the bill would prohibit NeHC from 
modifying its charter, duties, membership, and other functions 
to be consistent with Sections 3002 and 3003 in a manner that 
would permit the Secretary to recognize it as the HIT Policy 
Committee or the HIT Standards Committee.
      Sec. 3009. Relation to HIPAA Privacy and Security Law. 
The House bill specifies that this title may not be construed 
as having any effect on the authorities of the Secretary under 
HIPAA privacy and security law.
      Sec. 3010. Authorization for Appropriations. The House 
bill would authorize an appropriation of $250 million for 
FY2009 for implementing this subtitle.
Senate Bill
      The Senate bill includes the same provisions as the House 
bill, other than an authorization for appropriations (Sec. 
3010), but with the following additional language: (1) the 
definition of health care provider is broader than in the House 
bill; (2) the duties of the National Coordinator would include 
reviewing federal HIT investments to ensure that federal HIT 
programs are meeting the objectives of the strategic plan, and 
providing comments and advice on federal HIT programs at the 
request of the Office of Management and Budget (OMB); (3) the 
updated HIT Strategic Plan would include specific plans for 
ensuring that populations with unique needs, such as children, 
are appropriately addressed in the technology design; (4) the 
Secretary would be authorized to recognize an entity or 
entities for harmonizing or updating standards and 
implementation specifications; and (5) the National 
Coordinator's report on resource requirements for achieving 
nationwide EHR utilization by 2014 would include resources for 
health informatics and management education programs to ensure 
a sufficient HIT workforce.
      In addition, the Senate bill would require the HIT Policy 
Committee to provide recommendations on the use of electronic 
systems to collect patient demographic data (consistent with 
the evaluation of health disparities data under Sec. 1809 of 
the Social Security Act) and on technologies and design 
features that address the needs of children and other 
vulnerable populations, instead of providing recommendations on 
encryption technologies as required in the House bill. To the 
list of other areas that the HIT Policy Committee might 
consider, the Senate bill includes methods for allowing 
individuals and their caregivers secure access to protected 
health information. Unlike the House bill, the Senate bill 
specifies the size and composition of the HIT Policy Committee, 
and outlines certain details of its operation.
      The Senate bill includes additional provisions regarding 
the operations of the HIT Standards Committee. They include 
conducting open and public meetings, adopting a consensus 
approach to standards development and harmonization, and 
providing an opportunity for public comment. Unlike the House 
bill, which would make the HIT Standards Committee subject to 
the Federal Advisory Committee Act, the Senate bill would apply 
OMB Circular A-119 (Federal Participation in the Development 
and Use of Voluntary Consensus Standards) to the Committee. It 
also would require the Secretary, as necessary and consistent 
with the HIT Standards Committee's published schedule, to adopt 
additional standards, implementation specifications, and 
certification criteria following the adoption of the initial 
set of requirements by December 31, 2009.
      The Senate bill's transition provision states that 
nothing in the bill would require the creation of a new ONCHIT, 
to the extent that the existing office is consistent with the 
Act. Further, nothing in the bill would prohibit National 
eHealth Collaborative from modifying its structure and function 
in order to be recognized as the HIT Standards Committee. 
Finally, the Senate bill specifies that until recommendations 
are made by the HIT Policy Committee, recommendations of the 
HIT Standards Committee would have to be consistent with the 
most recent recommendations of AHIC Successor, Inc.
Conference Agreement
      The conference agreement is largely similar to the 
provisions in both bills. Here are some additions or 
distinctions:
Sec. 3000.
      Definitions. The conference agreement includes a broader 
definition of health care provider, including additions by the 
Senate and House. The conference agreement clarified the 
definition of health information technology to include internet 
based products and HIT aimed at usage by patients. The term 
``qualified electronic health record'' includes computerized 
provider order entry systems.
Sec. 3001.
      Office of the National Coordinator of Health Information 
Technology. The duties of the National Coordinator include the 
review of federal health information technology investments 
from the Senate bill.
      The elements of the strategic plan developed by the 
National Coordinator include the Senate language regarding 
strategies to enhance increase prevention and coordination of 
community resources and plans for ensuring that populations 
with unique needs are addressed in technology design, as 
appropriate.
      The section on harmonization included in the Senate bill 
was modified and moved to Section 3003 and ensures that 
harmonization standards or updates developed by other entities 
can be recognized by the HIT Standards Committee.
      The conference agreement retains the intent of the Senate 
language requiring the National Coordinator to estimate 
resources needed to establish a sufficient health information 
technology workforce.
      To the extent that this section calls the National 
Coordinator to ensure that every person in the United States 
have an EHR by 2014, this goal is not intended to require 
individuals to receive services from providers that have 
electronic health records and is aimed at having the National 
Coordinator take steps to help providers adopt electronic 
health records. This provision does not constitute a legal 
requirement on any patient to have an electronic health record. 
For religious or other reasons, non-traditional health care 
providers may also choose not to use an electronic health 
record.
Sec. 3002.
      HIT Policy Committee. The conference agreement includes 
the House language on areas required for consideration 
regarding security of transmitted individually identifiable 
health information and includes the Senate language regarding 
collection of demographic data and modified the Senate language 
regarding technology to address the needs of children.
      The language on other areas of consideration includes the 
Senate language regarding methods to facilitate secure access 
by an individual to their protected health information and 
modified the Senate language regarding access to such 
information by a family member, caregiver, or guardian acting 
on behalf of a patient.
      The conference agreement adopted the Senate specifics on 
the membership of the HIT Policy Committee. The conference 
agreement modified the language by increasing the members 
appointed by the Secretary and those representing patients or 
consumers and modified the Senate language regarding 
participation on the Committee and to allow the Secretary to 
fill seats if membership has not been filled by 45 days after 
enactment.
Sec. 3003.
      HIT Standards Committee. The Conference report includes 
provisions from the House and Senate bills. The principal 
changes from the House-passed bill are: (1) there is a new 
provision allowing the Standards Committee to recognize 
harmonized standards from an outside entity; (2) there is a new 
provision requiring balanced membership and that no single 
sector unduly influence the recommendations or procedures of 
the committee; and (3) there is a new provision requiring the 
involvement of outside experts with relevant expertise. The 
principal change from the Senate-passed bill is that the 
Standards Committee is subject to the Federal Advisory 
Committee Act.
Sec. 3004.
      Process for Adoption of endorsed Recommendations; 
Adoption of Initial Set of Standards, Implementation 
Specifications, and Certification Criteria. The Conference 
report includes provisions from the House and Senate bills. The 
principal change from the House-passed bill and the Senate-
passed bill is that there is explicit authority to allow the 
Secretary to issue the initial set of standards as interim 
final rules. This clarification should not be read to impact 
the authority or discretion of the Secretary in future 
regulations regarding standards.
Sec. 3005.
      Application and Use of Adopted Standards and 
Implementation Specifications by Federal Agencies. The 
conference report includes this provision unaltered.
Sec. 3006.
      Voluntary Application and Use of Adopted Standards and 
Implementation Specifications by Private Entities. The 
Conference report contains the same policy as the House and 
Senate bills, with language modified for technical purposes.
Sec. 3007.
      Federal Health Information Technology. The Conference 
report includes provisions from the House and Senate bills. The 
principal change from the House-passed bill is that the 
Secretary is authorized to ``make available'' rather than 
``provide'' the technology specified under the Section. The 
principal change from the Senate-passed bill is that only the 
Secretary is charged with making the assessment of market 
failure.
Sec. 3008.
      Transitions. The Conference report contains the same 
policy as the House and Senate bill, with language modified for 
technical purposes.
Sec. 3009.
      Relation to HIPAA Privacy and Security Law. The 
Conference report contains the same policy as the House and 
Senate bills, with language modified for technical purposes. In 
addition, the conference report includes a provision clarifying 
the discretion of the Secretary.
Sec. 3010.
      Authorization for Appropriations. The Conference report 
does not include this section.
Technical Amendment. (House bill Sec. 4102; Senate bill Sec. 13102; 
        Conference agreement Sec. 13102)
Current Law
      Under HIPAA, the definition of a health plan (42 U.S.C. 
1320(d)(5)) includes Parts A, B, and C of the Medicare program.
House Bill
      The House bill would amend the HIPAA definition of health 
plan to include Medicare Part D.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.

 Part II--Application and Use of Adopted Health Information Technology 
                           Standards; Reports

Coordination of Federal Activities with Adopted Standards and 
        Implementation Specifications. (House bill Sec. 4111; Senate 
        bill Sec. 13111; Conference agreement Sec. 13111)
Current Law
      No provisions; however, in August 2006, the President 
issued Executive Order 13410 committing federal agencies that 
purchase and deliver health care to require the use of HIT that 
is based on interoperability standards recognized by the 
Secretary.
House Bill
      The House bill would require federal agencies that 
implement, acquire, or upgrade HIT systems for the electronic 
exchange of health information to use HIT systems and products 
that meet the standards adopted by the Secretary under this 
Act. The President would be required to ensure that federal 
activities involving the collection and submission of health 
information are consistent with such standards within three 
years of their adoption.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Application to Private Entities. (House bill Sec. 4112; Senate bill 
        Sec. 13112; Conference agreement Sec. 13112)
Current Law
      No provisions.
House Bill
      The House bill would require health care payers and 
providers that contract with the federal government to use HIT 
systems and products that meet the standards adopted by the 
Secretary under this Act.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Study and Reports. (House bill Sec. 4113; Senate bill Sec. 13113; 
        Conference agreement Sec. 13113)
Current Law
      No provisions.
House Bill
      The House bill would require the Secretary, within two 
years and annually thereafter, to report to Congress on efforts 
to facilitate the adoption of a nationwide system for the 
electronic exchange of health information; to conduct a study, 
not later than two years after enactment, that examines methods 
to create efficient reimbursement incentives for improving 
health care quality in Federally qualified health centers, 
rural health clinical and free clinics; and to conduct a study, 
not later than 24 months after enactment, of matters relating 
to the potential use of new aging services technology to assist 
seniors, individuals with disabilities and their caregivers 
throughout the aging process.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.

          Subtitle B--Testing of Health Information Technology

National Institute for Standards and Technology Testing. (House bill 
        Sec. 4201; Senate bill Sec. 13201; Conference agreement Sec. 
        13201)
Current Law
      No provisions; however, ONCHIT is working with the 
National Institute for Standards and Technology (NIST) on 
testing HIT standards. NIST is assisting with the HITSP 
standards harmonization process and with CCHIT's certification 
activities.
House Bill
      The House bill would require NIST, in coordination with 
the HIT Standards Committee, to test HIT standards, as well as 
support the establishment of a voluntary testing program by 
accredited testing laboratories.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Research and Development Programs. (House bill Sec. 4202; Senate bill 
        Sec. 13202; Conference agreement Sec. 13202)
Current Law
      No provisions.
House Bill
      The House bill would require NIST, in consultation with 
the National Science Foundation and other federal agencies, to 
award competitive grants to universities (or research 
consortia) to establish multidisciplinary Centers for Health 
Care Information Enterprise Integration. The purpose of the 
Centers would be to generate innovative approaches to the 
development of a fully interoperable national health care 
infrastructure, as well as to develop and use HIT. The bill 
requires the National High-Performance Computing Program to 
coordinate federal research and development programs related to 
the deployment of HIT.
Senate Bill
      The Senate would authorize but not require the National 
High-Performance Computing Program to review federal research 
and development programs relating to the deployment of HIT.
Conference Agreement
      The conference agreement has the Senate language with an 
amendment. The Conference agreement retains the House and 
Senate language directing NIST to award competitive grants to 
universities to establish multidisciplinary Centers for Health 
Care Information Enterprise Integration. With respect to the 
National High-Performance Computing Program, the agreement 
notes that the ongoing work of the National Information 
Technology Research and Development (NITRD) program authorized 
by section 101 of the High-Performance Computing Act of 1991 
(15 U.S.C. 5511) shall include health information technology 
research and development.

  Subtitle C--Incentives for the Use of Health Information Technology

                    PART I--GRANTS AND LOANS FUNDING

Grant, Loan, and Demonstration Programs. (House bill Sec. 4301; Senate 
        bill Sec. 13301; Conference agreement Sec. 13301)
Current Law
      No provisions; however, since 2004, the Agency for 
Healthcare Research and Quality (AHRQ) has awarded $260 million 
to support and stimulate investment in HIT. AHRQ-funded 
projects, many of which are focused on rural and underserved 
populations, cover a broad range of HIT tools and systems 
including EHRs, personal health records (a term that refers to 
health information collected by and under the control of the 
patient), e-prescribing, privacy and security, quality 
measurement, and Medicaid technical assistance.
House Bill
      The House bill would amend PHSA Title XXX (as added by 
this Act) by adding a new Subtitle B--Incentives for the Use of 
Information Technology.
      Sec. 3011. Immediate Funding To Strengthen the Health 
Information Technology Infrastructure. The House bill would 
require the Secretary, using funds appropriated under Section 
3018 and in a manner consistent with the National Coordinator's 
strategic plan, to invest in HIT so as to promote the use and 
exchange of electronic health information. The Secretary must, 
to the greatest extent practicable, ensure that the funds are 
used to acquire HIT that meets current standards and 
certification criteria. Funds would be administered through 
different agencies with relevant expertise, including ONCHIT, 
AHRQ, CMS, the Centers for Disease Control and Prevention 
(CDC), and the Indian Health Service (IHS), to support the 
following: (1) HIT architecture to support the secure 
electronic exchange of information; (2) electronic health 
records for providers not eligible for HIT incentive payments 
under Medicare and Medicaid; (3) training and dissemination of 
information on best practices to integrate HIT into health care 
delivery; (4) telemedicine; (5) interoperable clinical data 
repositories; (6) technologies and best practices for 
protecting health information; and (7) HIT use by public health 
departments. The Secretary must invest $300 million to support 
regional health information exchanges, and may use funds to 
carry out other activities authorized under this Act and other 
relevant laws.
      Sec. 3012. Health Information Technology Implementation 
Assistance. The House bill would require the National 
Coordinator, in consultation with NIST and other agencies with 
experience in IT services, to establish an HIT extension 
program to assist providers in adopting and using certified EHR 
technology. The Secretary would be required to create an HIT 
Research Center to serve as a forum for exchanging knowledge 
and experience, disseminating information on lessons learned 
and best practices, providing technical assistance to health 
information networks, and learning about using HIT in medically 
underserved communities.
      The Secretary also would be required to support HIT 
Regional Extension Centers, affiliated with nonprofit 
organizations, to provide assistance to providers in the 
region. Priority would be given to public, nonprofit, and 
critical access hospitals, community health centers, individual 
and small group practices, and entities that serve the 
uninsured, underinsured, and medically underserved individuals. 
Centers would be permitted to receive up to 4 years of funding 
to cover up to 50% of their capital and annual operating and 
maintenance expenditures. The Secretary would be required, 
within 90 days of enactment, to publish a notice describing the 
program and the availability of funds. Each regional center 
receiving funding would be required to submit to a biennial 
evaluation of its performance against specified objectives. 
Continued funding after two years of support would be 
contingent on receiving a positive evaluation.
      Sec. 3013. State Grants To Promote Health Information 
Technology. The National Coordinator would be authorized to 
award planning and implementation grants to states or qualified 
state-designated entities to facilitate and expand electronic 
health information exchange. To qualify as a state-designated 
entity, an entity would have to be a nonprofit organization 
with broad stakeholder representation on its governing board 
and adopt nondiscrimination and conflict of interest policies. 
In order to receive an implementation grant, a state or 
qualified state-designated entity would have to submit a plan 
describing the activities to be carried out (consistent with 
the National Coordinator's strategic plan) to facilitate and 
expand electronic health information exchange. The Secretary 
would be required annually to evaluate the grant activity under 
this section and implement the lessons learned from each 
evaluation in the subsequent round of awards in such a manner 
as to realize the greatest improvement in health care quality, 
decrease in costs, and the most effective and secure electronic 
information exchange. Grants would require a match of at least 
$1 for each $10 of federal funds in FY2011, at least $1 for 
each $7 of federal funds in FY2012, and at least $1 for each $3 
of federal funds in FY2013 and each subsequent fiscal year. For 
fiscal years before FY2011, the Secretary would determine 
whether a state match is required.
      Sec. 3104. Competitive Grants to States and Indian Tribes 
for the Development of Loan Programs to Facilitate the 
Widespread Adoption of Certified EHR Technology. The House bill 
would authorize the National Coordinator to award competitive 
grants to states or Indian tribes to establish loan programs 
for health care providers to purchase certified EHR technology, 
train personnel in the use of such technology, and improve the 
secure electronic exchange of health information. To be 
eligible, grantees would be required to: (1) establish a 
qualified HIT loan fund; (2) submit a strategic plan, updated 
annually, describing the intended uses of the funds and 
providing assurances that loans will only be given to health 
care providers that submit required reports on quality measures 
and use the certified EHR technology supported by the loan for 
the electronic exchange of health information to improve the 
quality of care; and (3) provide matching funds of at least $1 
for every $5 of federal funding. Loans would be repayable over 
a period of up to 10 years. Each year, the National Coordinator 
would be required to provide a report to Congress summarizing 
the annual reports submitted by grantees. Awards would not be 
permitted before January 1, 2010.
      Sec. 3015. Demonstration Program to Integrate Information 
Technology into Clinical Education. The House bill would 
authorize the Secretary to create a demonstration program for 
awarding competitive grants to medical, dental, and nursing 
schools, and to other graduate health education programs to 
integrate HIT into the clinical education of health care 
professionals. To be eligible, grantees would have to submit a 
strategic plan. A grant could not cover more than 50% of the 
costs of any activity for which assistance is provided, though 
the Secretary would have the authority to waive that cost-
sharing requirement. The Secretary would be required annually 
to report to designated House and Senate Committees on the 
demonstrations, with recommendations.
      Sec. 3016. Information Technology Professionals in Health 
Care. The House bill would require the Secretary, in 
consultation with the Director of the National Science 
Foundation, to provide financial assistance to universities to 
establish or expand medical informatics programs. A grant could 
not cover more than 50% of the costs of any activity for which 
assistance is provided, though the Secretary would have the 
authority to waive that cost-sharing requirement.
      Sec. 3017. General Grant and Loan Provision. The 
Secretary would be permitted to require that grantees, within 
one year of receiving an award, report on the effectiveness of 
the activities for which the funds were provided and the impact 
of the project on health care quality and safety. The House 
bill would require the National Coordinator annually to 
evaluate the grant activities under this title and implement 
the lessons learned from each evaluation in the subsequent 
round of awards in such a manner as to realize the greatest 
improvement in the quality and efficiency of health care.
      Sec. 3018. Authorization for Appropriations. The House 
bill would authorize the appropriation of such sums as may be 
necessary for each of FY2009 through FY2013 to carry out this 
subtitle. Amounts so appropriated would remain available until 
expended.
Senate Bill
      The Senate bill includes the same provisions as the House 
bill, but with the following additional language: (1) the list 
of activities for which state implementation grants may be used 
includes establishing models that promote lifetime access to 
health records; and (2) the use of loan funds by providers may 
include upgrading HIT to meet certification criteria.
Conference Agreement
      The Conference report includes the provision from the 
Senate that the use of loan funds by providers may include 
upgrading HIT to meet certification criteria. The Conference 
report does not include the provision from the Senate that the 
list of activities for which state implementation grants may be 
used includes establishing models that promote lifetime access 
to health records.
      The Conference report modifies Section 3011 to no longer 
include a specific description of $300 million in funding for 
promoting regional and sub-national health information 
exchange. This funding is reflected in the corresponding 
sections of the Economic Recovery and Reinvestment Act that 
appropriate funds for activities authorized under this title.
      The Conference report modifies Section 3016 to no longer 
require matching funds from universities participating in this 
program.
      As a result of the incentives and appropriations for 
health information technology provided in this bill, it is 
expected that nonprofit organizations may be formed to 
facilitate the electronic use and exchange of health-related 
information consistent with standards adopted by HHS, and that 
such organizations may seek exemption from income tax as 
organizations described in IRC sec. 501(c)(3). Consequently, if 
a nonprofit organization otherwise organized and operated 
exclusively for exempt purposes described in IRC sec. 501(c)(3) 
engages in activities to facilitate the electronic use or 
exchange of health-related information to advance the purposes 
of the bill, consistent with standards adopted by HHS, such 
activities will be considered activities that substantially 
further an exempt purpose under IRC sec. 501(c)(3), 
specifically the purpose of lessening the burdens of 
government. Private benefit attributable to cost savings 
realized from the conduct of such activities will be viewed as 
incidental to the accomplishment of the nonprofit 
organization's exempt purpose.

                          Subtitle D--Privacy

Definitions. (House bill Sec. 4400; Senate bill Sec. 13400; Conference 
        agreement Sec. 13400)
Current Law
      Under the Administrative Simplification provisions of the 
Health Insurance Portability and Accountability Act of 1996 
(HIPAA; P.L. 104-191), Congress set itself a three-year 
deadline to enact health information privacy legislation. If, 
as turned out to be the case, lawmakers were unable to pass 
such legislation before the deadline, the HHS Secretary was 
instructed to promulgate regulations containing standards to 
protect the privacy of individually identifiable health 
information. The HIPAA privacy rule (45 CFR Parts 160, 164) 
established a set of patient rights, including the right of 
access to one's medical information, and placed certain 
limitations on when and how health plans and health care 
providers may use and disclose such protected health 
information (PHI). Generally, plans and providers may use and 
disclose health information for the purpose of treatment, 
payment, and other health care operations without the 
individual's authorization and with few restrictions. In 
certain other circumstances (e.g., disclosures to family 
members and friends), the rule requires plans and providers to 
give the individual the opportunity to object to the 
disclosure. The rule also permits the use and disclosure of 
health information without the individual's permission for 
various specified activities (e.g., public health oversight, 
law enforcement) that are not directly connected to the 
treatment of the individual. For all uses and disclosures of 
health information that are not otherwise required or permitted 
by the rule, plans and providers must obtain a patient's 
written authorization.
      The HIPAA privacy rule also permits health plans and 
health care providers--referred to as HIPAA covered entities--
to share health information with their business associates who 
provide a wide variety of functions for them, including legal, 
actuarial, accounting, data aggregation, management, 
administrative, accreditation, and financial services. A 
covered entity is permitted to disclose health information to a 
business associate or to allow a business associate to create 
or receive health information on its behalf, provided the 
covered entity receives satisfactory assurance in the form of a 
written contract that the business associate will appropriately 
safeguard the information.
      In addition to health information privacy standards, 
HIPAA's Administrative Simplification provisions instructed the 
Secretary to issue security standards to safeguard PHI in 
electronic form against unauthorized access, use, and 
disclosure. The security rule (45 CFR Parts 160, 164) specifies 
a series of administrative, technical, and physical security 
procedures for providers and plans to use to ensure the 
confidentiality of electronic health information.
House Bill
      The House bill defines the following key privacy and 
security terms, in most cases by reference to definitions in 
the HIPAA Administrative Simplification standards: breach, 
business associate, covered entity, disclose, electronic health 
record, electronic medical record, health care operations, 
health care provider, health plan, National Coordinator, 
payment, personal health record, protected health information, 
Secretary, security, state, treatment, use, and vendor of 
personal health records.
Senate Bill
      Same provision.
Conference Agreement
      The Conference report includes some technical 
modifications to the definitions.
      One set of such modifications is included in the 
definition of ``breach''. The Conference report includes a 
technical change to clarify that some inadvertent disclosures 
can constitute a breach under the meaning of this subtitle. The 
conference report clarifies the definition to stipulate that 
disclosures (as defined in 45 CFR 164.103) constitute a breach, 
except as otherwise provided under the definition. The 
definition provides that a disclosure where a person would not 
reasonably be able to retain the information disclosed is not a 
breach. Also not a breach is any inadvertent disclosure from an 
individual who is otherwise authorized to access protected 
health information at a facility operated by a covered entity 
or business associate to another similarly situated individual 
at same facility provided that any such information received as 
a result of such disclosure is not further acquired, accessed, 
used, or disclosed without authorization by any person.
      Another set of such modifications pertains to the 
definition of Personal Health Records. Specifically, the report 
clarifies that Personal Health Records are ``managed, shared, 
and controlled by or primarily for the individual.'' This 
technical change clarifies that PHRs include the kinds of 
records managed by or for individuals, but does not include the 
kinds of records managed by or primarily for commercial 
enterprises, such as life insurance companies that maintain 
such records for their own business purposes. By extension, a 
life insurance company would not be considered a PHR vendor 
under this subtitle. A second clarification in the definition 
of PHR is the use of the term ``PHR individual identifiable 
health information'' (as defined in section 13407(f)(2)). In 
the House and Senate bills, the term ``individually 
identifiable health information'' was used. Use of that term 
would have required that, to be considered a PHR, an electronic 
record would have to include information that was ``created or 
received by a health care provider, health plan, employer, or 
health care clearinghouse.'' However, there is increasing use 
of electronic records that contain personal health information 
that has not been created or received by a health care 
provider, health plan, employer, or health care clearinghouse. 
Use of the term ``individually identifiable health 
information'' would have thus improperly narrowed the scope of 
the term Personal Health Record under this subtitle. Thus, the 
conference report included the broader term, PHR individual 
identifiable health information, so that the scope of the term 
Personal Health Record would properly include electronic 
records of personal health information, regardless of whether 
they have been ``created or received by a health care provider, 
health plan, employer, or health care clearinghouse.''

      PART I--IMPROVED PRIVACY PROVISIONS AND SECURITY PROVISIONS

Application of Security Provisions and Penalties to Business Associates 
        of Covered Entities; Annual Guidance on Security Provisions. 
        (House bill Sec. 4401; Senate bill Sec. 13401; Conference 
        agreement Sec. 13401)
Current Law
      The Security Rule promulgated pursuant to the Health 
Insurance Portability and Accountability Act (HIPAA) include 
three sets of safeguards: administrative, physical, and 
technical, required of covered entities (providers, health 
plans and healthcare clearinghouses). Administrative safeguards 
include such functions as assigning or delegating security 
responsibilities to employees, as well as security training 
requirements. Physical safeguards are intended to protect 
electronic systems and data from threats, environmental 
hazards, and unauthorized access. Technical safeguards are 
primarily IT functions used to protect and control access to 
data.
      HIPAA permits business associates (those who perform 
business functions for covered entities) to create, receive, 
maintain or transmit electronic health information on behalf of 
that covered entity, provided the covered entity receives 
satisfactory assurance in the form of a written contract that 
the business associate will implement administrative, 
technical, and physical safeguards that reasonably and 
appropriately protect the information.
      Violations cannot be enforced directly against business 
associates. Although providers and health plans are not liable 
for, or required to monitor, the actions of their business 
associates, if it finds out about a material breach or 
violation of the contract by a business associate, it must take 
reasonable steps to remedy the situation, and, if unsuccessful, 
terminate the contract. If termination is not feasible, the 
covered entity must notify HHS.
House Bill
      The House bill would apply the HIPAA security standards 
and the civil and criminal penalties for violating those 
standards to business associates in the same manner as they 
apply to the providers and health plans for whom they are 
working. It also would require the Secretary, in consultation 
with stakeholders, to issue annual guidance on the most 
effective and appropriate technical safeguards, including the 
technologies that render information unusable, unreadable, or 
indecipherable recommended by the HIT Policy Committee, for 
protecting electronic health information.
Senate Bill
      Same provision, but without any reference to recommended 
safeguard technologies standards.
Conference Agreement
      The conference agreement includes language contained in 
the House bill.
Notification in the Case of Breach. (House bill Sec. 4402; Senate bill 
        Sec. 13402; Conference agreement Sec. 13402)
Current Law
      The Privacy and Security Rules promulgated pursuant to 
HIPAA does not require covered entities, providers, health 
plans or healthcare clearinghouses, to notify HHS or 
individuals of a breach of the privacy, security, or integrity 
of their protected health information.
House Bill
      In the event of a breach of unsecured PHI that is 
discovered by a covered entity, the House bill would require 
the covered entity to notify each individual whose information 
has been, or is reasonably believed to have been, accessed, 
acquired, or disclosed as a result of such breach. Exceptions 
to the breach notification requirement are for unintentional 
acquisition, access, use or disclosure of protected health 
information. For a breach of unsecured PHI under the control of 
a business associate, the business associate upon discovery of 
the breach would be required to notify the covered entity. 
Notice of the breach would have to be provided to the Secretary 
and prominent media outlets serving a particular area if more 
than 500 individuals in that area were impacted. If the breach 
impacted fewer than 500 individuals, the covered entity 
involved would have to maintain a log of such breaches and 
annually submit it to the Secretary.
      The House bill would define unsecured PHI as information 
that is not secured through the use of a technology or 
methodology identified by the Secretary as rendering the 
information unusable, unreadable, and undecipherable to 
unauthorized individuals.
      The House bill would require the Secretary each year to 
report to appropriate committees in Congress on the number and 
type of breaches, actions taken in response, and 
recommendations made by the National Coordinator on how to 
reduce the number of breaches. Within 180 days of enactment, 
the Secretary would be required to issue interim final 
regulations to implement this section. The provisions in the 
section would apply to breaches discovered at least 30 days 
after the regulations were published.
Senate Bill
      Same provision, but without any reference to recommended 
encryption standards in issuing annual guidance on securing 
PHI.
Conference Agreement
      Similar provision to the House bill with one difference; 
notifications in cases of unintentional disclosures would be 
required unless such disclosure is to an individual authorized 
to access health information at the same facility.
Education on Health Information Privacy. (House bill Sec. 4403; Senate 
        bill Sec. 13403; Conference agreement Sec. 13403)
Current Law
      The Privacy Rule promulgated pursuant to HIPAA requires 
each covered entity to designate a privacy official for the 
development and implementation of its policies and procedures.
House Bill
      Within six months of enactment, the House bill would 
require the Secretary to designate a privacy advisor in each 
HHS regional office to offer education and guidance to covered 
entities and business associates on their federal health 
information privacy and security rights and responsibilities. 
Within 12 months of enactment, OCR would be required to develop 
and maintain a national education program to educate the public 
about their privacy rights and the potential uses of their PHI.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Application of Privacy Provisions and Penalties to Business Associates 
        of Covered Entities. (House bill Sec. 4404; Senate bill Sec. 
        13404; Conference agreement Sec. 13404)
Current Law
      The Privacy Rule promulgated pursuant to HIPAA permits a 
covered entity to disclose health information to a business 
associate or to allow a business associate to create or receive 
health information on its behalf, provided the covered entity 
receives satisfactory assurance in the form of a written 
contract that the business associate will appropriately 
safeguard the information.
      Violations cannot be enforced directly against business 
associates. Although covered entities are not liable for, or 
required to monitor, the actions of their business associates, 
if it finds out about a material breach or violation of the 
contract by a business associate, it must take reasonable steps 
to remedy the situation, and, if unsuccessful, terminate the 
contract. If termination is not feasible, the covered entity 
must notify HHS.
House Bill
      The House bill would apply the HIPAA Privacy Rule, the 
additional privacy requirements, and the civil and criminal 
penalties for violating those standards to business associates 
in the same manner as they apply to the providers and health 
plans for whom they are working.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Restrictions on Certain Disclosures and Sales of Health Information; 
        Accounting of Certain Protected Health Information Disclosures; 
        Access to Certain Information in Electronic Format. (House bill 
        Sec. 4405; Senate bill Sec. 13405; Conference agreement Sec. 
        13405)
Current Law
      The privacy rule established several individual privacy 
rights. First, it established a new federal legal right for 
individuals to see and obtain a copy of their own PHI in the 
form or format requested by the individual, if it is readily 
producible in such form or format. If not, then the information 
must be provided in hard copy or such form or format as agreed 
to by the covered entity and the individual. The covered entity 
can impose reasonable, cost-based fees for providing the 
information. Second, the rule gives individuals the right to 
amend or supplement their own PHI. The covered entity must act 
on an individual's request for amendment within 60 days of 
receiving the request. That deadline may be extended up to 30 
days. Third, individuals have the right to request that a 
covered entity restrict the use and disclosure of their PHI for 
the purposes of treatment, payment, or health care operations. 
However, the covered entity is not required to agree to such a 
restriction unless it has entered into an agreement to 
restrict, in which case it must abide by the agreement. 
Finally, individuals have the right to an accounting of 
disclosures of their PHI by a covered entity during the 
previous six years, with certain exceptions. For example, a 
covered entity is not required to provide an accounting of 
disclosures that have been made to carry out treatment, 
payment, and health care operations.
      The privacy rule incorporates a minimum necessary 
standard. Whenever a covered entity uses or discloses PHI or 
requests such information from another covered entity, it must 
make reasonable efforts to limit the information to the minimum 
necessary to accomplish the intended purpose of the use or 
disclosure. There are a number of circumstances in which the 
minimum necessary standard does not apply; for example, 
disclosures to or requests by a health care provider for 
treatment purposes. The rule also permits the disclosure of a 
``limited data set'' for certain specified purposes (e.g., 
research), pursuant to a data use agreement with the recipient. 
A limited data set, while not meeting the rule's definition of 
de-identified information (see below), has most direct 
identifiers removed and is considered by HHS to pose a low 
privacy risk.
House Bill
      The House bill would give individuals the right to 
receive an electronic copy of their PHI, if it is maintained in 
an electronic health record. Any associated fee charged by the 
covered entity could only cover its labor costs for providing 
the electronic copy. The bill would require a health care 
provider to honor a patient's request that the PHI regarding a 
specific health care item or service not be disclosed to a 
health plan for purposes of payment or health care operations, 
if the patient paid out-of-pocket in full for that item or 
service. The House bill also would give an individual the right 
to receive an accounting of PHI disclosures made by covered 
entities or their business associates for treatment, payment, 
and health care operations during the previous three years, if 
the disclosures were through an electronic health record. 
Within 18 months of adopting standards on accounting of 
disclosures (as required under PHSA Section 3002, as added by 
Section 4101 of this Act), the Secretary would be required to 
issue regulations on what information shall be collected about 
each disclosure. For current users of electronic health 
records, the accounting requirements would apply to disclosures 
made on or after January 1, 2014. For covered entities yet to 
acquire electronic health records, the accounting requirements 
would apply to disclosures on or after January 1, 2011, or the 
date of electronic health record acquisition, whichever is 
later.
      The House bill would require covered entities to limit 
the use, disclosure, or request of PHI, to the extent 
practicable, to a limited data set or, if needed, to the 
minimum necessary to accomplish the intended purpose of such 
use, disclosure, or request. This requirement would sunset at 
such a time as the Secretary issues guidance on what 
constitutes minimum necessary. The Secretary would have 18 
months to issue such guidance. In addition, the bill would 
clarify that the entity disclosing the PHI (as opposed to the 
requester) makes the minimum necessary determination. The HIPAA 
privacy rule's exceptions to the minimum necessary standard 
would continue to apply.
      Within 18 months of enactment, the Secretary would be 
required to issue regulations to eliminate from the definition 
of health care operations those activities that can reasonably 
and efficiently be conducted with de-identified information or 
that should require authorization for the use or disclosure of 
PHI.
      The House bill would prohibit the sale of PHI by a 
covered entity or business associate without patient 
authorization except in certain specified circumstances, such 
as to recoup the costs of preparing and transmitting data for 
public health or research activities (as defined in the HIPAA 
privacy rule), or to provide an individual with a copy of his 
or her PHI. Within 18 months of enactment, the Secretary would 
be required to issue regulations governing the sale of PHI.
      Finally, the House bill specifies that none of its 
provisions would constitute a waiver of any health privacy 
privilege otherwise applicable to an individual.
Senate Bill
      The Senate bill includes all the same provisions as the 
House bill, other than the final provision protecting an 
individual's health privacy privileges, but with the following 
additional language: (1) in developing guidance on what 
constitutes minimum necessary, the Secretary would be required 
to take into consideration the information necessary to improve 
patient outcomes and to manage chronic disease; (2) in 
developing regulations on the accounting of disclosures through 
an EHR, the Secretary would be required to take into account an 
individual's interest in learning when the PHI was disclosed 
and to whom, as well as the cost of accounting for such 
disclosures; (3) regarding the definition of health care 
operations, the Secretary would be required to review and 
evaluate the definition and, to the extent necessary, eliminate 
those activities that could reasonably and efficiently be 
conducted using de-identified information or that should 
require authorization; (4) the Secretary could not require the 
use of de-identified information or require authorization for 
the use and disclosure of information for activities within a 
covered entity that are described in paragraph one of the 
definition of health care operations; and (6) in developing 
regulation governing the sale of PHI, the Secretary would be 
required to evaluate the impact of charging an amount to cover 
the costs of preparing and transmitting data for public health 
or research activities.
Conference Agreement
      The conference agreement maintains most of these 
provisions but makes small modifications. The conference 
agreement takes the Senate changes on issuing guidance on what 
constitutes minimum necessary and what factors have to be 
considered. The conference agreement requires an accounting of 
disclosures but has a longer timeframe for allowing providers 
to come into compliance with this requirement than the House 
bill and shorter than the Senate bill. The requirement to 
account for disclosures under this section is prospective. For 
example, a covered entity that acquires an electronic health 
record as of June 30, 2012 would be required to account for 
disclosures made through that electronic health record as of 
June 30, 2012 and forward. The covered entity would be required 
to retain that accounting for a period of three years. Thus, if 
an individual requested an accounting for disclosures on June 
30, 2015, the covered entity would be required to provide that 
accounting for the period of June 30, 2012 to June 30, 2015, 
with respect to such individual, consistent with the 
requirements of Section 13405. However, if an individual 
requested an accounting of disclosures on June 30, 2013, the 
covered entity would be required to provide such accounting 
only for the period of June 30, 2012 to June 30, 2013.
      Section 13405(c)(4) of the Senate-passed bill included a 
provision allowing the imposition of a reasonable fee for the 
accounting for disclosures required under this Section. 
However, this statutory provision was duplicative of an 
existing provision under 45 CFR 164.528(c)(2) which already 
allows for the imposition of a reasonable fee for providing 
such accounting, so the provision from the Senate passed bill 
was struck.
      The conference agreement strikes the provision requiring 
the Secretary to review the definition of health care 
operations. The conference agreement permits the sale of 
protected health information in cases of research but only 
limited to costs of preparing and transmitting data. It also 
permits the sale of protected health information for public 
health activities the Secretary is required to study and 
determine whether costs should be limited. The conference 
agreement allows an individual to request their health 
information in an electronic format if it is maintained in such 
a format for a reasonable cost based fee as it was in the House 
and Senate bills. The conference agreement permits the 
individual to designate that the information be sent to another 
entity or person. Finally, the conference agreement specifies 
that none of its provisions would constitute a waiver of any 
health privacy privilege otherwise applicable to an individual, 
but moves this provision to section 13421 Relationship to Other 
Laws.
Conditions of Certain Contacts as Part of Health Care Operations. 
        (House bill Sec. 4406; Senate bill Sec. 13406; Conference 
        agreement Sec. 13406)
Current Law
      Generally, covered entities may use and disclose health 
information for the purpose of treatment, payment, and other 
health care operations without the individual's authorization 
and with few restrictions. Health care operations are broadly 
defined to include quality assessment and improvement 
activities, case management and care coordination, evaluation 
of health care professionals, underwriting, legal services, 
business planning, customer services, grievance resolution, and 
fundraising.
      Under the Privacy Rule promulgated pursuant to HIPAA, a 
covered entity may not disclose health information to a third 
party (e.g., pharmaceutical company), in exchange for direct or 
indirect remuneration, for the marketing activities of the 
third party without first obtaining a patient's authorization. 
Similarly, a covered entity may not use or disclose health 
information for its own marketing activities without 
authorization. Marketing is defined as a communication about a 
product or service that encourages the recipient to purchase or 
use the product or service. However, communications made by a 
covered entity (or its business associate) to encourage a 
patient to purchase or use a health care-related product or 
service are excluded from this definition and, therefore, do 
not require the patient's authorization, even if the covered 
entity is paid by a third party to engage in such activities.
House Bill
      The House bill would clarify that a marketing 
communication by a covered entity or business associate about a 
product or service that encourages the recipient to purchase or 
use the product or service may not be considered a health care 
operation, unless the communication relates to a health care-
related product or service. Further, it would prohibit a 
covered entity or business associate from receiving direct or 
indirect payment for marketing a health care-related product or 
service without first obtaining the recipient's authorization. 
Business associates would be permitted to receive payment from 
a covered entity for making any such communication on behalf of 
the covered entity that is consistent with the contract. 
Fundraising using a patient's protected health information 
would not be permitted without a patient's authorization.
Senate Bill
      Like the House bill, the Senate bill would clarify that a 
marketing communication by a covered entity or business 
associate about a product or service that encourages the 
recipient to purchase or use the product or service may not be 
considered a health care operation, unless the communication 
relates to a health care-related product or service. Further, 
the Senate bill states that a communication about a health 
care-related product or service would be permitted as a 
healthcare operation including where the covered entity 
receives payment for making the communications where (1) the 
communication only describes a health care item or service 
previously prescribed for or administered to the recipient, or 
(2) the covered entity or business associate obtains 
authorization. Finally, the Senate bill does not include the 
House provision on fundraising.
Conference Agreement
      The conference agreement retains the general rules about 
marketing in both the House and Senate bills. The conference 
report makes an exception and allows providers to be paid 
reasonable fees as determined by the Secretary to make a 
communication to their patients about a drug or biologic that 
the patient is currently prescribed. The conference agreement 
continues to permit fundraising activities by the provider 
using a patient's protected health information so long as any 
written fundraising provide an opportunity to opt out of future 
fundraising communications. If the recipient chooses to opt out 
of future fundraising communications, that choice is treated as 
a revocation of authorization under 45 CFR 164.508. All the 
protections that apply under 45 CFR 164.508 to an individual 
who has revoked an authorization would thus apply to a 
recipient of communications who chooses to opt out of receiving 
future fundraising communications, including the right not to 
be denied treatment as a result of making that choice.
Temporary Breach Notification Requirement for Vendors of Personal 
        Health Records and Other Non-HIPAA Covered Entities. (House 
        bill Sec. 4407; Senate bill Sec. 13407; Conference agreement 
        Sec. 13407)
Current Law
      There is no Federal law that requires entities to notify 
individual when their health information has been breached.
House Bill
      The House bill would require personal health record (PHR) 
vendors and entities offering products and services through a 
PHR vendor's website, upon discovery of a breach of security of 
unsecured PHR health information, to notify the individuals 
impacted and the FTC. Further, third party service providers 
that provide services to PHR vendors and to other entities 
offering products and services through a PHR vendor's website 
and, as a result, that handle unsecured PHR health information 
would, following the discovery of a breach of security of such 
information, be required to notify the vendor or other entity. 
The requirements in Section 4402 for the content and timeliness 
of notifications also would apply to this section. Unsecured 
PHR health information means PHR health information that is not 
protected through the use of a technology or methodology 
specified by the Secretary in guidance issued pursuant to 
Section 4402.
      The FTC would be required to notify HHS of any breach 
notices it received and would given enforcement authority 
regarding such breaches of unsecured PHR health information. 
Within 180 days, the Secretary would be required to issue 
interim final regulations to implement this section. The 
provisions in the section would apply to breaches discovered no 
sooner than 30 days after the regulations are published. The 
provisions in this section would no longer apply to breaches 
occurring after HHS or FTC had adopted new privacy and security 
standards for non-HIPAA covered entities, including 
requirements relating to breach notification.
Senate Bill
      The Senate bill includes the same provisions.
Conference Agreement
      The conference agreement is the same as the House and 
Senate language with minor clarifications. The conference 
agreement requires the FTC issue regulations as opposed to the 
Secretary of HHS. The conference agreement applies the breach 
notification provision to entities that access and receive 
health information to and from a personal health record.
Business Associate Contracts Required for Certain Entities. (House bill 
        Sec. 4408; Senate bill Sec. 13408; Conference agreement Sec. 
        13408)
Current Law
      A covered entity (a provider, health plan, or 
clearinghouse) is permitted to disclose health information to a 
business associate or to allow a business associate to create 
or receive health information on its behalf, provided the 
covered entity receives satisfactory assurance in the form of a 
written contract that the business associate will appropriately 
safeguard the information. Current law does not explicitly 
include or exclude regional health information exchanges, 
regional health information organizations, and others offering 
personal health records for a covered entity from regulation 
under the Privacy Rule promulgated under HIPAA.
House Bill
      The House bill requires organizations that contract with 
covered entities for the purpose of exchanging electronic 
health information, for example, Health Information Exchanges, 
Regional Health Information Organizations (RHIOs), and PHR 
vendors that offer their products through or for a provider or 
health plan, to have business associate contracts with those 
providers or health plans.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Clarification of Application of Wrongful Disclosures Criminal 
        Penalties. (House bill Sec. 4409; Senate bill Sec. 13409; 
        Conference agreement Sec. 13409)
Current Law
      The HIPAA criminal penalties include fines of up to 
$250,000 and up to 10 years in prison for disclosing or 
obtaining health information with the intent to sell, transfer 
or use it for commercial advantage, personal gain, or malicious 
harm. In July 2005, the Justice Department Office of Legal 
Counsel (OLC) addressed which persons may be prosecuted under 
HIPAA and concluded that only a covered entity could be 
criminally liable.
House Bill
      The House bill clarifies that criminal penalties for 
wrongful disclosure of PHI apply to individuals who without 
authorization obtain or disclose such information maintained by 
a covered entity, whether they are employees or not.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Improved Enforcement. (House bill Sec. 4410; Senate bill Sec. 13410; 
        Conference agreement Sec. 13410)
Current Law
      HIPAA authorized the Secretary to impose civil monetary 
penalties on any person failing to comply with the privacy and 
security standards. The maximum civil fine is $100 per 
violation and up to $25,000 for all violations of an identical 
requirement or prohibition during a calendar year. Civil 
monetary penalties may not be imposed if (1) the violation is a 
criminal offense under HIPAA's criminal penalty provisions (see 
below); (2) the person did not have actual or constructive 
knowledge of the violation; or (3) the failure to comply was 
due to reasonable cause and not to willful neglect, and the 
failure to comply was corrected during a 30-day period 
beginning on the first date the person liable for the penalty 
knew, or by exercising reasonable diligence would have known, 
that the failure to comply occurred. For certain wrongful 
disclosures of PHI, OCR may refer the case to the Department of 
Justice for criminal prosecution. HIPAA's criminal penalties 
include fines of up to $250,000 and up to 10 years in prison 
for disclosing or obtaining health information with the intent 
to sell, transfer or use it for commercial advantage, personal 
gain, or malicious harm.
House Bill
      The House bill would amend HIPAA to permit OCR to pursue 
an investigation and the imposition of civil monetary penalties 
against any individual for an alleged criminal violation of the 
Privacy and Security Rule of HIPAA if the Justice Department 
had not prosecuted the individual. In addition, the bill would 
amend HIPAA to require a formal investigation of complaints and 
the imposition of civil monetary penalties for violations due 
to willful neglect. The Secretary would be required to issue 
regulations within 18 months to implement those amendments. The 
bill also would require that any civil monetary penalties 
collected be transferred to OCR to be used for enforcing the 
HIPAA privacy and security standards. Within 18 months of 
enactment, GAO would be required to submit recommendations for 
giving a percentage of any civil monetary penalties collected 
to the individuals harmed. Based on those recommendations, the 
Secretary, within three years of enactment, would be required 
to establish by regulation a methodology to distribute a 
percentage of any collected penalties to harmed individuals.
      The House bill would increase and tier the penalties for 
violations of HIPAA. It would preserve the current requirement 
that a civil fine not be imposed if the violation was due to 
reasonable cause and was corrected within 30 days.
      Finally, the House bill would authorize State Attorneys 
General to bring a civil action in Federal district court 
against individuals who violate the HIPAA privacy and security 
standards, in order to enjoin further such violation and seek 
damages of up to $100 per violation, capped at $25,000 for all 
violations of an identical requirement or prohibition in any 
calendar year. State action against a person would not be 
permitted if a federal civil action against that same 
individual was pending. Nothing in this section would prevent 
OCR from continuing to use corrective action without a penalty 
in cases where the person did not know, and by exercising 
reasonable diligence would not have known, about the violation.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Audits. (House bill Sec. 4411; Senate bill Sec. 13411; Conference 
        agreement Sec. 13411)
Current Law
      The Secretary is authorized to conduct compliance reviews 
to determine whether covered entities are complying with HIPAA 
standards.
House Bill
      The House bill would require the Secretary to perform 
periodic audits to ensure compliance with the Privacy and 
Security Rule promulgated pursuant to HIPAA and the 
requirements of this subtitle.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Special Rule for Information to Reduce Medication Errors and Improve 
        Patient Safety. (House bill Sec. 4412)
Current Law
      Under the privacy rule, communications made by a covered 
entity (or its business associate) to encourage a patient to 
purchase or use a health care-related product or service are 
excluded from the definition of marketing and, therefore, do 
not require the patient's authorization, even if the covered 
entity is paid by a third party to engage in such activities.
House Bill
      The House bill states that none of the privacy provisions 
in the bill would prevent a pharmacist from communicating with 
patients to reduce medication errors and improve patient safety 
provided there is no remuneration other than for treatment of 
the individual and payment for such treatment. The Secretary 
would be permitted by regulation to allow pharmacists to 
receive reasonable, cost-based payment for such communications, 
if it is determined that this would improve patient care and 
protect PHI.
Senate Bill
      The Senate bill does not include this same provision, but 
has corresponding limitation in section 13406 of the Senate 
bill.
Conference Agreement
      The conference agreement does not include this same 
provision, but has corresponding limitations in section 13406.

 PART II--RELATIONSHIP TO OTHER LAWS; REGULATORY REFERENCES; EFFECTIVE 
                             DATE; REPORTS

Relationship to Other Laws. (House bill Sec. 4421; Senate bill Sec. 
        13421; Conference agreement Sec. 13421)
Current Law
      Under Section 1178 of the Social Security Act, as amended 
by HIPAA, the security standards preempt any contrary provision 
of state law, with certain specified exceptions (e.g., public 
health reporting). Pursuant to HIPAA Section 264, however, the 
privacy rule does not preempt a contrary provision of state law 
that is more protective of patient medical privacy. 
Psychotherapy notes (i.e., notes recorded by a mental health 
professional during counseling) are afforded special protection 
under the privacy rule. Almost all uses and disclosures of such 
information require patient authorization.
House Bill
      The House bill would apply the preemption provisions in 
SSA Section 1178 to the requirements of this subtitle and 
preserve the HIPAA privacy and security standards to the extent 
that they are consistent with the subtitle. The Secretary would 
be required by rulemaking to amend such standards as necessary 
to make them consistent with this subtitle.
Senate Bill
      The Senate bill includes the same provisions, with the 
additional requirement that the Secretary revise the definition 
of psychotherapy notes to include test data that are part of a 
mental health evaluation.
Conference Agreement
      The conference agreement takes language from the House 
bill. The provision related to psychotherapy notes is moved in 
the conference report.
Regulatory References. (House bill Sec. 4422; Senate bill Sec. 13422; 
        Conference agreement Sec. 13422)
Current Law
      No provision.
House Bill
      The House bill states that each reference in this 
subtitle to a federal regulation refers to the most recent 
version of the regulation.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Effective Date. (House bill Sec. 4423; Senate bill Sec. 13423; 
        Conference agreement Sec. 13423)
Current Law
      No provision.
House Bill
      Except as otherwise specifically provided, the provisions 
in this subtitle would become effective 12 months after 
enactment.
Senate Bill
      Same provision.
Conference Agreement
      Same provision.
Studies, Reports, Guidance. (House bill Sec. 4424; Senate bill Sec. 
        13424; Conference agreement Sec. 13424)
Current Law
      Any person who believes a covered entity is not complying 
with the privacy rule may file a complaint with HHS. The rule 
authorizes the Secretary to conduct investigations to determine 
whether covered entities are in compliance. HIPAA does not 
require the Secretary to issue a compliance report.
      The HIPAA Administrative Simplification standards apply 
to individual and group health plans that provide or pay for 
medical care; health care clearinghouses (i.e., entities that 
facilitate and process the flow of information between health 
care providers and payers); and health care providers. In 
addition, the privacy and security standards apply to business 
associates with whom covered entities share health information. 
They do not apply directly to other entities that collect and 
maintain health information, including Health Information 
Exchanges, RHIOs, and PHR vendors, unless they are acting as 
providers or plans.
      The HIPAA standards are intended to protect individually 
identifiable health information; de-identified information is 
not subject to the regulations. Under the privacy rule, health 
information is de-identified if 18 specific identifiers (e.g., 
name, social security number, address) have been removed, or if 
a qualified statistician, using accepted principles, determines 
that the risk is very small that the individual could be 
identified.
      Generally, plans and providers may use and disclose 
health information for the purpose of treatment, payment, and 
other health care operations without the individual's 
authorization and with few restrictions. Covered entities may, 
but are not required, to obtain an individual's general consent 
to use or disclose PHI for treatment, payment, or health care 
operations.
House Bill
      The Secretary would be required annually to submit to 
specified Congressional Committees and post online a compliance 
report containing information on (1) the number and nature of 
complaints of alleged violations and how they were resolved, 
including the imposition of civil fines, (2) the number of 
covered entities receiving technical assistance in order to 
achieve compliance, as well as the types of assistance 
provided, (3) the number of audits performed and a summary of 
their findings, and (4) the Secretary's plan for the following 
year for improving compliance with and enforcement of the HIPAA 
standards and the provisions of this subtitle.
      The House bill would require the Secretary, within one 
year and in consultation with the Federal Trade Commission 
(FTC), to study the application of health information privacy 
and security requirements (including breach notification) to 
non-HIPAA covered entities and report the findings to specified 
House (Ways and Means, Energy and Commerce) and Senate 
(Finance, HELP) Committees. The report should include an 
examination of PHR vendors and other entities that offer 
products and services through the websites of PHR vendors and 
covered entities, provide a determination of which federal 
agency is best equipped to enforce new requirements for non-
HIPAA covered entities, and include a time frame for 
implementing regulations.
      The House bill would require the Secretary, within one 
year of enactment and in consultation with stakeholders, to 
issue guidance on how best to implement the HIPAA privacy 
rule's requirements for de-identifying PHI.
      The House bill would require GAO, within one year, to 
report to the House Ways and Means and Energy and Commerce 
Committees and the Senate Finance Committee on best practices 
related to the disclosure of PHI among health care providers 
for the purpose of treatment. The report must include an 
examination of practices implemented by states and other 
entities, such as health information exchanges, and how those 
practices improve the quality of care, as well as an 
examination of the use of electronic informed consent for 
disclosing PHI for treatment, payment, and health care 
operations.
Senate Bill
      The Senate bill includes the same provisions, with the 
additional requirement that GAO, within one year, report to 
Congress and the Secretary on the impact of the bill's privacy 
provisions on health care costs.
Conference Agreement
      The conference agreement maintains most all study 
language and adds a study to require the Secretary to review 
the definition of ``psychotherapy notes'' with regard to 
including test data that are part of a mental health 
evaluation. The Secretary may revise the definition by 
regulation based on the recommendations of the study. In 
addition, the conference agreement broadened the study added by 
the Senate on the impact of the bill's privacy provisions on 
health care costs. It requires the GAO to study all impact of 
all the provisions of the HITECH Act on health care costs, 
adoption of electronic health records by providers, and 
reductions in medical errors and other quality improvements.

               TITLE XIV--STATE FISCAL STABILIZATION FUND

                        DEPARTMENT OF EDUCATION

                    STATE FISCAL STABILIZATION FUND

      The conference agreement provides $53,600,000,000 for a 
State Fiscal Stabilization Fund, instead of $79,000,000,000 as 
provided by the House and $39,000,000,000 as provided by the 
Senate. The conference agreement makes the entire amount 
available upon enactment of the bill as proposed by the Senate. 
House bill designated half of these funds to become available 
on July 1, 2009, and half of the funds to become available on 
July 1, 2010. The economic recovery bill includes these funds 
in order to provide fiscal relief to the States to prevent tax 
increases and cutbacks in critical education and other 
services.

                     GENERAL PROVISIONS--THIS TITLE

                              Allocations

      The conference agreement provides that up to one-half of 
1 percent of the State Fiscal Stabilization Fund is allocated 
to the outlying areas, based on their respective needs; an 
additional $14,000,000 is allocated to the Department of 
Education for administration, oversight, and evaluation; and 
$5,000,000,000 is reserved for the Secretary of Education for 
State Incentive Grants and an Innovation Fund. The agreement 
provides that any remaining funds shall be allocated to States 
on the following basis: 61 percent based on population ages 5 
through 24 and 39 percent based on total population. The House 
and Senate included similar provisions, except that the House 
bill provided $15,000,000,000 and the Senate bill provided 
$7,500,000,000 for State Incentive Grants and an Innovation 
Fund.

                          State Uses of Funds

      The conference agreement requires Governors to use 81.8 
percent of their State allocations to support elementary, 
secondary, and higher education. Funding received must first be 
used to restore State aid to school districts under the State's 
primary elementary and secondary education funding formulae to 
the greater of the fiscal year 2008 or 2009 level in each of 
fiscal years 2009, 2010, and 2011, and, where applicable, to 
allow existing formula increases for elementary and secondary 
education for fiscal years 2010 and 2011 to be implemented; and 
to restore State support to public institutions of higher 
education to the greater of the fiscal year 2008 or fiscal year 
2009 level, to the extent feasible given available 
Stabilization funds. Any remaining education funds must be 
allocated to school districts based on the Federal Title I 
formula. The conference agreement also provides that Governors 
shall use 18.2 percent of State allocations for public safety 
and other government services, which may include education 
services. These funds may also be used for elementary, 
secondary, and higher education modernization, renovation and 
repair activities that are consistent with State laws. The 
agreement also provides that Governors shall consider for 
modernization funding any institution of higher education in 
the State that meets certain criteria.
      The House and Senate bills contained similar provisions, 
except that the House bill did not provide for Stabilization 
funds to be used for existing formula increases for elementary 
and secondary education for fiscal years 2010 and 2011, while 
the Senate bill did not provide Stabilization funds for a 
Governor's discretionary fund for public safety and other 
government services. Neither House nor Senate bill provided for 
the use of these funds for facility modernization activities.

              Uses of Funds by Local Educational Agencies

      The conference agreement provides that school districts 
receiving Stabilization funds may only use the funds for 
activities authorized under the Elementary and Secondary 
Education Act (ESEA), the Individuals with Disabilities Act 
(IDEA), the Carl D. Perkins Career and Technical Education Act 
of 2006 (Perkins), and for school modernization, renovation, 
and repair of public school facilities (including charter 
schools), which may include modernization, renovation, and 
repairs consistent with a recognized green building rating 
system. School district modernization activities must be 
consistent with State laws.
      The House and Senate bills included similar provisions, 
except that neither bill permitted funds for capital projects 
unless authorized under ESEA, IDEA, or the Perkins Act.

           Uses of Funds by Institutions of Higher Education

      The conference agreement provides that public 
institutions of higher education receiving Stabilization funds 
must use these funds for educational and general expenditures, 
and in such a way as to mitigate the need to raise tuition and 
fees, or for modernization, renovation, or repairs of 
facilities that are primarily used for instruction, research, 
or student housing. Use of funds for endowments and certain 
types of facilities such as athletic stadiums are prohibited. 
The House and Senate bills included similar provisions, except 
that neither bill permitted funds for higher education 
modernization, renovation, or repair projects.

                           State Applications

      The conference agreement requires that Governors shall 
submit applications in order to receive Stabilization funds, 
which shall include certain assurances, provide baseline data 
regarding each of the areas described in such assurances, and 
describe how States intend to use their allocations. Such 
assurances shall include that the State will: in each of fiscal 
years 2009, 2010, and 2011, maintain State support for 
elementary, secondary, and public postsecondary education at 
least at the levels in fiscal year 2006, and address 4 key 
areas: (1) achieve equity in teacher distribution, (2) 
establish a longitudinal data system that includes the elements 
described in the America COMPETES Act, (3) enhance the quality 
of academic assessments relating to English language learners 
and students with disabilities, and improve State academic 
content standards and student academic achievement standards, 
and (4) ensure compliance with corrective actions required for 
low-performing schools. The agreement further provides that, in 
order to receive an Incentive Grant, a Governor shall: submit 
an application that describes the State's progress in each of 
the assurances and how the State would use grant funding to 
continue making progress toward meeting the State's student 
academic achievement standards. The House and Senate bills 
contained similar provisions, except both bills included 
slightly difference requirements pertaining to assurances.

                         State Incentive Grants

      The conference agreement authorizes the Secretary of 
Education to award, in fiscal year 2010, Incentive Grants to 
States that have made significant progress in achieving equity 
in teacher distribution, establishing a longitudinal data 
system, and enhancing assessments for English language learners 
and students with disabilities. Each State receiving an 
Incentive Grant shall use at least 50 percent of its grant to 
provide school districts with subgrants based on their most 
recent relative Title I allocations. The House and Senate bills 
included similar provisions.

                            Innovation Fund

      The conference agreement authorizes up to $650,000,000 
for an Innovation Fund, awarded by the Secretary of Education, 
which shall consist of academic achievement awards to recognize 
school districts, or partnerships between nonprofit 
organizations and State educational agencies, school districts, 
or one or more schools that have made achievement gains. The 
House and Senate bills included similar provisions.

                             State Reports

      The conference agreement requires that a State receiving 
Stabilization funds shall submit an annual report to the 
Secretary describing the uses of funds provided within the 
State; the distribution of funds received; the number of jobs 
saved or created; tax increases averted; the State's progress 
in reducing inequities in the distribution of highly-qualified 
teachers, developing a longitudinal data system, and 
implementing valid assessments; actions taken to limit tuition 
and fee increases at public institutions of higher education; 
and the extent to which public institutions of higher education 
maintained, increased, or decreased enrollments of in-State 
students. The House and Senate bills included similar 
provisions.

                               Evaluation

      The conference agreement requires the Government 
Accountability Office to conduct evaluations of the programs 
under this title, which shall include, but not be limited to, 
the impact of the funding provided on the progress made toward 
closing achievement gaps. The House and Senate bills included 
identical provisions.

                     Secretary's Report to Congress

      The conference agreement provides that the Secretary of 
Education shall submit a report to certain committees of the 
House of Representatives and the Senate that evaluates the 
information provided in the State reports submitted under 
section 14008. The House and Senate bills included identical 
provisions.

             Prohibition on Provision of Certain Assistance

      The conference agreement provides that no recipient of 
funds under this title shall use such funds to provide 
financial assistance to students to attend private elementary 
or secondary schools, except provided in section 14003. The 
House and Senate bills included similar provisions, although 
the House bill did not include such exception.

                             Fiscal Relief

      The conference agreement provides that the Secretary of 
Education may waive or modify any requirement of this title 
relating to maintenance of effort, for States and school 
districts that have experienced a precipitous decline in 
financial resources. In granting such a waiver, the Secretary 
shall determine that the State or school district will maintain 
the proportionate share of total revenues for elementary and 
secondary education as in the preceding fiscal year. The House 
bill did not include a similar provision. The Senate bill 
included different provisions to waive maintenance of effort 
and the use of Federal funds to supplement, not supplant, non-
Federal funds.

                              Definitions

      The conference agreement defines certain terms used in 
this title. The House and Senate bills included nearly 
identical provisions.

               TITLE XV--ACCOUNTABILITY AND TRANSPARENCY

      Sec. 1501. Definitions.--The conference agreement 
includes a section providing various definitions for purposes 
of this title, as proposed by the Senate.

          Subtitle A--Transparency and Oversight Requirements

      Sec. 1511. Certifications.--With respect to funds under 
this Act made available to state or local governments for 
infrastructure investments, the conference agreement requires a 
certification from the governor, mayor or other chief executive 
that the project in question has received the full review and 
vetting required by law and is an appropriate use of taxpayer 
dollars. This is a modification of provisions contained in both 
the House and Senate versions of this legislation.
      Sec. 1512. Reports on Use of Funds.--The conference 
agreement requires reporting of various matters by governments 
and organizations receiving funds from the Federal government 
under this Act, including amounts received, projects or 
activities for which the funds are to be used, estimated 
numbers of jobs created or retained, and information regarding 
subcontracts and subgrants. This is a modification of 
provisions in the House and Senate bills.
      Sec. 1513. Reports of the Council of Economic Advisors.--
The conference report requires quarterly reports from the 
Council of Economic Advisors regarding the estimated impact of 
this Act on employment, economic growth, and other key economic 
indicators. Similar provisions were proposed by the House and 
the Senate.
      Sec. 1514. Inspector General Reviews.--The conference 
report includes a modified version of a House provision 
requiring agency inspectors general to review any concerns 
raised by the public about specific investments using funds 
made available in this Act, and to relay findings of their 
reviews to the head of the agency concerned. Subsection (b) of 
the House provision, relating to inspector general access to 
records, has been deleted because the matter is addressed more 
comprehensively in section 1515 of the conference report.
      Sec. 1515. Inspector General Access to Records.--The 
agreement includes a modification of a House provision 
authorizing agency inspectors general to examine records and 
interview employees of contractors and grantees receiving funds 
under this Act. The House provision related only to contractors 
but applied to the Government Accountability Office (GAO) as 
well as inspectors general. GAO access is addressed in a 
separate provision in the Legislative Branch title of this 
conference report.

       Subtitle B--Recovery Accountability and Transparency Board

      Sec. 1521. Establishment of Board.--The conference 
agreement, like the House and Senate bills, establishes a 
Recovery Accountability and Transparency Board to coordinate 
and conduct oversight of Federal spending under this Act to 
prevent fraud, waste, and abuse.
      Sec. 1522. Composition of Board.--The conference 
agreement specifies that the Board shall be chaired by an 
individual to be designated by the President, and shall consist 
of inspectors general of certain specified agencies and such 
others as the President may designate. This is quite similar to 
the Senate provision. The House version called for a somewhat 
smaller Board chaired by the President's Chief Performance 
Officer and made up of a combination of inspectors general and 
agency deputy secretaries.
      Secs. 1523 through 1525. Board Functions, Powers and 
Personnel.--These sections of the conference report, which 
generally follow the Senate provisions, set out the functions 
and powers of the Board and provide various authorities related 
to personnel, details, and information and assistance from 
other Federal agencies.
      Sec. 1526. Board Website.--The conference report requires 
the Board to establish a web site to foster greater 
accountability and transparency in use of funds in this Act, 
and specifies a number of categories of information to be 
posted on that website. This is a modification of language from 
both the House and the Senate.
      Sec. 1527. Independence of Inspectors General.--Like the 
House and Senate bills, the conference report specifies that it 
is not intended to affect the independent authority of 
inspectors general as to whether to conduct audits or 
investigations of funds under this Act, but requires an 
inspector general (IG) which rejects a Board recommendation 
regarding investigations to submit a report to the Board, the 
agency head, and congressional committees stating the reasons 
for that action. The conference report adds language clarifying 
that the decision of an IG is to be final.
      Sec. 1529. Authorization of Appropriations.--The 
conference report, like the Senate bill, authorizes 
appropriations of such sums as may be necessary for the Board. 
The House version did not contain an explicit authorization, 
but did make an appropriation. In the conference report, an 
appropriation for the Board is contained in the Financial 
Services and General Government title.
      The conferees note that funding appropriated to the Board 
will support activities related to accountability, 
transparency, and oversight of spending under the Act. Funds 
may be transferred to support the operations of the Recovery 
Independent Advisory Panel established under section 1541 of 
the Act and for technical and administrative services and 
support provided by the General Services Administration. Funds 
may also be transferred to the Office of Management and Budget 
for coordinating and overseeing the implementation of the 
reporting requirements established under section 1526 of the 
Act.
      Sec. 1530. Termination of the Board.--The conference 
report terminates the Board on September 30, 2013--one year 
later than proposed by the Senate. The House proposed to 
terminate the Board 1 year after 90 percent of funds 
appropriated in this Act have been spent.

            Subtitle C--Recovery Independent Advisory Panel

      Secs. 1541 through 1546. Independent Advisory Panel.--
Like both the House and Senate bills, the conference report 
establishes an Independent Advisory Panel to advise the Board. 
The conference report is very similar to the Senate version.

  Subtitle D--Additional Accountability and Transparency Requirements

      Sec. 1551. Authority To Establish Separate Funding 
Accounts.--The conference agreement contains new language 
requiring funds appropriated in this Act to be made available 
in separate Treasury accounts to facilitate tracking of these 
funds, unless a waiver is granted by the Director of the Office 
of Management and Budget.
      Sec. 1552. Set-Aside for State and Local Government 
Reporting and Recordkeeping.--The conference agreement includes 
new language allowing agencies, after notice and comment 
rulemaking, to reasonably adjust limits on administrative 
expenditures for Federal grants to help recipients defray costs 
of data collection requirements under this Act.
      Sec. 1553. Protecting State and Local Government and 
Contractor Whistleblowers.--The conference agreement includes 
language providing new protections against reprisals for 
employees of State and local governments or private contractors 
who disclose to Federal officials information reasonably 
believed to be evidence of gross mismanagement, gross waste, or 
violations of law related to contracts or grants using funds in 
this Act. This is a modification of provisions appearing in 
both versions of the legislation. Among other things, the 
conference version modifies time limits on investigations of 
complaints and clarifies the burden of proof required to 
establish violations.
      Sec. 1554. Special Contracting Provisions.--The 
conference report includes a modification of a provision 
proposed by the House specifying that, to the maximum extent 
feasible, contracts using funds in this Act shall be awarded as 
fixed-price contracts and through competitive procedures.
      Protection for Federal Whistleblowers.--The conference 
report does not include language proposed by the House relating 
to protections for Federal employee whistleblowers.

                TITLE--XVI GENERAL PROVISIONS--THIS ACT

      Section 1601 provides that each amount appropriated or 
made available in this Act is in addition to amounts otherwise 
appropriated for the fiscal year involved. Further, enactment 
of this Act shall have no effect on the availability of amounts 
under the continuing resolution for fiscal year 2009.
      Section 1602 provides for quick-start activities. For 
infrastructure investment funds, recipients of funds provided 
in this Act should give preference to activities that can be 
started and completed expeditiously, with a goal of using at 
least 50 percent for activities that can be initiated within 
120 days of enactment. Also recipients should use grant funds 
in a manner that maximizes job creation and economic benefit.
      Section 1603 provides that funds appropriated in this Act 
shall be available until September 30, 2010, unless expressly 
provided otherwise in this Act.
      Section 1604 prohibits the use of funds for particular 
activities.
      Section 1605 provides for the use of American iron, steel 
and manufactured goods, except in certain instances. Section 
1605(d) is not intended to repeal by implication the 
President's authority under Title III of the Trade Agreements 
Act of 1979. The conferees anticipate that the Administration 
will rely on the authority under 19 U.S.C. 2511(b) to the 
extent necessary to comply with U.S. obligations under the WTO 
Agreement on Government Procurement and under U.S. free trade 
agreements and so that section 1605 will not apply to least 
developed countries to the same extent that it does not apply 
to the parties to those international agreements. The conferees 
also note that waiver authority under section 2511(b)(2) has 
not been used.
      Section 1606 provides for specific wage rate 
requirements. All laborers and mechanics employed by 
contractors and subcontractors on projects funded directly by 
or assisted in whole or in part by and through the Federal 
government pursuant to this Act shall be paid not less than the 
wages prevailing in the locality for similar projects as 
determined by the Secretary of Labor in accordance with the 
Davis-Bacon Act.
      Section 1607 provides additional funding distribution and 
assurance of the appropriate use of funds. Not later than 45 
days after the enactment of this Act, the governor of each 
state shall certify that the state will request and use funds 
provided by this Act to the state and its agencies. If funds 
made available to a state in any division of this Act are not 
accepted for use by its governor, then acceptance by the state 
legislature, by adoption of a concurrent resolution, shall be 
sufficient to provide funding to the state. After adoption of a 
concurrent resolution, funding to the State will be for 
distribution to local governments, councils of governments, 
public entities, and public-private entities within the State, 
either by formula or at the State's discretion.
      Section 1608 amends section 107(b) of the Emergency 
Economic Stabilization Act of 2008 (relating to contracting 
procedures) to include individuals with disabilities and 
businesses owned by such individuals.
      Section 1609 makes various findings regarding the 
National Environmental Policy Act (NEPA). In addition, this 
section provides that adequate resources within this Act must 
be devoted to ensuring that NEPA reviews are completed 
expeditiously. The President shall report quarterly to the 
appropriate congressional committees regarding NEPA 
requirements and documentation for projects funded in this Act.
      Section 1610 prohibits the use of funds for contracts and 
grants not awarded in accordance with the Federal Property and 
Administration Services Act, or chapter 137 of title 10, United 
States Code and Federal Acquisition Regulation, or as otherwise 
authorized by statute. The provision is not intended to 
override other specific statutory authorizations for 
procurements, including the Small Business Act and the Javits-
Wagner-O'Day Act.
      Section 1611 provides that it shall be unlawful for any 
recipient of funding of Title I of the Emergency Economic 
Stabilization Act of 2008 or section 13 of the Federal Reserve 
Act to hire any nonimmigrant described in section 
101(a)(15)(h)(i)(b) of the Immigration and Nationality Act 
unless the recipient is in compliance with the requirements for 
an H-1B dependent employer as defined in that Act. This 
requirement is effective for a two-year period beginning on the 
date of enactment of this Act.
      Section 1612 provides limited transfer authority. The 
conferees recognize the challenges that the Administration will 
face in determining how best to respond to the current economic 
crisis. Accordingly, the Senate and House passed bills each 
included permissive authority to reprogram or transfer funds 
within certain agencies and programs to mitigate these 
concerns.
      It is clearly understood that as the Administration 
attempts to find the best means to respond to the crisis, the 
priority and utility of different programs could shift. As 
such, the conferees have agreed to provide authority during 
current fiscal year for Agency heads to transfer up to 1% of 
certain funds within their jurisdiction from the amounts 
provided in this Act. The conferees do not intend for this 1% 
transfer provision to either nullify or expand upon the 
transfer authorities provided for selected agencies and 
programs elsewhere in this Act. The Committees on 
Appropriations intend to carefully monitor the use of this 
authority and expect Agency heads to exercise its use in 
accordance with established reprogramming practices and only 
after consulting with the Committees on Appropriations before 
pursuing any transfer.
      The conference agreement does not include the following 
provisions proposed by the House: requirements for timely award 
of grants; use it or lose it requirements for grantees; set-
asides for management and oversight; as these issues have been 
addressed, in certain circumstances, within the appropriate 
appropriating paragraphs. In addition, the conference agreement 
does not include the following provisions proposed by the 
House: requirements regarding funding for the State of 
Illinois; and requirements for participation in E-Verify.

                   Conference Total--With Comparisons

      The total new budget (obligational) authority for the 
fiscal year 2009 recommended by the Committee of Conference, 
comparisons to the House and Senate bills for 2009 follow:

                        [In thousands of dollars]



House bill, fiscal year 2009..........................       361,038,500
Senate bill, fiscal year 2009.........................       289,794,425
Conference agreement, fiscal year 2009................       311,197,500
Conference agreement compared with:...................
  House bill, fiscal year 2009........................       -49,841,000
  Senate bill, fiscal year 2009.......................       +21,403,075


 DIVISION B--TAX, UNEMPLOYMENT, HEALTH, STATE FISCAL RELIEF, AND OTHER 
                               PROVISIONS

                        TITLE I--TAX PROVISIONS

               A. Tax Relief for Individuals and Families

1. Making Work Pay Credit (sec. 1001 of the House bill, sec. 1001 of 
        the Senate amendment, sec. 1001 of the conference agreement, 
        and new sec. 36A of the Code)

                              PRESENT LAW

Earned income tax credit
      Low- and moderate-income workers may be eligible for the 
refundable earned income tax credit (``EITC''). Eligibility for 
the EITC is based on earned income, adjusted gross income, 
investment income, filing status, and immigration and work 
status in the United States. The amount of the EITC is based on 
the presence and number of qualifying children in the worker's 
family, as well as on adjusted gross income and earned income.
      The EITC generally equals a specified percentage of 
earned income \1\ up to a maximum dollar amount. The maximum 
amount applies over a certain income range and then diminishes 
to zero over a specified phaseout range. For taxpayers with 
earned income (or adjusted gross income (``AGI''), if greater) 
in excess of the beginning of the phaseout range, the maximum 
EITC amount is reduced by the phaseout rate multiplied by the 
amount of earned income (or AGI, if greater) in excess of the 
beginning of the phaseout range. For taxpayers with earned 
income (or AGI, if greater) in excess of the end of the 
phaseout range, no credit is allowed.
---------------------------------------------------------------------------
    \1\ Earned income is defined as (1) wages, salaries, tips, and 
other employee compensation, but only if such amounts are includible in 
gross income, plus (2) the amount of the individual's net self-
employment earnings.
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      The EITC is a refundable credit, meaning that if the 
amount of the credit exceeds the taxpayer's Federal income tax 
liability, the excess is payable to the taxpayer as a direct 
transfer payment. Under an advance payment system, eligible 
taxpayers may elect to receive the credit in their paychecks, 
rather than waiting to claim a refund on their tax returns 
filed by April 15 of the following year.
Child credit
      An individual may claim a tax credit for each qualifying 
child under the age of 17. The amount of the credit per child 
is $1,000 through 2010 and $500 thereafter. A child who is not 
a citizen, national, or resident of the United States cannot be 
a qualifying child.
      The credit is phased out for individuals with income over 
certain threshold amounts. Specifically, the otherwise 
allowable child tax credit is reduced by $50 for each $1,000 
(or fraction thereof) of modified adjusted gross income over 
$75,000 for single individuals or heads of households, $110,000 
for married individuals filing joint returns, and $55,000 for 
married individuals filing separate returns. For purposes of 
this limitation, modified adjusted gross income includes 
certain otherwise excludable income earned by U.S. citizens or 
residents living abroad or in certain U.S. territories.
      The credit is allowable against the regular tax and the 
alternative minimum tax. To the extent the child credit exceeds 
the taxpayer's tax liability, the taxpayer is eligible for a 
refundable credit (the additional child tax credit) equal to 15 
percent of earned income in excess of a threshold dollar amount 
(the ``earned income'' formula). The threshold dollar amount is 
$12,550 (for 2009), and is indexed for inflation.
      Families with three or more children may determine the 
additional child tax credit using the ``alternative formula,'' 
if this results in a larger credit than determined under the 
earned income formula. Under the alternative formula, the 
additional child tax credit equals the amount by which the 
taxpayer's social security taxes exceed the taxpayer's earned 
income tax credit.
      Earned income is defined as the sum of wages, salaries, 
tips, and other taxable employee compensation plus net self-
employment earnings. Unlike the EITC, which also includes the 
preceding items in its definition of earned income, the 
additional child tax credit is based only on earned income to 
the extent it is included in computing taxable income. For 
example, some ministers' parsonage allowances are considered 
self-employment income, and thus are considered earned income 
for purposes of computing the EITC, but the allowances are 
excluded from gross income for individual income tax purposes, 
and thus are not considered earned income for purposes of the 
additional child tax credit.

                               HOUSE BILL

In general
      The provision provides eligible individuals a refundable 
income tax credit for two years (taxable years beginning in 
2009 and 2010).
      The credit is the lesser of (1) 6.2 percent of an 
individual's earned income or (2) $500 ($1,000 in the case of a 
joint return). For these purposes, the earned income definition 
is the same as for the earned income tax credit with two 
modifications. First, earned income for these purposes does not 
include net earnings from self-employment which are not taken 
into account in computing taxable income. Second, earned income 
for these purposes includes combat pay excluded from gross 
income under section 112.\2\
---------------------------------------------------------------------------
    \2\ Unless otherwise stated, all section references are to the 
Internal Revenue Code of 1986, as amended (the ``Code'').
---------------------------------------------------------------------------
      The credit is phased out at a rate of two percent of the 
eligible individual's modified adjusted gross income above 
$75,000 ($150,000 in the case of a joint return). For these 
purposes an eligible individual's modified adjusted gross 
income is the eligible individual's adjusted gross income 
increased by any amount excluded from gross income under 
sections 911, 931, or 933. An eligible individual means any 
individual other than: (1) a nonresident alien; (2) an 
individual with respect to whom another individual may claim a 
dependency deduction for a taxable year beginning in a calendar 
year in which the eligible individual's taxable year begins; 
and (3) an estate or trust. Each eligible individual must 
satisfy identical taxpayer identification number requirements 
to those applicable to the earned income tax credit.
Treatment of the U.S. possessions
            Mirror code possessions \3\
---------------------------------------------------------------------------
    \3\ Possessions with mirror code tax systems are the United States 
Virgin Islands, Guam, and the Commonwealth of the Northern Mariana 
Islands.
---------------------------------------------------------------------------
      The U.S. Treasury will make payments to each mirror code 
possession in an amount equal to the aggregate amount of the 
credits allowable by reason of the provision to that 
possession's residents against its income tax. This amount will 
be determined by the Treasury Secretary based on information 
provided by the government of the respective possession. For 
purposes of these payments, a possession is a mirror code 
possession if the income tax liability of residents of the 
possession under that possession's income tax system is 
determined by reference to the U.S. income tax laws as if the 
possession were the United States.
            Non-mirror code possessions \4\
---------------------------------------------------------------------------
    \4\ Possessions that do not have mirror code tax systems are Puerto 
Rico and American Samoa.
---------------------------------------------------------------------------
      To each possession that does not have a mirror code tax 
system, the U.S. Treasury will make two payments (for 2009 and 
2010, respectively) in an amount estimated by the Secretary as 
being equal to the aggregate credits that would have been 
allowed to residents of that possession if a mirror code tax 
system had been in effect in that possession. Accordingly, the 
amount of each payment to a non-mirror Code possession will be 
an estimate of the aggregate amount of the credits that would 
be allowed to the possession's residents if the credit provided 
by the provision to U.S. residents were provided by the 
possession to its residents. This payment will not be made to 
any U.S. possession unless that possession has a plan that has 
been approved by the Secretary under which the possession will 
promptly distribute the payment to its residents.
            General rules
      No credit against U.S. income tax is permitted under the 
provision for any person to whom a credit is allowed against 
possession income taxes as a result of the provision (for 
example, under that possession's mirror income tax). Similarly, 
no credit against U.S. income tax is permitted for any person 
who is eligible for a payment under a non-mirror code 
possession's plan for distributing to its residents the payment 
described above from the U.S. Treasury.
      For purposes of the payments to the possessions, the 
Commonwealth of Puerto Rico and the Commonwealth of the 
Northern Mariana Islands are considered possessions of the 
United States.
      For purposes of the rule permitting the Treasury 
Secretary to disburse appropriated amounts for refunds due from 
certain credit provisions of the Internal Revenue Code of 1986, 
the payments required to be made to possessions under the 
provision are treated in the same manner as a refund due from 
the credit allowed under the provision.
Federal programs or Federally-assisted programs
      Any credit or refund allowed or made to an individual 
under this provision (including to any resident of a U.S. 
possession) is not taken into account as income and shall not 
be taken into account as resources for the month of receipt and 
the following two months for purposes of determining 
eligibility of such individual or any other individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or 
local program financed in whole or in part with Federal funds.
Income tax withholding
      Taxpayers' reduced tax liability under the provision 
shall be expeditiously implemented through revised income tax 
withholding schedules produced by the Internal Revenue Service. 
These revised income tax withholding schedules should be 
designed to reduce taxpayers' income tax withheld for each 
remaining pay period in the remainder of 2009 by an amount 
equal to the amount that withholding would have been reduced 
had the provision been reflected in the income tax withholding 
schedules for the entire taxable year.
Effective date
      The provision applies to taxable years beginning after 
December 31, 2008.

                            SENATE AMENDMENT

In general
      The Senate is the same as the House bill, except that the 
credit is phased out at a rate of four percent (rather than two 
percent) of the eligible individual's modified adjusted gross 
income above $70,000 ($140,000 in the case of a joint return).
      Also, the Senate amendment provides that the otherwise 
allowable credit allowed under the provision is reduced by the 
amount of any payment received by the taxpayer pursuant to the 
provisions of the bill providing economic recovery payments 
under the Veterans Administration, Railroad Retirement Board, 
and the Social Security Administration. The provision treats 
the failure to reduce the credit by the amount of these 
payments, and the omission of the correct TIN, as clerical 
errors. This allows the IRS to assess any tax resulting from 
such failure or omission without the requirement to send the 
taxpayer a notice of deficiency allowing the taxpayer the right 
to file a petition with the Tax Court.
Income tax withholding
      The Senate amendment also provides for a more accelerated 
delivery of the credit in 2009 through revised income tax 
withholding schedules produced by the Department of the 
Treasury. Under the Senate amendment, these revised income tax 
withholding schedules would be designed to reduce taxpayers' 
income tax withheld for the remainder of 2009 in such a manner 
that the full annual benefit of the provision is reflected in 
income tax withheld during the remainder of 2009.

                          CONFERENCE AGREEMENT

In general
      The provision provides eligible individuals a refundable 
income tax credit for two years (taxable years beginning in 
2009 and 2010).
      The credit is the lesser of (1) 6.2 percent of an 
individual's earned income or (2) $400 ($800 in the case of a 
joint return). For these purposes, the earned income definition 
is the same as for the earned income tax credit with two 
modifications. First, earned income for these purposes does not 
include net earnings from self-employment which are not taken 
into account in computing taxable income. Second, earned income 
for these purposes includes combat pay excluded from gross 
income under section 112.
      The credit is phased out at a rate of two percent of the 
eligible individual's modified adjusted gross income above 
$75,000 ($150,000 in the case of a joint return). For these 
purposes an eligible individual's modified adjusted gross 
income is the eligible individual's adjusted gross income 
increased by any amount excluded from gross income under 
sections 911, 931, or 933. An eligible individual means any 
individual other than: (1) a nonresident alien; (2) an 
individual with respect to whom another individual may claim a 
dependency deduction for a taxable year beginning in a calendar 
year in which the eligible individual's taxable year begins; 
and (3) an estate or trust.
      Also, the conference agreement provides that the 
otherwise allowable making work pay credit allowed under the 
provision is reduced by the amount of any payment received by 
the taxpayer pursuant to the provisions of the bill providing 
economic recovery payments under the Veterans Administration, 
Railroad Retirement Board, and the Social Security 
Administration and a temporary refundable tax credit for 
certain government retirees.\5\ The conference agreement treats 
the failure to reduce the making work pay credit by the amount 
of such payments or credit, and the omission of the correct 
TIN, as clerical errors. This allows the IRS to assess any tax 
resulting from such failure or omission without the requirement 
to send the taxpayer a notice of deficiency allowing the 
taxpayer the right to file a petition with the Tax Court.
---------------------------------------------------------------------------
    \5\ The credit for certain government employees is available for 
2009. The credit is $250 ($500 for a joint return where both spouses 
are eligible individuals). An eligible individual for these purposes is 
an individual: (1) who receives an amount as a pension or annuity for 
service performed in the employ of the United States or any State or 
any instrumentality thereof, which is not considered employment for 
purposes of Social Security taxes; and (2) who does not receive an 
economic recovery payment under the Veterans Administration, Railroad 
Retirement Board, or the Social Security Administration.
---------------------------------------------------------------------------
      Each tax return on which this credit is claimed must 
include the social security number of the taxpayer (in the case 
of a joint return, the social security number of at least one 
spouse).
Treatment of the U.S. possessions
      The conference agreement follows the House bill and the 
Senate amendment.
Federal programs or Federally-assisted programs
      The conference agreement follows the House bill and the 
Senate amendment.
Income tax withholding
      The conference agreement follows the Senate amendment.
Effective date
      The provision applies to taxable years beginning after 
December 31, 2008.
2. Increase in the earned income tax credit (sec. 1101 of the House 
        bill, sec. 1002 of the Senate amendment, sec. 1002 of the 
        conference agreement, and sec. 32 of the Code)

                              PRESENT LAW

Overview
      Low- and moderate-income workers may be eligible for the 
refundable earned income tax credit (``EITC''). Eligibility for 
the EITC is based on earned income, adjusted gross income, 
investment income, filing status, and immigration and work 
status in the United States. The amount of the EITC is based on 
the presence and number of qualifying children in the worker's 
family, as well as on adjusted gross income and earned income.
      The EITC generally equals a specified percentage of 
earned income \6\ up to a maximum dollar amount. The maximum 
amount applies over a certain income range and then diminishes 
to zero over a specified phaseout range. For taxpayers with 
earned income (or adjusted gross income (AGI), if greater) in 
excess of the beginning of the phaseout range, the maximum EITC 
amount is reduced by the phaseout rate multiplied by the amount 
of earned income (or AGI, if greater) in excess of the 
beginning of the phaseout range. For taxpayers with earned 
income (or AGI, if greater) in excess of the end of the 
phaseout range, no credit is allowed.
---------------------------------------------------------------------------
    \6\ Earned income is defined as (1) wages, salaries, tips, and 
other employee compensation, but only if such amounts are includible in 
gross income, plus (2) the amount of the individual's net self-
employment earnings.
---------------------------------------------------------------------------
      An individual is not eligible for the EITC if the 
aggregate amount of disqualified income of the taxpayer for the 
taxable year exceeds $3,100 (for 2009). This threshold is 
indexed for inflation. Disqualified income is the sum of: (1) 
interest (taxable and tax exempt); (2) dividends; (3) net rent 
and royalty income (if greater than zero); (4) capital gains 
net income; and (5) net passive income (if greater than zero) 
that is not self-employment income.
      The EITC is a refundable credit, meaning that if the 
amount of the credit exceeds the taxpayer's Federal income tax 
liability, the excess is payable to the taxpayer as a direct 
transfer payment. Under an advance payment system, eligible 
taxpayers may elect to receive the credit in their paychecks, 
rather than waiting to claim a refund on their tax returns 
filed by April 15 of the following year.
Filing status
      An unmarried individual may claim the EITC if he or she 
files as a single filer or as a head of household. Married 
individuals generally may not claim the EITC unless they file 
jointly. An exception to the joint return filing requirement 
applies to certain spouses who are separated. Under this 
exception, a married taxpayer who is separated from his or her 
spouse for the last six months of the taxable year shall not be 
considered as married (and, accordingly, may file a return as 
head of household and claim the EITC), provided that the 
taxpayer maintains a household that constitutes the principal 
place of abode for a dependent child (including a son, stepson, 
daughter, stepdaughter, adopted child, or a foster child) for 
over half the taxable year,\7\ and pays over half the cost of 
maintaining the household in which he or she resides with the 
child during the year.
---------------------------------------------------------------------------
    \7\ A foster child must reside with the taxpayer for the entire 
taxable year.
---------------------------------------------------------------------------
Presence of qualifying children and amount of the earned income credit
      Three separate credit schedules apply: one schedule for 
taxpayers with no qualifying children, one schedule for 
taxpayers with no qualifying child, and one schedule for 
taxpayers with more than one qualifying child.\8\
---------------------------------------------------------------------------
    \8\ All income thresholds are indexed for inflation annually.
---------------------------------------------------------------------------
      Taxpayers with no qualifying children may claim a credit 
if they are over age 24 and below age 65. The credit is 7.65 
percent of earnings up to $5,970, resulting in a maximum credit 
of $457 for 2009. The maximum is available for those with 
incomes between $5,970 and $7,470 ($10,590 if married filing 
jointly). The credit begins to phase down at a rate of 7.65 
percent of earnings above $7,470 ($10,590 if married filing 
jointly) resulting in a $0 credit at $13,440 of earnings 
($16,560 if married filing jointly).
      Taxpayers with one qualifying child may claim a credit in 
2009 of 34 percent of their earnings up to $8,950, resulting in 
a maximum credit of $3,043. The maximum credit is available for 
those with earnings between $8,950 and $16,420 ($19,540 if 
married filing jointly). The credit begins to phase down at a 
rate of 15.98 percent of earnings above $16,420 ($19,540 if 
married filing jointly). The credit is phased down to $0 at 
$35,463 of earnings ($38,583 if married filing jointly).
      Taxpayers with more than one qualifying child may claim a 
credit in 2009 of 40 percent of earnings up to $12,570, 
resulting in a maximum credit of $5,028. The maximum credit is 
available for those with earnings between $12,570 and $16,420 
($19,540 if married filing jointly). The credit begins to phase 
down at a rate of 21.06 percent of earnings above $16,420 
($19,540 if married filing jointly). The credit is phased down 
to $0 at $40,295 of earnings ($43,415 if married filing 
jointly).
      If more than one taxpayer lives with a qualifying child, 
only one of these taxpayers may claim the child for purposes of 
the EITC. If multiple eligible taxpayers actually claim the 
same qualifying child, then a tiebreaker rule determines which 
taxpayer is entitled to the EITC with respect to the qualifying 
child. Any eligible taxpayer with at least one qualifying child 
who does not claim the EITC with respect to qualifying children 
due to failure to meet certain identification requirements with 
respect to such children (i.e., providing the name, age and 
taxpayer identification number of each of such children) may 
not claim the EITC for taxpayers without qualifying children.

                               HOUSE BILL

Three or more qualifying children
      The provision increases the EITC credit percentage for 
families with three or more qualifying children to 45 percent 
for 2009 and 2010. For example, in 2009 taxpayers with three or 
more qualifying children may claim a credit of 45 percent of 
earnings up to $12,570, resulting in a maximum credit of 
$5,656.50.
Provide additional marriage penalty relief through higher threshold 
        phase-out amounts for married couples filing joint returns
      The provision increases the threshold phase-out amounts 
for married couples filing joint returns to $5,000 \9\ above 
the threshold phase-out amounts for singles, surviving spouses, 
and heads of households for 2009 and 2010. For example, in 2009 
the maximum credit of $3,043 for one qualifying child is 
available for those with earnings between $8,950 and $16,420 
($21,420 if married filing jointly). The credit begins to phase 
down at a rate of 15.98 percent of earnings above $16,420 
($21,420 if married filing jointly). The credit is phased down 
to $0 at $35,463 of earnings ($40,463 if married filing 
jointly).
---------------------------------------------------------------------------
    \9\ The $5,000 is indexed for inflation in the case of taxable 
years beginning in 2010.
---------------------------------------------------------------------------
Effective date
      The provision is effective for taxable years beginning 
after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
3. Increase of refundable portion of the child credit (sec. 1102 of the 
        House bill, sec. 1003 of the Senate amendment, sec. 1003 of the 
        conference agreement and sec. 24 of the Code)

                              PRESENT LAW

      An individual may claim a tax credit for each qualifying 
child under the age of 17. The amount of the credit per child 
is $1,000 through 2010, and $500 thereafter. A child who is not 
a citizen, national, or resident of the United States cannot be 
a qualifying child.
      The credit is phased out for individuals with income over 
certain threshold amounts. Specifically, the otherwise 
allowable child tax credit is reduced by $50 for each $1,000 
(or fraction thereof) of modified adjusted gross income over 
$75,000 for single individuals or heads of households, $110,000 
for married individuals filing joint returns, and $55,000 for 
married individuals filing separate returns. For purposes of 
this limitation, modified adjusted gross income includes 
certain otherwise excludable income earned by U.S. citizens or 
residents living abroad or in certain U.S. territories.
      The credit is allowable against the regular tax and the 
alternative minimum tax. To the extent the child credit exceeds 
the taxpayer's tax liability, the taxpayer is eligible for a 
refundable credit (the additional child tax credit) equal to 15 
percent of earned income in excess of a threshold dollar amount 
(the ``earned income'' formula). The threshold dollar amount is 
$12,550 (for 2009), and is indexed for inflation.
      Families with three or more children may determine the 
additional child tax credit using the ``alternative formula,'' 
if this results in a larger credit than determined under the 
earned income formula. Under the alternative formula, the 
additional child tax credit equals the amount by which the 
taxpayer's social security taxes exceed the taxpayer's earned 
income tax credit (``EITC'').
      Earned income is defined as the sum of wages, salaries, 
tips, and other taxable employee compensation plus net self-
employment earnings. Unlike the EITC, which also includes the 
preceding items in its definition of earned income, the 
additional child tax credit is based only on earned income to 
the extent it is included in computing taxable income. For 
example, some ministers' parsonage allowances are considered 
self-employment income and thus, are considered earned income 
for purposes of computing the EITC, but the allowances are 
excluded from gross income for individual income tax purposes 
and thus, are not considered earned income for purposes of the 
additional child tax credit.
      Any credit or refund allowed or made to an individual 
under this provision (including to any resident of a U.S. 
possession) is not taken into account as income and shall not 
be taken into account as resources for the month of receipt and 
the following two months for purposes of determining 
eligibility of such individual or any other individual for 
benefits or assistance, or the amount or extent of benefits or 
assistance, under any Federal program or under any State or 
local program financed in whole or in part with Federal funds.

                               HOUSE BILL

      The provision modifies the earned income formula for the 
determination of the refundable child credit to apply to 15 
percent of earned income in excess of $0 for taxable years 
beginning in 2009 and 2010.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill except 
that the refundable child credit is calculated to apply to 15 
percent of earned income in excess of $8,100 for taxable years 
beginning in 2009 and 2010.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment except that the refundable child credit is 
calculated to apply to 15 percent of earned income in excess of 
$3,000 for taxable years beginning in 2009 and 2010.
4. American Opportunity Tax credit (sec. 1201 of the House bill, sec. 
        1004 of the Senate amendment, sec. 1004 of the conference 
        agreement, and sec. 25A of the Code)

                              PRESENT LAW

      Individual taxpayers are allowed to claim a nonrefundable 
credit, the Hope credit, against Federal income taxes of up to 
$1,800 (for 2009) per eligible student per year for qualified 
tuition and related expenses paid for the first two years of 
the student's post-secondary education in a degree or 
certificate program.\10\ The Hope credit rate is 100 percent on 
the first $1,200 of qualified tuition and related expenses, and 
50 percent on the next $1,200 of qualified tuition and related 
expenses; these dollar amounts are indexed for inflation, with 
the amount rounded down to the next lowest multiple of $100. 
Thus, for example, a taxpayer who incurs $1,200 of qualified 
tuition and related expenses for an eligible student is 
eligible (subject to the adjusted gross income phaseout 
described below) for a $1,200 Hope credit. If a taxpayer incurs 
$2,400 of qualified tuition and related expenses for an 
eligible student, then he or she is eligible for a $1,800 Hope 
credit.
---------------------------------------------------------------------------
    \10\ Sec. 25A. The Hope credit generally may not be claimed against 
a taxpayer's alternative minimum tax liability. However, the credit may 
be claimed against a taxpayer's alternative minimum tax liability for 
taxable years beginning prior to January 1, 2009.
---------------------------------------------------------------------------
      The Hope credit that a taxpayer may otherwise claim is 
phased out ratably for taxpayers with modified adjusted gross 
income between $50,000 and $60,000 ($100,000 and $120,000 for 
married taxpayers filing a joint return) for 2009. The adjusted 
gross income phaseout ranges are indexed for inflation, with 
the amount rounded down to the next lowest multiple of $1,000.
      The qualified tuition and related expenses must be 
incurred on behalf of the taxpayer, the taxpayer's spouse, or a 
dependent of the taxpayer. The Hope credit is available with 
respect to an individual student for two taxable years, 
provided that the student has not completed the first two years 
of post-secondary education before the beginning of the second 
taxable year.
      The Hope credit is available in the taxable year the 
expenses are paid, subject to the requirement that the 
education is furnished to the student during that year or 
during an academic period beginning during the first three 
months of the next taxable year. Qualified tuition and related 
expenses paid with the proceeds of a loan generally are 
eligible for the Hope credit. The repayment of a loan itself is 
not a qualified tuition or related expense.
      A taxpayer may claim the Hope credit with respect to an 
eligible student who is not the taxpayer or the taxpayer's 
spouse (e.g., in cases in which the student is the taxpayer's 
child) only if the taxpayer claims the student as a dependent 
for the taxable year for which the credit is claimed. If a 
student is claimed as a dependent, the student is not entitled 
to claim a Hope credit for that taxable year on the student's 
own tax return. If a parent (or other taxpayer) claims a 
student as a dependent, any qualified tuition and related 
expenses paid by the student are treated as paid by the parent 
(or other taxpayer) for purposes of determining the amount of 
qualified tuition and related expenses paid by such parent (or 
other taxpayer) under the provision. In addition, for each 
taxable year, a taxpayer may elect either the Hope credit, the 
Lifetime Learning credit, or an above-the-line deduction for 
qualified tuition and related expenses with respect to an 
eligible student.
      The Hope credit is available for ``qualified tuition and 
related expenses,'' which include tuition and fees (excluding 
nonacademic fees) required to be paid to an eligible 
educational institution as a condition of enrollment or 
attendance of an eligible student at the institution. Charges 
and fees associated with meals, lodging, insurance, 
transportation, and similar personal, living, or family 
expenses are not eligible for the credit. The expenses of 
education involving sports, games, or hobbies are not qualified 
tuition and related expenses unless this education is part of 
the student's degree program.
      Qualified tuition and related expenses generally include 
only out-of-pocket expenses. Qualified tuition and related 
expenses do not include expenses covered by employer-provided 
educational assistance and scholarships that are not required 
to be included in the gross income of either the student or the 
taxpayer claiming the credit. Thus, total qualified tuition and 
related expenses are reduced by any scholarship or fellowship 
grants excludable from gross income under section 117 and any 
other tax-free educational benefits received by the student (or 
the taxpayer claiming the credit) during the taxable year. The 
Hope credit is not allowed with respect to any education 
expense for which a deduction is claimed under section 162 or 
any other section of the Code.
      An eligible student for purposes of the Hope credit is an 
individual who is enrolled in a degree, certificate, or other 
program (including a program of study abroad approved for 
credit by the institution at which such student is enrolled) 
leading to a recognized educational credential at an eligible 
educational institution. The student must pursue a course of 
study on at least a half-time basis. A student is considered to 
pursue a course of study on at least a half-time basis if the 
student carries at least one half the normal full-time work 
load for the course of study the student is pursuing for at 
least one academic period that begins during the taxable year. 
To be eligible for the Hope credit, a student must not have 
been convicted of a Federal or State felony consisting of the 
possession or distribution of a controlled substance.
      Eligible educational institutions generally are 
accredited post-secondary educational institutions offering 
credit toward a bachelor's degree, an associate's degree, or 
another recognized post-secondary credential. Certain 
proprietary institutions and post-secondary vocational 
institutions also are eligible educational institutions. To 
qualify as an eligible educational institution, an institution 
must be eligible to participate in Department of Education 
student aid programs.
      Effective for taxable years beginning after December 31, 
2010, the changes to the Hope credit made by the Economic 
Growth and Tax Relief Reconciliation Act of 2001 (``EGTRRA'') 
no longer apply. The principal EGTRRA change scheduled to 
expire is the change that permitted a taxpayer to claim a Hope 
credit in the same year that he or she claims an exclusion from 
a Coverdell education savings account. Thus, after 2010, a 
taxpayer cannot claim a Hope credit in the same year he or she 
claims an exclusion from a Coverdell education savings account.

                               HOUSE BILL

      The provision modifies the Hope credit for taxable years 
beginning in 2009 or 2010. The modified credit is referred to 
as the American Opportunity Tax credit. The allowable modified 
credit is up to $2,500 per eligible student per year for 
qualified tuition and related expenses paid for each of the 
first four years of the student's post-secondary education in a 
degree or certificate program. The modified credit rate is 100 
percent on the first $2,000 of qualified tuition and related 
expenses, and 25 percent on the next $2,000 of qualified 
tuition and related expenses. For purposes of the modified 
credit, the definition of qualified tuition and related 
expenses is expanded to include course materials.
      Under the provision, the modified credit is available 
with respect to an individual student for four years, provided 
that the student has not completed the first four years of 
post-secondary education before the beginning of the fourth 
taxable year. Thus, the modified credit, in addition to other 
modifications, extends the application of the Hope credit to 
two more years of post-secondary education.
      The modified credit that a taxpayer may otherwise claim 
is phased out ratably for taxpayers with modified adjusted 
gross income between $80,000 and $90,000 ($160,000 and $180,000 
for married taxpayers filing a joint return). The modified 
credit may be claimed against a taxpayer's alternative minimum 
tax liability.
      Forty percent of a taxpayer's otherwise allowable 
modified credit is refundable. However, no portion of the 
modified credit is refundable if the taxpayer claiming the 
credit is a child to whom section 1(g) applies for such taxable 
year (generally, any child under age 18 or any child under age 
24 who is a student providing less than one-half of his or her 
own support, who has at least one living parent and does not 
file a joint return).
      In addition, the provision requires the Secretary of the 
Treasury to conduct two studies and submit a report to Congress 
on the results of those studies within one year after the date 
of enactment. The first study shall examine how to coordinate 
the Hope and Lifetime Learning credits with the Pell grant 
program. The second study shall examine requiring students to 
perform community service as a condition of taking their 
tuition and related expenses into account for purposes of the 
Hope and Lifetime Learning credits.
      Effective date.--The provision is effective with respect 
to taxable years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill, 
except that the Senate amendment provides that only 30 percent 
of a taxpayer's otherwise allowable modified credit is 
refundable.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill, with the 
following modifications. Under the conference agreement, bona 
fide residents of the U.S. possessions (American Samoa, 
Commonwealth of the Northern Mariana Islands, Commonwealth of 
Puerto Rico, Guam, Virgin Islands) are not permitted to claim 
the refundable portion of the American opportunity credit in 
the United States. Rather, a bona fide resident of a mirror 
code possession (Commonwealth of the Northern Mariana Islands, 
Guam, Virgin Islands) may claim the refundable portion of the 
credit in the possession in which the individual is a resident. 
Similarly, a bona fide resident of a non-mirror code possession 
(Commonwealth of Puerto Rico, American Samoa) may claim the 
refundable portion of the credit in the possession in which the 
individual is a resident, but only if that possession 
establishes a plan for permitting the claim under its internal 
law.
      The conference agreement provides that the U.S. Treasury 
will make payments to the possessions in respect of credits 
allowable to their residents under their internal laws. 
Specifically, the U.S. Treasury will make payments to each 
mirror code possession in an amount equal to the aggregate 
amount of the refundable portion of the credits allowable by 
reason of the provision to that possession's residents against 
its income tax. This amount will be determined by the Treasury 
Secretary based on information provided by the government of 
the respective possession. To each possession that does not 
have a mirror code tax system, the U.S. Treasury will make two 
payments (for 2009 and 2010, respectively) in an amount 
estimated by the Secretary as being equal to the aggregate 
amount of the refundable portion of the credits that would have 
been allowed to residents of that possession if a mirror code 
tax system had been in effect in that possession. Accordingly, 
the amount of each payment to a non-mirror code possession will 
be an estimate of the aggregate amount of the refundable 
portion of the credits that would be allowed to the 
possession's residents if the credit provided by the provision 
to U.S. residents were provided by the possession to its 
residents. This payment will not be made to any U.S. possession 
unless that possession has a plan that has been approved by the 
Secretary under which the possession will promptly distribute 
the payment to its residents.
5. Temporarily allow computer technology and equipment as a qualified 
        higher education expense for qualified tuition programs (sec. 
        1005 of the Senate amendment, sec. 1005 of the conference 
        agreement, and sec. 529 of the Code)

                              PRESENT LAW

      Section 529 provides specified income tax and transfer 
tax rules for the treatment of accounts and contracts 
established under qualified tuition programs.\11\ A qualified 
tuition program is a program established and maintained by a 
State or agency or instrumentality thereof, or by one or more 
eligible educational institutions, which satisfies certain 
requirements and under which a person may purchase tuition 
credits or certificates on behalf of a designated beneficiary 
that entitle the beneficiary to the waiver or payment of 
qualified higher education expenses of the beneficiary (a 
``prepaid tuition program''). In the case of a program 
established and maintained by a State or agency or 
instrumentality thereof, a qualified tuition program also 
includes a program under which a person may make contributions 
to an account that is established for the purpose of satisfying 
the qualified higher education expenses of the designated 
beneficiary of the account, provided it satisfies certain 
specified requirements (a ``savings account program''). Under 
both types of qualified tuition programs, a contributor 
establishes an account for the benefit of a particular 
designated beneficiary to provide for that beneficiary's higher 
education expenses.
---------------------------------------------------------------------------
    \11\ For purposes of this description, the term ``account'' is used 
interchangeably to refer to a prepaid tuition benefit contract or a 
tuition savings account established pursuant to a qualified tuition 
program.
---------------------------------------------------------------------------
      For this purpose, qualified higher education expenses 
means tuition, fees, books, supplies, and equipment required 
for the enrollment or attendance of a designated beneficiary at 
an eligible educational institution, and expenses for special 
needs services in the case of a special needs beneficiary that 
are incurred in connection with such enrollment or attendance. 
Qualified higher education expenses generally also include room 
and board for students who are enrolled at least half-time.
      Contributions to a qualified tuition program must be made 
in cash. Section 529 does not impose a specific dollar limit on 
the amount of contributions, account balances, or prepaid 
tuition benefits relating to a qualified tuition account; 
however, the program is required to have adequate safeguards to 
prevent contributions in excess of amounts necessary to provide 
for the beneficiary's qualified higher education expenses. 
Contributions generally are treated as a completed gift 
eligible for the gift tax annual exclusion. Contributions are 
not tax deductible for Federal income tax purposes, although 
they may be deductible for State income tax purposes. Amounts 
in the account accumulate on a tax-free basis (i.e., income on 
accounts in the plan is not subject to current income tax).
      Distributions from a qualified tuition program are 
excludable from the distributee's gross income to the extent 
that the total distribution does not exceed the qualified 
higher education expenses incurred for the beneficiary. If a 
distribution from a qualified tuition program exceeds the 
qualified higher education expenses incurred for the 
beneficiary, the portion of the excess that is treated as 
earnings generally is subject to income tax and an additional 
10-percent tax. Amounts in a qualified tuition program may be 
rolled over to another qualified tuition program for the same 
beneficiary or for a member of the family of that beneficiary 
without income tax consequences.
      In general, prepaid tuition contracts and tuition savings 
accounts established under a qualified tuition program involve 
prepayments or contributions made by one or more individuals 
for the benefit of a designated beneficiary, with decisions 
with respect to the contract or account to be made by an 
individual who is not the designated beneficiary. Qualified 
tuition accounts or contracts generally require the designation 
of a person (generally referred to as an ``account owner'') 
whom the program administrator (oftentimes a third party 
administrator retained by the State or by the educational 
institution that established the program) may look to for 
decisions, recordkeeping, and reporting with respect to the 
account established for a designated beneficiary. The person or 
persons who make the contributions to the account need not be 
the same person who is regarded as the account owner for 
purposes of administering the account. Under many qualified 
tuition programs, the account owner generally has control over 
the account or contract, including the ability to change 
designated beneficiaries and to withdraw funds at any time and 
for any purpose. Thus, in practice, qualified tuition accounts 
or contracts generally involve a contributor, a designated 
beneficiary, an account owner (who oftentimes is not the 
contributor or the designated beneficiary), and an 
administrator of the account or contract.\12\
---------------------------------------------------------------------------
    \12\ Section 529 refers to contributors and designated 
beneficiaries, but does not define or otherwise refer to the term 
account owner, which is a commonly used term among qualified tuition 
programs.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision expands the definition of qualified higher 
education expenses for expenses paid or incurred in 2009 and 
2010 to include expenses for certain computer technology and 
equipment to be used by the designated beneficiary while 
enrolled at an eligible educational institution.
      Effective date.--The provision is effective for expenses 
paid or incurred after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
6. Modifications to homebuyer credit (sec. 1301 of the House bill, sec. 
        1006 of the Senate amendment, sec. 1006 of the conference 
        agreement, and sec. 36 of the Code)

                              PRESENT LAW

      A taxpayer who is a first-time homebuyer is allowed a 
refundable tax credit equal to the lesser of $7,500 ($3,750 for 
a married individual filing separately) or 10 percent of the 
purchase price of a principal residence. The credit is allowed 
for the tax year in which the taxpayer purchases the home 
unless the taxpayer makes an election as described below. The 
credit is allowed for qualifying home purchases on or after 
April 9, 2008 and before July 1, 2009 (without regard to 
whether there was a binding contract to purchase prior to April 
9, 2008).
      The credit phases out for individual taxpayers with 
modified adjusted gross income between $75,000 and $95,000 
($150,000 and $170,000 for joint filers) for the year of 
purchase.
      A taxpayer is considered a first-time homebuyer if such 
individual had no ownership interest in a principal residence 
in the United States during the three-year period prior to the 
purchase of the home to which the credit applies.
      No credit is allowed if the D.C. homebuyer credit is 
allowable for the taxable year the residence is purchased or a 
prior taxable year. A taxpayer is not permitted to claim the 
credit if the taxpayer's financing is from tax-exempt mortgage 
revenue bonds, if the taxpayer is a nonresident alien, or if 
the taxpayer disposes of the residence (or it ceases to be a 
principal residence) before the close of a taxable year for 
which a credit otherwise would be allowable.
      The credit is recaptured ratably over fifteen years with 
no interest charge beginning in the second taxable year after 
the taxable year in which the home is purchased. For example, 
if the taxpayer purchases a home in 2008, the credit is allowed 
on the 2008 tax return, and repayments commence with the 2010 
tax return. If the taxpayer sells the home (or the home ceases 
to be used as the principal residence of the taxpayer or the 
taxpayer's spouse) prior to complete repayment of the credit, 
any remaining credit repayment amount is due on the tax return 
for the year in which the home is sold (or ceases to be used as 
the principal residence). However, the credit repayment amount 
may not exceed the amount of gain from the sale of the 
residence to an unrelated person. For this purpose, gain is 
determined by reducing the basis of the residence by the amount 
of the credit to the extent not previously recaptured. No 
amount is recaptured after the death of a taxpayer. In the case 
of an involuntary conversion of the home, recapture is not 
accelerated if a new principal residence is acquired within a 
two-year period. In the case of a transfer of the residence to 
a spouse or to a former spouse incident to divorce, the 
transferee spouse (and not the transferor spouse) will be 
responsible for any future recapture.
      An election is provided to treat a home purchased in the 
eligible period in 2009 as if purchased on December 31, 2008 
for purposes of claiming the credit on the 2008 tax return and 
for establishing the beginning of the recapture period. 
Taxpayers may amend their returns for this purpose.

                               HOUSE BILL

      The provision waives the recapture of the credit for 
qualifying home purchases after December 31, 2008 and before 
July 1, 2009. This waiver of recapture applies without regard 
to whether the taxpayer elects to treat the purchase in 2009 as 
occurring on December 31, 2008. If the taxpayer disposes of the 
home or the home otherwise ceases to be the principal residence 
of the taxpayer within 36 months from the date of purchase, the 
present law rules for recapture of the credit will still apply.
      Effective date.--The provision applies to residences 
purchased after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment repeals the existing section 36 for 
purchases on or after the date of enactment of the American 
Recovery and Reinvestment Act of 2009.
      A taxpayer is allowed a new nonrefundable tax credit 
equal to the lesser of $15,000 ($7,500 for a married individual 
filing separately) or 10 percent of the purchase price of a 
principal residence. The credit is allowed for the tax year in 
which the taxpayer purchases the home unless the taxpayer makes 
an election as described below. The credit is allowed for 
qualifying home purchases after the date of enactment of the 
American Recovery and Reinvestment Act and on or before the 
date that is one year after such date of enactment.
      The credit is limited to the excess of regular tax 
liability plus alternative minimum tax liability over the sum 
of other nonrefundable personal credits.
      No credit is allowed for any purchase for which the 
section 36 first-time homebuyer credit or the D.C. homebuyer 
credit is allowable. If a credit is allowed under this 
provision in the case of any individual (and such individual's 
spouse, if married) with respect to the purchase of any 
principal residence, no credit is allowed with respect to the 
purchase of any other principal residence by such individual or 
a spouse of such individual.
      If the taxpayer disposes of the residence (or it ceases 
to be a principal residence) at any time within 24 months after 
the date on which the taxpayer purchased the residence, then 
the credit shall be subject to recapture for the taxable year 
in which such disposition occurred (or in which the taxpayer 
failed to occupy the residence as a principal residence). No 
amount is recaptured after the death of a taxpayer or in the 
case of a member of the Armed Forces of the United States on 
active duty who fails to meet the residency requirement 
pursuant to a military order and incident to a permanent change 
of station. In the case of an involuntary conversion of the 
home, recapture is not accelerated if a new principal residence 
is acquired within a two-year period. In the case of a transfer 
of the residence to a spouse or to a former spouse incident to 
divorce, the transferee spouse (and not the transferor spouse) 
will be responsible for any future recapture.
      A further election is provided to treat a home purchased 
in the eligible period as if purchased on December 31, 2008 for 
purposes of claiming the credit on the 2008 tax return. 
Taxpayers may amend their returns for this purpose.
      Effective date.--The provision applies to purchases after 
the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement extends the existing homebuyer 
credit for qualifying home purchases before December 1, 2009. 
In addition, it increases the maximum credit amount to $8,000 
($4,000 for a married individual filing separately) and waives 
the recapture of the credit for qualifying home purchases after 
December 31, 2008 and before December 1, 2009. This waiver of 
recapture applies without regard to whether the taxpayer elects 
to treat the purchase in 2009 as occurring on December 31, 
2008. If the taxpayer disposes of the home or the home 
otherwise ceases to be the principal residence of the taxpayer 
within 36 months from the date of purchase, the present law 
rules for recapture of the credit will apply.
      The conference agreement modifies the coordination with 
the first-time homebuyer credit for residents of the District 
of Columbia under section 1400C. No credit under section 1400C 
shall be allowed to any taxpayer with respect to the purchase 
of a residence during 2009 if a credit under section 36 is 
allowable to such taxpayer (or the taxpayer's spouse) with 
respect to such purchase. Taxpayers thus qualify for the more 
generous national first-time homebuyer credit rather than the 
D.C. homebuyer credit for qualifying purchases in 2009. No 
credit under section 36 is allowed for a taxpayer who claimed 
the D.C. homebuyer credit in any prior taxable year.
      The conference agreement removes the prohibition on 
claiming the credit if the residence is financed by the 
proceeds of a mortgage revenue bond, a qualified mortgage issue 
the interest on which is exempt from tax under section 103.
      Effective date.--The provision applies to residences 
purchased after December 31, 2008.
7. Election to substitute grants to States for low-income housing 
        projects in lieu of low-income housing credit allocation for 
        2009 (secs. 1302 and 1711 of the House bill, secs. 1404 and 
        1602 of the conference agreement, and sec. 42 of the Code)

                              PRESENT LAW

In general
      The low-income housing credit may be claimed over a 10-
year period by owners of certain residential rental property 
for the cost of rental housing occupied by tenants having 
incomes below specified levels.\13\ The amount of the credit 
for any taxable year in the credit period is the applicable 
percentage of the qualified basis of each qualified low-income 
building. The qualified basis of any qualified low-income 
building for any taxable year equals the applicable fraction of 
the eligible basis of the building.
---------------------------------------------------------------------------
    \13\ Sec. 42.
---------------------------------------------------------------------------
Volume limits
      A low-income housing credit is allowable only if the 
owner of a qualified building receives a housing credit 
allocation from the State or local housing credit agency. 
Generally, the aggregate credit authority provided annually to 
each State for calendar year 2009 is $2.30 per resident, with a 
minimum annual cap of $2,665,000 for certain small population 
States. \14\ These amounts are indexed for inflation. Projects 
that also receive financing with proceeds of tax-exempt bonds 
issued subject to the private activity bond volume limit do not 
require an allocation of the low-income housing credit.
---------------------------------------------------------------------------
    \14\ Rev. Proc. 2008-66.
---------------------------------------------------------------------------
Basic rule for Federal grants
      The basis of a qualified building must be reduced by the 
amount of any federal grant with respect to such building.

                               HOUSE BILL

Low-income housing grant election amount
      The Secretary of the Treasury shall make a grant to the 
State housing credit agency of each State in an amount equal to 
the low-income housing grant election amount.
      The low-income housing grant election amount for a State 
is an amount elected by the State subject to certain limits. 
The maximum low-income housing grant election amount for a 
State may not exceed 85 percent of the product of ten and the 
sum of the State's: (1) unused housing credit ceiling for 2008; 
(2) any returns to the State during 2009 of credit allocations 
previously made by the State; (3) 40 percent of the State's 
2009 credit allocation; and (4) 40 percent of the State's share 
of the national pool allocated in 2009, if any.
      Grants under this provision are not taxable income to 
recipients.
Subawards to low-income housing credit buildings
      A State receiving a grant under this provision is to use 
these monies to make subawards to finance the construction, or 
acquisition and rehabilitation of qualified low-income 
buildings as defined under the low-income housing credit. A 
subaward may be made to finance a qualified low-income building 
regardless of whether the building has an allocation of low-
income housing credit. However, in the case of qualified low-
income buildings without allocations of the low-income housing 
credit, the State housing credit agency must make a 
determination that the subaward with respect to such building 
will increase the total funds available to the State to build 
and rehabilitate affordable housing. In conjunction with this 
determination the State housing credit agency must establish a 
process in which applicants for the subawards must demonstrate 
good faith efforts to obtain investment commitments before the 
agency makes such subawards.
      Any building receiving grant money from a subaward is 
required to satisfy the low-income housing credit rules. The 
State housing credit agency shall perform asset management 
functions to ensure compliance with the low-income housing 
credit rules and the long-term viability of buildings financed 
with these subawards. \15\ Failure to satisfy the low-income 
housing credit rules will result in recapture enforced by means 
of liens or other methods that the Secretary of the Treasury 
(or delegate) deems appropriate. Any such recapture will be 
payable to the Secretary of the Treasury for deposit in the 
general fund of the Treasury.
---------------------------------------------------------------------------
    \15\ The State housing credit agency may collect reasonable fees 
from subaward recipients to cover the expenses of the agency's asset 
management duties. Alternatively, the State housing credit agency may 
retain a third party to perform these asset management duties.
---------------------------------------------------------------------------
      Any grant funds not used to make subawards before January 
1, 2011 and any grant monies from subawards returned on or 
after January 1, 2011 must be returned to the Secretary of the 
Treasury.
Basic rule for Federal grants
      The grants received under this provision do not reduce 
tax basis of a qualified low-income building.
Reduction in low-income housing credit volume limit for 2009
      The otherwise applicable low-income housing credit volume 
limit for any State for 2009 is reduced by the amount taken 
into account in determining the low-income housing grant 
election amount.
Appropriations
      The provision appropriates to the Secretary of the 
Treasury such sums as may be necessary to carry out this 
provision.
Effective date
      The provision is effective on the date of enactment.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill.
8. Election to accelerate the low-income housing credit allocation 
        (sec. 1903 of the Senate amendment)

                              PRESENT LAW

In general
      The low-income housing credit may be claimed over a 10-
year period by owners of certain residential rental property 
for the cost of rental housing occupied by tenants having 
incomes below specified levels.\16\ The amount of the credit 
for any taxable year in the credit period is the applicable 
percentage of the qualified basis of each qualified low-income 
building. The qualified basis of any qualified low-income 
building for any taxable year equals the applicable fraction of 
the eligible basis of the building.
---------------------------------------------------------------------------
    \16\ Sec. 42.
---------------------------------------------------------------------------
Volume limits
      A low-income housing credit is allowable only if the 
owner of a qualified building receives a housing credit 
allocation from the State or local housing credit agency. 
Generally, the aggregate credit authority provided annually to 
each State for calendar year 2009 is $2.30 per resident, with a 
minimum annual cap of $2,665,000 for certain small population 
States.\17\ These amounts are indexed for inflation. Projects 
that also receive financing with proceeds of tax-exempt bonds 
issued subject to the private activity bond volume limit do not 
require an allocation of the low-income housing credit.
---------------------------------------------------------------------------
    \17\ Rev. Proc. 2008-66.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision allows a taxpayer election to double the 
amount of the otherwise allowable low-income housing tax credit 
with respect to a project for each of the taxpayer's first 
three taxable years beginning after December 31, 2008. The 
otherwise allowable low-income housing tax credit over the 
remaining credit period for the project with respect to a 
taxpayer making the election will be reduced on a pro rata 
basis by an amount equal to the acceleration in the first three 
years.
      The election is only available for non-federally 
subsidized low-income housing projects placed in service after 
December 31, 2008 which are pursuant to a low-income housing 
credit allocation from a State housing credit ceiling before 
2011 (e.g. an allocation of 2011 credit ceiling makes the 
project ineligible for the election). Further, the election is 
limited to low-income housing tax credit initial investments 
made pursuant to a binding agreement by the taxpayer after 
December 31, 2008 and before January 1, 2011. For example, a 
taxpayer could not make this election with respect to initial 
investments made pursuant to a binding agreement in existence 
on January 1, 2008 even though the building is not placed-in-
service until after December 31, 2008.
      The election shall be made in a time and manner 
prescribed by the Secretary of the Treasury (or his delegate). 
The election is irrevocable. In the case of a partnership the 
election can only be made at the partnership level, not by 
individual partners.
      Effective date.--The provision is effective on the date 
of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement does not follow the Senate 
amendment.
9. Exclusion from gross income for unemployment compensation benefits 
        (sec. 1007 of the Senate amendment, sec. 1007 of the conference 
        agreement, and sec. 85 of the Code)

                              PRESENT LAW

      An individual must include in gross income any 
unemployment compensation benefits received under the laws of 
the United States or any State.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment provides that up to $2,400 of 
unemployment compensation benefits received in 2009 are 
excluded from gross income by the recipient.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
10. Deduction for interest on indebtedness for the purchase of 
        qualified motor vehicles (sec. 1008 of the Senate amendment)

                              PRESENT LAW

      In the case of a taxpayer other than a corporation, no 
deduction is allowed for personal interest paid or accrued 
during the taxable year. Personal interest is all interest 
other than (1) interest paid or accrued on indebtedness 
properly allocable to a trade or business; (2) investment 
interest; (3) interest which is taken into account in computing 
income or loss from a passive activity of the taxpayer; (4) 
qualified home mortgage interest; (5) certain estate tax 
related interest; and (6) certain interest on educational 
loans.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment provides an above-the-line deduction 
for qualified motor vehicle interest. Qualified motor vehicle 
interest means any interest paid or accrued during the taxable 
year on any indebtedness incurred after November 12, 2008 and 
before January 1, 2010 to acquire a qualified motor vehicle and 
secured by such vehicle. It also includes interest on any 
indebtedness secured by such qualified motor vehicle resulting 
from the refinancing of otherwise qualified motor vehicle 
interest. The amount of qualified indebtedness is limited to 
$49,500 ($24,750 in the case of a married individual filing 
separately). The deduction is phased out for taxpayers with 
modified adjusted gross income between $125,000 and $135,000 
($250,000 and $260,000 in the case of a joint return).
      If the indebtedness includes the amounts of any State or 
local sales or excise taxes paid or accrued by the taxpayer in 
connection with the acquisition of a qualified motor vehicle 
for which a deduction is allowed under section 164(a)(6) 
(relating to the deduction of State and local sales or excise 
taxes on qualified motor vehicles), the aggregate amount of 
such indebtedness taken into account shall be reduced, but not 
below zero, by the amount of any such taxes for which such 
deduction is allowed.
      A qualified motor vehicle means a passenger automobile or 
light truck acquired for use by the taxpayer and not for resale 
after November 12, 2008 and before January 1, 2010, the 
original use of which commences with the taxpayer and which has 
a gross vehicle weight rating of not more than 8,500 pounds.
      Any person who is engaged in a trade or business and 
receives from any individual $600 or more of qualified motor 
vehicle interest for any calendar year is required to report 
certain information as the Secretary may prescribe and furnish 
information to such individual on or before January 31 of the 
year following the calendar year for which the interest is 
received.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement does not follow the Senate 
amendment.
11. Deduction for State sales tax and excise tax on the purchase of 
        qualified motor vehicles (sec. 1009 of the Senate amendment, 
        sec. 1008 of the conference agreement, and secs. 63 and 164 of 
        the Code)

                              PRESENT LAW

      In general, a deduction from gross income is allowed for 
certain taxes for the taxable year within which the taxes are 
paid or accrued. These include State and local, and foreign, 
real property taxes; State and local personal property taxes; 
State, local, and foreign income, war profits, and excess 
profit taxes; generation skipping transfer taxes; environmental 
taxes imposed by section 59A; and taxes paid or accrued within 
the taxable year in carrying on a trade or business or an 
activity described in section 212 (relating to the expenses for 
production of income). At the election of the taxpayer for the 
taxable year, a taxpayer may deduct State and local sales taxes 
in lieu of State and local income taxes. No deduction is 
allowed for any general sales tax imposed with respect to an 
item at a rate other than the general rate of tax, except in 
the case of a lower rate of tax applicable to items of food, 
clothing, medical supplies, and motor vehicles. In the case of 
motor vehicles, if the rate of tax exceeds the general rate, 
such excess shall be disregarded and the general rate shall be 
treated as the rate of tax.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment provides an above-the-line deduction 
for qualified motor vehicle taxes. Qualified motor vehicle 
taxes include any State or local sales or excise tax imposed on 
the purchase of a qualified motor vehicle. A qualified motor 
vehicle means a passenger automobile or light truck acquired 
for use by the taxpayer and not for resale after November 12, 
2008 and before January 1, 2010, the original use of which 
commences with the taxpayer and which has a gross vehicle 
weight rating of not more than 8,500 pounds.
      The deduction is limited to sales tax of up to $49,500.
      The deduction is phased out for taxpayers with modified 
adjusted gross income between $125,000 and $135,000 ($250,000 
and $260,000 in the case of a joint return).
      Notwithstanding other provisions of present law, 
qualified motor vehicle taxes are not treated as part of the 
cost of acquired property or, in the case of a disposition, as 
a reduction in the amount realized on the disposition.
      A taxpayer who makes an election to deduct State and 
local sales taxes for the taxable year shall not be allowed the 
above-the-line deduction for qualified motor vehicle taxes.
      If the indebtedness described in section 163(h)(5)(A) 
includes the amounts of any State or local sales or excise 
taxes paid or accrued by the taxpayer in connection with the 
acquisition of a qualified motor vehicle, the aggregate amount 
of such indebtedness taken into account shall be reduced, but 
not below zero, by the amount of any such taxes for which a 
deduction is allowed.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the House bill 
or the Senate amendment. The conference agreement provides a 
deduction for qualified motor vehicle taxes. It expands the 
definition of taxes allowed as a deduction to include qualified 
motor vehicle taxes paid or accrued within the taxable year. A 
taxpayer who itemizes and makes an election to deduct State and 
local sales taxes for qualified motor vehicles for the taxable 
year shall not be allowed the increased standard deduction for 
qualified motor vehicle taxes.
      Qualified motor vehicle taxes include any State or local 
sales or excise tax imposed on the purchase of a qualified 
motor vehicle. A qualified motor vehicle means a passenger 
automobile, light truck, or motorcycle which has a gross 
vehicle weight rating of not more than 8,500 pounds, or a motor 
home acquired for use by the taxpayer after the date of 
enactment and before January 1, 2010, the original use of which 
commences with the taxpayer.
      The deduction is limited to the tax on up to $49,500 of 
the purchase price of a qualified motor vehicle. The deduction 
is phased out for taxpayers with modified adjusted gross income 
between $125,000 and $135,000 ($250,000 and $260,000 in the 
case of a joint return).
      Effective date.--The provision is effective for purchases 
on or after the date of enactment and before January 1, 2010.
12. Extend alternative minimum tax relief for individuals (secs. 1011 
        and 1012 of the Senate amendment, secs. 1011 and 1012 of the 
        conference agreement, and secs. 26 and 55 of the Code)

                              PRESENT LAW

      Present law imposes an alternative minimum tax (``AMT'') 
on individuals. The AMT is the amount by which the tentative 
minimum tax exceeds the regular income tax. An individual's 
tentative minimum tax is the sum of (1) 26 percent of so much 
of the taxable excess as does not exceed $175,000 ($87,500 in 
the case of a married individual filing a separate return) and 
(2) 28 percent of the remaining taxable excess. The taxable 
excess is so much of the alternative minimum taxable income 
(``AMTI'') as exceeds the exemption amount. The maximum tax 
rates on net capital gain and dividends used in computing the 
regular tax are used in computing the tentative minimum tax. 
AMTI is the individual's taxable income adjusted to take 
account of specified preferences and adjustments.
      The exemption amounts are: (1) $69,950 for taxable years 
beginning in 2008 and $45,000 in taxable years beginning after 
2008 in the case of married individuals filing a joint return 
and surviving spouses; (2) $46,200 for taxable years beginning 
in 2008 and $33,750 in taxable years beginning after 2008 in 
the case of other unmarried individuals; (3) $34,975 for 
taxable years beginning in 2008 and $22,500 in taxable years 
beginning after 2008 in the case of married individuals filing 
separate returns; and (4) $22,500 in the case of an estate or 
trust. The exemption amount is phased out by an amount equal to 
25 percent of the amount by which the individual's AMTI exceeds 
(1) $150,000 in the case of married individuals filing a joint 
return and surviving spouses, (2) $112,500 in the case of other 
unmarried individuals, and (3) $75,000 in the case of married 
individuals filing separate returns or an estate or a trust. 
These amounts are not indexed for inflation.
      Present law provides for certain nonrefundable personal 
tax credits (i.e., the dependent care credit, the credit for 
the elderly and disabled, the adoption credit, the child 
credit, the credit for interest on certain home mortgages, the 
Hope Scholarship and Lifetime Learning credits, the credit for 
savers, the credit for certain nonbusiness energy property, the 
credit for residential energy efficient property, the credit 
for plug-in electric drive motor vehicles; and the D.C. first-
time homebuyer credit).
      For taxable years beginning before 2009, the 
nonrefundable personal credits are allowed to the extent of the 
full amount of the individual's regular tax and alternative 
minimum tax.
      For taxable years beginning after 2008, the nonrefundable 
personal credits (other than the adoption credit, the child 
credit, the credit for savers, the credit for residential 
energy efficient property, and the credit for plug-in electric 
drive motor vehicles) are allowed only to the extent that the 
individual's regular income tax liability exceeds the 
individual's tentative minimum tax, determined without regard 
to the minimum tax foreign tax credit. The adoption credit, the 
child credit, the credit for savers, the credit for residential 
energy efficient property, and the credit for plug-in electric 
drive motor vehicles are allowed to the full extent of the 
individual's regular tax and alternative minimum tax.\18\
---------------------------------------------------------------------------
    \18\ The rule applicable to the adoption credit and child credit is 
subject to the EGTRRA sunset.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment provides that the individual AMT 
exemption amount for taxable years beginning in 2009 is 
$70,950, in the case of married individuals filing a joint 
return and surviving spouses; (2) $46,700 in the case of other 
unmarried individuals; and (3) $35,475 in the case of married 
individuals filing separate returns.
      For taxable years beginning in 2009, the provision allows 
an individual to offset the entire regular tax liability and 
alternative minimum tax liability by the nonrefundable personal 
credits.
      Effective date.--The provision is effective for taxable 
years beginning in 2009.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.

                     B. Tax Incentives for Business

1. Special allowance for certain property acquired during 2009 and 
        extension of election to accelerate AMT and research credits in 
        lieu of bonus depreciation (sec. 1401 of the House bill, sec. 
        1201 of the Senate amendment, sec. 1201 of the conference 
        agreement, and sec. 168(k) of the Code)

                              PRESENT LAW

      An additional first-year depreciation deduction is 
allowed equal to 50 percent of the adjusted basis of qualified 
property placed in service during 2008 (and 2009 for certain 
longer-lived and transportation property).\19\ The additional 
first-year depreciation deduction is allowed for both regular 
tax and alternative minimum tax purposes for the taxable year 
in which the property is placed in service.\20\ The basis of 
the property and the depreciation allowances in the year of 
purchase and later years are appropriately adjusted to reflect 
the additional first-year depreciation deduction. In addition, 
there are no adjustments to the allowable amount of 
depreciation for purposes of computing a taxpayer's alternative 
minimum taxable income with respect to property to which the 
provision applies. The amount of the additional first-year 
depreciation deduction is not affected by a short taxable year. 
The taxpayer may elect out of additional first-year 
depreciation for any class of property for any taxable year.
---------------------------------------------------------------------------
    \19\ Sec. 168(k). The additional first-year depreciation deduction 
is subject to the general rules regarding whether an item is deductible 
under section 162 or instead is subject to capitalization under section 
263 or section 263A.
    \20\ However, the additional first-year depreciation deduction is 
not allowed for purposes of computing earnings and profits.
---------------------------------------------------------------------------
      The interaction of the additional first-year depreciation 
allowance with the otherwise applicable depreciation allowance 
may be illustrated as follows. Assume that in 2008, a taxpayer 
purchases new depreciable property and places it in 
service.\21\ The property's cost is $1,000, and it is five-year 
property subject to the half-year convention. The amount of 
additional first-year depreciation allowed is $500. The 
remaining $500 of the cost of the property is deductible under 
the rules applicable to 5-year property. Thus, 20 percent, or 
$100, is also allowed as a depreciation deduction in 2008. The 
total depreciation deduction with respect to the property for 
2008 is $600. The remaining $400 cost of the property is 
recovered under otherwise applicable rules for computing 
depreciation.
---------------------------------------------------------------------------
    \21\ Assume that the cost of the property is not eligible for 
expensing under section 179.
---------------------------------------------------------------------------
      In order for property to qualify for the additional 
first-year depreciation deduction it must meet all of the 
following requirements. First, the property must be (1) 
property to which MACRS applies with an applicable recovery 
period of 20 years or less, (2) water utility property (as 
defined in section 168(e)(5)), (3) computer software other than 
computer software covered by section 197, or (4) qualified 
leasehold improvement property (as defined in section 
168(k)(3)).\22\
---------------------------------------------------------------------------
    \22\ A special rule precludes the additional first-year 
depreciation deduction for any property that is required to be 
depreciated under the alternative depreciation system of MACRS.
---------------------------------------------------------------------------
      Second, the original use \23\ of the property must 
commence with the taxpayer after December 31, 2007.\24\ Third, 
the taxpayer must purchase the property within the applicable 
time period. Finally, the property must be placed in service 
after December 31, 2007, and before January 1, 2009. An 
extension of the placed in service date of one year (i.e., to 
January 1, 2010) is provided for certain property with a 
recovery period of ten years or longer and certain 
transportation property.\25\ Transportation property is defined 
as tangible personal property used in the trade or business of 
transporting persons or property.
---------------------------------------------------------------------------
    \23\ The term ``original use'' means the first use to which the 
property is put, whether or not such use corresponds to the use of such 
property by the taxpayer.
    If in the normal course of its business a taxpayer sells fractional 
interests in property to unrelated third parties, then the original use 
of such property begins with the first user of each fractional interest 
(i.e., each fractional owner is considered the original user of its 
proportionate share of the property).
    \24\ A special rule applies in the case of certain leased property. 
In the case of any property that is originally placed in service by a 
person and that is sold to the taxpayer and leased back to such person 
by the taxpayer within three months after the date that the property 
was placed in service, the property would be treated as originally 
placed in service by the taxpayer not earlier than the date that the 
property is used under the leaseback.
    If property is originally placed in service by a lessor (including 
by operation of section 168(k)(2)(D)(i)), such property is sold within 
three months after the date that the property was placed in service, 
and the user of such property does not change, then the property is 
treated as originally placed in service by the taxpayer not earlier 
than the date of such sale.
    \25\ In order for property to qualify for the extended placed in 
service date, the property is required to have an estimated production 
period exceeding one year and a cost exceeding $1 million.
---------------------------------------------------------------------------
      The applicable time period for acquired property is (1) 
after December 31, 2007, and before January 1, 2009, but only 
if no binding written contract for the acquisition is in effect 
before January 1, 2008, or (2) pursuant to a binding written 
contract which was entered into after December 31, 2007, and 
before January 1, 2009.\26\ With respect to property that is 
manufactured, constructed, or produced by the taxpayer for use 
by the taxpayer, the taxpayer must begin the manufacture, 
construction, or production of the property after December 31, 
2007, and before January 1, 2009. Property that is 
manufactured, constructed, or produced for the taxpayer by 
another person under a contract that is entered into prior to 
the manufacture, construction, or production of the property is 
considered to be manufactured, constructed, or produced by the 
taxpayer. For property eligible for the extended placed in 
service date, a special rule limits the amount of costs 
eligible for the additional first-year depreciation. With 
respect to such property, only the portion of the basis that is 
properly attributable to the costs incurred before January 1, 
2009 (``progress expenditures'') is eligible for the additional 
first-year depreciation.\27\
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    \26\ Property does not fail to qualify for the additional first-
year depreciation merely because a binding written contract to acquire 
a component of the property is in effect prior to January 1, 2008.
    \27\ For purposes of determining the amount of eligible progress 
expenditures, it is intended that rules similar to sec. 46(d)(3) as in 
effect prior to the Tax Reform Act of 1986 shall apply.
---------------------------------------------------------------------------
      Property does not qualify for the additional first-year 
depreciation deduction when the user of such property (or a 
related party) would not have been eligible for the additional 
first-year depreciation deduction if the user (or a related 
party) were treated as the owner. For example, if a taxpayer 
sells to a related party property that was under construction 
prior to January 1, 2008, the property does not qualify for the 
additional first-year depreciation deduction. Similarly, if a 
taxpayer sells to a related party property that was subject to 
a binding written contract prior to January 1, 2008, the 
property does not qualify for the additional first-year 
depreciation deduction. As a further example, if a taxpayer 
(the lessee) sells property in a sale-leaseback arrangement, 
and the property otherwise would not have qualified for the 
additional first-year depreciation deduction if it were owned 
by the taxpayer-lessee, then the lessor is not entitled to the 
additional first-year depreciation deduction.
      The limitation on the amount of depreciation deductions 
allowed with respect to certain passenger automobiles (sec. 
280F) is increased in the first year by $8,000 for automobiles 
that qualify (and do not elect out of the increased first year 
deduction). The $8,000 increase is not indexed for inflation.
      Corporations otherwise eligible for additional first year 
depreciation under section 168(k) may elect to claim additional 
research or minimum tax credits in lieu of claiming 
depreciation under section 168(k) for ``eligible qualified 
property'' placed in service after March 31, 2008 and before 
December 31, 2008.\28\ A corporation making the election 
forgoes the depreciation deductions allowable under section 
168(k) and instead increases the limitation under section 38(c) 
on the use of research credits or section 53(c) on the use of 
minimum tax credits.\29\ The increases in the allowable credits 
are treated as refundable for purposes of this provision. The 
depreciation for qualified property is calculated for both 
regular tax and AMT purposes using the straight-line method in 
place of the method that would otherwise be used absent the 
election under this provision.
---------------------------------------------------------------------------
    \28\ Sec. 168(k)(4). In the case of an electing corporation that is 
a partner in a partnership, the corporate partner's distributive share 
of partnership items is determined as if section 168(k) does not apply 
to any eligible qualified property and the straight line method is used 
to calculate depreciation of such property.
    \29\ Special rules apply to an applicable partnership.
---------------------------------------------------------------------------
      The research credit or minimum tax credit limitation is 
increased by the bonus depreciation amount, which is equal to 
20 percent of bonus depreciation \30\ for certain eligible 
qualified property that could be claimed absent an election 
under this provision. Generally, eligible qualified property 
included in the calculation is bonus depreciation property that 
meets the following requirements: (1) the original use of the 
property must commence with the taxpayer after March 31, 2008; 
(2) the taxpayer must purchase the property either (a) after 
March 31, 2008, and before January 1, 2009, but only if no 
binding written contract for the acquisition is in effect 
before April 1, 2008,\31\ or (b) pursuant to a binding written 
contract which was entered into after March 31, 2008, and 
before January 1, 2009; \32\ and (3) the property must be 
placed in service after March 31, 2008, and before January 1, 
2009 (January 1, 2010 for certain longer-lived and 
transportation property).
---------------------------------------------------------------------------
    \30\ For this purpose, bonus depreciation is the difference between 
(i) the aggregate amount of depreciation for all eligible qualified 
property determined if section 168(k)(1) applied using the most 
accelerated depreciation method (determined without regard to this 
provision), and shortest life allowable for each property, and (ii) the 
amount of depreciation that would be determined if section 168(k)(1) 
did not apply using the same method and life for each property.
    \31\ In the case of passenger aircraft, the written binding 
contract limitation does not apply.
    \32\ Special rules apply to property manufactured, constructed, or 
produced by the taxpayer for use by the taxpayer.
---------------------------------------------------------------------------
      The bonus depreciation amount is limited to the lesser 
of: (1) $30 million, or (2) six percent of the sum of research 
credit carryforwards from taxable years beginning before 
January 1, 2006 and minimum tax credits allocable to the 
adjusted minimum tax imposed for taxable years beginning before 
January 1, 2006. All corporations treated as a single employer 
under section 52(a) are treated as one taxpayer for purposes of 
the limitation, as well as for electing the application of this 
provision.

                               HOUSE BILL

      The provision extends the additional first-year 
depreciation deduction for one year, generally through 2009 
(through 2010 for certain longer-lived and transportation 
property).\33\
---------------------------------------------------------------------------
    \33\ The provision does not modify the property eligible for the 
election to accelerate AMT and research credits in lieu of bonus 
depreciation under section 168(k)(4). However, the provision includes a 
technical amendment to section 168(k)(4)(D) providing that no written 
binding contract for the acquisition of eligible qualified property may 
be in effect before April 1, 2008 (effective for taxable years ending 
after March 31, 2008).
---------------------------------------------------------------------------
      Effective date.--The provision is effective for property 
placed in service after December 31, 2008.

                            SENATE AMENDMENT

      The provision extends the additional first-year 
depreciation deduction for one year, generally through 2009 
(through 2010 for certain longer-lived and transportation 
property).
      The provision generally permits corporations to increase 
the research credit or minimum tax credit limitation by the 
bonus depreciation amount with respect to certain property 
placed in service in 2009 (2010 in the case of certain longer-
lived and transportation property). The provision applies with 
respect to extension property, which is defined as property 
that is eligible qualified property solely because it meets the 
requirements under the extension of the special allowance for 
certain property acquired during 2009.
      Under the provision, a taxpayer that has made an election 
to increase the research credit or minimum tax credit 
limitation for eligible qualified property for its first 
taxable year ending after March 31, 2008, may choose not to 
make this election for extension property. Further, the 
provision allows a taxpayer that has not made an election for 
eligible qualified property for its first taxable year ending 
after March 31, 2008, to make the election for extension 
property for its first taxable year ending after December 31, 
2008, and for each subsequent year. In the case of a taxpayer 
electing to increase the research or minimum tax credit for 
both eligible qualified property and extension property, a 
separate bonus depreciation amount, maximum amount, and maximum 
increase amount is computed and applied to each group of 
property.\34\
---------------------------------------------------------------------------
    \34\ In computing the maximum amount, the maximum increase amount 
for extension property is reduced by bonus depreciation amounts for 
preceding taxable years only with respect to extension property.
---------------------------------------------------------------------------
      Effective date.--The extension of the additional first-
year depreciation deduction is generally effective for property 
placed in service after December 31, 2008.
      The extension of the election to accelerate AMT and 
research credits in lieu of bonus depreciation is effective for 
taxable years ending after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
2. Temporary increase in limitations on expensing of certain 
        depreciable business assets (sec. 1402 of the House bill, sec. 
        1202 of the Senate amendment, sec. 1202 of the conference 
        agreement, and sec. 179 of the Code)

                              PRESENT LAW

      In lieu of depreciation, a taxpayer with a sufficiently 
small amount of annual investment may elect to deduct (or 
``expense'') such costs under section 179. Present law provides 
that the maximum amount a taxpayer may expense for taxable 
years beginning in 2008 is $250,000 of the cost of qualifying 
property placed in service for the taxable year.\35\ For 
taxable years beginning in 2009 and 2010, the limitation is 
$125,000. In general, qualifying property is defined as 
depreciable tangible personal property that is purchased for 
use in the active conduct of a trade or business. Off-the-shelf 
computer software placed in service in taxable years beginning 
before 2011 is treated as qualifying property. For taxable 
years beginning in 2008, the $250,000 amount is reduced (but 
not below zero) by the amount by which the cost of qualifying 
property placed in service during the taxable year exceeds 
$800,000. For taxable years beginning in 2009 and 2010, the 
$125,000 amount is reduced (but not below zero) by the amount 
by which the cost of qualifying property placed in service 
during the taxable year exceeds $500,000. The $125,000 and 
$500,000 amounts are indexed for inflation in taxable years 
beginning in 2009 and 2010.
---------------------------------------------------------------------------
    \35\ Additional section 179 incentives are provided with respect to 
qualified property meeting applicable requirements that is used by a 
business in an empowerment zone (sec. 1397A) or a renewal community 
(sec. 1400J), qualified section 179 Gulf Opportunity Zone property 
(sec. 1400N(e)), qualified Recovery Assistance property placed in 
service in the Kansas disaster area (Pub. L. No. 110-234, sec. 15345 
(2008)), and qualified disaster assistance property (sec. 179(e)).
---------------------------------------------------------------------------
      The amount eligible to be expensed for a taxable year may 
not exceed the taxable income for a taxable year that is 
derived from the active conduct of a trade or business 
(determined without regard to this provision). Any amount that 
is not allowed as a deduction because of the taxable income 
limitation may be carried forward to succeeding taxable years 
(subject to similar limitations). No general business credit 
under section 38 is allowed with respect to any amount for 
which a deduction is allowed under section 179. An expensing 
election is made under rules prescribed by the Secretary.\36\
---------------------------------------------------------------------------
    \36\ Sec. 179(c)(1). Under Treas. Reg. sec. 1.179-5, applicable to 
property placed in service in taxable years beginning after 2002 and 
before 2008, a taxpayer is permitted to make or revoke an election 
under section 179 without the consent of the Commissioner on an amended 
Federal tax return for that taxable year. This amended return must be 
filed within the time prescribed by law for filing an amended return 
for the taxable year. T.D. 9209, July 12, 2005.
---------------------------------------------------------------------------
      For taxable years beginning in 2011 and thereafter (or 
before 2003), the following rules apply. A taxpayer with a 
sufficiently small amount of annual investment may elect to 
deduct up to $25,000 of the cost of qualifying property placed 
in service for the taxable year. The $25,000 amount is reduced 
(but not below zero) by the amount by which the cost of 
qualifying property placed in service during the taxable year 
exceeds $200,000. The $25,000 and $200,000 amounts are not 
indexed for inflation. In general, qualifying property is 
defined as depreciable tangible personal property that is 
purchased for use in the active conduct of a trade or business 
(not including off-the-shelf computer software). An expensing 
election may be revoked only with consent of the 
Commissioner.\37\
---------------------------------------------------------------------------
    \37\ Sec. 179(c)(2).
---------------------------------------------------------------------------

                               HOUSE BILL

      The provision extends the $250,000 and $800,000 amounts 
to taxable years beginning in 2009.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
3. Five-year carryback of operating losses (secs. 1411 and 1412 of the 
        House bill, secs. 1211 and 1212 of the Senate amendment, sec. 
        1211 of the conference agreement, and sec. 172 of the Code)

                              PRESENT LAW

      Under present law, a net operating loss (``NOL'') 
generally means the amount by which a taxpayer's business 
deductions exceed its gross income. In general, an NOL may be 
carried back two years and carried over 20 years to offset 
taxable income in such years.\38\ NOLs offset taxable income in 
the order of the taxable years to which the NOL may be 
carried.\39\
---------------------------------------------------------------------------
    \38\ Sec. 172(b)(1)(A).
    \39\ Sec. 172(b)(2).
---------------------------------------------------------------------------
      The alternative minimum tax rules provide that a 
taxpayer's NOL deduction cannot reduce the taxpayer's 
alternative minimum taxable income (``AMTI'') by more than 90 
percent of the AMTI.
      Different rules apply with respect to NOLs arising in 
certain circumstances. A three-year carryback applies with 
respect to NOLs (1) arising from casualty or theft losses of 
individuals, or (2) attributable to Presidentially declared 
disasters for taxpayers engaged in a farming business or a 
small business. A five-year carryback applies to NOLs (1) 
arising from a farming loss (regardless of whether the loss was 
incurred in a Presidentially declared disaster area), (2) 
certain amounts related to Hurricane Katrina, Gulf Opportunity 
Zone, and Midwestern Disaster Area, or (3) qualified disaster 
losses.\40\ Special rules also apply to real estate investment 
trusts (no carryback), specified liability losses (10-year 
carryback), and excess interest losses (no carryback to any 
year preceding a corporate equity reduction transaction). 
Additionally, a special rule applies to certain electric 
utility companies.
---------------------------------------------------------------------------
    \40\ Sec. 172(b)(1)(J).
---------------------------------------------------------------------------
      In the case of a life insurance company, present law 
allows a deduction for the operations loss carryovers and 
carrybacks to the taxable year, in lieu of the deduction for 
net operation losses allowed to other corporations.\41\ A life 
insurance company is permitted to treat a loss from operations 
(as defined under section 810(c)) for any taxable year as an 
operations loss carryback to each of the three taxable years 
preceding the loss year and an operations loss carryover to 
each of the 15 taxable years following the loss year.\42\ 
Special rules apply to new life insurance companies.
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    \41\ Secs. 810, 805(a)(5).
    \42\ Sec. 810(b)(1).
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                               HOUSE BILL

      The House bill provides an election \43\ to increase the 
present-law carryback period for an applicable 2008 or 2009 NOL 
from two years to any whole number of years elected by the 
taxpayer which is more than two and less than six. An 
applicable NOL is the taxpayer's NOL for any taxable year 
ending in 2008 or 2009, or if elected by the taxpayer, the NOL 
for any taxable year beginning in 2008 or 2009. If an election 
is made to increase the carryback period, the applicable NOL is 
permanently reduced by 10 percent.
---------------------------------------------------------------------------
    \43\ For all elections under this provision, the common parent of a 
group of corporations filing a consolidated return makes the election, 
which is binding on all such corporations.
---------------------------------------------------------------------------
      These provisions may be illustrated by the following 
example. Taxpayer incurs a $100 NOL for its taxable year ended 
January 31, 2008 and elects to carryback the NOL five years to 
its taxable year ended January 31, 2003. Under the provision, 
Taxpayer must first permanently reduce the NOL by 10 percent, 
or $10, and then may carryback the $90 NOL to its taxable year 
ended January 31, 2003.
      The provision also suspends the 90-percent limitation on 
the use of any alternative tax NOL deduction attributable to 
carrybacks of losses from taxable years ending during 2008 or 
2009, and carryovers of losses to such taxable years (this rule 
applies to taxable years beginning in 2008 or 2009 if an 
election is in place to use such years as applicable NOLs).
      For life insurance companies, the provision provides an 
election to increase the present-law carryback period for an 
applicable loss from operations from three years to four or 
five years. An applicable loss from operations is the 
taxpayer's loss from operations for any taxable year ending in 
2008 or 2009, or if elected by the taxpayer, the loss from 
operations for any taxable year beginning in 2008 or 2009. If 
an election is made to increase the carryback period, the 
applicable loss from operations is permanently reduced by 10 
percent.
      The provision does not apply to: (1) any taxpayer if (a) 
the Federal Government acquires, at any time,\44\ an equity 
interest in the taxpayer pursuant to the Emergency Economic 
Stabilization Act of 2008, or (b) the Federal Government 
acquires, at any time, any warrant (or other right) to acquire 
any equity interest with respect to the taxpayer pursuant to 
such Act; (2) the Federal National Mortgage Association and the 
Federal Home Loan Mortgage Corporation; or (3) any taxpayer 
that in 2008 or 2009 \45\ is a member of the same affiliated 
group (as defined in section 1504 without regard to subsection 
(b) thereof) as a taxpayer to which the provision does not 
otherwise apply.
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    \44\ For example, if the Federal government acquires an equity 
interest in the taxpayer during 2010, or in later years, the taxpayer 
is not entitled to the extended carryback rules under this provision. 
If the carryback has previously been claimed, amended filings may be 
necessary to reflect this disallowance.
    \45\ For example, a taxpayer with an NOL in 2008 that in 2010 joins 
an affiliated group with a member in which the Federal Government has 
an equity interest pursuant to the Emergency Economic Stabilization Act 
of 2008 may not utilize the extended carryback rules under this 
provision with regard to the 2008 NOL. The taxpayer is required to 
amend prior filings to reflect the permitted carryback period.
---------------------------------------------------------------------------
      Effective date.--The provision is generally effective for 
net operating losses arising in taxable years ending after 
December 31, 2007. The modification to the alternative tax NOL 
deduction applies to taxable years ending after 1997.\46\ The 
modification with respect to operating loss deductions of life 
insurance companies applies to losses from operations arising 
in taxable years ending after December 31, 2007.
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    \46\ NOL deductions from as early as taxable years ending after 
1997 may be carried forward to 2008 and utilize the provision 
suspending the 90 percent limitation on alternative tax NOL deductions.
---------------------------------------------------------------------------
      For an NOL or loss from operations for a taxable year 
ending before the enactment of the provision, the provision 
includes the following transition rules: (1) any election to 
waive the carryback period under either sections 172(b)(3) or 
810(b)(3) with respect to such loss may be revoked before the 
applicable date; (2) any election to increase the carryback 
period under this provision is treated as timely made if made 
before the applicable date; and (3) any application for a 
tentative carryback adjustment under section 6411(a) with 
respect to such loss is treated as timely filed if filed before 
the applicable date. For purposes of the transition rules, the 
applicable date is the date which is 60 days after the date of 
the enactment of the provision.

                            SENATE AMENDMENT

      The Senate amendment is generally the same as the House 
bill, except that the Senate amendment does not include the 
permanent reduction of the NOL for taxpayers electing to 
increase the carryback period.
      Effective date.--The effective date follows the House 
bill.

                          CONFERENCE AGREEMENT

      The conference agreement provides an eligible small 
business with an election \47\ to increase the present-law 
carryback period for an applicable 2008 NOL from two years to 
any whole number of years elected by the taxpayer that is more 
than two and less than six. An eligible small business is a 
taxpayer meeting a $15,000,000 gross receipts test.\48\ An 
applicable NOL is the taxpayer's NOL for any taxable year 
ending in 2008, or if elected by the taxpayer, the NOL for any 
taxable year beginning in 2008. However, any election under 
this provision may be made only with respect to one taxable 
year.
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    \47\ For all elections under this provision, the common parent of a 
group of corporations filing a consolidated return makes the election, 
which is binding on all such corporations.
    \48\ For this purpose, the gross receipt test of sec. 448(c) is 
applied by substituting $15,000,000 for $5,000,000 each place it 
appears.
---------------------------------------------------------------------------
      Effective date.--The conference agreement provision is 
effective for net operating losses arising in taxable years 
ending after December 31, 2007.
      For an NOL for a taxable year ending before the enactment 
of the provision, the provision includes the following 
transition rules: (1) any election to waive the carryback 
period under either section 172(b)(3) with respect to such loss 
may be revoked before the applicable date; (2) any election to 
increase the carryback period under this provision is treated 
as timely made if made before the applicable date; and (3) any 
application for a tentative carryback adjustment under section 
6411(a) with respect to such loss is treated as timely filed if 
filed before the applicable date. For purposes of the 
transition rules, the applicable date is the date which is 60 
days after the date of the enactment of the provision.
4. Estimated tax payments (sec. 1212 of the conference agreement and 
        sec. 6654 of the Code)

                              PRESENT LAW

      Under present law, the income tax system is designed to 
ensure that taxpayers pay taxes throughout the year based on 
their income and deductions. To the extent that tax is not 
collected through withholding, taxpayers are required to make 
quarterly estimated payments of tax, the amount of which is 
determined by reference to the required annual payment. The 
required annual payment is the lesser of 90 percent of the tax 
shown on the return or 100 percent of the tax shown on the 
return for the prior taxable year (110 percent if the adjusted 
gross income for the preceding year exceeded $150,000). An 
underpayment results if the required payment exceeds the amount 
(if any) of the installment paid on or before the due date of 
the installment. The period of the underpayment runs from the 
due date of the installment to the earlier of (1) the 15th day 
of the fourth month following the close of the taxable year or 
(2) the date on which each portion of the underpayment is made. 
If a taxpayer fails to pay the required estimated tax payments 
under the rules, a penalty is imposed in an amount determined 
by applying the underpayment interest rate to the amount of the 
underpayment for the period of the underpayment. The penalty 
for failure to pay estimated tax is the equivalent of interest, 
which is based on the time value of money.
      Taxpayers are not liable for a penalty for the failure to 
pay estimated tax in certain circumstances. The statute 
provides exceptions for U.S. persons who did not have a tax 
liability the preceding year, if the tax shown on the return 
for the taxable year (or, if no return is filed, the tax), 
reduced by withholding, is less than $1,000, or the taxpayer is 
a recently retired or disabled person who satisfies the 
reasonable cause exception.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement provides that the required 
annual estimated tax payments of a qualified individual for 
taxable years beginning in 2009 is not greater than 90 percent 
of the tax liability shown on the tax return for the preceding 
taxable year. A qualified individual means any individual if 
the adjusted gross income shown on the tax return for the 
preceding taxable year is less than $500,000 ($250,000 if 
married filing separately) and the individual certifies that at 
least 50 percent of the gross income shown on the return for 
the preceding taxable year was income from a small trade or 
business. For purposes of this provision, a small trade or 
business means any trade or business that employed no more than 
500 persons, on average, during the calendar year ending in or 
with the preceding taxable year.
      Effective date.--The proposal is effective on the date of 
enactment.
5. Modification of work opportunity tax credit (sec. 1421 of the House 
        bill, sec. 1221 of the Senate amendment, sec. 1221 of the 
        conference agreement, and sec. 51 of the Code)

                              PRESENT LAW

In general
      The work opportunity tax credit is available on an 
elective basis for employers hiring individuals from one or 
more of nine targeted groups. The amount of the credit 
available to an employer is determined by the amount of 
qualified wages paid by the employer. Generally, qualified 
wages consist of wages attributable to service rendered by a 
member of a targeted group during the one-year period beginning 
with the day the individual begins work for the employer (two 
years in the case of an individual in the long-term family 
assistance recipient category).
Targeted groups eligible for the credit
      Generally an employer is eligible for the credit only for 
qualified wages paid to members of a targeted group.
            (1) Families receiving TANF
      An eligible recipient is an individual certified by a 
designated local employment agency (e.g., a State employment 
agency) as being a member of a family eligible to receive 
benefits under the Temporary Assistance for Needy Families 
Program (``TANF'') for a period of at least nine months, part 
of which is during the 18-month period ending on the hiring 
date. For these purposes, members of the family are defined to 
include only those individuals taken into account for purposes 
of determining eligibility for the TANF.
            (2) Qualified veteran
      There are two subcategories of qualified veterans related 
to eligibility for Food stamps and compensation for a service-
connected disability.
            Food stamps
      A qualified veteran is a veteran who is certified by the 
designated local agency as a member of a family receiving 
assistance under a food stamp program under the Food Stamp Act 
of 1977 for a period of at least three months, part of which is 
during the 12-month period ending on the hiring date. For these 
purposes, members of a family are defined to include only those 
individuals taken into account for purposes of determining 
eligibility for a food stamp program under the Food Stamp Act 
of 1977.
            Entitled to compensation for a service-connected disability
      A qualified veteran also includes an individual who is 
certified as entitled to compensation for a service-connected 
disability and: (1) having a hiring date which is not more than 
one year after having been discharged or released from active 
duty in the Armed Forces of the United States; or (2) having 
been unemployed for six months or more (whether or not 
consecutive) during the one-year period ending on the date of 
hiring.
            Definitions
      For these purposes, being entitled to compensation for a 
service-connected disability is defined with reference to 
section 101 of Title 38, U.S. Code, which means having a 
disability rating of 10 percent or higher for service connected 
injuries.
      For these purposes, a veteran is an individual who has 
served on active duty (other than for training) in the Armed 
Forces for more than 180 days or who has been discharged or 
released from active duty in the Armed Forces for a service-
connected disability. However, any individual who has served 
for a period of more than 90 days during which the individual 
was on active duty (other than for training) is not a qualified 
veteran if any of this active duty occurred during the 60-day 
period ending on the date the individual was hired by the 
employer. This latter rule is intended to prevent employers who 
hire current members of the armed services (or those departed 
from service within the last 60 days) from receiving the 
credit.
            (3) Qualified ex-felon
      A qualified ex-felon is an individual certified as: (1) 
having been convicted of a felony under any State or Federal 
law; and (2) having a hiring date within one year of release 
from prison or the date of conviction.
            (4) Designated community residents
      A designated community resident is an individual 
certified as being at least age 18 but not yet age 40 on the 
hiring date and as having a principal place of abode within an 
empowerment zone, enterprise community, renewal community or a 
rural renewal community. For these purposes, a rural renewal 
county is a county outside a metropolitan statistical area (as 
defined by the Office of Management and Budget) which had a net 
population loss during the five-year periods 1990-1994 and 
1995-1999. Qualified wages do not include wages paid or 
incurred for services performed after the individual moves 
outside an empowerment zone, enterprise community, renewal 
community or a rural renewal community.
            (5) Vocational rehabilitation referral
      A vocational rehabilitation referral is an individual who 
is certified by a designated local agency as an individual who 
has a physical or mental disability that constitutes a 
substantial handicap to employment and who has been referred to 
the employer while receiving, or after completing: (a) 
vocational rehabilitation services under an individualized, 
written plan for employment under a State plan approved under 
the Rehabilitation Act of 1973; (b) under a rehabilitation plan 
for veterans carried out under Chapter 31 of Title 38, U.S. 
Code; or (c) an individual work plan developed and implemented 
by an employment network pursuant to subsection (g) of section 
1148 of the Social Security Act. Certification will be provided 
by the designated local employment agency upon assurances from 
the vocational rehabilitation agency that the employee has met 
the above conditions.
            (6) Qualified summer youth employee
      A qualified summer youth employee is an individual: (a) 
who performs services during any 90-day period between May 1 
and September 15; (b) who is certified by the designated local 
agency as being 16 or 17 years of age on the hiring date; (c) 
who has not been an employee of that employer before; and (d) 
who is certified by the designated local agency as having a 
principal place of abode within an empowerment zone, enterprise 
community, or renewal community (as defined under Subchapter U 
of Subtitle A, Chapter 1 of the Internal Revenue Code). As with 
designated community residents, no credit is available on wages 
paid or incurred for service performed after the qualified 
summer youth moves outside of an empowerment zone, enterprise 
community, or renewal community. If, after the end of the 90-
day period, the employer continues to employ a youth who was 
certified during the 90-day period as a member of another 
targeted group, the limit on qualified first year wages will 
take into account wages paid to the youth while a qualified 
summer youth employee.
            (7) Qualified food stamp recipient
      A qualified food stamp recipient is an individual at 
least age 18 but not yet age 40 certified by a designated local 
employment agency as being a member of a family receiving 
assistance under a food stamp program under the Food Stamp Act 
of 1977 for a period of at least six months ending on the 
hiring date. In the case of families that cease to be eligible 
for food stamps under section 6(o) of the Food Stamp Act of 
1977, the six-month requirement is replaced with a requirement 
that the family has been receiving food stamps for at least 
three of the five months ending on the date of hire. For these 
purposes, members of the family are defined to include only 
those individuals taken into account for purposes of 
determining eligibility for a food stamp program under the Food 
Stamp Act of 1977.
            (8) Qualified SSI recipient
      A qualified SSI recipient is an individual designated by 
a local agency as receiving supplemental security income 
(``SSI'') benefits under Title XVI of the Social Security Act 
for any month ending within the 60-day period ending on the 
hiring date.
            (9) Long-term family assistance recipients
      A qualified long-term family assistance recipient is an 
individual certified by a designated local agency as being: (a) 
a member of a family that has received family assistance for at 
least 18 consecutive months ending on the hiring date; (b) a 
member of a family that has received such family assistance for 
a total of at least 18 months (whether or not consecutive) 
after August 5, 1997 (the date of enactment of the welfare-to-
work tax credit \49\ if the individual is hired within two 
years after the date that the 18-month total is reached; or (c) 
a member of a family who is no longer eligible for family 
assistance because of either Federal or State time limits, if 
the individual is hired within two years after the Federal or 
State time limits made the family ineligible for family 
assistance.
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    \49\ The welfare-to-work tax credit was consolidated into the work 
opportunity tax credit in the Tax Relief and Health Care Act of 2006, 
for qualified individuals who begin to work for an employer after 
December 31, 2006.
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Qualified wages
      Generally, qualified wages are defined as cash wages paid 
by the employer to a member of a targeted group. The employer's 
deduction for wages is reduced by the amount of the credit.
      For purposes of the credit, generally, wages are defined 
by reference to the FUTA definition of wages contained in sec. 
3306(b) (without regard to the dollar limitation therein 
contained). Special rules apply in the case of certain 
agricultural labor and certain railroad labor.
Calculation of the credit
      The credit available to an employer for qualified wages 
paid to members of all targeted groups except for long-term 
family assistance recipients equals 40 percent (25 percent for 
employment of 400 hours or less) of qualified first-year wages. 
Generally, qualified first-year wages are qualified wages (not 
in excess of $6,000) attributable to service rendered by a 
member of a targeted group during the one-year period beginning 
with the day the individual began work for the employer. 
Therefore, the maximum credit per employee is $2,400 (40 
percent of the first $6,000 of qualified first-year wages). 
With respect to qualified summer youth employees, the maximum 
credit is $1,200 (40 percent of the first $3,000 of qualified 
first-year wages). Except for long-term family assistance 
recipients, no credit is allowed for second-year wages.
      In the case of long-term family assistance recipients, 
the credit equals 40 percent (25 percent for employment of 400 
hours or less) of $10,000 for qualified first-year wages and 50 
percent of the first $10,000 of qualified second-year wages. 
Generally, qualified second-year wages are qualified wages (not 
in excess of $10,000) attributable to service rendered by a 
member of the long-term family assistance category during the 
one-year period beginning on the day after the one-year period 
beginning with the day the individual began work for the 
employer. Therefore, the maximum credit per employee is $9,000 
(40 percent of the first $10,000 of qualified first-year wages 
plus 50 percent of the first $10,000 of qualified second-year 
wages).
      In the case of a qualified veteran who is entitled to 
compensation for a service connected disability, the credit 
equals 40 percent of $12,000 of qualified first-year wages. 
This expanded definition of qualified first-year wages does not 
apply to the veterans qualified with reference to a food stamp 
program, as defined under present law.
Certification rules
      An individual is not treated as a member of a targeted 
group unless: (1) on or before the day on which an individual 
begins work for an employer, the employer has received a 
certification from a designated local agency that such 
individual is a member of a targeted group; or (2) on or before 
the day an individual is offered employment with the employer, 
a pre-screening notice is completed by the employer with 
respect to such individual, and not later than the 28th day 
after the individual begins work for the employer, the employer 
submits such notice, signed by the employer and the individual 
under penalties of perjury, to the designated local agency as 
part of a written request for certification. For these 
purposes, a pre-screening notice is a document (in such form as 
the Secretary may prescribe) which contains information 
provided by the individual on the basis of which the employer 
believes that the individual is a member of a targeted group.
Minimum employment period
      No credit is allowed for qualified wages paid to 
employees who work less than 120 hours in the first year of 
employment.
Other rules
      The work opportunity tax credit is not allowed for wages 
paid to a relative or dependent of the taxpayer. No credit is 
allowed for wages paid to an individual who is a more than 
fifty-percent owner of the entity. Similarly, wages paid to 
replacement workers during a strike or lockout are not eligible 
for the work opportunity tax credit. Wages paid to any employee 
during any period for which the employer received on-the-job 
training program payments with respect to that employee are not 
eligible for the work opportunity tax credit. The work 
opportunity tax credit generally is not allowed for wages paid 
to individuals who had previously been employed by the 
employer. In addition, many other technical rules apply.
Expiration
      The work opportunity tax credit is not available for 
individuals who begin work for an employer after August 31, 
2011.

                               HOUSE BILL

In general
      The provision creates a new targeted group for the work 
opportunity tax credit. That new category is unemployed 
veterans and disconnected youth who begin work for the employer 
in 2009 or 2010.
      An unemployed veteran is defined as an individual 
certified by the designated local agency as someone who: (1) 
has served on active duty (other than for training) in the 
Armed Forces for more than 180 days or who has been discharged 
or released from active duty in the Armed Forces for a service-
connected disability; (2) has been discharged or released from 
active duty in the Armed Forces during 2008, 2009, or 2010; and 
(3) has received unemployment compensation under State or 
Federal law for not less than four weeks during the one-year 
period ending on the hiring date.
      A disconnected youth is defined as an individual 
certified by the designated local agency as someone: (1) at 
least age 16 but not yet age 25 on the hiring date; (2) not 
regularly attending any secondary, technical, or post-secondary 
school during the six-month period preceding the hiring date; 
(3) not regularly employed during the six-month period 
preceding the hiring date; and (4) not readily employable by 
reason of lacking a sufficient number of skills.
Effective date
      The provisions are effective for individuals who begin 
work for an employer after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill except 
that the otherwise applicable definition of unemployed veterans 
is expanded to include individuals who were discharged or 
released from active duty in the Armed Forces during the period 
beginning on September 1, 2001 and ending on December 31, 2010.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment with one modification. Under this modification 
an unemployed veteran for purposes of this new targeted group 
is defined below:
      An unemployed veteran is defined as an individual 
certified by the designated local agency as someone who: (1) 
has served on active duty (other than for training) in the 
Armed Forces for more than 180 days or who has been discharged 
or released from active duty in the Armed Forces for a service-
connected disability; (2) has been discharged or released from 
active duty in the Armed Forces during the five-year period 
ending on the hiring date; and (3) has received unemployment 
compensation under State or Federal law for not less than four 
weeks during the one-year period ending on the hiring date.
      For purposes of the disconnected youths, it is intended 
that a low level of formal education may satisfy the 
requirement that an individual is not readily employable by 
reason of lacking a sufficient number of skills. Further, it is 
intended that the Internal Revenue Service, when providing 
general guidance regarding the various new criteria, shall take 
into account the administrability of the program by the State 
agencies.
6. Clarification of regulations related to limitations on certain 
        built-in losses following an ownership change (sec. 1431 of the 
        House bill, sec. 1281 of the Senate amendment, sec. 1261 of the 
        conference agreement, and sec. 382 of the Code)

                              PRESENT LAW

      Section 382 limits the extent to which a ``loss 
corporation'' that experiences an ``ownership change'' may 
offset taxable income in any post-change taxable year by pre-
change net operating losses, certain built-in losses, and 
deductions attributable to the pre-change period.\50\ In 
general, the amount of income in any post-change year that may 
be offset by such net operating losses, built-in losses and 
deductions is limited to an amount (referred to as the 
``section 382 limitation'') determined by multiplying the value 
of the loss corporation immediately before the ownership change 
by the long-term tax-exempt interest rate.\51\
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    \50\ Sec. 383 imposes similar limitations, under regulations, on 
the use of carryforwards of general business credits, alternative 
minimum tax credits, foreign tax credits, and net capital loss 
carryforwards. Sec. 383 generally refers to sec. 382 for the meanings 
of its terms, but requires appropriate adjustments to take account of 
its application to credits and net capital losses.
    \51\ If the loss corporation had a ``net unrealized built-in gain'' 
(or NUBIG) at the time of the ownership change, then the sec. 382 
limitation for any taxable year may be increased by the amount of the 
``recognized built-in gains'' (discussed further below) for that year. 
A NUBIG is defined as the amount by which the fair market value of the 
assets of the corporation immediately before an ownership change 
exceeds the aggregate adjusted basis of such assets at such time. 
However, if the amount of the NUBIG does not exceed the lesser of (i) 
15 percent of the fair market value of the corporation's assets or (ii) 
$10,000,000, then the amount of the NUBIG is treated as zero. Sec. 
382(h)(1).
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      A ``loss corporation'' is defined as a corporation 
entitled to use a net operating loss carryover or having a net 
operating loss carryover for the taxable year in which the 
ownership change occurs. Except to the extent provided in 
regulations, such term includes any corporation with a ``net 
unrealized built-in loss'' (or NUBIL), \52\ defined as the 
amount by which the fair market value of the assets of the 
corporation immediately before an ownership change is less than 
the aggregate adjusted basis of such assets at such time. 
However, if the amount of the NUBIL does not exceed the lesser 
of (i) 15 percent of the fair market value of the corporation's 
assets or (ii) $10,000,000, then the amount of the NUBIL is 
treated as zero.\53\
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    \52\ Sec. 382(k)(1).
    \53\ Sec. 382(h)(3).
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      An ownership change is defined generally as an increase 
by more than 50-percentage points in the percentage of stock of 
a loss corporation that is owned by any one or more five-
percent (or greater) shareholders (as defined) within a three-
year period.\54\ Treasury regulations provide generally that 
this measurement is to be made as of any ``testing date,'' 
which is any date on which the ownership of one or more persons 
who were or who become five-percent shareholders increases.\55\
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    \54\ Determinations of the percentage of stock of any corporation 
held by any person are made on the basis of value. Sec. 382(k)(6)(C).
    \55\ See Treas. Reg. sec. 1.382-2(a)(4) (providing that ``a loss 
corporation is required to determine whether an ownership change has 
occurred immediately after any owner shift, or issuance or transfer 
(including an issuance or transfer described in Treas. Reg. sec. 1.382-
4(d)(8)(i) or (ii)) of an option with respect to stock of the loss 
corporation that is treated as exercised under Treas. Reg. sec. 1.382-
4(d)(2)'' and defining a ``testing date'' as ``each date on which a 
loss corporation is required to make a determination of whether an 
ownership change has occurred'') and Temp. Treas. Reg. sec. 1.382-
2T(e)(1) (defining an ``owner shift'' as ``any change in the ownership 
of the stock of a loss corporation that affects the percentage of such 
stock owned by any 5-percent shareholder''). Treasury regulations under 
section 382 provide that, in computing stock ownership on specified 
testing dates, certain unexercised options must be treated as exercised 
if certain ownership, control, or income tests are met. These tests are 
met only if ``a principal purpose of the issuance, transfer, or 
structuring of the option (alone or in combination with other 
arrangements) is to avoid or ameliorate the impact of an ownership 
change of the loss corporation.'' Treas. Reg. sec. 1.382-4(d). Compare 
prior temporary regulations, Temp. Reg. sec. 1.382-2T(h)(4) (``Solely 
for the purpose of determining whether there is an ownership change on 
any testing date, stock of the loss corporation that is subject to an 
option shall be treated as acquired on any such date, pursuant to an 
exercise of the option by its owner on that date, if such deemed 
exercise would result in an ownership change.''). Internal Revenue 
Service Notice 2008-76, I.R.B. 2008-39 (September 29, 2008), released 
September 7, 2008, provides that the Treasury Department intends to 
issue regulations modifying the term ``testing date'' under sec. 382 to 
exclude any date on or after which the United States acquires stock or 
options to acquire stock in certain corporations with respect to which 
there is a ``Housing Act Acquisition'' pursuant to the Housing and 
Economic Recovery Act of 2008 (P.L. 110-289). The Notice states that 
the regulations will apply on and after September 7, 2008, unless and 
until there is additional guidance. Internal Revenue Service Notice 
2008-84, I.R.B. 2008-41 (October 14, 2008), provides that the Treasury 
Department intends to issue regulations modifying the term ``testing 
date'' under sec. 382 to exclude any date as of the close of which the 
United States owns, directly or indirectly, a more than 50 percent 
interest in a loss corporation, which regulations will apply unless and 
until there is additional guidance. Internal Revenue Service Notice 
2008-100, 2008-14 I.R.B. 1081 (released October 15, 2008) provides that 
the Treasury Department intends to issue regulations providing, among 
other things, that certain instruments acquired by the Treasury 
Department under the Capital Purchase Program (CPP) pursuant to the 
Emergency Economic Stabilization Act of 2008 (P.L. 100-343) (``EESA'') 
shall not be treated as stock for certain purposes. The Notice also 
provides that certain capital contributions made by Treasury pursuant 
to the CPP shall not be considered to have been made as part of a plan 
the principal purpose of which was to avoid or increase any sec. 382 
limitation (for purposes of section 382(1)(1)). The Notice states that 
taxpayers may rely on the rules described unless and until there is 
further guidance; and that any contrary guidance will not apply to 
instruments (i) held by Treasury that were acquired pursuant to the CCP 
prior to publication of that guidance, or (ii) issued to Treasury 
pursuant to the CCP under written binding contracts entered into prior 
to the publication of that guidance. Internal Revenue Service Notice 
2009-14, 2009-7 I.R.B. 1 (January 30, 2009) amplifies and supersedes 
Notice 2008-100, and provides additional guidance regarding the 
application of sec. 382 and other provisions of law to corporations 
whose instruments are acquired by the Treasury Department under certain 
programs pursuant to EESA.
---------------------------------------------------------------------------
      Section 382(h) governs the treatment of certain built-in 
losses and built-in gains recognized with respect to assets 
held by the loss corporation at the time of the ownership 
change. In the case of a loss corporation that has a NUBIL 
(measured immediately before an ownership change), section 
382(h)(1) provides that any ``recognized built-in loss'' (or 
RBIL) for any taxable year during a ``recognition period'' 
(consisting of the five years beginning on the ownership change 
date) is subject to the section 382 limitation in the same 
manner as if it were a pre-change net operating loss.\56\ An 
RBIL is defined for this purpose as any loss recognized during 
the recognition period on the disposition of any asset held by 
the loss corporation immediately before the ownership change 
date, to the extent that such loss is attributable to an excess 
of the adjusted basis of the asset on the change date over its 
fair market value on that date.\57\ An RBIL also includes any 
amount allowable as depreciation, amortization or depletion 
during the recognition period, to the extent that such amount 
is attributable to the excess of the adjusted basis of the 
asset over its fair market value on the ownership change 
date.\58\ In addition, any amount that is allowable as a 
deduction during the recognition period (determined without 
regard to any carryover) but which is attributable to periods 
before the ownership change date is treated as an RBIL for the 
taxable year in which it is allowable as a deduction.\59\
---------------------------------------------------------------------------
    \56\ Sec. 382(h)(2). The total amount of the loss corporation's 
RBILs that are subject to the section 382 limitation cannot exceed the 
amount of the corporation's NUBIL.
    \57\ Sec. 382(h)(2)(B).
    \58\ Id.
    \59\ Sec. 382(h)(6)(B).
---------------------------------------------------------------------------
      As indicated above, section 382(h)(1) provides in the 
case of a loss corporation that has a NUBIG that the section 
382 limitation may be increased for any taxable year during the 
recognition period by the amount of recognized built-in gains 
(or RBIGs) for such taxable year.\60\ An RBIG is defined for 
this purpose as any gain recognized during the recognition 
period on the disposition of any asset held by the loss 
corporation immediately before the ownership change date, to 
the extent that such gain is attributable to an excess of the 
fair market value of the asset on the change date over its 
adjusted basis on that date.\61\ In addition, any item of 
income that is properly taken into account during the 
recognition period but which is attributable to periods before 
the ownership change date is treated as an RBIG for the taxable 
year in which it is properly taken into account.\62\
---------------------------------------------------------------------------
    \60\ The total amount of such increases cannot exceed the amount of 
the corporation's NUBIG.
    \61\ Sec. 382(h)(2)(A).
    \62\ Sec. 382(h)(6)(A).
---------------------------------------------------------------------------
      Internal Revenue Service Notice 2003-65 \63\ provides two 
alternative safe harbor approaches for the identification of 
built-in items for purposes of section 382(h): the ``1374 
approach'' and the ``338 approach.''
---------------------------------------------------------------------------
    \63\ 2003-2 C.B. 747.
---------------------------------------------------------------------------
      Under the 1374 approach,\64\ NUBIG or NUBIL is the net 
amount of gain or loss that would be recognized in a 
hypothetical sale of the assets of the loss corporation 
immediately before the ownership change.\65\ The amount of gain 
or loss recognized during the recognition period on the sale or 
exchange of an asset held at the time of the ownership change 
is RBIG or RBIL, respectively, to the extent it is attributable 
to a difference between the adjusted basis and the fair market 
value of the asset on the change date, as described above. 
However, the 1374 approach generally relies on the accrual 
method of accounting to identify items of income or deduction 
as RBIG or RBIL, respectively. Generally, items of income or 
deduction properly included in income or allowed as a deduction 
during the recognition period are considered attributable to 
period before the change date (and thus are treated as RBIG or 
RBIL, respectively), if a taxpayer using an accrual method of 
accounting would have included the item in income or been 
allowed a deduction for the item before the change date. 
However, the 1374 approach includes a number of exceptions to 
this general rule, including a special rule dealing with bad 
debt deductions under section 166. Under this special rule, any 
deduction item properly taken into account during the first 12 
months of the recognition period as a bad debt deduction under 
section 166 is treated as RBIL if the item arises from a debt 
owed to the loss corporation at the beginning of the 
recognition period (and deductions for such items properly 
taken into account after the first 12 months of the recognition 
period are not RBILs).\66\
---------------------------------------------------------------------------
    \64\ The 1374 approach generally incorporates rules similar to 
those of section 1374(d) and the Treasury regulations thereunder in 
calculating NUBIG and NUBIL and identifying RBIG and RBIL.
    \65\ More specifically, NUBIG or NUBIL is calculated by determining 
the amount that would be realized if immediately before the ownership 
change the loss corporation had sold all of its assets, including 
goodwill, at fair market value to a third party that assumed all of its 
liabilities, decreased by the sum of any deductible liabilities of the 
loss corporation that would be included in the amount realized on the 
hypothetical sale and the loss corporation's aggregate adjusted basis 
in all of its assets, increased or decreased by the corporation's 
section 481 adjustments that would be taken into account on a 
hypothetical sale, and increased by any RBIL that would not be allowed 
as a deduction under section 382, 383 or 384 on the hypothetical sale.
    \66\ Notice 2003-65, section III.B.2.b.
---------------------------------------------------------------------------
      The 338 approach identifies items of RBIG and RBIL 
generally by comparing the loss corporation's actual items of 
income, gain, deduction and loss with those that would have 
resulted if a section 338 election had been made with respect 
to a hypothetical purchase of all of the outstanding stock of 
the loss corporation on the change date. Under the 338 
approach, NUBIG or NUBIL is calculated in the same manner as it 
is under the 1374 approach.\67\ The 338 approach identifies 
RBIG or RBIL by comparing the loss corporation's actual items 
of income, gain, deduction and loss with the items of income, 
gain, deduction and loss that would result if a section 338 
election had been made for the hypothetical purchase. The loss 
corporation is treated for this purpose as using those 
accounting methods that the loss corporation actually uses. The 
338 approach does not include any special rule with regard to 
bad debt deductions under section 166.
---------------------------------------------------------------------------
    \67\ Accordingly, unlike the case in which a section 338 election 
is actually made, contingent consideration (including a contingent 
liability) is taken into account in the initial calculation of NUBIG or 
NUBIL, and no further adjustments are made to reflect subsequent 
changes in deemed consideration.
---------------------------------------------------------------------------
      Section 166 generally allows a deduction in respect of 
any debt that becomes worthless, in whole or in part, during 
the taxable year.\68\ The determination of whether a debt is 
worthless, in whole or in part, is a question of fact. However, 
in the case of a bank or other corporation that is subject to 
supervision by Federal authorities, or by State authorities 
maintaining substantially equivalent standards, the Treasury 
regulations under section 166 provide a presumption of 
worthlessness to the extent that a debt is charged off during 
the taxable year pursuant to a specific order of such an 
authority or in accordance with established policies of such an 
authority (and in the latter case, the authority confirms in 
writing upon the first subsequent audit of the bank or other 
corporation that the charge-off would have been required if the 
audit had been made at the time of the charge-off). The 
presumption does not apply if the taxpayer does not claim the 
amount so charged off as a deduction for the taxable year in 
which the charge-off takes place. In that case, the charge-off 
is treated as having been involuntary; however, in order to 
claim the section 166 deduction in a later taxable year, the 
taxpayer must produce sufficient evidence to show that the debt 
became partially worthless in the later year or became 
recoverable only in part subsequent to the taxable year of the 
charge-off, as the case may be, and to the extent that the 
deduction claimed in the later year for a partially worthless 
debt was not involuntarily charged off in prior taxable years, 
it was charged off in the later taxable year.\69\
---------------------------------------------------------------------------
    \68\ Section 166 does not apply, however, to a debt which is 
evidenced by a security, defined for this purpose (by cross-reference 
to section 165(g)(2)(C)) as a bond, debenture, note or certificate or 
other evidence of indebtedness issued by a corporation or by a 
government or political subdivision thereof, with interest coupons or 
in registered form. Sec. 166(e).
    \69\ See Treas. Reg. sec. 1.166-2(d)(1) and (2).
---------------------------------------------------------------------------
      The Treasury regulations also permit a bank (generally as 
defined for purposes of section 581, with certain 
modifications) that is subject to supervision by Federal 
authorities, or State authorities maintaining substantially 
equivalent standards, to make a ``conformity election'' under 
which debts charged off for regulatory purposes during a 
taxable year are conclusively presumed to be worthless for tax 
purposes to the same extent, provided that the charge-off 
results from a specific order of the regulatory authority or 
corresponds to the institution's classification of the debt as 
a ``loss asset'' pursuant to loan loss classification standards 
that are consistent with those of certain specified bank 
regulatory authorities. The conformity election is treated as 
the adoption of a method of accounting.\70\
---------------------------------------------------------------------------
    \70\ See Treas. Reg. sec. 1.166-2(d)(3); cf. Priv. Let. Rul. 
9248048 (July 7, 1992); Tech. Ad. Mem. 9122001 (Feb. 8, 1991).
---------------------------------------------------------------------------
      Internal Revenue Service Notice 2008-83,\71\ released on 
October 1, 2008, provides that ``[f]or purposes of section 
382(h), any deduction properly allowed after an ownership 
change (as defined in section 382(g)) to a bank with respect to 
losses on loans or bad debts (including any deduction for a 
reasonable addition to a reserve for bad debts) shall not be 
treated as a built-in loss or a deduction that is attributable 
to periods before the change date.'' \72\ The Notice further 
states that the Internal Revenue Service and the Treasury 
Department are studying the proper treatment under section 
382(h) of certain items of deduction or loss allowed after an 
ownership change to a corporation that is a bank (as defined in 
section 581) both immediately before and after the change date, 
and that any such corporation may rely on the treatment set 
forth in Notice 2008-83 unless and until there is additional 
guidance.
---------------------------------------------------------------------------
    \71\ 2008-42 I.R.B. 2008-42 (Oct. 20, 2008).
    \72\ Notice 2008-83, section 2.
---------------------------------------------------------------------------

                               HOUSE BILL

      The provision states that Congress finds as follows: (1) 
The delegation of authority to the Secretary of the Treasury, 
or his delegate, under section 382(m) does not authorize the 
Secretary to provide exemptions or special rules that are 
restricted to particular industries or classes of taxpayers; 
(2) Internal Revenue Service Notice 2008-83 is inconsistent 
with the congressional intent in enacting such section 382(m); 
(3) the legal authority to prescribe Notice 2008-83 is 
doubtful; (4) however, as taxpayers should generally be able to 
rely on guidance issued by the Secretary of the Treasury, 
legislation is necessary to clarify the force and effect of 
Notice 2008-83 and restore the proper application under the 
Internal Revenue Code of the limitation on built-in losses 
following an ownership change of a bank.
      Under the provision, Treasury Notice 2008-83 shall be 
deemed to have the force and effect of law with respect to any 
ownership change (as defined in section 382(g)) occurring on or 
before January 16, 2009, and with respect to any ownership 
change (as so defined) which occurs after January 16, 2009, if 
such change (1) is pursuant to a written binding contract 
entered in to on or before such date or (2) is pursuant to a 
written agreement entered into on or before such date and such 
agreement was described on or before such date in a public 
announcement or in a filing with the Securities and Exchange 
Commission required by reason of such ownership change, but 
shall otherwise have no force or effect with respect to any 
ownership change after such date.
      Effective date.--The provision is effective on the date 
of enactment.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
7. Treatment of certain ownership changes for purposes of limitations 
        on net operating loss carryforwards and certain built-in losses 
        (sec. 1262 of the conference agreement and sec. 382 of the 
        Code)

                              PRESENT LAW

      Section 382 limits the extent to which a ``loss 
corporation'' that experiences an ``ownership change'' may 
offset taxable income in any post-change taxable year by pre-
change net operating losses, certain built-in losses, and 
deductions attributable to the pre-change period.\73\ In 
general, the amount of income in any post-change year that may 
be offset by such net operating losses, built-in losses and 
deductions is limited to an amount (referred to as the 
``section 382 limitation'') determined by multiplying the value 
of the loss corporation immediately before the ownership change 
by the long-term tax-exempt interest rate.\74\
---------------------------------------------------------------------------
    \73\ Section 383 imposes similar limitations, under regulations, on 
the use of carryforwards of general business credits, alternative 
minimum tax credits, foreign tax credits, and net capital loss 
carryforwards. Section 383 generally refers to section 382 for the 
meanings of its terms, but requires appropriate adjustments to take 
account of its application to credits and net capital losses.
    \74\ If the loss corporation had a ``net unrealized built in gain'' 
(or NUBIG) at the time of the ownership change, then the section 382 
limitation for any taxable year may be increased by the amount of the 
``recognized built-in gains'' (discussed further below) for that year. 
A NUBIG is defined as the amount by which the fair market value of the 
assets of the corporation immediately before an ownership change 
exceeds the aggregate adjusted basis of such assets at such time. 
However, if the amount of the NUBIG does not exceed the lesser of (i) 
15 percent of the fair market value of the corporation's assets or (ii) 
$10,000,000, then the amount of the NUBIG is treated as zero. Sec. 
382(h)(1).
---------------------------------------------------------------------------
      A ``loss corporation'' is defined as a corporation 
entitled to use a net operating loss carryover or having a net 
operating loss carryover for the taxable year in which the 
ownership change occurs. Except to the extent provided in 
regulations, such term includes any corporation with a ``net 
unrealized built-in loss'' (or NUBIL),\75\ defined as the 
amount by which the fair market value of the assets of the 
corporation immediately before an ownership change is less than 
the aggregate adjusted basis of such assets at such time. 
However, if the amount of the NUBIL does not exceed the lesser 
of (i) 15 percent of the fair market value of the corporation's 
assets or (ii) $10,000,000, then the amount of the NUBIL is 
treated as zero.\76\
---------------------------------------------------------------------------
    \75\ Sec. 382(k)(1).
    \76\ Sec. 382(h)(3).
---------------------------------------------------------------------------
      An ownership change is defined generally as an increase 
by more than 50-percentage points in the percentage of stock of 
a loss corporation that is owned by any one or more five-
percent (or greater) shareholders (as defined) within a three-
year period.\77\ Treasury regulations provide generally that 
this measurement is to be made as of any ``testing date,'' 
which is any date on which the ownership of one or more persons 
who were or who become five-percent shareholders increases.\78\
---------------------------------------------------------------------------
    \77\ Determinations of the percentage of stock of any corporation 
held by any person are made on the basis of value. Sec. 382(k)(6)(C).
    \78\ See Treas. Reg. sec. 1.382-2(a)(4) (providing that ``a loss 
corporation is required to determine whether an ownership change has 
occurred immediately after any owner shift, or issuance or transfer 
(including an issuance or transfer described in Treas. Reg. sec. 1.382-
4(d)(8)(i) or (ii)) of an option with respect to stock of the loss 
corporation that is treated as exercised under Treas. Reg. sec. 1.382-
4(d)(2)'' and defining a ``testing date'' as ``each date on which a 
loss corporation is required to make a determination of whether an 
ownership change has occurred'') and Temp. Treas. Reg. sec. 1.382-
2T(e)(1) (defining an ``owner shift'' as ``any change in the ownership 
of the stock of a loss corporation that affects the percentage of such 
stock owned by any 5-percent shareholder''). Treasury regulations under 
section 382 provide that, in computing stock ownership on specified 
testing dates, certain unexercised options must be treated as exercised 
if certain ownership, control, or income tests are met. These tests are 
met only if ``a principal purpose of the issuance, transfer, or 
structuring of the option (alone or in combination with other 
arrangements) is to avoid or ameliorate the impact of an ownership 
change of the loss corporation.'' Treas. Reg. sec. 1.382-4(d). Compare 
prior temporary regulations, Temp. Reg. sec. 1.382-2T(h)(4) (``Solely 
for the purpose of determining whether there is an ownership change on 
any testing date, stock of the loss corporation that is subject to an 
option shall be treated as acquired on any such date, pursuant to an 
exercise of the option by its owner on that date, if such deemed 
exercise would result in an ownership change.''). Internal Revenue 
Service Notice 2008-76, I.R.B. 2008-39 (September 29, 2008), released 
September 7, 2008, provides that the Treasury Department intends to 
issue regulations modifying the term ``testing date'' under section 382 
to exclude any date on or after which the United States acquires stock 
or options to acquire stock in certain corporations with respect to 
which there is a ``Housing Act Acquisition'' pursuant to the Housing 
and Economic Recovery Act of 2008 (P.L. 110-289). The Notice states 
that the regulations will apply on and after September 7, 2008, unless 
and until there is additional guidance. Internal Revenue Service Notice 
2008-84, I.R.B. 2008-41 (October 14, 2008), provides that the Treasury 
Department intends to issue regulations modifying the term ``testing 
date'' under section 382 to exclude any date as of the close of which 
the United States owns, directly or indirectly, a more than 50 percent 
interest in a loss corporation, which regulations will apply unless and 
until there is additional guidance. Internal Revenue Service Notice 
2008-100, 2008-14 I.R.B. 1081 (released October 15, 2008) provides that 
the Treasury Department intends to issue regulations providing, among 
other things, that certain instruments acquired by the Treasury 
Department under the Capital Purchase Program (CPP) pursuant to the 
Emergency Economic Stabilization Act of 2008 (P.L. 100-343) (``EESA'') 
shall not be treated as stock for certain purposes. The Notice also 
provides that certain capital contributions made by Treasury pursuant 
to the CPP shall not be considered to have been made as part of a plan 
the principal purpose of which was to avoid or increase any section 382 
limitation (for purposes of section 382(l)(1)). The Notice states that 
taxpayers may rely on the rules described unless and until there is 
further guidance; and that any contrary guidance will not apply to 
instruments (i) held by Treasury that were acquired pursuant to the CCP 
prior to publication of that guidance, or (ii) issued to Treasury 
pursuant to the CCP under written binding contracts entered into prior 
to the publication of that guidance. Internal Revenue Service Notice 
2009-14, 2009-7 I.R.B. 1 (January 30, 2009) amplifies and supersedes 
Notice 2008-100, and provides additional guidance regarding the 
application of section 382 and other provisions of law to corporations 
whose instruments are acquired by the Treasury Department under certain 
programs pursuant to EESA.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement amends section 382 of the Code 
to provide an exception from the application of the section 382 
limitation. Under the provision, the section 382 limitation 
that would otherwise arise as a result of an ownership change 
shall not apply in the case of an ownership change that occurs 
pursuant to a restructuring plan of a taxpayer which is 
required under a loan agreement or commitment for a line of 
credit entered into with the Department of the Treasury under 
the Emergency Economic Stabilization Act of 2008, and is 
intended to result in a rationalization of the costs, 
capitalization, and capacity with respect to the manufacturing 
workforce of, and suppliers to, the taxpayer and its 
subsidiaries.\79\
---------------------------------------------------------------------------
    \79\ This exception shall not apply in the case of any subsequent 
ownership change unless such subsequent ownership change also meets the 
requirements of the exception.
---------------------------------------------------------------------------
      However, an ownership change that would otherwise be 
excepted from the section 382 limitation under the provision 
will instead remain subject to the section 382 limitation if, 
immediately after such ownership change, any person (other than 
a voluntary employees' beneficiary association within the 
meaning of section 501(c)(9)) owns stock of the new loss 
corporation possessing 50 percent or more of the total combined 
voting power of all classes of stock entitled to vote or of the 
total value of the stock of such corporation. For purposes of 
this rule, persons who bear a relationship to one another 
described in section 267(b) or 707(b)(1), or who are members of 
a group of persons acting in concert, are treated as a single 
person.
      The exception from the application of the section 382 
limitation under the provision does not change the fact that an 
ownership change has occurred for other purposes of section 
382.\80\
---------------------------------------------------------------------------
    \80\ For example, an ownership change has occurred for purposes of 
determining the testing period under section 382(i)(2).
---------------------------------------------------------------------------
      Effective date.--The conference agreement applies to 
ownership changes after the date of enactment.
8. Deferral of certain income from the discharge of indebtedness (sec. 
        1231 of the Senate amendment, sec. 1231 of the conference 
        agreement, and sec. 108 of the Code)

                              PRESENT LAW

      In general, gross income includes income that is realized 
by a debtor from the discharge of indebtedness, subject to 
certain exceptions for debtors in title 11 bankruptcy cases, 
insolvent debtors, certain student loans, certain farm 
indebtedness, certain real property business indebtedness, and 
certain qualified principal residence indebtedness.\81\ In 
cases involving discharges of indebtedness that are excluded 
from gross income under the exceptions to the general rule, 
taxpayers generally are required to reduce certain tax 
attributes, including net operating losses, general business 
credits, minimum tax credits, capital loss carryovers, and 
basis in property, by the amount of the discharge of 
indebtedness.\82\
---------------------------------------------------------------------------
    \81\ See sections 61(a)(12) and 108. But see sec. 102 (a debt 
cancellation which constitutes a gift or bequest is not treated as 
income to the donee debtor).
    \82\ Sec. 108(b).
---------------------------------------------------------------------------
      The amount of discharge of indebtedness excluded from 
income by an insolvent debtor not in a title 11 bankruptcy case 
cannot exceed the amount by which the debtor is insolvent. In 
the case of a discharge in bankruptcy or where the debtor is 
insolvent, any reduction in basis may not exceed the excess of 
the aggregate bases of properties held by the taxpayer 
immediately after the discharge over the aggregate of the 
liabilities of the taxpayer immediately after the 
discharge.\83\
---------------------------------------------------------------------------
    \83\ Sec. 1017.
---------------------------------------------------------------------------
      For all taxpayers, the amount of discharge of 
indebtedness generally is equal to the excess of the adjusted 
issue price of the indebtedness being satisfied over the amount 
paid (or deemed paid) to satisfy such indebtedness.\84\ This 
rule generally applies to (1) the acquisition by the debtor of 
its debt instrument in exchange for cash, (2) the issuance of a 
debt instrument by the debtor in satisfaction of its 
indebtedness, including a modification of indebtedness that is 
treated as an exchange (a debt-for-debt exchange), (3) the 
transfer by a debtor corporation of stock, or a debtor 
partnership of a capital or profits interest in such 
partnership, in satisfaction of its indebtedness (an equity-
for-debt exchange), and (4) the acquisition by a debtor 
corporation of its indebtedness from a shareholder as a 
contribution to capital.
---------------------------------------------------------------------------
    \84\ Treas. Reg. sec. 1.61-12(c)(2)(ii). Treas. Reg. sec. 1.1275-
1(b) defines ``adjusted issue price.''
---------------------------------------------------------------------------
            Debt-for-debt exchanges
      If a debtor issues a debt instrument in satisfaction of 
its indebtedness, the debtor is treated as having satisfied the 
indebtedness with an amount of money equal to the issue price 
of the newly issued debt instrument.\85\ The issue price of 
such newly issued debt instrument generally is determined under 
sections 1273 and 1274.\86\ Similarly, a ``significant 
modification'' of a debt instrument, within the meaning of 
Treas. Reg. sec. 1.1001-3, results in an exchange of the 
original debt instrument for a modified instrument. In such 
cases, where the issue price of the modified debt instrument is 
less than the adjusted issue price of the original debt 
instrument, the debtor will have income from the cancellation 
of indebtedness.
---------------------------------------------------------------------------
    \85\ Sec. 108(e)(10)(A).
    \86\ Sec. 108(e)(10)(B).
---------------------------------------------------------------------------
      If any new debt instrument is issued (including as a 
result of a significant modification to a debt instrument), 
such debt instrument will have original issue discount equal to 
the excess (if any) of such debt instrument's stated redemption 
price at maturity over its issue price.\87\ In general, an 
issuer of a debt instrument with original issue discount may 
deduct for any taxable year, with respect to such debt 
instrument, an amount of original issue discount equal to the 
aggregate daily portions of the original issue discount for 
days during such taxable year.\88\
---------------------------------------------------------------------------
    \87\ Sec. 1273.
    \88\ Sec. 163(e).
---------------------------------------------------------------------------
            Equity-for-debt exchanges
      If a corporation transfers stock, or a partnership 
transfers a capital or profits interest in such partnership, to 
a creditor in satisfaction of its indebtedness, then such 
corporation or partnership is treated as having satisfied its 
indebtedness with an amount of money equal to the fair market 
value of the stock or interest.\89\
---------------------------------------------------------------------------
    \89\ Sec. 108(e)(8).
---------------------------------------------------------------------------
            Related party acquisitions
      Indebtedness directly or indirectly acquired by a person 
who bears a relationship to the debtor described in section 
267(b) or section 707(b) is treated as if it were acquired by 
the debtor.\90\ Thus, where a debtor's indebtedness is acquired 
for less than its adjusted issue price by a person related to 
the debtor (within the meaning of section 267(b) or 707(b)), 
the debtor recognizes income from the cancellation of 
indebtedness. Regulations under section 108 provide that the 
indebtedness acquired by the related party is treated as new 
indebtedness issued by the debtor to the related holder on the 
acquisition date (the deemed issuance).\91\ The new 
indebtedness is deemed issued with an issue price equal to the 
amount used under regulations to compute the amount of 
cancellation of indebtedness income realized by the debtor 
(i.e., either the holder's adjusted basis or the fair market 
value of the indebtedness, as the case may be).\92\ The 
indebtedness deemed issued pursuant to the regulations has 
original issue discount to the extent its stated redemption 
price at maturity exceeds its issue price.
---------------------------------------------------------------------------
    \90\ Sec. 108(e)(4).
    \91\ Treas. Reg. sec. 1.108-2(g).
    \92\ Id.
---------------------------------------------------------------------------
      In the case of a deemed issuance under Treas. Reg. sec. 
1.108-2(g), the related holder does not recognize any gain or 
loss, and the related holder's adjusted basis in the 
indebtedness remains the same as it was immediately before the 
deemed issuance.\93\ The deemed issuance is treated as a 
purchase of the indebtedness by the related holder for purposes 
of section 1272(a)(7) (pertaining to reduction of original 
issue discount where a subsequent holder pays acquisition 
premium) and section 1276 (pertaining to acquisitions of debt 
at a market discount).\94\
---------------------------------------------------------------------------
    \93\ Treas. Reg. sec. 1.108-2(g)(2).
    \94\ Id.
---------------------------------------------------------------------------
            Contribution of a debt instrument to capital of a 
                    corporation
      Where a debtor corporation acquires its indebtedness from 
a shareholder as a contribution to capital, section 118 \95\ 
does not apply, but the corporation is treated as satisfying 
such indebtedness with an amount of money equal to the 
shareholder's adjusted basis in the indebtedness.
---------------------------------------------------------------------------
    \95\ Section 118 provides, in general, that in the case of a 
corporation, gross income does not include any contribution to the 
capital of the taxpayer.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision permits a taxpayer to elect to defer income 
from cancellation of indebtedness recognized by the taxpayer as 
a result of a repurchase by (1) the taxpayer or (2) a person 
who bears a relationship to the taxpayer described in section 
267(b) or section 707(b), of a ``debt instrument'' that was 
issued by the taxpayer. The provision applies only to 
repurchases of debt that (1) occur after December 31, 2008, and 
prior to January 1, 2011, and (2) are repurchases for cash. 
Thus, for example, the provision does not apply to a debt-for-
debt exchange or to any exchange of the taxpayer's equity for a 
debt instrument of the taxpayer. For purposes of the provision, 
a ``debt instrument'' is broadly defined to include any bond, 
debenture, note, certificate or any other instrument or 
contractual arrangement constituting indebtedness.
      Income from the discharge of indebtedness in connection 
with the repurchase of a debt instrument in 2009 or 2010 must 
be included in the gross income of the taxpayer ratably in the 
eight taxable years beginning with (1) for repurchases in 2009, 
the second taxable year following the taxable year in which the 
repurchase occurs or (2) for repurchases in 2010, the taxable 
year following the taxable year in which the repurchase occurs. 
The provision authorizes the Secretary of the Treasury to 
prescribe such regulations as may be necessary or appropriate 
for purposes of applying the provision.
      Effective date.--The provision applies to discharges in 
taxable years ending after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment 
with modifications. The provision permits a taxpayer to elect 
to defer cancellation of indebtedness income arising from a 
``reacquisition'' of ``an applicable debt instrument'' after 
December 31, 2008, and before January 1, 2011. Income deferred 
pursuant to the election must be included in the gross income 
of the taxpayer ratably in the five taxable years beginning 
with (1) for repurchases in 2009, the fifth taxable year 
following the taxable year in which the repurchase occurs or 
(2) for repurchases in 2010, the fourth taxable year following 
the taxable year in which the repurchase occurs.
      An ``applicable debt instrument'' is any debt instrument 
issued by (1) a C corporation or (2) any other person in 
connection with the conduct of a trade or business by such 
person. For purposes of the provision, a ``debt instrument'' is 
broadly defined to include any bond, debenture, note, 
certificate or any other instrument or contractual arrangement 
constituting indebtedness (within the meaning of section 
1275(a)(1)).
      A ``reacquisition'' is any ``acquisition'' of an 
applicable debt instrument by (1) the debtor that issued (or is 
otherwise the obligor under) such debt instrument or (2) any 
person related to the debtor within the meaning of section 
108(e)(4). For purposes of the provision, an ``acquisition'' 
includes, without limitation, (1) an acquisition of a debt 
instrument for cash, (2) the exchange of a debt instrument for 
another debt instrument (including an exchange resulting from a 
modification of a debt instrument), (3) the exchange of 
corporate stock or a partnership interest for a debt 
instrument, (4) the contribution of a debt instrument to the 
capital of the issuer, and (5) the complete forgiveness of a 
debt instrument by a holder of such instrument.
            Special rules for debt-for-debt exchanges
      If a taxpayer makes the election provided by the 
provision for a debt-for-debt exchange in which the newly 
issued debt instrument issued (or deemed issued, including by 
operation of the rules in Treas. Reg. sec. 1.108-2(g)) in 
satisfaction of an outstanding debt instrument of the debtor 
has original issue discount, then any otherwise allowable 
deduction for original issue discount with respect to such 
newly issued debt instrument that (1) accrues before the first 
year of the five-taxable-year period in which the related, 
deferred discharge of indebtedness income is included in the 
gross income of the taxpayer and (2) does not exceed such 
related, deferred discharge of indebtedness income, is deferred 
and allowed as a deduction ratably over the same five-taxable-
year period in which the deferred discharge of indebtedness 
income is included in gross income.
      This rule can apply also in certain cases when a debtor 
reacquires its debt for cash. If the taxpayer issues a debt 
instrument and the proceeds of such issuance are used directly 
or indirectly to reacquire a debt instrument of the taxpayer, 
the provision treats the newly issued debt instrument as if it 
were issued in satisfaction of the retired debt instrument. If 
the newly issued debt instrument has original issue discount, 
the rule described above applies. Thus, all or a portion of the 
interest deductions with respect to original issue discount on 
the newly issued debt instrument are deferred into the five-
taxable-year period in which the discharge of indebtedness 
income is recognized. Where only a portion of the proceeds of a 
new issuance are used by a taxpayer to satisfy outstanding 
debt, then the deferral rule applies to the portion of the 
original issue discount on the newly issued debt instrument 
that is equal to the portion of the proceeds of such newly 
issued instrument used to retire outstanding debt of the 
taxpayer.
            Acceleration of deferred items
      Cancellation of indebtedness income and any related 
deduction for original issue discount that is deferred by an 
electing taxpayer (and has not previously been taken into 
account) generally is accelerated and taken into income in the 
taxable year in which the taxpayer: (1) dies, (2) liquidates or 
sells substantially all of its assets (including in a title 11 
or similar case), (3) ceases to do business, or (4) or is in 
similar circumstances. In a case under title 11 or a similar 
case, any deferred items are taken into income as of the day 
before the petition is filed. Deferred items are accelerated in 
a case under title 11 where the taxpayer liquidates, sells 
substantially all of its assets, or ceases to do business, but 
not where a taxpayer reorganizes and emerges from the title 11 
case. In the case of a pass thru entity, this acceleration rule 
also applies to the sale, exchange, or redemption of an 
interest in the entity by a holder of such interest.
            Special rule for partnerships
      In the case of a partnership, any income deferred under 
the provision is allocated to the partners in the partnership 
immediately before the discharge of indebtedness in the manner 
such amounts would have been included in the distributive 
shares of such partners under section 704 if such income were 
recognized at the time of the discharge. Any decrease in a 
partner's share of liabilities as a result of such discharge is 
not taken into account for purposes of section 752 at the time 
of the discharge to the extent the deemed distribution under 
section 752 would cause the partner to recognize gain under 
section 731. Thus, the deemed distribution under section 752 is 
deferred with respect to a partner to the extent it exceeds 
such partner's basis. Amounts so deferred are taken into 
account at the same time, and to the extent remaining in the 
same amount, as income deferred under the provision is 
recognized by the partner.
            Coordination with section 108(a) and procedures for 
                    election
      Where a taxpayer makes the election provided by the 
provision, the exclusions provided by section 108(a)(1)(A), 
(B), (C), and (D) shall not apply to the income from the 
discharge of indebtedness for the year in which the taxpayer 
makes the election or any subsequent year. Thus, for example, 
an insolvent taxpayer may elect under the provision to defer 
income from the discharge of indebtedness rather than excluding 
such income and reducing tax attributes by a corresponding 
amount. The election is to be made on an instrument by 
instrument basis; once made, the election is irrevocable. A 
taxpayer makes an election with respect to a debt instrument by 
including with its return for the taxable year in which the 
reacquisition of the debt instrument occurs a statement that 
(1) clearly identifies the debt instrument and (2) includes the 
amount of deferred income to which the provision applies and 
such other information as may be prescribed by the Secretary. 
The Secretary is authorized to require reporting of the 
election (and other information with respect to the 
reacquisition) for years subsequent to the year of the 
reacquisition.
            Regulatory authority
      The provision authorizes the Secretary of the Treasury to 
prescribe such regulations as may be necessary or appropriate 
for purposes of applying the provision, including rules 
extending the acceleration provisions to other circumstances 
where appropriate, rules requiring reporting of the election 
and such other information as the Secretary may require on 
returns of tax for subsequent taxable years, rules for the 
application of the provision to partnerships, S corporations, 
and other pass thru entities, including for the allocation of 
deferred deductions.
      Effective date.--The provision is effective for 
discharges in taxable years ending after December 31, 2008.
9. Modifications of rules for original issue discount on certain high 
        yield obligations (sec. 1232 of the conference agreement and 
        sec. 163 of the Code)

                              PRESENT LAW

      In general, the issuer of a debt instrument with original 
issue discount may deduct the portion of such original issue 
discount equal to the aggregate daily portions of the original 
issue discount for days during the taxable year.\96\ However, 
in the case of an applicable high-yield discount obligation (an 
``AHYDO'') issued by a corporate issuer: (1) no deduction is 
allowed for the ``disqualified portion'' of the original issue 
discount on such obligation, and (2) the remainder of the 
original issue discount on any such obligation is not allowable 
as a deduction until paid by the issuer.\97\
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    \96\ Sec. 163(e)(1). For purposes of section 163(e)(1), the daily 
portion of the original issue discount for any day is determined under 
section 1272(a) (without regard to paragraph (7) thereof and without 
regard to section 1273(a)(3)).
    \97\ Sec. 163(e)(5).
---------------------------------------------------------------------------
      An AHYDO is any debt instrument if (1) the maturity date 
on such instrument is more than five years from the date of 
issue; (2) the yield to maturity on such instrument exceeds the 
sum of (a) the applicable Federal rate in effect under section 
1274(d) for the calendar month in which the obligation is 
issued and (b) five percentage points, and (3) such instrument 
has ``significant original issue discount.'' \98\ An instrument 
is treated as having ``significant original issue discount'' if 
the aggregate amount of interest that would be includible in 
the gross income of the holder with respect to such instrument 
for periods before the close of any accrual period (as defined 
in section 1272(a)(5)) ending after the date five years after 
the date of issue, exceeds the sum of (1) the aggregate amount 
of interest to be paid under the instrument before the close of 
such accrual period, and (2) the product of the issue price of 
such instrument (as defined in sections 1273(b) and 1274(a)) 
and its yield to maturity.\99\
---------------------------------------------------------------------------
    \98\ Sec. 163(i)(1).
    \99\ Sec. 163(i)(2).
---------------------------------------------------------------------------
      The disqualified portion of the original issue discount 
on an AHYDO is the lesser of (1) the amount of original issue 
discount with respect to such obligation or (2) the portion of 
the ``total return'' on such obligation which bears the same 
ratio to such total return as the ``disqualified yield'' (i.e., 
the excess of the yield to maturity on the obligation over the 
applicable Federal rate plus six percentage points) on such 
obligation bears to the yield to maturity on such 
obligation.\100\ The term ``total return'' means the amount 
which would have been the original issue discount of the 
obligation if interest described in section 1273(a)(2) were 
included in the 101 stated redemption to maturity.\101\ A 
corporate holder treats the disqualified portion of original 
issue discount as a stock distribution for purposes of the 
dividend received deduction.\102\
---------------------------------------------------------------------------
    \100\ Sec. 163(e)(5)(C).
    \101\ Sec. 163(e)(5)(C)(ii).
    \102\ Sec. 163(e)(5)(B).
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement adds a provision that suspends 
the rules in section 163(e)(5) for certain obligations issued 
in a debt-for-debt exchange, including an exchange resulting 
from a significant modification of a debt instrument, after 
August 31, 2008, and before January 1, 2010.
      In general, the suspension does not apply to any newly 
issued debt instrument (including any debt instrument issued as 
a result of a significant modification of a debt instrument) 
that is issued for an AHYDO. However, any newly issued debt 
instrument (including any debt instrument issued as a result of 
a significant modification of a debt instrument) for which the 
AHYDO rules are suspended under the provision is not treated as 
an AHYDO for purposes of a subsequent application of the 
suspension rule. Thus, for example, if a new debt instrument 
that would be an AHYDO under present law is issued in exchange 
for a debt instrument that is not an AHYDO, and the provision 
suspends application of section 163(e)(5), another new debt 
instrument, issued during the suspension period in exchange for 
the instrument with respect to which the rule in section 
163(e)(5) was suspended, would be eligible for the relief 
provided by the provision despite the fact that it is issued 
for an instrument that is an AHYDO under present law.
      In addition, the suspension does not apply to any newly 
issued debt instrument (including any debt instrument issued as 
a result of a significant modification of a debt instrument) 
that is (1) described in section 871(h)(4) (without regard to 
subparagraph (D) thereof) (i.e., certain contingent debt) or 
(2) issued to a person related to the issuer (within the 
meaning of section 108(e)(4)).
      The provision provides authority to the Secretary to 
apply the suspension rule to periods after December 31, 2009, 
where the Secretary determines that such application is 
appropriate in light of distressed conditions in the debt 
capital markets. In addition, the provision grants authority to 
the Secretary to use a rate that is higher than the applicable 
Federal rate for purposes of applying section 163(e)(5) for 
obligations issued after December 31, 2009, in taxable years 
ending after such date if the Secretary determines that such 
higher rate is appropriate in light of distressed conditions in 
the debt capital markets.
      Effective date.--The temporary suspension of section 
163(e)(5) applies to obligations issued after August 31, 2008, 
in taxable years ending after such date. The additional 
authority granted to the Secretary to use a rate higher than 
the applicable Federal rate for purposes of applying section 
163(e)(5) applies to obligations issued after December 31, 
2009, in taxable years ending after such date.
10. Special rules applicable to qualified small business stock for 2009 
        and 2010 (sec. 1241 of the Senate amendment, sec. 1241 of the 
        conference agreement, and sec. 1202 of the Code)

                              PRESENT LAW

      Under present law, individuals may exclude 50 percent (60 
percent for certain empowerment zone businesses) of the gain 
from the sale of certain small business stock acquired at 
original issue and held for at least five years.\103\ The 
portion of the gain includible in taxable income is taxed at a 
maximum rate of 28 percent under the regular tax.\104\ A 
percentage of the excluded gain is an alternative minimum tax 
preference,\105\ the portion of the gain includible in 
alternative minimum taxable income is taxed at a maximum rate 
of 28 percent under the alternative minimum tax.
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    \103\ Sec. 1202.
    \104\ Sec. 1(h).
    \105\ Sec. 57(a)(7). In the case of qualified small business stock, 
the percentage of gain excluded from gross income which is an 
alternative minimum tax preference is (i) seven percent in the case of 
stock disposed of in a taxable year beginning before 2011; (ii) 42 
percent in the case of stock acquired before January 1, 2001, and 
disposed of in a taxable year beginning after 2010; and (iii) 28 
percent in the case of stock acquired after December 31, 2000, and 
disposed of in a taxable year beginning after 2010.
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      Thus, under present law, gain from the sale of qualified 
small business stock is taxed at effective rates of 14 percent 
under the regular tax \106\ and (i) 14.98 percent under the 
alternative minimum tax for dispositions before January 1, 
2011; (ii) 19.98 percent under the alternative minimum tax for 
dispositions after December 31, 2010, in the case of stock 
acquired before January 1, 2001; and (iii) 17.92 percent under 
the alternative minimum tax for dispositions after December 31, 
2010, in the case of stock acquired after December 31, 
2000.\107\
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    \106\ The 50 percent of gain included in taxable income is taxed at 
a maximum rate of 28 percent.
    \107\ The amount of gain included in alternative minimum tax is 
taxed at a maximum rate of 28 percent. The amount so included is the 
sum of (i) 50 percent (the percentage included in taxable income) of 
the total gain and (ii) the applicable preference percentage of the 
one-half gain that is excluded from taxable income.
---------------------------------------------------------------------------
      The amount of gain eligible for the exclusion by an 
individual with respect to any corporation is the greater of 
(1) ten times the taxpayer's basis in the stock or (2) $10 
million. In order to qualify as a small business, when the 
stock is issued, the gross assets of the corporation may not 
exceed $50 million. The corporation also must meet certain 
active trade or business requirements.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      Under the Senate amendment, the percentage exclusion for 
qualified small business stock sold by an individual is 
increased from 50 percent (60 percent for certain empowerment 
zone businesses) to 75 percent.
      As a result of the increased exclusion, gain from the 
sale of qualified small business stock to which the provision 
applies is taxed at effective rates of seven percent under the 
regular tax \108\ and 12.88 percent under the alternative 
minimum tax.\109\
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    \108\ The 25 percent of gain included in taxable income is taxed at 
a maximum rate of 28 percent.
    \109\ The 46 percent of gain included in alternative minimum tax is 
taxed at a maximum rate of 28 percent. Forty-six percent is the sum of 
25 percent (the percentage of total gain included in taxable income) 
plus 21 percent (the percentage of total gain which is an alternative 
minimum tax preference).
---------------------------------------------------------------------------
      Effective date.--The provision is effective for stock 
issued after the date of enactment and before January 1, 2011.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
11. Temporary reduction in recognition period for S corporation built-
        in gains tax (sec. 1261 of the Senate amendment, sec. 1251 of 
        the conference agreement, and sec. 1374 of the Code)

                              PRESENT LAW

      A ``small business corporation'' (as defined in section 
1361(b)) may elect to be treated as an S corporation. Unlike C 
corporations, S corporations generally pay no corporate-level 
tax. Instead, items of income and loss of an S corporation pass 
though to its shareholders. Each shareholder takes into account 
separately its share of these items on its individual income 
tax return.\110\
---------------------------------------------------------------------------
    \110\ Sec. 1366.
---------------------------------------------------------------------------
      A corporate level tax, at the highest marginal rate 
applicable to corporations (currently 35 percent) is imposed on 
an S corporation's gain that arose prior to the conversion of 
the C corporation to an S corporation and is recognized by the 
S corporation during the recognition period, i.e., the first 10 
taxable years that the S election is in effect.\111\
---------------------------------------------------------------------------
    \111\ Sec. 1374.
---------------------------------------------------------------------------
      Gains recognized in the recognition period are not built-
in gains to the extent they are shown to have arisen while the 
S election was in effect or are offset by recognized built-in 
losses. The built-in gains tax also applies to gains with 
respect to net recognized built-in gain attributable to 
property received by an S corporation from a C corporation in a 
carryover basis transaction.\112\ The amount of the built-in 
gains tax is treated as a loss taken into account by the 
shareholders in computing their individual income tax.\113\
---------------------------------------------------------------------------
    \112\ Sec. 1374(d)(8). With respect to such assets, the recognition 
period runs from the day on which such assets were acquired (in lieu of 
the beginning of the first taxable year for which the corporation was 
an S corporation). Sec. 1374(d)(8)(B).
    \113\ Sec. 1366(f)(2).
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment provides that, for any taxable year 
beginning in 2009 and 2010, no tax is imposed on an S 
corporation under section 1374 if the seventh taxable year in 
the corporation's recognition period preceded such taxable 
year. Thus, with respect to gain that arose prior to the 
conversion of a C corporation to an S corporation, no tax will 
be imposed under section 1374 after the seventh taxable year 
the S corporation election is in effect. In the case of built-
in gain attributable to an asset received by an S corporation 
from a C corporation in a carryover basis transaction, no tax 
will be imposed under section 1374 if such gain is recognized 
after the date that is seven years following the date on which 
such asset was acquired.\114\
---------------------------------------------------------------------------
    \114\ Shareholders will continue to take into account all items of 
gain and loss under section 1366.
---------------------------------------------------------------------------
      Effective date.--The provision applies to taxable years 
beginning after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
12. Broadband internet access tax credit (sec. 1271 of the Senate 
        amendment)

                              PRESENT LAW

      A taxpayer is allowed to recover, through annual 
depreciation deductions, the cost of certain property used in a 
trade or business or for the production of income. The amount 
of the depreciation deduction allowed with respect to tangible 
property for a taxable year is determined under the modified 
accelerated cost recovery system (``MACRS'').\115\ Under MACRS, 
different types of property generally are assigned applicable 
recovery periods and depreciation methods. The recovery periods 
applicable to most tangible personal property (generally 
tangible property other than residential rental property and 
nonresidential real property) range from three to 25 years. The 
depreciation methods generally applicable to tangible personal 
property are the 200-percent and 150-percent declining balance 
methods, switching to the straight-line method for the taxable 
year in which the depreciation deduction would be maximized.
---------------------------------------------------------------------------
    \115\ Sec. 168.
---------------------------------------------------------------------------
      No credit is specifically designed under present law to 
encourage the development of qualified broadband expenditures.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The amendment provides an investment tax credit for 
``qualified broadband expenditures.'' Qualified broadband 
expenditures comprise both ``current-generation'' and ``next-
generation'' broadband. The provision establishes a 10 percent 
credit for investment in current-generation broadband in rural 
and underserved areas. The provision establishes a 20 percent 
credit for investment in current-generation broadband in 
unserved areas. The provision establishes a 20 percent credit 
for investment in next-generation broadband in rural, 
underserved, unserved, and residential areas. The basis of 
qualified property must be reduced by the amount of credit 
received. To qualify for the credit, the qualified broadband 
equipment must be placed in service after December 31, 2008, 
and before January 1, 2011.
      ``Current-generation'' broadband services are defined as 
the transmission of signals at a rate of at least 5 million 
bits per second to the subscriber and at a rate of at least 1 
million bits per second from the subscriber or wireless 
technology transmission of signals at a rate of at least 3 
million bits per second to the subscriber and at a rate of at 
least 768 kilobits per second from the subscriber. ``Next-
generation'' broadband services are defined as the transmission 
of signals at a rate of at least 100 million bits per second to 
the subscriber and at a rate of at least 20 million bits per 
second from the subscriber.
      Qualified broadband expenditures means the direct or 
indirect costs properly taken into account for the taxable year 
for the purchase or installation of qualified equipment 
(including upgrades) and the connection of the equipment to a 
qualified subscriber.
      Qualified broadband expenditures include only the portion 
of the purchase price paid by the lessor, in the case of leased 
equipment, that is attributable to otherwise qualified 
broadband expenditures by the lessee. In the case of property 
that is originally placed in service by a person and that is 
sold to the taxpayer and leased back to such person by the 
taxpayer within three months after the date that the property 
was originally placed in service, the property is treated as 
originally placed in service by the taxpayer not earlier than 
the date that the property is used under the leaseback.
      A qualified subscriber, with respect to current-
generation broadband services, means any nonresidential 
subscriber maintaining a permanent place of business in a 
rural, underserved, or unserved area, or any residential 
subscriber residing in a rural, underserved, or unserved area 
that is not a saturated market. A qualified subscriber, with 
respect to next generation broadband services, means any 
nonresidential subscriber maintaining a permanent place of 
business in a rural, underserved, or unserved area, or any 
residential subscriber.
      For this purpose, a rural area is a low-income community 
designated under section 45D which is defined as a population 
census tract located in either (1) a poverty rate of at least 
20 percent or (2) median family income which does not exceed 80 
percent of the greater of metropolitan area median family 
income or statewide median family income (for a non-
metropolitan census tract, does not exceed 80 percent of 
statewide median family income).
      An underserved area means a census tract located in an 
empowerment zone or enterprise community designated under 
section 1391, or the District of Columbia Enterprise Zone 
established under section 1400, or a renewal community 
designated under section 1400E, or a low-income community 
designated under section 45D.
      An unserved area is an area without current-generation 
broadband service.
      A saturated market, for this purpose, means any census 
tract in which, as of the date of enactment, current generation 
broadband services have been provided by a single provider to 
85 percent or more of the total potential residential 
subscribers. The services must be usable at least a majority of 
the time during periods of maximum demand, and usable in a 
manner substantially the same as services provided through 
equipment not eligible for the deduction under this provision.
      If current- or next-generation broadband services can be 
provided through qualified equipment to both qualified 
subscribers and to other subscribers, the provision provides 
that the expenditures with respect to the equipment are 
allocated among subscribers to determine the amount of 
qualified broad broadband expenditures that may be deducted 
under the provision.
      Qualified equipment means equipment that provides 
current- or next-generation broadband services at least a 
majority of the time during periods of maximum demand to each 
subscriber, and in a manner substantially the same as such 
services are provided by the provider to subscribers through 
equipment with respect to which no deduction is allowed under 
the provision. Limitations are imposed under the provision on 
equipment depending on where it extends, and on certain packet 
switching equipment, and on certain multiplexing and 
demultiplexing equipment.
      Expenditures generally are not taken into account for 
purposes of the credit under the provision with respect to 
property used predominantly outside the United States, used 
predominantly to furnish lodging, used by a tax-exempt 
organization (other than in a business whose income is subject 
to unrelated business income tax), or used by the United States 
or a political subdivision or by a possession, agency or 
instrumentality thereof or by a foreign person or entity. The 
basis of property is reduced by the cost of the property that 
is taken into account as a deduction under the provision. 
Recapture rules are provided. The credit is part of the general 
business credit.
      Effective date.--The provision is effective for property 
placed in service after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the Senate 
amendment provision.

            C. Fiscal Relief for State and Local Governments

1. De minimis safe harbor exception for tax-exempt interest expense of 
        financial institutions and modification of small issuer 
        exception to tax-exempt interest expense allocation rules for 
        financial institutions (secs. 1501 and 1502 of the House bill, 
        secs. 1501 and 1502 of the Senate amendment, secs. 1501 and 
        1502 of the conference agreement, and sec. 265 of the Code)

                              PRESENT LAW

      Present law disallows a deduction for interest on 
indebtedness incurred or continued to purchase or carry 
obligations the interest on which is exempt from tax. \116\ In 
general, an interest deduction is disallowed only if the 
taxpayer has a purpose of using borrowed funds to purchase or 
carry tax-exempt obligations; a determination of the taxpayer's 
purpose in borrowing funds is made based on all of the facts 
and circumstances. \117\
---------------------------------------------------------------------------
    \116\ Sec. 265(a).
    \117\ See Rev. Proc. 72-18, 1972-1 C.B. 740.
---------------------------------------------------------------------------
            Two-percent rule for individuals and certain nonfinancial 
                    corporations
      In the absence of direct evidence linking an individual 
taxpayer's indebtedness with the purchase or carrying of tax-
exempt obligations, the Internal Revenue Service takes the 
position that it ordinarily will not infer that a taxpayer's 
purpose in borrowing money was to purchase or carry tax-exempt 
obligations if the taxpayer's investment in tax-exempt 
obligations is ``insubstantial.'' \118\ An individual's 
holdings of tax-exempt obligations are presumed to be 
insubstantial if during the taxable year the average adjusted 
basis of the individual's tax-exempt obligations is two percent 
or less of the average adjusted basis of the individual's 
portfolio investments and assets held by the individual in the 
active conduct of a trade or business.
---------------------------------------------------------------------------
    \118\ Id.
---------------------------------------------------------------------------
      Similarly, in the case of a corporation that is not a 
financial institution or a dealer in tax-exempt obligations, 
where there is no direct evidence of a purpose to purchase or 
carry tax-exempt obligations, the corporation's holdings of 
tax-exempt obligations are presumed to be insubstantial if the 
average adjusted basis of the corporation's tax-exempt 
obligations is two percent or less of the average adjusted 
basis of all assets held by the corporation in the active 
conduct of its trade or business.
            Financial institutions
      In the case of a financial institution, the Code 
generally disallows that portion of the taxpayer's interest 
expense that is allocable to tax-exempt interest. \119\ The 
amount of interest that is disallowed is an amount which bears 
the same ratio to such interest expense as the taxpayer's 
average adjusted bases of tax-exempt obligations acquired after 
August 7, 1986, bears to the average adjusted bases for all 
assets of the taxpayer.
---------------------------------------------------------------------------
    \119\ Sec. 265(b)(1). A ``financial institution'' is any person 
that (1) accepts deposits from the public in the ordinary course of 
such person's trade or business and is subject to Federal or State 
supervision as a financial institution or (2) is a corporation 
described in section 585(a)(2). Sec. 265(b)(5).
---------------------------------------------------------------------------
            Exception for certain obligations of qualified small 
                    issuers
      The general rule in section 265(b), denying financial 
institutions' interest expense deductions allocable to tax-
exempt obligations, does not apply to ``qualified tax-exempt 
obligations.'' \120\ Instead, as discussed in the next section, 
only 20 percent of the interest expense allocable to 
``qualified tax-exempt obligations'' is disallowed. \121\ A 
``qualified tax-exempt obligation'' is a tax-exempt obligation 
that (1) is issued after August 7, 1986, by a qualified small 
issuer, (2) is not a private activity bond, and (3) is 
designated by the issuer as qualifying for the exception from 
the general rule of section 265(b).
---------------------------------------------------------------------------
    \120\ Sec. 265(b)(3).
    \121\ Secs. 265(b)(3)(A), 291(a)(3) and 291(e)(1).
---------------------------------------------------------------------------
      A ``qualified small issuer'' is an issuer that reasonably 
anticipates that the amount of tax-exempt obligations that it 
will issue during the calendar year will be $10 million or 
less. \122\ The Code specifies the circumstances under which an 
issuer and all subordinate entities are aggregated. \123\ For 
purposes of the $10 million limitation, an issuer and all 
entities that issue obligations on behalf of such issuer are 
treated as one issuer. All obligations issued by a subordinate 
entity are treated as being issued by the entity to which it is 
subordinate. An entity formed (or availed of) to avoid the $10 
million limitation and all entities benefiting from the device 
are treated as one issuer.
---------------------------------------------------------------------------
    \122\ Sec. 265(b)(3)(C).
    \123\ Sec. 265(b)(3)(E).
---------------------------------------------------------------------------
      Composite issues (i.e., combined issues of bonds for 
different entities) qualify for the ``qualified tax-exempt 
obligation'' exception only if the requirements of the 
exception are met with respect to (1) the composite issue as a 
whole (determined by treating the composite issue as a single 
issue) and (2) each separate lot of obligations that is part of 
the issue (determined by treating each separate lot of 
obligations as a separate issue). \124\ Thus a composite issue 
may qualify for the exception only if the composite issue 
itself does not exceed $10 million, and if each issuer 
benefitting from the composite issue reasonably anticipates 
that it will not issue more than $10 million of tax-exempt 
obligations during the calendar year, including through the 
composite arrangement.
---------------------------------------------------------------------------
    \124\ Sec. 265(b)(3)(F).
---------------------------------------------------------------------------
            Treatment of financial institution preference items
      Section 291(a)(3) reduces by 20 percent the amount 
allowable as a deduction with respect to any financial 
institution preference item. Financial institution preference 
items include interest on debt to tax-exempt obligations 
acquired after December 31, 1982, and before August 8, 1986. 
\125\ Section 265(b)(3) treats qualified tax-exempt obligations 
as if they were acquired on August 7, 1986. As a result, the 
amount allowable as a deduction by a financial institution with 
respect to interest incurred to carry a qualified tax-exempt 
obligation is reduced by 20 percent.
---------------------------------------------------------------------------
    \125\ Sec. 291(e)(1).
---------------------------------------------------------------------------

                               HOUSE BILL

            Two-percent safe harbor for financial institutions
      The provision provides that tax-exempt obligations issued 
during 2009 or 2010 and held by a financial institution, in an 
amount not to exceed two percent of the adjusted basis of the 
financial institution's assets, are not taken into account for 
the purpose of determining the portion of the financial 
institution's interest expense subject to the pro rata interest 
disallowance rule of section 265(b). For purposes of this rule, 
a refunding bond (whether a current or advance refunding) is 
treated as issued on the date of the issuance of the refunded 
bond (or in the case of a series of refundings, the original 
bond).
      The provision also amends section 291(e) to provide that 
tax-exempt obligations issued during 2009 and 2010, and not 
taken into account for purposes of the calculation of a 
financial institution's interest expense subject to the pro 
rata interest disallowance rule, are treated as having been 
acquired on August 7, 1986. As a result, such obligations are 
financial institution preference items, and the amount 
allowable as a deduction by a financial institution with 
respect to interest incurred to carry such obligations is 
reduced by 20 percent.
            Modifications to qualified small issuer exception
      With respect to tax-exempt obligations issued during 2009 
and 2010, the provision increases from $10 million to $30 
million the annual limit for qualified small issuers.
      In addition, in the case of ``qualified financing issue'' 
issued in 2009 or 2010, the provision applies the $30 million 
annual volume limitation at the borrower level (rather than at 
the level of the pooled financing issuer). Thus, for the 
purpose of applying the requirements of the section 265(b)(3) 
qualified small issuer exception, the portion of the proceeds 
of a qualified financing issue that are loaned to a ``qualified 
borrower'' that participates in the issue are treated as a 
separate issue with respect to which the qualified borrower is 
deemed to be the issuer.
      A ``qualified financing issue'' is any composite, pooled 
or other conduit financing issue the proceeds of which are used 
directly or indirectly to make or finance loans to one or more 
ultimate borrowers all of whom are qualified borrowers. A 
``qualified borrower'' means (1) a State or political 
subdivision of a State or (2) an organization described in 
section 501(c)(3) and exempt from tax under section 501(a). 
Thus, for example, a $100 million pooled financing issue that 
was issued in 2009 could qualify for the section 265(b)(3) 
exception if the proceeds of such issue were used to make four 
equal loans of $25 million to four qualified borrowers. 
However, if (1) more than $30 million were loaned to any 
qualified borrower, (2) any borrower were not a qualified 
borrower, or (3) any borrower would, if it were the issuer of a 
separate issue in an amount equal to the amount loaned to such 
borrower, fail to meet any of the other requirements of section 
265(b)(3), the entire $100 million pooled financing issue would 
fail to qualify for the exception.
      For purposes of determining whether an issuer meets the 
requirements of the small issuer exception, qualified 501(c)(3) 
bonds issued in 2009 or 2010 are treated as if they were issued 
by the 501(c)(3) organization for whose benefit they were 
issued (and not by the actual issuer of such bonds). In 
addition, in the case of an organization described in section 
501(c)(3) and exempt from taxation under section 501(a), 
requirements for ``qualified financing issues'' shall be 
applied as if the section 501(c)(3) organization were the 
issuer. Thus, in any event, an organization described in 
section 501(c)(3) and exempt from taxation under section 501(a) 
shall be limited to the $30 million per issuer cap for 
qualified tax exempt obligations described in section 
265(b)(3).
      Effective date.--The provisions are effective for 
obligations issued after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
2. Temporary modification of alternative minimum tax limitations on 
        tax-exempt bonds (sec. 1503 of the House bill, sec. 1503 of the 
        Senate amendment, sec. 1503 of the conference agreement, and 
        secs. 56 and 57 of the Code)

                              PRESENT LAW

      Present law imposes an alternative minimum tax (``AMT'') 
on individuals and corporations. AMT is the amount by which the 
tentative minimum tax exceeds the regular income tax. The 
tentative minimum tax is computed based upon a taxpayer's 
alternative minimum taxable income (``AMTI''). AMTI is the 
taxpayer's taxable income modified to take into account certain 
preferences and adjustments. One of the preference items is 
tax-exempt interest on certain tax-exempt bonds issued for 
private activities (sec. 57(a)(5)). Also, in the case of a 
corporation, an adjustment based on current earnings is 
determined, in part, by taking into account 75 percent of 
items, including tax-exempt interest, that are excluded from 
taxable income but included in the corporation's earnings and 
profits (sec. 56(g)(4)(B)).

                               HOUSE BILL

      The House bill provides that tax-exempt interest on 
private activity bonds issued in 2009 and 2010 is not an item 
of tax preference for purposes of the alternative minimum tax 
and interest on tax exempt bonds issued in 2009 and 2010 is not 
included in the corporate adjustment based on current earnings. 
For these purposes, a refunding bond is treated as issued on 
the date of the issuance of the refunded bond (or in the case 
of a series of refundings, the original bond).
      Effective date.--The provision applies to interest on 
bonds issued after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement provides that tax-exempt 
interest on private activity bonds issued in 2009 and 2010 is 
not an item of tax preference for purposes of the alternative 
minimum tax and interest on tax exempt bonds issued in 2009 and 
2010 is not included in the corporate adjustment based on 
current earnings. For these purposes, a refunding bond is 
treated as issued on the date of the issuance of the refunded 
bond (or in the case of a series of refundings, the original 
bond).
      The conference agreement also provides that tax-exempt 
interest on private activity bonds issued in 2009 and 2010 to 
currently refund a private activity bond issued after December 
31, 2003, and before January 1, 2009, is not an item of tax 
preference for purposes of the alternative minimum tax. Also 
tax-exempt interest on bonds issued in 2009 and 2010 to 
currently refund a bond issued after December 31, 2003, and 
before January 1, 2009, is not included in the corporate 
adjustment based on current earnings.
      Effective date.--The provision applies to interest on 
bonds issued after December 31, 2008.
3. Temporary expansion of availability of industrial development bonds 
        to facilities creating intangible property and other 
        modifications (sec. 1301 of the Senate amendment, sec. 1301 of 
        the conference agreement, and sec. 144(a) of the Code)

                              PRESENT LAW

      Qualified small issue bonds (commonly referred to as 
``industrial development bonds'' or ``small issue IDBs'') are 
tax-exempt bonds issued by State and local governments to 
finance private business manufacturing facilities (including 
certain directly related and ancillary facilities) or the 
acquisition of land and equipment by certain farmers. In both 
instances, these bonds are subject to limits on the amount of 
financing that may be provided, both for a single borrowing and 
in the aggregate. In general, no more than $1 million of small-
issue bond financing may be outstanding at any time for 
property of a business (including related parties) located in 
the same municipality or county. Generally, this $1 million 
limit may be increased to $10 million if, in addition to 
outstanding bonds, all other capital expenditures of the 
business (including related parties) in the same municipality 
or county are counted toward the limit over a six-year period 
that begins three years before the issue date of the bonds and 
ends three years after such date. Outstanding aggregate 
borrowing is limited to $40 million per borrower (including 
related parties) regardless of where the property is located.
      The Code permits up to $10 million of capital 
expenditures to be disregarded, in effect increasing from $10 
million to $20 million the maximum allowable amount of total 
capital expenditures by an eligible business in the same 
municipality or county. However, no more than $10 million of 
bond financing may be outstanding at any time for property of 
an eligible business (including related parties) located in the 
same municipality or county. Other limits (e.g., the $40 
million per borrower limit) also continue to apply.
      A manufacturing facility is any facility which is used in 
the manufacturing or production of tangible personal property 
(including the processing resulting in a change in the 
condition of such property). Manufacturing facilities include 
facilities that are directly related and ancillary to a 
manufacturing facility (as described in the previous sentence) 
if (1) such facilities are located on the same site as the 
manufacturing facility and (2) not more than 25 percent of the 
net proceeds of the issue are used to provide such 
facilities.\126\
---------------------------------------------------------------------------
    \126\ The 25 percent restriction was enacted by the Technical and 
Miscellaneous Tax Act of 1988 because of concern over the scope of the 
definition of manufacturing facility. See H.R. Rpt. No. 100-795 (1988). 
The amendment was intended to clarify that while the manufacturing 
facility definition does not preclude the financing of ancillary 
activities, the 25 percent restriction was intended to limit the use of 
bond proceeds to finance facilities other than for ``core 
manufacturing.'' The conference agreement followed the House bill, 
which the conference report described as follows: ``The House bill 
clarifies that up to 25 percent of the proceeds of a qualified small 
issue may be used to finance ancillary activities which are carried out 
at the manufacturing site. All such ancillary activities must be 
subordinate and integral to the manufacturing process.''
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

In general
      For bonds issued after the date of enactment and before 
January 1, 2011, the provision expands the definition of 
manufacturing facilities to mean any facility that is used in 
the manufacturing, creation, or production of tangible property 
or intangible property (within the meaning of section 
197(d)(1)(C)(iii)). For this purpose, intangible property means 
any patent, copyright, formula, process, design, knowhow, 
format, or other similar item. It is intended to include among 
other items, the creation of computer software, and 
intellectual property associated bio-tech and pharmaceuticals.
      In lieu of the directly related and ancillary test of 
present law, the provision provides a special rule for bonds 
issued after the date of enactment and before January 1, 2011. 
For these bonds, the provision provides that facilities that 
are functionally related and subordinate to the manufacturing 
facility are treated as a manufacturing facility and the 25 
percent of net proceeds restriction does not apply to such 
facilities.\127\ Functionally related and subordinate 
facilities must be located on the same site as the 
manufacturing facility.
---------------------------------------------------------------------------
    \127\ The provision is based in part on a similar rule applicable 
to exempt facility bonds. Treas. Reg. sec. 1.103-8(a)(3) provides: 
``(3) Functionally related and subordinate. An exempt facility includes 
any land, building, or other property functionally related and 
subordinate to such facility. Property is not functionally related and 
subordinate to a facility if it is not of a character and size 
commensurate with the character and size of such facility.''
---------------------------------------------------------------------------
Effective date
      The provision is effective for bonds issued after the 
date of enactment and before January 1, 2011.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
4. Qualified school construction bonds (sec. 1511 of the House bill, 
        sec. 1521 of the Senate amendment, sec. 1521 of the conference 
        agreement, and new sec. 54F of the Code)

                              PRESENT LAW

Tax-exempt bonds
      Interest on State and local governmental bonds generally 
is excluded from gross income for Federal income tax purposes 
if the proceeds of the bonds are used to finance direct 
activities of these governmental units or if the bonds are 
repaid with revenues of the governmental units. These can 
include tax-exempt bonds which finance public schools.\128\ An 
issuer must file with the Internal Revenue Service certain 
information about the bonds issued in order for that bond issue 
to be tax-exempt.\129\ Generally, this information return is 
required to be filed no later than the 15th day of the second 
month after the close of the calendar quarter in which the 
bonds were issued.
---------------------------------------------------------------------------
    \128\ Sec. 103.
    \129\ Sec. 149(e).
---------------------------------------------------------------------------
      The tax exemption for State and local bonds does not 
apply to any arbitrage bond.\130\ An arbitrage bond is defined 
as any bond that is part of an issue if any proceeds of the 
issue are reasonably expected to be used (or intentionally are 
used) to acquire higher yielding investments or to replace 
funds that are used to acquire higher yielding 
investments.\131\ In general, arbitrage profits may be earned 
only during specified periods (e.g., defined ``temporary 
periods'') before funds are needed for the purpose of the 
borrowing or on specified types of investments (e.g., 
``reasonably required reserve or replacement funds''). Subject 
to limited exceptions, investment profits that are earned 
during these periods or on such investments must be rebated to 
the Federal Government.
---------------------------------------------------------------------------
    \130\ Sec. 103(a) and (b)(2).
    \131\ Sec. 148.
---------------------------------------------------------------------------
Qualified zone academy bonds
      As an alternative to traditional tax-exempt bonds, States 
and local governments were given the authority to issue 
``qualified zone academy bonds.'' \132\ A total of $400 million 
of qualified zone academy bonds is authorized to be issued 
annually in calendar years 1998 through 2009. The $400 million 
aggregate bond cap is allocated each year to the States 
according to their respective populations of individuals below 
the poverty line. Each State, in turn, allocates the credit 
authority to qualified zone academies within such State.
---------------------------------------------------------------------------
    \132\ Sec. 1397E.
---------------------------------------------------------------------------
      A taxpayer holding a qualified zone academy bond on the 
credit allowance date is entitled to a credit. The credit is 
includible in gross income (as if it were a taxable interest 
payment on the bond), and may be claimed against regular income 
tax and alternative minimum tax liability.
      The Treasury Department sets the credit rate at a rate 
estimated to allow issuance of qualified zone academy bonds 
without discount and without interest cost to the issuer.\133\ 
The Secretary determines credit rates for tax credit bonds 
based on general assumptions about credit quality of the class 
of potential eligible issuers and such other factors as the 
Secretary deems appropriate. The Secretary may determine credit 
rates based on general credit market yield indexes and credit 
ratings. The maximum term of the bond is determined by the 
Treasury Department, so that the present value of the 
obligation to repay the principal on the bond is 50 percent of 
the face value of the bond.
---------------------------------------------------------------------------
    \133\ Given the differences in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
---------------------------------------------------------------------------
      ``Qualified zone academy bonds'' are defined as any bond 
issued by a State or local government, provided that (1) at 
least 95 percent of the proceeds are used for the purpose of 
renovating, providing equipment to, developing course materials 
for use at, or training teachers and other school personnel in 
a ``qualified zone academy'' and (2) private entities have 
promised to contribute to the qualified zone academy certain 
equipment, technical assistance or training, employee services, 
or other property or services with a value equal to at least 10 
percent of the bond proceeds.
      A school is a ``qualified zone academy'' if (1) the 
school is a public school that provides education and training 
below the college level, (2) the school operates a special 
academic program in cooperation with businesses to enhance the 
academic curriculum and increase graduation and employment 
rates, and (3) either (a) the school is located in an 
empowerment zone or enterprise community designated under the 
Code, or (b) it is reasonably expected that at least 35 percent 
of the students at the school will be eligible for free or 
reduced-cost lunches under the school lunch program established 
under the National School Lunch Act.
      The arbitrage requirements which generally apply to 
interest-bearing tax-exempt bonds also generally apply to 
qualified zone academy bonds. In addition, an issuer of 
qualified zone academy bonds must reasonably expect to and 
actually spend 100 percent of the proceeds of such bonds on 
qualified zone academy property within the three years period 
that begins on the date of issuance. To the extent less than 
100 percent of the proceeds are used to finance qualified zone 
academy property during the three years spending period, bonds 
will continue to qualify as qualified zone academy bonds if 
unspent proceeds are used within 90 days from the end of such 
three years period to redeem any nonqualified bonds. The three 
years spending period may be extended by the Secretary if the 
issuer establishes that the failure to meet the spending 
requirement is due to reasonable cause and the related purposes 
for issuing the bonds will continue to proceed with due 
diligence.
      Two special arbitrage rules apply to qualified zone 
academy bonds. First, available project proceeds invested 
during the three-year period beginning on the date of issue are 
not subject to the arbitrage restrictions (i.e., yield 
restriction and rebate requirements). Available project 
proceeds are proceeds from the sale of an issue of qualified 
zone academy bonds, less issuance costs (not to exceed two 
percent) and any investment earnings on such proceeds. Thus, 
available project proceeds invested during the three-year 
spending period may be invested at unrestricted yields, but the 
earnings on such investments must be spent on qualified zone 
academy property. Second, amounts invested in a reserve fund 
are not subject to the arbitrage restrictions to the extent: 
(1) such fund is funded at a rate not more rapid than equal 
annual installments; (2) such fund is funded in a manner 
reasonably expected to result in an amount not greater than an 
amount necessary to repay the issue; and (3) the yield on such 
fund is not greater than the average annual interest rate of 
tax-exempt obligations having a term of 10 years or more that 
are issued during the month the qualified zone academy bonds 
are issued.
      Issuers of qualified zone academy bonds are required to 
report issuance to the Internal Revenue Service in a manner 
similar to the information returns required for tax-exempt 
bonds.

                               HOUSE BILL

In general
      The provision creates a new category of tax-credit bonds: 
qualified school construction bonds. Qualified school 
construction bonds must meet three requirements: (1) 100 
percent of the available project proceeds of the bond issue is 
used for the construction, rehabilitation, or repair of a 
public school facility or for the acquisition of land on which 
such a bond-financed facility is to be constructed; (2) the 
bond is issued by a State or local government within which such 
school is located; and (3) the issuer designates such bonds as 
a qualified school construction bond.
National limitation
      There is a national limitation on qualified school 
construction bonds of $11 billion for calendar years 2009 and 
2010, respectively. Allocations of the national limitation of 
qualified school construction bonds are divided between the 
States and certain large school districts. The States receive 
60 percent of the national limitation for a calendar year and 
the remaining 40 percent of the national limitation for a 
calendar year is allocated to certain of the largest school 
districts.
Allocation to the States
      Generally allocations are made to the States under the 60 
percent allocation according to their respective populations of 
children aged five through seventeen. However, the Secretary of 
the Treasury shall adjust the annual allocations among the 
States to ensure that for each State the sum of its allocations 
under the 60 percent allocation plus any allocations to large 
educational agencies within the States is not less than a 
minimum percentage. A State's minimum percentage for a calendar 
year is a product of 1.68 and the minimum percentage described 
in section 1124(d) of the Elementary and Secondary Education 
Act of 1965 for such State for the most recent fiscal year 
ending before such calendar year.
      For allocation purposes, a State includes the District of 
Columbia and any possession of the United States. The provision 
provides a special allocation for possessions of the United 
States other than Puerto Rico under the 60 percent share of the 
national limitation for States. Under this special rule an 
allocation to a possession other than Puerto Rico is made on 
the basis of the respective populations of individuals below 
the poverty line (as defined by the Office of Management and 
Budget) rather than respective populations of children aged 
five through seventeen. This special allocation reduces the 
State allocation share of the national limitation otherwise 
available for allocation among the States. Under another 
special rule the Secretary of the Interior may allocate $200 
million of school construction bonds for 2009 and 2010, 
respectively, to Indian schools. This special allocation for 
Indian schools is to be used for purposes of the construction, 
rehabilitation, and repair of schools funded by the Bureau of 
Indian Affairs. For purposes of such allocations Indian tribal 
governments are qualified issuers. The special allocation for 
Indian schools does not reduce the State allocation share of 
the national limitation otherwise available for allocation 
among the States.
      If an amount allocated under this allocation to the 
States is unused for a calendar year it may be carried forward 
by the State to the next calendar year.
Allocation to large school districts
      The remaining 40 percent of the national limitation for a 
calendar year is allocated by the Secretary of the Treasury 
among local educational agencies which are large local 
educational agencies for such year. This allocation is made in 
proportion to the respective amounts each agency received for 
Basic Grants under subpart 2 of Part A of Title I of the 
Elementary and Secondary Education Act of 1965 for the most 
recent fiscal year ending before such calendar year. Any unused 
allocation of any agency within a State may be allocated by the 
agency to such State. With respect to a calendar year, the term 
large local educational agency means any local educational 
agency if such agency is: (1) among the 100 local educational 
agencies with the largest numbers of children aged 5 through 17 
from families living below the poverty level, or (2) one of not 
more than 25 local educational agencies (other than in 1, 
immediately above) that the Secretary of Education determines 
are in particular need of assistance, based on a low level of 
resources for school construction, a high level of enrollment 
growth, or other such factors as the Secretary of Education 
deems appropriate. If any amount allocated to large local 
educational agency is unused for a calendar year the agency may 
reallocate such amount to the State in which the agency is 
located.
      The provision makes qualified school construction bonds a 
type of qualified tax credit bond for purposes of section 54A. 
In addition, qualified school construction bonds may be issued 
by Indian tribal governments only to the extent such bonds are 
issued for purposes that satisfy the present law requirements 
for tax-exempt bonds issued by Indian tribal governments (i.e., 
essential governmental functions and certain manufacturing 
purposes).
      The provision requires 100 percent of the available 
project proceeds of qualified school construction bonds to be 
used within the three-year period that begins on the date of 
issuance. Available project proceeds are proceeds from the sale 
of the issue less issuance costs (not to exceed two percent) 
and any investment earnings on such sale proceeds. To the 
extent less than 100 percent of the available project proceeds 
are used to finance qualified purposes during the three-year 
spending period, bonds will continue to qualify as qualified 
school construction bonds if unspent proceeds are used within 
90 days from the end of such three-year period to redeem bonds. 
The three-year spending period may be extended by the Secretary 
upon the issuer's request demonstrating that the failure to 
satisfy the three-year requirement is due to reasonable cause 
and the projects will continue to proceed with due diligence.
      Qualified school construction bonds generally are subject 
to the arbitrage requirements of section 148. However, 
available project proceeds invested during the three-year 
spending period are not subject to the arbitrage restrictions 
(i.e., yield restriction and rebate requirements). In addition, 
amounts invested in a reserve fund are not subject to the 
arbitrage restrictions to the extent: (1) such fund is funded 
at a rate not more rapid than equal annual installments; (2) 
such fund is funded in a manner reasonably expected to result 
in an amount not greater than an amount necessary to repay the 
issue; and (3) the yield on such fund is not greater than the 
average annual interest rate of tax-exempt obligations having a 
term of 10 years or more that are issued during the month the 
qualified school construction bonds are issued.
      The maturity of qualified school construction bonds is 
the term that the Secretary estimates will result in the 
present value of the obligation to repay the principal on such 
bonds being equal to 50 percent of the face amount of such 
bonds, using as a discount rate the average annual interest 
rate of tax-exempt obligations having a term of 10 years or 
more that are issued during the month the qualified school 
construction bonds are issued.
      As with present-law tax credit bonds, the taxpayer 
holding qualified school construction bonds on a credit 
allowance date is entitled to a tax credit. The credit rate on 
the bonds is set by the Secretary at a rate that is 100 percent 
of the rate that would permit issuance of such bonds without 
discount and interest cost to the issuer. The amount of the tax 
credit is determined by multiplying the bond's credit rate by 
the face amount on the holder's bond. The credit accrues 
quarterly, is includible in gross income (as if it were an 
interest payment on the bond), and can be claimed against 
regular income tax liability and alternative minimum tax 
liability. Unused credits may be carried forward to succeeding 
taxable years. In addition, credits may be separated from the 
ownership of the underlying bond in a manner similar to the 
manner in which interest coupons can be stripped from interest-
bearing bonds.
      Issuers of qualified school construction bonds are 
required to certify that the financial disclosure requirements 
and applicable State and local law requirements governing 
conflicts of interest are satisfied with respect to such issue, 
as well as any other additional conflict of interest rules 
prescribed by the Secretary with respect to any Federal, State, 
or local government official directly involved with the 
issuance of qualified school construction bonds.
Effective date
      The provision is effective for bonds issued after 
December 31, 2008.

                            SENATE AMENDMENT

In general
      The Senate amendment is the same as the House bill.
National limitation
      There is a national limitation on qualified school 
construction bonds of $5 billion for Calendar years 2009 and 
2010, respectively. Also, allocations of the national 
limitation of qualified school construction bonds are divided 
between the States with no special allocations to certain large 
school districts.
Allocation to the States
      The allocations are made to the States according to their 
respective populations of children aged five through seventeen. 
However, the Secretary of the Treasury shall adjust the annual 
allocations among the States to ensure that for each State is 
not less than a minimum percentage. A State's minimum 
percentage for a calendar year is calculated by dividing (1) 
the amount the State is eligible to receive under section 
1124(d) of the Elementary and Secondary Education Act of 1965 
for such State for the most recent fiscal year ending before 
such calendar year by (2) the amount all States are eligible to 
received under section 1124(d) of the Elementary and Secondary 
Education Act of 1965 for such fiscal year, and then 
multiplying the result by 100.
Allocation to large school districts
      No portion of the national limitation for a calendar year 
is allocated by the Secretary of the Treasury among local 
educational agencies which are large local educational agencies 
for such year.
Effective date
      The provision is effective for obligations issued after 
the date of enactment.

                          CONFERENCE AGREEMENT

In general
      The provision creates a new category of tax-credit bonds: 
qualified school construction bonds. Qualified school 
construction bonds must meet three requirements: (1) 100 
percent of the available project proceeds of the bond issue is 
used for the construction, rehabilitation, or repair of a 
public school facility or for the acquisition of land on which 
such a bond-financed facility is to be constructed; (2) the 
bond is issued by a State or local government within which such 
school is located; and (3) the issuer designates such bonds as 
a qualified school construction bond.
National limitation
      There is a national limitation on qualified school 
construction bonds of $11 billion for calendar years 2009 and 
2010, respectively.
Allocation to the States
      The national limitation is tentatively allocated among 
the States in proportion to respective amounts each such State 
is eligible to receive under section 1124 of the Elementary and 
Secondary Education Act of 1965 for the most recent fiscal year 
ending before such calendar year. The amount each State is 
allocated under the above formula is then reduced by the amount 
received by any local large educational agency within the 
State.
      For allocation purposes, a State includes the District of 
Columbia and any possession of the United States. The provision 
provides a special allocation for possessions of the United 
States other than Puerto Rico under the national limitation for 
States. Under this special rule an allocation to a possession 
other than Puerto Rico is made on the basis of the respective 
populations of individuals below the poverty line (as defined 
by the Office of Management and Budget) rather than respective 
populations of children aged five through seventeen. This 
special allocation reduces the State allocation share of the 
national limitation otherwise available for allocation among 
the States. Under another special rule the Secretary of the 
Interior may allocate $200 million of school construction bonds 
for 2009 and 2010, respectively, to Indian schools. This 
special allocation for Indian schools is to be used for 
purposes of the construction, rehabilitation, and repair of 
schools funded by the Bureau of Indian Affairs. For purposes of 
such allocations Indian tribal governments are qualified 
issuers. The special allocation for Indian schools does not 
reduce the State allocation share of the national limitation 
otherwise available for allocation among the States.
      If an amount allocated under this allocation to the 
States is unused for a calendar year it may be carried forward 
by the State to the next calendar year.
Allocation to large school districts
      Forty percent of the national limitation is allocated 
among large local educational agencies in proportion to the 
respective amounts each agency received under section 1124 of 
the Elementary and Secondary Education Act of 1965 for the most 
recent fiscal year ending before such calendar year. Any unused 
allocation of any agency within a State may be allocated by the 
agency to such State. With respect to a calendar year, the term 
large local educational agency means any local educational 
agency if such agency is: (1) among the 100 local educational 
agencies with the largest numbers of children aged 5 through 17 
from families living below the poverty level, or (2) one of not 
more than 25 local educational agencies (other than in 1, 
immediately above) that the Secretary of Education determines 
are in particular need of assistance, based on a low level of 
resources for school construction, a high level of enrollment 
growth, or other such factors as the Secretary of Education 
deems appropriate. If any amount allocated to large local 
educational agency is unused for a calendar year the agency may 
reallocate such amount to the State in which the agency is 
located.
Application of qualified tax credit bond rules
      The provision makes qualified school construction bonds a 
type of qualified tax credit bond for purposes of section 54A. 
In addition, qualified school construction bonds may be issued 
by Indian tribal governments only to the extent such bonds are 
issued for purposes that satisfy the present law requirements 
for tax-exempt bonds issued by Indian tribal governments (i.e., 
essential governmental functions and certain manufacturing 
purposes).
      The provision requires 100 percent of the available 
project proceeds of qualified school construction bonds to be 
used within the three-year period that begins on the date of 
issuance. Available project proceeds are proceeds from the sale 
of the issue less issuance costs (not to exceed two percent) 
and any investment earnings on such sale proceeds. To the 
extent less than 100 percent of the available project proceeds 
are used to finance qualified purposes during the three-year 
spending period, bonds will continue to qualify as qualified 
school construction bonds if unspent proceeds are used within 
90 days from the end of such three-year period to redeem bonds. 
The three-year spending period may be extended by the Secretary 
upon the issuer's request demonstrating that the failure to 
satisfy the three-year requirement is due to reasonable cause 
and the projects will continue to proceed with due diligence.
      Qualified school construction bonds generally are subject 
to the arbitrage requirements of section 148. However, 
available project proceeds invested during the three-year 
spending period are not subject to the arbitrage restrictions 
(i.e., yield restriction and rebate requirements). In addition, 
amounts invested in a reserve fund are not subject to the 
arbitrage restrictions to the extent: (1) such fund is funded 
at a rate not more rapid than equal annual installments; (2) 
such fund is funded in a manner reasonably expected to result 
in an amount not greater than an amount necessary to repay the 
issue; and (3) the yield on such fund is not greater than the 
average annual interest rate of tax-exempt obligations having a 
term of 10 years or more that are issued during the month the 
qualified school construction bonds are issued.
      The maturity of qualified school construction bonds is 
the term that the Secretary estimates will result in the 
present value of the obligation to repay the principal on such 
bonds being equal to 50 percent of the face amount of such 
bonds, using as a discount rate the average annual interest 
rate of tax-exempt obligations having a term of 10 years or 
more that are issued during the month the qualified school 
construction bonds are issued.
      As with present-law tax credit bonds, the taxpayer 
holding qualified school construction bonds on a credit 
allowance date is entitled to a tax credit. The credit rate on 
the bonds is set by the Secretary at a rate that is 100 percent 
of the rate that would permit issuance of such bonds without 
discount and interest cost to the issuer. The amount of the tax 
credit is determined by multiplying the bond's credit rate by 
the face amount on the holder's bond. The credit accrues 
quarterly, is includible in gross income (as if it were an 
interest payment on the bond), and can be claimed against 
regular income tax liability and alternative minimum tax 
liability. Unused credits may be carried forward to succeeding 
taxable years. In addition, credits may be separated from the 
ownership of the underlying bond in a manner similar to the 
manner in which interest coupons can be stripped from interest-
bearing bonds.
      Issuers of qualified school construction bonds are 
required to certify that the financial disclosure requirements 
and applicable State and local law requirements governing 
conflicts of interest are satisfied with respect to such issue, 
as well as any other additional conflict of interest rules 
prescribed by the Secretary with respect to any Federal, State, 
or local government official directly involved with the 
issuance of qualified school construction bonds.
Effective date
      The provision is effective for obligations issued after 
the date of enactment.
5. Extend and expand qualified zone academy bonds (sec. 1512 of the 
        House bill, sec. 1522 of the Senate amendment, sec. 1522 of the 
        conference agreement, and sec. 54E of the Code)

                              PRESENT LAW

Tax-exempt bonds
      Interest on State and local governmental bonds generally 
is excluded from gross income for Federal income tax purposes 
if the proceeds of the bonds are used to finance direct 
activities of these governmental units or if the bonds are 
repaid with revenues of the governmental units. These can 
include tax-exempt bonds which finance public schools.\134\ An 
issuer must file with the Internal Revenue Service certain 
information about the bonds issued in order for that bond issue 
to be tax-exempt.\135\ Generally, this information return is 
required to be filed no later the 15th day of the second month 
after the close of the calendar quarter in which the bonds were 
issued.
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    \134\ Sec. 103.
    \135\ Sec. 149(e).
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      The tax exemption for State and local bonds does not 
apply to any arbitrage bond.\136\ An arbitrage bond is defined 
as any bond that is part of an issue if any proceeds of the 
issue are reasonably expected to be used (or intentionally are 
used) to acquire high fielding investments or to replace funds 
that are used to acquire higher yielding investments.\137\ In 
general, arbitrage profits may be earned only during specified 
periods (e.g., defined ``temporary periods'') before funds are 
needed for the purpose of the borrowing or on specified types 
of investments (e.g., ``reasonably required reserve or 
replacement funds''). Subject to limited exceptions, investment 
profits that are earned during these periods or on such 
investments must be rebated to the Federal Government.
---------------------------------------------------------------------------
    \136\ Sec. 103(a) and (b)(2).
    \137\ Sec. 148.
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Qualified zone academy bonds
      As an alternative to traditional tax-exempt bonds, States 
and local governments were given the authority to issue 
``qualified zone academy bonds.'' \138\ A total of $400 million 
of qualified zone academy bonds is authorized to be issued 
annually in calendar years 1998 through 2009. The $400 million 
aggregate bond cap is allocated each year to the States 
according to their respective populations of individuals below 
the poverty line. Each State, in turn, allocates the credit 
authority to qualified zone academies within such State.
---------------------------------------------------------------------------
    \138\ See secs. 54E and 1397E.
---------------------------------------------------------------------------
      A taxpayer holding a qualified zone academy bond on the 
credit allowance date is entitled to a credit. The credit is 
includible in gross income (as if it were a taxable interest 
payment on the bond), and may be claimed against regular income 
tax and alternative minimum tax liability.
      The Treasury Department sets the credit rate at a rate 
estimated to allow issuance qualified zone academy bonds 
without discount and without interest cost to the issuer.\139\ 
The Secretary determines credit rates for tax credit bonds 
based on general assumptions about credit quality of the class 
of potential eligible issuers and such other factors as the 
Secretary deems appropriate. The Secretary may determine credit 
rates based on general credit market yield indexes and credit 
ratings. The maximum term of the bond is determined by the 
Treasury Department, so that the present value of the 
obligation to repay the principal on the bond is 50 percent of 
the face value of the bond.
---------------------------------------------------------------------------
    \139\ Given the differences in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
---------------------------------------------------------------------------
      ``Qualified zone academy bonds'' are defined as any bond 
issued by a State or local government, provided that (1) at 
least 95 percent of the proceeds are used for the purpose of 
renovating, providing equipment to, developing course materials 
for use at, or training teachers and other school personnel in 
a ``qualified zone academy'' and (2) private entities have 
promised to contribute to the qualified zone academy certain 
equipment, technical assistance or training, employee services, 
or other property or services with a value equal to at least 10 
percent of the bond proceeds.
      A school is a ``qualified zone academy'' if (1) the 
school is a public school that provides education and training 
below the college level, (2) the school operates a special 
academic program in cooperation with businesses to enhance the 
academic curriculum and increase graduation and employment 
rates, and (3) either (a) the school is located in an 
empowerment zone or enterprise community designated under the 
Code, or (b) it is reasonably expected that at least 35 percent 
of the students at the school will be eligible for free or 
reduced-cost lunches under the school lunch program established 
under the National School Lunch Act.
      The arbitrage requirements which generally apply to 
interest-bearing tax-exempt bonds also generally apply to 
qualified zone academy bonds. In addition, an issuer of 
qualified zone academy bonds must reasonably expect to and 
actually spend 100 percent or more of the proceeds of such 
bonds on qualified zone academy property within the three-year 
period that begins on the date of issuance. To the extent less 
than 100 percent of the proceeds are used to finance qualified 
zone academy property during the three-year spending period, 
bonds will continue to qualify as qualified zone academy bonds 
if unspent proceeds are used within 90 days from the end of 
such three-year period to redeem any nonqualified bonds. The 
three-year spending period may be extended by the Secretary if 
the issuer establishes that the failure to meet the spending 
requirement is due to reasonable cause and the related purposes 
for issuing the bonds will continue to proceed with due 
diligence.
      Two special arbitrage rules apply to qualified zone 
academy bonds. First, available project proceeds invested 
during the three-year period beginning on the date of issue are 
not subject to the arbitrage restrictions (i.e., yield 
restriction and rebate requirements). Available project 
proceeds are proceeds from the sale of an issue of qualified 
zone academy bonds, less issuance costs (not to exceed two 
percent) and any investment earnings on such proceeds. Thus, 
available project proceeds invested during the three-year 
spending period may be invested at unrestricted yields, but the 
earnings on such investments must be spent on qualified zone 
academy property. Second, amounts invested in a reserve fund 
are not subject to the arbitrage restrictions to the extent: 
(1) such fund is funded at a rate not more rapid than equal 
annual installments; (2) such fund is funded in a manner 
reasonably expected to result in an amount not greater than an 
amount necessary to repay the issue; and (3) the yield on such 
fund is not greater than the average annual interest rate of 
tax-exempt obligations having a term of 10 years or more that 
are issued during the month the qualified zone academy bonds 
are issued.
      Issuers of qualified zone academy bonds are required to 
report issuance to the Internal Revenue Service in a manner 
similar to the information returns required for tax-exempt 
bonds.

                               HOUSE BILL

In general
      The provision extends and expands the present-law 
qualified zone academy bond program. The provision authorizes 
issuance of up to $1.4 billion of qualified zone academy bonds 
annually for 2009 and 2010, respectively.
Effective date
      The provision applies to obligations issued after 
December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
6. Build America bonds (sec. 1521 of the House bill, sec. 1531 of the 
        Senate amendment, sec. 1531 of the conference agreement, and 
        new secs. 54AA and 6431 of the Code)

                              PRESENT LAW

In general
      Under present law, gross income does not include interest 
on State or local bonds. State and local bonds are classified 
generally as either governmental bonds or private activity 
bonds. Governmental bonds are bonds the proceeds of which are 
primarily used to finance governmental functions or which are 
repaid with governmental funds. Private activity bonds are 
bonds in which the State or local government serves as a 
conduit providing financing to nongovernmental persons (e.g., 
private businesses or individuals). The exclusion from income 
for State and local bonds does not apply to private activity 
bonds, unless the bonds are issued for certain permitted 
purposes (``qualified private activity bonds'') and other Code 
requirements are met.
Private activity bonds
      The Code defines a private activity bond as any bond that 
satisfies (1) the private business use test and the private 
security or payment test (``the private business test''); or 
(2) ``the private loan financing test.'' \140\
---------------------------------------------------------------------------
    \140\ Sec. 141.
---------------------------------------------------------------------------
            Private business test
      Under the private business test, a bond is a private 
activity bond if it is part of an issue in which:
            1. More than 10 percent of the proceeds of the 
        issue (including use of the bond-financed property) are 
        to be used in the trade or business of any person other 
        than a governmental unit (``private business use''); 
        and
            2. More than 10 percent of the payment of principal 
        or interest on the issue is, directly or indirectly, 
        secured by (a) property used or to be used for a 
        private business use or (b) to be derived from payments 
        in respect of property, or borrowed money, used or to 
        be used for a private business use (``private payment 
        test'').\141\
---------------------------------------------------------------------------
    \141\ The 10 percent private business test is reduced to five 
percent in the case of private business uses (and payments with respect 
to such uses) that are unrelated to any governmental use being financed 
by the issue.
---------------------------------------------------------------------------
      A bond is not a private activity bond unless both parts 
of the private business test (i.e., the private business use 
test and the private payment test) are met. Thus, a facility 
that is 100 percent privately used does not cause the bonds 
financing such facility to be private activity bonds if the 
bonds are not secured by or paid with private payments. For 
example, land improvements that benefit a privately-owned 
factory may be financed with governmental bonds if the debt 
service on such bonds is not paid by the factory owner or other 
private parties.
            Private loan financing test
      A bond issue satisfies the private loan financing test if 
proceeds exceeding the lesser of $5 million or five percent of 
such proceeds are used directly or indirectly to finance loans 
to one or more nongovernmental persons. Private loans include 
both business and other (e.g., personal) uses and payments by 
private persons; however, in the case of business uses and 
payments, all private loans also constitute private business 
uses and payments subject to the private business test.
            Arbitrage restrictions
      The exclusion from income for interest on State and local 
bonds does not apply to any arbitrage bond.\142\ An arbitrage 
bond is defined as any bond that is part of an issue if any 
proceeds of the issue are reasonably expected to be used (or 
intentionally are used) to acquire higher yielding investments 
or to replace funds that are used to acquire higher yielding 
investments.\143\ In general, arbitrage profits may be earned 
only during specified periods (e.g., defined ``temporary 
periods'') before funds are needed for the purpose of the 
borrowing or on specified types of investments (e.g., 
``reasonably required reserve or replacement funds''). Subject 
to limited exceptions, investment profits that are earned 
during these periods or on such investments must be rebated to 
the Federal Government.
---------------------------------------------------------------------------
    \142\ Sec. 103(a) and (b)(2).
    \143\ Sec. 148.
---------------------------------------------------------------------------
Qualified tax credit bonds
      In lieu of interest, holders of qualified tax credit 
bonds receive a tax credit that accrues quarterly. The 
following bonds are qualified tax credit bonds: qualified 
forestry conservation bonds, new clean renewable energy bonds, 
qualified energy conservation bonds, and qualified zone academy 
bonds.\144\
---------------------------------------------------------------------------
    \144\ See secs. 54B, 54C, 54D, and 54E.
---------------------------------------------------------------------------
      Section 54A of the Code sets forth general rules 
applicable to qualified tax credit bonds. These rules include 
requirements regarding credit allowance dates, the expenditure 
of available project proceeds, reporting, arbitrage, maturity 
limitations, and financial conflicts of interest, among other 
special rules.
      A taxpayer who holds a qualified tax credit bond on one 
or more credit allowance dates of the bond during the taxable 
year shall be allowed a credit against the taxpayer's income 
tax for the taxable year. In general, the credit amount for any 
credit allowance date is 25 percent of the annual credit 
determined with respect to the bond. The annual credit is 
determined by multiplying the applicable credit rate by the 
outstanding face amount of the bond. The applicable credit rate 
for the bond is the rate that the Secretary estimates will 
permit the issuance of the qualified tax credit bond with a 
specified maturiy or redemption date without discount and 
without interest cost to the qualified issuer.\145\ The 
Secretary determines credit rates for tax credit bonds based on 
general assumptions about credit quality of the class of 
potential eligible issuers and such other factors as the 
Secretary deems appropriate. The Secretary may determine credit 
rates based on general credit market yield indexes and credit 
ratings.
---------------------------------------------------------------------------
    \145\ Given the differences in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
---------------------------------------------------------------------------
      The credit is included in gross income and, under 
regulations prescribed by the Secretary, may be stripped (a 
separation (including at issuance) of the ownership of a 
qualified tax credit bond and the entitlement to the credit 
with respect to such bond).
      Section 54A of the Code requires that 100 percent of the 
available project proceeds of qualified tax credit bonds must 
be used within the three-year period that begins on the date of 
issuance. Available project proceeds are proceeds from the sale 
of the bond issue less issuance costs (not to exceed two 
percent) and any investment earnings on such sale proceeds. To 
the extent less than 100 percent of the available project 
proceeds are used to finance qualified projects during the 
three-year spending period, bonds will continue to qualify as 
qualified tax credit bonds if unspent proceeds are used within 
90 days from the end of such three-year period to redeem bonds. 
The three-year spending period may be extended by the Secretary 
upon the issuer's request demonstrating that the failure to 
satisfy the three-year requirement is due to reasonable cause 
and the projects will continue to proceed with due diligence.
      Qualified tax credit bonds generally are subject to the 
arbitrage requirements of section 148. However, available 
project proceeds invested during the three-year spending period 
are not subject to the arbitrage restrictions (i.e., yield 
restriction and rebate requirements). In addition, amounts 
invested in a reserve fund are not subject to the arbitrage 
restrictions to the extent: (1) Such fund is funded at a rate 
not more rapid than equal annual installments; (2) such fund is 
funded in a manner reasonably expected to result in an amount 
not greater than an amount necessary to repay the issue; and 
(3) the yield on such fund is not greater than the average 
annual interest rate of tax-exempt obligations having a term of 
10 years or more that are issued during the month the qualified 
tax credit bonds are issued.
      The maturity of qualified tax credit bonds is the term 
that the Secretary estimates will result in the present value 
of the obligation to repay the principal on such bonds being 
equal to 50 percent of the face amount of such bonds, using as 
a discount rate the average annual interest rate of tax-exempt 
obligations having a term of 10 years or more that are issued 
during the month the qualified tax credit bonds are issued.

                               HOUSE BILL

In general
      The provision permits an issuer to elect to have an 
otherwise tax-exempt bond treated as a ``taxable governmental 
bond.'' A ``taxable governmental bond'' is any obligation 
(other than a private activity bond) if the interest on such 
obligation would be (but for this provision) excludable from 
gross income under section 103 and the issuer makes an 
irrevocable election to have the provision apply. In 
determining if an obligation would be tax-exempt under section 
103, the credit (or the payment discussed below for qualified 
bonds) is not treated as a Federal guarantee. Further, the 
yield on a taxable governmental bond is determined without 
regard to the credit. A taxable governmental bond does not 
include any bond if the issue price has more than a de minimis 
amount of premium over the stated principal amount of the bond.
      The holder of a taxable governmental bond will accrue a 
tax credit in the amount of 35 percent of the interest paid on 
the interest payment dates of the bond during the calendar 
year.\146\ The interest payment date is any date on which the 
holder of record of the taxable governmental bond is entitled 
to a payment of interest under such bond. The sum of the 
accrued credits is allowed against regular and alternative 
minimum tax. Unused credit may be carried forward to succeeding 
taxable years. The credit, as well as the interest paid by the 
issuer, is included in gross income and the credit may be 
stripped under rules similar to those provided in section 54A 
regarding qualified tax credit bonds. Rules similar to those 
that apply for S corporations, partnerships and regulated 
investment companies with respect to qualified tax credit bonds 
also apply to the credit.
---------------------------------------------------------------------------
    \146\ Original issue discount (OID) is not treated as a payment of 
interest for purposes of determining the credit under the provision. 
OID is the excess of an obligation's stated redemption price at 
maturity over the obligation's issue price (sec. 1273(a)).
---------------------------------------------------------------------------
      Unlike the tax credit for bonds issued under section 54A, 
the credit rate would not be calculated by the Secretary, but 
rather would be set by law at 35 percent. The actual credit 
that a taxpayer may claim is determined by multiplying the 
interest payment that the taxpayer receives from the issuer 
(i.e., the bond coupon payment) by 35 percent. Because the 
credit that the taxpayer claims is also included in income, the 
Committee anticipates that State and local issuers will issue 
bonds paying interest at rates approximately equal to 74.1 
percent of comparable taxable bonds. The Committee anticipates 
that if an issuer issues a taxable governmental bond with 
coupons at 74.1 percent of a comparable taxable bond's coupon 
that the issuer's bond should sell at par. For example, if a 
taxable bond of comparable risk pays a $1,000 coupon and sells 
at par, then if a State or local issuer issues an equal-sized 
bond with coupon of $741.00, such a bond should also sell at 
par. The taxpayer who acquires the latter bond will receive an 
interest payment of $741 and may claim a credit of $259 (35 
percent of $741). The credit and the interest payment are both 
included in the taxpayer's income. Thus, the taxpayer's taxable 
income from this instrument would be $1,000. This is the same 
taxable income that the taxpayer would recognize from holding 
the comparable taxable bond. Consequently the issuer's bond 
should sell at the same price as would the taxable bond.
Special rule for qualified bonds issued during 2009 and 2010
      A ``qualified bond'' is any taxable governmental bond 
issued as part of an issue if 100 percent of the available 
project proceeds of such issue are to be used for capital 
expenditures.\147\ The bond must be issued after the date of 
enactment of the provision and before January 1, 2011. The 
issuer must make an irrevocable election to have the special 
rule for qualified bonds apply.
---------------------------------------------------------------------------
    \147\ Under Treas. Reg. sec. 150-1(b), capital expenditure means 
any cost of a type that is properly chargeable to capital account (or 
would be so chargeable with a proper election or with the application 
of the definition of placed in service under Treas. Reg. sec. 1.150-
2(c)) under general Federal income tax principles. For purposes of 
applying the ``general Federal income tax principles'' standard, an 
issuer should generally be treated as if it were a corporation subject 
to taxation under subchapter C of chapter 1 of the Code. An example of 
a capital expenditure would include expenditures made for the purchase 
of fiber-optic cable to provide municipal broadband service.
---------------------------------------------------------------------------
      Under the special rule for qualified bonds, in lieu of 
the tax credit to the holder, the issuer is allowed a credit 
equal to 35 percent of each interest payment made under such 
bond.\148\ If in 2009 or 2010, the issuer elects to receive the 
credit, in the example above, for the State or local issuer's 
bond to sell at par, the issuer would have to issue the bond 
with a $1,000 interest coupon. The taxpayer who holds such a 
bond would include $1,000 on interest in his or her income. 
From the taxpayer's perspective the bond is the same as the 
taxable bond in the example above and the taxpayer would be 
willing to pay par for the bond. However, under the provision 
the State or local issuer would receive a payment of $350 for 
each $1,000 coupon paid to bondholders. (The net interest cost 
to the issuer would be $650.)
---------------------------------------------------------------------------
    \148\ Original issue discount (OID) is not treated as a payment of 
interest for purposes of calculating the refundable credit under the 
provision.
---------------------------------------------------------------------------
      The payment by the Secretary is to be made 
contemporaneously with the interest payment made by the issuer, 
and may be made either in advance or as reimbursement. In lieu 
of payment to the issuer, the payment may be made to a person 
making interest payments on behalf of the issuer. For purposes 
of the arbitrage rules, the yield on a qualified bond is 
reduced by the amount of the credit/payment.
Transitional coordination with State law
      As noted above, interest on a taxable governmental bond 
and the related credit are includible in gross income to the 
holder for Federal tax purposes. The provision provides that 
until a State provides otherwise, the interest on any taxable 
governmental bond and the amount of any credit, determined with 
respect to such bond shall be treated as being exempt from 
Federal income tax for purposes of State income tax laws.
Effective date
      The provision is effective for obligations issued after 
the date of enactment.

                            SENATE AMENDMENT

In general
      The Senate amendment is the same as the House bill except 
that it renames these bonds ``Build America Bonds.''
      The Senate amendment also restricts these bonds to 
obligations issued before January 1, 2011.
      For bonds issued by small issuers,\149\ the credit rate 
is 40 percent instead of 35 percent.
---------------------------------------------------------------------------
    \149\ Small issuer status is determined generally by reference to 
the rules of (sec. 148(f)(4)(D)) and increasing the aggregate face 
amount of all tax-exempt governmental bonds reasonably expected to be 
issued during the calendar year from $5 million to $30 million.
---------------------------------------------------------------------------
Special rule for qualified bonds issued during 2009 and 2010
      The Senate amendment is the same as the House bill, 
except for bonds issued by small issuers, the credit rate is 40 
percent instead of 35 percent.
Transitional coordination with State law
      The Senate amendment is the same as the House bill.
Effective date
      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

In general
      The conference agreement follows the House bill except 
that it renames these bonds ``Build America Bonds.''
      The conference agreement restricts these bonds to 
obligations issued before January 1, 2011.
Special rule for qualified bonds issued during 2009 and 2010
      The conference agreement follows the House bill, except 
that it allows for a reasonably required reserve fund to be 
funded from bond proceeds.\150\
---------------------------------------------------------------------------
    \150\ Under section 148(d)(2), a bond is an arbitrage bond if the 
amount of the proceeds from the sale of such issue that is part or any 
reserve or replacement fund exceeds 10 percent of the proceeds. As such 
the interest on such bond would not be tax-exempt under section 103 and 
thus would not be a qualified bond for purposes of the provision.
---------------------------------------------------------------------------
Transitional coordination with State law
      The conference agreement follows the House bill and the 
Senate amendment.
Effective date
      The conference agreement follows the House bill and the 
Senate amendment.
7. Recovery zone bonds (sec. 1531 of the House bill, sec. 1401 of the 
        Senate amendment, sec. 1401 of the conference agreement, and 
        new secs. 1400U-1, 1400U-2, and 1400U-3 of the Code)

                              PRESENT LAW

In general
      Under present law, gross income does not include interest 
on State or local bonds. State and local bonds are classified 
generally as either governmental bonds or private activity 
bonds. Governmental bonds are bonds the proceeds of which are 
primarily used to finance governmental functions or which are 
repaid with governmental funds. Private activity bonds are 
bonds in which the State or local government serves as a 
conduit providing financing to nongovernmental persons (e.g., 
private businesses or individuals). The exclusion from income 
for State and local bonds does not apply to private activity 
bonds unless the bonds are issued for certain permitted 
purposes (``qualified private activity bonds'') and other Code 
requirements are met.
Private activity bonds
      The Code defines a private activity bond as any bond that 
satisfies (1) the private business use test and the private 
security or payment test (``the private business test''); or 
(2) ``the private loan financing test.''\151\
---------------------------------------------------------------------------
    \151\ Sec. 141.
---------------------------------------------------------------------------
            Private business test
      Under the private business test, a bond is a private 
activity bond if it is part of an issue in which:
            1. More than 10 percent of the proceeds of the 
        issue (including use of the bond-financed property) are 
        to be used in the trade or business of any person other 
        than a governmental unit (``private business use''); 
        and
            2. More than 10 percent of the payment of principal 
        or interest on the issue is, directly or indirectly, 
        secured by (a) property used or to be used for a 
        private business use or (b) to be derived from payments 
        in respect of property, or borrowed money, used or to 
        be used for a private business use (``private payment 
        test'').\152\
---------------------------------------------------------------------------
    \152\ The 10 percent private business test is reduced to five 
percent in the case of private business uses (and payments with respect 
to such uses) that are unrelated to any governmental use being financed 
by the issue.
---------------------------------------------------------------------------
       A bond is not a private activity bond unless both parts 
of the private business test (i.e., the private business use 
test and the private payment test) are met. Thus, a facility 
that is 100 percent privately used does not cause the bonds 
financing such facility to be private activity bonds if the 
bonds are not secured by or paid with private payments. For 
example, land improvements that benefit a privately-owned 
factory may be financed with governmental bonds if the debt 
service on such bonds is not paid by the factory owner or other 
private parties and such bonds are not secured by the property.
            Private loan financing test
      A bond issue satisfies the private loan financing test if 
proceeds exceeding the lesser of $5 million or five percent of 
such proceeds are used directly or indirectly to finance loans 
to one or more nongovernmental persons. Private loans include 
both business and other (e.g., personal) uses and payments to 
private persons; however, in the case of business uses and 
payments, all private loans also constitute private business 
uses and payments subject to the private business test.
            Arbitrage restrictions
      The exclusion from income for interest on State and local 
bonds does not apply to any arbitrage bond.\153\ An arbitrage 
bond is defined as any bond that is part of an issue if any 
proceeds of the issue are reasonably expected to be used (or 
intentionally are used) to acquire higher yielding investments 
or to replace funds that are used to acquire higher yielding 
investments.\154\ In general, arbitrage profits may be earned 
only during specified periods (e.g., defined ``temporary 
periods'') before funds are needed for the purpose of the 
borrowing or on specified types of investments (e.g., 
``reasonably required reserve or replacement funds''). Subject 
to limited exceptions, investment profits that are earned 
during these periods or on such investments must be rebated to 
the Federal Government.
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    \153\ Sec. 103(a) and (b)(2).
    \154\ Sec. 148.
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Qualified private activity bonds
      Qualified private activity bonds permit States or local 
governments to act as conduits providing tax-exempt financing 
for certain private activities. The definition of qualified 
private activity bonds includes an exempt facility bond, or 
qualified mortgage, veterans' mortgage, small issue, 
redevelopment, 501(c)(3), or student loan bond (sec. 141(e)).
      The definition of an exempt facility bond includes bonds 
issued to finance certain transportation facilities (airports, 
ports, mass commuting, and high-speed intercity rail 
facilities); qualified residential rental projects; privately 
owned and/or operated utility facilities (sewage, water, solid 
waste disposal, and local district heating and cooling 
facilities, certain private electric and gas facilities, and 
hydroelectric dam enhancements); public/private educational 
facilities; qualified green building and sustainable design 
projects; and qualified highway or surface freight transfer 
facilities (sec. 142(a)).
      In most cases, the aggregate volume of qualified private 
activity bonds is restricted by annual aggregate volume limits 
imposed on bonds issued by issuers within each State (``State 
volume cap''). For calendar year 2007, the State volume cap, 
which is indexed for inflation, equals $85 per resident of the 
State, or $256.24 million, if greater. Exceptions to the State 
volume cap are provided for bonds for certain governmentally 
owned facilities (e.g., airports, ports, high-speed intercity 
rail, and solid waste disposal) and bonds which are subject to 
separate local, State, or national volume limits (e.g., public/
private educational facility bonds, enterprise zone facility 
bonds, qualified green building bonds, and qualified highway or 
surface freight transfer facility bonds).
      Qualified private activity bonds generally are subject to 
restrictions on the use of proceeds for the acquisition of land 
and existing property. In addition, qualified private activity 
bonds generally are subject to restrictions on the use of 
proceeds to finance certain specified facilities (e.g., 
airplanes, skyboxes, other luxury boxes, health club 
facilities, gambling facilities, and liquor stores), and use of 
proceeds to pay costs of issuance (e.g., bond counsel and 
underwriter fees). Small issue and redevelopment bonds also are 
subject to additional restrictions on the use of proceeds for 
certain facilities (e.g., golf courses and massage parlors).
      Moreover, the term of qualified private activity bonds 
generally may not exceed 120 percent of the economic life of 
the property being financed and certain public approval 
requirements (similar to requirements that typically apply 
under State law to issuance of governmental debt) apply under 
Federal law to issuance of private activity bonds.
Qualified tax credit bonds
      In lieu of interest, holders of qualified tax credit 
bonds receive a tax credit that accrues quarterly. The 
following bonds are qualified tax credit bonds: qualified 
forestry conservation bonds, new clean renewable energy bonds, 
qualified energy conservation bonds, and qualified zone academy 
bonds.\155\
---------------------------------------------------------------------------
    \155\ See secs. 54B, 54C, 54D, and 54E.
---------------------------------------------------------------------------
      Section 54A of the Code sets forth general rules 
applicable to qualified tax credit bonds. These rules include 
requirements regarding the expenditure of available project 
proceeds, reporting, arbitrage, maturity limitations, and 
financial conflicts of interest, among other special rules.
      A taxpayer who holds a qualified tax credit bond on one 
or more credit allowance dates of the bond during the taxable 
year shall be allowed a credit against the taxpayer's income 
tax for the taxable year. In general, the credit amount for any 
credit allowance date is 25 percent of the annual credit 
determined with respect to the bond. The annual credit is 
determined by multiplying the applicable credit rate by the 
outstanding face amount of the bond. The applicable credit rate 
for the bond is the rate that the Secretary estimates will 
permit the issuance of the qualified tax credit bond with a 
specified maturity or redemption date without discount and 
without interest cost to the qualified issuer.\156\ The 
Secretary determines credit rates for tax credit bonds based on 
general assumptions about credit quality of the class of 
potential eligible issuers and such other factors as the 
Secretary deems appropriate. The Secretary may determine credit 
rates based on general credit market yield indexes and credit 
ratings. The credit is included in gross income and, under 
regulations prescribed by the Secretary, may be stripped.
---------------------------------------------------------------------------
    \156\ Given the differences in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
---------------------------------------------------------------------------
      Section 54A of the Code requires that 100 percent of the 
available project proceeds of qualified tax credit bonds must 
be used within the three-year period that begins on the date of 
issuance. Available project proceeds are proceeds from the sale 
of the bond issue less issuance costs (not to exceed two 
percent) and any investment earnings on such sale proceeds. To 
the extent less than 100 percent of the available project 
proceeds are used to finance qualified projects during the 
three-year spending period, bonds will continue to qualify as 
qualified tax credit bonds if unspent proceeds are used within 
90 days from the end of such three-year period to redeem bonds. 
The three-year spending period may be extended by the Secretary 
upon the issuer's request demonstrating that the failure to 
satisfy the three-year requirement is due to reasonable cause 
and the projects will continue to proceed with due diligence.
      Qualified tax credit bonds generally are subject to the 
arbitrage requirements of section 148. However, available 
project proceeds invested during the three-year spending period 
are not subject to the arbitrage restrictions (i.e., yield 
restriction and rebate requirements). In addition, amounts 
invested in a reserve fund are not subject to the arbitrage 
restrictions to the extent: (1) such fund is funded at a rate 
not more rapid than equal annual installments; (2) such fund is 
funded in a manner reasonably expected to result in an amount 
not greater than an amount necessary to repay the issue; and 
(3) the yield on such fund is not greater than the average 
annual interest rate of tax-exempt obligations having a term of 
10 years or more that are issued during the month the qualified 
tax credit bonds are issued.
      The maturity of qualified tax credit bonds is the term 
that the Secretary estimates will result in the present value 
of the obligation to repay the principal on such bonds being 
equal to 50 percent of the face amount of such bonds, using as 
a discount rate the average annual interest rate of tax-exempt 
obligations having a term of 10 years or more that are issued 
during the month the qualified tax credit bonds are issued.

                               HOUSE BILL

In general
      The provision permits an issuer to designate one or more 
areas as recovery zones. The area must have significant 
poverty, unemployment, general distress, or home foreclosures, 
or be any area for which a designation as an empowerment zone 
or renewal community is in effect. Issuers may issue recovery 
zone economic development bonds and recovery zone facility 
bonds with respect to these zones.
      There is a national recovery zone economic development 
bond limitation of $10 billion. In addition, there is a 
separate national recovery zone facility bond limitation of $15 
billion. The Secretary is to separately allocate the bond 
limitations among the States in the proportion that each 
State's employment decline bears to the national decline in 
employment (the aggregate 2008 State employment declines for 
all States). In turn each State is to reallocate its allocation 
among the counties (parishes) and large municipalities in such 
State in the proportion that each such county or municipality's 
2008 employment decline bears to the aggregate employment 
declines for all counties and municipalities in such State. In 
calculating the local employment decline with respect to a 
county, the portion of such decline attributable to a large 
municipality is disregarded for purposes of determining the 
county's portion of the State employment decline and is 
attributable to the large municipality only.
      For purposes of the provision ``2008 State employment 
decline'' means, with respect to any State, the excess (if any) 
of (i) the number of individuals employed in such State as 
determined for December 2007, over (ii) the number of 
individuals employed in such State as determined for December 
2008. The term ``large municipality'' means a municipality with 
a population of more than 100,000.
Recovery Zone Economic Development Bonds
      New section 54AA(h) of the House bill creates a special 
rule for qualified bonds (a type of taxable governmental bond) 
issued before January 1, 2011, that entitles the issuer of such 
bonds to receive an advance tax credit equal to 35 percent of 
the interest payable on an interest payment date. For taxable 
governmental bonds that are designated recovery zone economic 
development bonds, the applicable percentage is 55 percent.
      A recovery zone economic development bond is a taxable 
governmental bond issued as part of an issue if 100 percent of 
the available project proceeds of such issue are to be used for 
one or more qualified economic development purposes and the 
issuer designates such bond for purposes of this section. A 
qualified economic development purpose means expenditures for 
purposes of promoting development or other economic activity in 
a recovery zone, including (1) capital expenditures paid or 
incurred with respect to property located in such zone, (2) 
expenditures for public infrastructure and construction of 
public facilities located in a recovery zone.
      The aggregate face amount of bonds which may be 
designated by any issuer cannot exceed the amount of the 
recovery zone economic development bond limitation allocated to 
such issuer.
Recovery Zone Facility Bonds
      The provision creates a new category of exempt facility 
bonds, ``recovery zone facility bonds.'' A recovery zone 
facility bond means any bond issued as part of an issue if: (1) 
95 percent or more of the net proceeds of such issue are to be 
used for recovery zone property and (2) such bond is issued 
before January 1, 2011, and (3) the issuer designates such bond 
as a recovery zone facility bond. The aggregate face amount of 
bonds which may be designated by any issuer cannot exceed the 
amount of the recovery zone facility bond limitation allocated 
to such issuer.
      Under the provision, the term ``recovery zone property'' 
means any property subject to depreciation to which section 168 
applies (or would apply but for section 179) if (1) such 
property was acquired by the taxpayer by purchase after the 
date on which the designation of the recovery zone took effect; 
(2) the original use of such property in the recovery zone 
commences with the taxpayer; and (3) substantially all of the 
use of such property is in the recovery zone and is in the 
active conduct of a qualified business by the taxpayer in such 
zone. The term ``qualified business'' means any trade or 
business except that the rental to others of real property 
located in a recovery zone shall be treated as a qualified 
business only if the property is not residential rental 
property (as defined in section 168(e)(2)) and does not include 
any trade or business consisting of the operation of any 
facility described in section 144(c)(6)(B) (i.e., any private 
or commercial golf course, country club, massage parlor, hot 
tub facility, suntan facility, racetrack or other facility used 
for gambling, or any store the principal purpose of which is 
the sale of alcoholic beverages for consumption off premises).
      Subject to the following exceptions and modifications, 
issuance of recovery zone facility bonds is subject to the 
general rules applicable to issuance of qualified private 
activity bonds:
            1. Issuance of the bonds is not subject to the 
        aggregate annual State private activity bond volume 
        limits (sec. 146);
            2. The restriction on acquisition of existing 
        property does not apply (sec. 147(d));
Effective date
      The provision is effective for obligations issued after 
the date of enactment.

                            SENATE AMENDMENT

In general
      The Senate amendment is the same as the House bill with a 
modification for allocating the bonds between the States. Under 
the Senate amendment each State receives a minimum allocation 
of one percent of the national recovery zone economic 
development bond limitation and one percent of the national 
recovery zone facility bond limitation. The remainder of each 
bond limitation is separately allocated among the States in the 
proportion that each State's employment decline bears to the 
national decline in employment (the aggregate 2008 State 
employment declines for all States).
Recovery Zone Economic Development Bonds
      New section 54AA(g) of the Senate amendment creates a 
special rule for qualified bonds (a type of Build America Bond) 
issued before January 1, 2011, that entitles the issuer of such 
bonds to receive an advance tax credit equal to 35 percent of 
the interest payable on an interest payment date. For Build 
America Bonds that are designated recovery zone economic 
development bonds, the applicable percentage is 40 percent. In 
other respects the Senate amendment is the same as the House 
bill.
Recovery Zone Facility Bonds
      The Senate amendment is the same as the House bill.
Effective date
      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

In general
      The conference agreement follows the House bill, with a 
modification for allocating the bond limitations among the 
States. Under the conference agreement the national recovery 
zone economic development bond limitation and national recovery 
zone facility bond limitation are allocated among the States in 
the proportion that each State's employment decline bears to 
the national decline in employment (the aggregate 2008 State 
employment declines for all States).\157\ The Secretary is to 
adjust each State's allocation for a calendar year such that no 
State receives less than 0.9 percent of the national recovery 
zone economic development bond limitation and no less than 0.9 
percent of the national recovery zone facility bond limitation. 
The conference agreement also permits a county or large 
municipality to waive all or part of its allocation of the 
State bond limitations to allow further allocation within that 
State. With respect to all other aspects of the allocation of 
the bond limitations, the conference agreement follows the 
House bill.
---------------------------------------------------------------------------
    \157\ The Bureau of Labor Statistics prepares data on regional and 
State employment and unemployment. See e.g., Bureau of Labor 
Statistics, USDL 09-0093, Regional and State Employment and 
Unemployment: December 2008 (January 27, 2009) .
---------------------------------------------------------------------------
      The conference agreement also provides that a ``recovery 
zone'' includes any area designated by the issuer as 
economically distressed by reason of the closure or realignment 
of a military installation pursuant to the Defense Base Closure 
and Realignment Act of 1990.
Recovery Zone Economic Development Bonds
      The conference agreement follows the House bill, except 
the issuer of recovery zone economic development bonds is 
entitled to receive an advance tax credit equal to 45 percent 
of the interest payable on an interest payment date and the 
conference agreement allows for a reasonably required reserve 
fund to be funded from the proceeds of a recovery zone economic 
development bond.
Recovery Zone Facility Bonds
      The conference agreement follows the House bill, except 
``recovery zone property'' is defined as any property subject 
to depreciation to which section 168 applies (or would apply 
but for section 179) if (1) such property was constructed, 
reconstructed, renovated, or acquired by purchase by the 
taxpayer after the date on which the designation of the 
recovery zone took effect; (2) the original use of such 
property in the recovery zone commences with the taxpayer; and 
(3) substantially all of the use of such property is in the 
recovery zone and is in the active conduct of a qualified 
business by the taxpayer in such zone.
Effective date
      The conference agreement follows the House bill and the 
Senate amendment.
8. Tribal economic development bonds (sec. 1532 of the House bill, sec. 
        1402 of the Senate amendment, sec. 1402 of the conference 
        agreement, and new sec. 7871(f) of the Code)

                              PRESENT LAW

      Under present law, gross income does not include interest 
on State or local bonds.\158\ State and local bonds are 
classified generally as either governmental bonds or private 
activity bonds. Governmental bonds are bonds the proceeds of 
which are primarily used to finance governmental facilities or 
the debt is repaid with governmental funds. Private activity 
bonds are bonds in which the State or local government serves 
as a conduit providing financing to nongovernmental persons. 
For these purposes, the term ``nongovernmental person'' 
includes the Federal government and all other individuals and 
entities other than States or local governments.\159\ Interest 
on private activity bonds is taxable, unless the bonds are 
issued for certain purposes permitted by the Code and other 
requirements are met.\160\
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    \158\ Sec. 103.
    \159\ Sec. 141(b)(6); Treas. Reg. sec. 1.141-1(b).
    \160\ Secs. 103(b)(1) and 141.
---------------------------------------------------------------------------
      Although not States or subdivisions of States, Indian 
tribal governments are provided with a tax status similar to 
State and local governments for specified purposes under the 
Code.\161\ Among the purposes for which a tribal government is 
treated as a State is the issuance of tax-exempt bonds. Under 
section 7871(c), tribal governments are authorized to issue 
tax-exempt bonds only if substantially all of the proceeds are 
used for essential governmental functions.\162\
---------------------------------------------------------------------------
    \161\ Sec. 7871.
    \162\ Sec. 7871(c).
---------------------------------------------------------------------------
      The term essential governmental function does not include 
any function that is not customarily performed by State and 
local governments with general taxing powers. Section 7871(c) 
further prohibits Indian tribal governments from issuing tax-
exempt private activity bonds (as defined in section 141(a) of 
the Code) with the exception of certain bonds for manufacturing 
facilities.

                               HOUSE BILL

Tribal Economic Development Bonds
      The provision allows Indian tribal governments to issue 
``tribal economic development bonds.'' There is a national bond 
limitation of $2 billion, to be allocated as the Secretary 
determines appropriate, in consultation with the Secretary of 
the Interior. Tribal economic development bonds issued by an 
Indian tribal government are treated as if such bond were 
issued by a State except that section 146 (relating to State 
volume limitations) does not apply.
      A tribal economic development bond is any bond issued by 
an Indian tribal government (I) the interest on which would be 
tax-exempt if issued by a State or local government but would 
be taxable under section 7871(c), and (2) that is designated by 
the Indian tribal government as a tribal economic development 
bond. The aggregate face amount of bonds that may be designated 
by any Indian tribal government cannot exceed the amount of 
national tribal economic development bond limitation allocated 
to such government.
      Tribal economic development bonds cannot be used to 
finance any portion of a building in which class II or class 
III gaming (as defined in section 4 of the Indian Gaming 
Regulatory Act) is conducted, or housed, or any other property 
used in the conduct of such gaming. Nor can tribal economic 
development bonds be used to finance any facility located 
outside of the Indian reservation.
Treasury study
      The provision requires that the Treasury Department study 
the effects of tribal economic development bonds. One year 
after the date of enactment, a report is to be submitted to 
Congress providing the results of such study along with any 
recommendations, including whether the restrictions of section 
7871(c) should be eliminated or otherwise modified.
Effective date
      The provision applies to obligations issued after the 
date of enactment.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill except 
the Senate amendment defines a tribal economic development bond 
as any bond issued by an Indian tribal government (1) the 
interest on which would be tax-exempt if issued by a State or 
local government, and (2) that is designated by the Indian 
tribal government as a tribal economic development bond.
      The Senate amendment also clarifies that for purposes of 
section 141 of the Code, use of bond proceeds by an Indian 
tribe, or instrumentality thereof, is treated as use by a 
State.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
9. Pass-through of credits on tax credit bonds held by regulated 
        investment companies (sec. 1541 of the conference agreement and 
        new section 853A of the Code)

                              PRESENT LAW

      In lieu of interest, holders of qualified tax credit 
bonds receive a tax credit that accrues quarterly. The credit 
is treated as interest that is includible in gross income. The 
following bonds are qualified tax credit bonds: qualified 
forestry conservation bonds, new clean renewable energy bonds, 
qualified energy conservation bonds, and qualified zone academy 
bonds.\163\ The Code provides that in the case of a qualified 
tax credit bond held by a regulated investment company, the 
credit is allowed to shareholders of such company (and any 
gross income included with respect to such credit shall be 
treated as distributed to such shareholders) under procedures 
prescribed by the Secretary.\164\ The Secretary has not 
prescribed procedures for the pass through of the credit to 
regulated investment company shareholders.
---------------------------------------------------------------------------
    \163\ See secs. 54B, 54C, 54D, and 54E.
    \164\ See sec. 54A(h), which also covers real estate investment 
trusts.
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement provides procedures for passing 
through credits on ``tax credit bonds'' to the shareholders of 
an electing regulated investment company. In general, an 
electing regulated investment company is not allowed any 
credits with respect to any tax credit bonds it holds during 
any year for which an election is in effect. The company is 
treated as having an amount of interest included in its gross 
income in an amount equal that which would have been included 
if no election were in effect, and a dividends paid deduction 
in the same amount is allowed to the company. Each shareholder 
of the electing regulated investment company is (1) required to 
include in gross income an amount equal to the shareholder's 
proportional share of the interest attributable to its credits 
and (2) allowed such proportional share as a credit against 
such shareholder's Federal income tax. In order to pass through 
tax credits to a shareholder, a regulated investment company is 
required to mail a written notice to such shareholder not later 
than 60 days after the close of the regulated investment 
company's taxable year, designating the shareholder's 
proportionate share of passed-through credits and the 
shareholder's gross income in respect of such credits.
      A tax credit bond means a qualified tax credit bond as 
defined in section 54A(d), a build America bond (as defined in 
section 54AA(d)), and any other bond for which a credit is 
allowable under subpart H of part IV of subchapter A of the 
Code.
      The provision gives the Secretary authority to prescribe 
the time and manner in which a regulated investment company 
makes the election to pass through credits on tax credit bonds. 
In addition, the provision requires the Secretary to prescribe 
such guidance as may be necessary to carry out the provision, 
including prescribing methods for determining a shareholder's 
proportionate share of tax credits.
      Effective date.--The provision is applicable to taxable 
years ending after the date of enactment.
10. Delay in implementation of withholding tax on government 
        contractors (sec. 1541 of the House bill, sec. 1511 of the 
        Senate amendment, sec. 1511 of the conference agreement, and 
        sec. 3402(t) of the Code)

                              PRESENT LAW

      For payments made after December 31, 2010, the Code 
imposes a withholding requirement at a three-percent rate on 
certain payments to persons providing property or services made 
by the Government of the United States, every State, every 
political subdivision thereof, and every instrumentality of the 
foregoing (including multi-State agencies). The withholding 
requirement applies regardless of whether the government entity 
making such payment is the recipient of the property or 
services. Political subdivisions of States (or any 
instrumentality thereof) with less than $100 million of annual 
expenditures for property or services that would otherwise be 
subject to withholding are exempt from the withholding 
requirement.
      Payments subject to the three-percent withholding 
requirement include any payment made in connection with a 
government voucher or certificate program which functions as a 
payment for property or services. For example, payments to a 
commodity producer under a government commodity support program 
are subject to the withholding requirement. Present law also 
imposes information reporting requirements on the payments that 
are subject to withholding requirement.
      The three-percent withholding requirement does not apply 
to any payments made through a Federal, State, or local 
government public assistance or public welfare program for 
which eligibility is determined by a needs or income test. The 
three-percent withholding requirement also does not apply to 
payments of wages or to any other payment with respect to which 
mandatory (e.g., U.S.-source income of foreign taxpayers) or 
voluntary (e.g., unemployment benefits) withholding applies 
under present law. Although the withholding requirement applies 
to payments that are potentially subject to backup withholding 
under section 3406, it does not apply to those payments from 
which amounts are actually being withheld under backup 
withholding rules.
      The three-percent withholding requirement also does not 
apply to the following: payments of interest; payments for real 
property; payments to tax-exempt entities or foreign 
governments; intra-governmental payments; payments made 
pursuant to a classified or confidential contract (as defined 
in section 6050M(e)(3)), and payments to government employees 
that are not otherwise excludable from the new withholding 
proposal with respect to the employees' services as employees.

                               HOUSE BILL

      The provision repeals the three-percent withholding 
requirement on government payments.
      Effective date.--The provision is effective on the date 
of enactment.

                            SENATE AMENDMENT

      The provision delays the implementation of the three 
percent withholding requirement by one year to apply to 
payments after December 31, 2011.
      Effective date.--The provision is effective on the date 
of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
11. Extend and modify the new markets tax credit (sec. 1403 of the 
        Senate amendment, sec. 1403 of the conference agreement, and 
        sec. 45D of the Code)

                              PRESENT LAW

      Section 45D provides a new markets tax credit for 
qualified equity investments made to acquire stock in a 
corporation, or a capital interest in a partnership, that is a 
qualified community development entity (``CDE'').\165\ The 
amount of the credit allowable to the investor (either the 
original purchaser or a subsequent holder) is (1) a five-
percent credit for the year in which the equity interest is 
purchased from the CDE and for each of the following two years, 
and (2) a six-percent credit for each of the following four 
years. The credit is determined by applying the applicable 
percentage (five or six percent) to the amount paid to the CDE 
for the investment at its original issue, and is available for 
a taxable year to the taxpayer who holds the qualified equity 
investment on the date of the initial investment or on the 
respective anniversary date that occurs during the taxable 
year. The credit is recaptured if, at any time during the 
seven-year period that begins on the date of the original issue 
of the qualified equity investment, the issuing entity ceases 
to be a qualified CDE, the proceeds of the investment cease to 
be used as required, or the equity investment is redeemed.
---------------------------------------------------------------------------
    \165\ Section 45D was added by section 121(a) of the Community 
Renewal Tax Relief Act of 2000, Pub. L. No. 106-554 (2000).
---------------------------------------------------------------------------
      A qualified CDE is any domestic corporation or 
partnership: (1) whose primary mission is serving or providing 
investment capital for low-income communities or low-income 
persons; (2) that maintains accountability to residents of low-
income communities by providing them with representation on any 
governing board of or any advisory board to the CDE; and (3) 
that is certified by the Secretary as being a qualified CDE. A 
qualified equity investment means stock (other than 
nonqualified preferred stock) in a corporation or a capital 
interest in a partnership that is acquired directly from a CDE 
for cash, and includes an investment of a subsequent purchaser 
if such investment was a qualified equity investment in the 
hands of the prior holder. Substantially all of the investment 
proceeds must be used by the CDE to make qualified low-income 
community investments. For this purpose, qualified low-income 
community investments include: (1) capital or equity 
investments in, or loans to, qualified active low-income 
community businesses; (2) certain financial counseling and 
other services to businesses and residents in low-income 
communities; (3) the purchase from another CDE of any loan made 
by such entity that is a qualified low-income community 
investment; or (4) an equity investment in, or loan to, another 
CDE.
      A ``low-income community'' is a population census tract 
with either (1) a poverty rate of at least 20 percent or (2) 
median family income which does not exceed 80 percent of the 
greater of metropolitan area median family income or statewide 
median family income (for a non-metropolitan census tract, does 
not exceed 80 percent of statewide median family income). In 
the case of a population census tract located within a high 
migration rural county, low-income is defined by reference to 
85 percent (rather than 80 percent) of statewide median family 
income. For this purpose, a high migration rural county is any 
county that, during the 20-year period ending with the year in 
which the most recent census was conducted, has a net out-
migration of inhabitants from the county of at least 10 percent 
of the population of the county at the beginning of such 
period.
      The Secretary has the authority to designate ``targeted 
populations'' as low-income communities for purposes of the new 
markets tax credit. For this purpose, a ``targeted population'' 
is defined by reference to section 103(20) of the Riegle 
Community Development and Regulatory Improvement Act of 1994 
(12 U.S.C. 4702(20)) to mean individuals, or an identifiable 
group of individuals, including an Indian tribe, who (A) are 
low-income persons; or (B) otherwise lack adequate access to 
loans or equity investments. Under such Act, ``low-income'' 
means (1) for a targeted population within a metropolitan area, 
less than 80 percent of the area median family income; and (2) 
for a targeted population within a non-metropolitan area, less 
than the greater of 80 percent of the area median family income 
or 80 percent of the statewide non-metropolitan area median 
family income.\166\ Under such Act, a targeted population is 
not required to be within any census tract. In addition, a 
population census tract with a population of less than 2,000 is 
treated as a low-income community for purposes of the credit if 
such tract is within an empowerment zone, the designation of 
which is in effect under section 1391, and is contiguous to one 
or more low-income communities.
---------------------------------------------------------------------------
    \166\ 12 U.S.C. sec. 4702(17) (defines ``low-income'' for purposes 
of 12 U.S.C. sec. 4702(20)).
---------------------------------------------------------------------------
      A qualified active low-income community business is 
defined as a business that satisfies, with respect to a taxable 
year, the following requirements: (1) at least 50 percent of 
the total gross income of the business is derived from the 
active conduct of trade or business activities in any low-
income community; (2) a substantial portion of the tangible 
property of such business is used in a low-income community; 
(3) a substantial portion of the services performed for such 
business by its employees is performed in a low-income 
community; and (4) less than five percent of the average of the 
aggregate unadjusted bases of the property of such business is 
attributable to certain financial property or to certain 
collectibles.
      The maximum annual amount of qualified equity investments 
is capped at $3.5 billion per year for calendar years 2006 
through 2009. Lower caps applied for calendar years 2001 
through 2005.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      For calendar years 2008 and 2009, the Senate amendment 
increases the maximum amount of qualified equity investments by 
$1.5 billion (to $5 billion for each year). The Senate 
amendment requires that the additional amount for 2008 be 
allocated to qualified CDEs that submitted an allocation 
application with respect to calendar year 2008 and either (1) 
did not receive an allocation for such calendar year, or (2) 
received an allocation for such calendar year in an amount less 
than the amount requested in the allocation application. The 
Senate amendment also provides alternative minimum tax relief 
for equity investment allocations subject to the 2009 annual 
limitation.
      Effective date.--The provision is effective on the date 
of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement generally follows the Senate 
amendment but does not provide for any alternative minimum tax 
relief.

                          D. Energy Incentives

1. Extension of the renewable electricity production credit (sec. 1601 
        of the House bill, sec. 1101 of the Senate amendment, sec. 1101 
        of the conference agreement, and sec. 45 of the Code)

                              PRESENT LAW

In general
      An income tax credit is allowed for the production of 
electricity from qualified energy resources at qualified 
facilities (the ``renewable electricity production 
credit'').\167\ Qualified energy resources comprise wind, 
closed-loop biomass, open-loop biomass, geothermal energy, 
solar energy, small irrigation power, municipal solid waste, 
qualified hydropower production, and marine and hydrokinetic 
renewable energy. Qualified facilities are, generally, 
facilities that generate electricity using qualified energy 
resources. To be eligible for the credit, electricity produced 
from qualified energy resources at qualified facilities must be 
sold by the taxpayer to an unrelated person.
---------------------------------------------------------------------------
    \167\ Sec. 45. In addition to the renewable electricity production 
credit, section 45 also provides income tax credits for the production 
of Indian coal and refined coal at qualified facilities.
---------------------------------------------------------------------------
Credit amounts and credit period
            In general
      The base amount of the electricity production credit is 
1.5 cents per kilowatt-hour (indexed annually for inflation) of 
electricity produced. The amount of the credit was 2.1 cents 
per kilowatt-hour for 2008. A taxpayer may generally claim a 
credit during the 10-year period commencing with the date the 
qualified facility is placed in service. The credit is reduced 
for grants, tax-exempt bonds, subsidized energy financing, and 
other credits.
            Credit phaseout
      The amount of credit a taxpayer may claim is phased out 
as the market price of electricity exceeds certain threshold 
levels. The electricity production credit is reduced over a 3-
cent phaseout range to the extent the annual average contract 
price per kilowatt-hour of electricity sold in the prior year 
from the same qualified energy resource exceeds 8 cents 
(adjusted for inflation; 11.8 cents for 2008).
            Reduced credit periods and credit amounts
      Generally, in the case of open-loop biomass facilities 
(including agricultural livestock waste nutrient facilities), 
geothermal energy facilities, solar energy facilities, small 
irrigation power facilities, landfill gas facilities, and trash 
combustion facilities placed in service before August 8, 2005, 
the 10-year credit period is reduced to five years, commencing 
on the date the facility was originally placed in service. 
However, for qualified open-loop biomass facilities (other than 
a facility described in section 45(d)(3)(A)(i) that uses 
agricultural livestock waste nutrients) placed in service 
before October 22, 2004, the five-year period commences on 
January 1, 2005. In the case of a closed-loop biomass facility 
modified to co-fire with coal, to co-fire with other biomass, 
or to co-fire with coal and other biomass, the credit period 
begins no earlier than October 22, 2004.
      In the case of open-loop biomass facilities (including 
agricultural livestock waste nutrient facilities), small 
irrigation power facilities, landfill gas facilities, trash 
combustion facilities, and qualified hydropower facilities the 
otherwise allowable credit amount is 0.75 cent per kilowatt-
hour, indexed for inflation measured after 1992 (1 cent per 
kilowatt-hour for 2008).
            Other limitations on credit claimants and credit amounts
      In general, in order to claim the credit, a taxpayer must 
own the qualified facility and sell the electricity produced by 
the facility to an unrelated party. A lessee or operator may 
claim the credit in lieu of the owner of the qualifying 
facility in the case of qualifying open-loop biomass facilities 
and in the case of closed-loop biomass facilities modified to 
co-fire with coal, to co-fire with other biomass, or to co-fire 
with coal and other biomass. In the case of a poultry waste 
facility, the taxpayer may claim the credit as a lessee or 
operator of a facility owned by a governmental unit.
      For all qualifying facilities, other than closed-loop 
biomass facilities modified to co-fire with coal, to co-fire 
with other biomass, or to co-fire with coal and other biomass, 
the amount of credit a taxpayer may claim is reduced by reason 
of grants, tax-exempt bonds, subsidized energy financing, and 
other credits, but the reduction cannot exceed 50 percent of 
the otherwise allowable credit. In the case of closed-loop 
biomass facilities modified to co-fire with coal, to co-fire 
with other biomass, or to co-fire with coal and other biomass, 
there is no reduction in credit by reason of grants, tax-exempt 
bonds, subsidized energy financing, and other credits.
      The credit for electricity produced from renewable 
resources is a component of the general business credit.\168\ 
Generally, the general business credit for any taxable year may 
not exceed the amount by which the taxpayer's net income tax 
exceeds the greater of the tentative minimum tax or 25 percent 
of so much of the net regular tax liability as exceeds $25,000. 
However, this limitation does not apply to section 45 credits 
for electricity or refined coal produced from a facility 
(placed in service after October 22, 2004) during the first 
four years of production beginning on the date the facility is 
placed in service.\169\ Excess credits may be carried back one 
year and forward up to 20 years.
---------------------------------------------------------------------------
    \168\ Sec. 38(b)(8).
    \169\ Sec. 38(c)(4)(B)(ii).
---------------------------------------------------------------------------
Qualified facilities
            Wind energy facility
      A wind energy facility is a facility that uses wind to 
produce electricity. To be a qualified facility, a wind energy 
facility must be placed in service after December 31, 1993, and 
before January 1, 2010.
            Closed-loop biomass facility
      A closed-loop biomass facility is a facility that uses 
any organic material from a plant which is planted exclusively 
for the purpose of being used at a qualifying facility to 
produce electricity. In addition, a facility can be a closed-
loop biomass facility if it is a facility that is modified to 
use closed-loop biomass to co-fire with coal, with other 
biomass, or with both coal and other biomass, but only if the 
modification is approved under the Biomass Power for Rural 
Development Programs or is part of a pilot project of the 
Commodity Credit Corporation.
      To be a qualified facility, a closed-loop biomass 
facility must be placed in service after December 31, 1992, and 
before January 1, 2011. In the case of a facility using closed-
loop biomass but also co-firing the closed-loop biomass with 
coal, other biomass, or coal and other biomass, a qualified 
facility must be originally placed in service and modified to 
co-fire the closed-loop biomass at any time before January 1, 
2011.
      A qualified facility includes a new power generation unit 
placed in service after October 3, 2008, at an existing closed-
loop biomass facility, but only to the extent of the increased 
amount of electricity produced at the existing facility by 
reason of such new unit.
            Open-loop biomass (including agricultural livestock waste 
                    nutrients) facility
      An open-loop biomass facility is a facility that uses 
open-loop biomass to produce electricity. For purposes of the 
credit, open-loop biomass is defined as (1) any agricultural 
livestock waste nutrients or (2) any solid, nonhazardous, 
cellulosic waste material or any lignin material that is 
segregated from other waste materials and which is derived 
from:
             forest-related resources, including mill 
        and harvesting residues, precommercial thinnings, 
        slash, and brush;
             solid wood waste materials, including 
        waste pallets, crates, dunnage, manufacturing and 
        construction wood wastes, and landscape or right-of-way 
        tree trimmings; or
             agricultural sources, including orchard 
        tree crops, vineyard, grain, legumes, sugar, and other 
        crop by-products or residues.
      Agricultural livestock waste nutrients are defined as 
agricultural livestock manure and litter, including bedding 
material for the disposition of manure. Wood waste materials do 
not qualify as open-loop biomass to the extent they are 
pressure treated, chemically treated, or painted. In addition, 
municipal solid waste, gas derived from the biodegradation of 
solid waste, and paper which is commonly recycled do not 
qualify as open-loop biomass. Open-loop biomass does not 
include closed-loop biomass or any biomass burned in 
conjunction with fossil fuel (co-firing) beyond such fossil 
fuel required for start up and flame stabilization.
      In the case of an open-loop biomass facility that uses 
agricultural livestock waste nutrients, a qualified facility is 
one that was originally placed in service after October 22, 
2004, and before January 1, 2009, and has a nameplate capacity 
rating which is not less than 150 kilowatts. In the case of any 
other open-loop biomass facility, a qualified facility is one 
that was originally placed in service before January 1, 2011. A 
qualified facility includes a new power generation unit placed 
in service after October 3, 2008, at an existing open-loop 
biomass facility, but only to the extent of the increased 
amount of electricity produced at the existing facility by 
reason of such new unit.
            Geothermal facility
      A geothermal facility is a facility that uses geothermal 
energy to produce electricity. Geothermal energy is energy 
derived from a geothermal deposit that is a geothermal 
reservoir consisting of natural heat that is stored in rocks or 
in an aqueous liquid or vapor (whether or not under pressure). 
To be a qualified facility, a geothermal facility must be 
placed in service after October 22, 2004, and before January 1, 
2011.
            Solar facility
      A solar facility is a facility that uses solar energy to 
produce electricity. To be a qualified facility, a solar 
facility must be placed in service after October 22, 2004, and 
before January 1, 2006.
            Small irrigation facility
      A small irrigation power facility is a facility that 
generates electric power through an irrigation system canal or 
ditch without any dam or impoundment of water. The installed 
capacity of a qualified facility must be at least 150 kilowatts 
but less than five megawatts. To be a qualified facility, a 
small irrigation facility must be originally placed in service 
after October 22, 2004, and before October 3, 2008. Marine and 
hydrokinetic renewable energy facilities, described below, 
subsume small irrigation power facilities after October 2, 
2008.
            Landfill gas facility
      A landfill gas facility is a facility that uses landfill 
gas to produce electricity. Landfill gas is defined as methane 
gas derived from the biodegradation of municipal solid waste. 
To be a qualified facility, a landfill gas facility must be 
placed in service after October 22, 2004, and before January 1, 
2011.
            Trash combustion facility
      Trash combustion facilities are facilities that use 
municipal solid waste (garbage) to produce steam to drive a 
turbine for the production of electricity. To be a qualified 
facility, a trash combustion facility must be placed in service 
after October 22, 2004, and before January 1, 2011. A qualified 
trash combustion facility includes a new unit, placed in 
service after October 22, 2004, that increases electricity 
production capacity at an existing trash combustion facility. A 
new unit generally would include a new burner/boiler and 
turbine. The new unit may share certain common equipment, such 
as trash handling equipment, with other pre-existing units at 
the same facility. Electricity produced at a new unit of an 
existing facility qualifies for the production credit only to 
the extent of the increased amount of electricity produced at 
the entire facility.
            Hydropower facility
      A qualifying hydropower facility is (1) a facility that 
produced hydroelectric power (a hydroelectric dam) prior to 
August 8, 2005, at which efficiency improvements or additions 
to capacity have been made after such date and before January 
1, 2011, that enable the taxpayer to produce incremental 
hydropower or (2) a facility placed in service before August 8, 
2005, that did not produce hydroelectric power (a 
nonhydroelectric dam) on such date, and to which turbines or 
other electricity generating equipment have been added after 
such date and before January 1, 2011.
      At an existing hydroelectric facility, the taxpayer may 
claim credit only for the production of incremental 
hydroelectric power. Incremental hydroelectric power for any 
taxable year is equal to the percentage of average annual 
hydroelectric power produced at the facility attributable to 
the efficiency improvement or additions of capacity determined 
by using the same water flow information used to determine an 
historic average annual hydroelectric power production baseline 
for that facility. The Federal Energy Regulatory Commission 
will certify the baseline power production of the facility and 
the percentage increase due to the efficiency and capacity 
improvements.
      Nonhydroelectric dams converted to produce electricity 
must be licensed by the Federal Energy Regulatory Commission 
and meet all other applicable environmental, licensing, and 
regulatory requirements.
      For a nonhydroelectric dam converted to produce electric 
power before January 1, 2009, there must not be any enlargement 
of the diversion structure, construction or enlargement of a 
bypass channel, or the impoundment or any withholding of 
additional water from the natural stream channel.
      For a nonhydroelectric dam converted to produce electric 
power after December 31, 2008, the nonhydroelectric dam must 
have been (1) placed in service before October 3, 2008, (2) 
operated for flood control, navigation, or water supply 
purposes and (3) did not produce hydroelectric power on October 
3, 2008. In addition, the hydroelectric project must be 
operated so that the water surface elevation at any given 
location and time that would have occurred in the absence of 
the hydroelectric project is maintained, subject to any license 
requirements imposed under applicable law that change the water 
surface elevation for the purpose of improving environmental 
quality of the affected waterway. The Secretary, in 
consultation with the Federal Energy Regulatory Commission, 
shall certify if a hydroelectric project licensed at a 
nonhydroelectric dam meets this criteria.
            Marine and hydrokinetic renewable energy facility
      A qualified marine and hydrokinetic renewable energy 
facility is any facility that produces electric power from 
marine and hydrokinetic renewable energy, has a nameplate 
capacity rating of at least 150 kilowatts, and is placed in 
service after October 2, 2008, and before January 1, 2012. 
Marine and hydrokinetic renewable energy is defined as energy 
derived from (1) waves, tides, and currents in oceans, 
estuaries, and tidal areas; (2) free flowing water in rivers, 
lakes, and streams; (3) free flowing water in an irrigation 
system, canal, or other manmade channel, including projects 
that utilize nonmechanical structures to accelerate the flow of 
water for electric power production purposes; or (4) 
differentials in ocean temperature (ocean thermal energy 
conversion). The term does not include energy derived from any 
source that uses a dam, diversionary structure (except for 
irrigation systems, canals, and other man-made channels), or 
impoundment for electric power production.
Summary of credit rate and credit period by facility type

        TABLE 1.--SUMMARY OF SECTION 45 CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN RENEWABLE RESOURCES
----------------------------------------------------------------------------------------------------------------
                                                                            Credit period for  Credit period for
                                                                            facilities placed  facilities placed
                                                         Credit amount for   in service on or   in service after
        Eligible electricity production activity          2008 (cents per    before August 8,    August 8, 2005
                                                           kilowatt-hour)    2005 (years from     (years from
                                                                            placed-in-service  placed-in-service
                                                                                  date)              date)
----------------------------------------------------------------------------------------------------------------
Wind...................................................                2.1                 10                 10
Closed-loop biomass....................................                2.1             \1\ 10                 10
Open-loop biomass (including agricultural livestock                    1.0              \2\ 5                 10
 waste nutrient facilities)............................
Geothermal.............................................                2.1                  5                 10
Solar (pre-2006 facilities only).......................                2.1                  5                 10
Small irrigation power.................................                1.0                  5                 10
Municipal solid waste (including landfill gas                          1.0                  5                 10
 facilities and trash combustion facilities)...........
Qualified hydropower...................................                1.0                N/A                 10
Marine and hydrokinetic................................                1.0                N/A                10
----------------------------------------------------------------------------------------------------------------
\1\ In the case of certain co-firing closed-loop facilities, the credit period begins no earlier than October
  22, 2004.
\2\ For certain facilities placed in service before October 22, 2004, the five-year credit period commences on
  January 1, 2005.

Taxation of cooperatives and their patrons
      For Federal income tax purposes, a cooperative generally 
computes its income as if it were a taxable corporation, with 
one exception: the cooperative may exclude from its taxable 
income distributions of patronage dividends. Generally, a 
cooperative that is subject to the cooperative tax rules of 
subchapter T of the Code \170\ is permitted a deduction for 
patronage dividends paid only to the extent of net income that 
is derived from transactions with patrons who are members of 
the cooperative.\171\ The availability of such deductions from 
taxable income has the effect of allowing the cooperative to be 
treated like a conduit with respect to profits derived from 
transactions with patrons who are members of the cooperative.
---------------------------------------------------------------------------
    \170\ Secs. 1381-1383.
    \171\ Sec. 1382.
---------------------------------------------------------------------------
      Eligible cooperatives may elect to pass any portion of 
the credit through to their patrons. An eligible cooperative is 
defined as a cooperative organization that is owned more than 
50 percent by agricultural producers or entities owned by 
agricultural producers. The credit may be apportioned among 
patrons eligible to share in patronage dividends on the basis 
of the quantity or value of business done with or for such 
patrons for the taxable year. The election must be made on a 
timely filed return for the taxable year and, once made, is 
irrevocable for such taxable year.

                               HOUSE BILL

      The provision extends for three years (generally, through 
2013; through 2012 for wind facilities) the period during which 
qualified facilities producing electricity from wind, closed-
loop biomass, open-loop biomass, geothermal energy, municipal 
solid waste, and qualified hydropower may be placed in service 
for purposes of the electricity production credit. The 
provision extends for two years (through 2013) the placed-in-
service period for marine and hydrokinetic renewable energy 
resources.
      The provision also makes a technical amendment to the 
definition of small irrigation power facility to clarify its 
integration into the definition of marine and hydrokinetic 
renewable energy facility.
      Effective date.--The extension of the electricity 
production credit is effective for property placed in service 
after the date of enactment. The technical amendment is 
effective as if included in section 102 of the Energy 
Improvement and Extension Act of 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
2. Election of investment credit in lieu of production tax credits 
        (sec. 1602 of the House bill, sec. 1102 of the Senate 
        amendment, sec. 1102 of the conference agreement, and secs. 45 
        and 48 of the Code)

                              PRESENT LAW

Renewable electricity credit
      An income tax credit is allowed for the production of 
electricity from qualified energy resources at qualified 
facilities.\172\ Qualified energy resources comprise wind, 
closed-loop biomass, open-loop biomass, geothermal energy, 
solar energy, small irrigation power, municipal solid waste, 
qualified hydropower production, and marine and hydrokinetic 
renewable energy. Qualified facilities are, generally, 
facilities that generate electricity using qualified energy 
resources. To be eligible for the credit, electricity produced 
from qualified energy resources at qualified facilities must be 
sold by the taxpayer to an unrelated person. The credit 
amounts, credit periods, definitions of qualified facilities, 
and other rules governing this credit are described more fully 
in section D.1 of this document.
---------------------------------------------------------------------------
    \172\ Sec. 45. In addition to the electricity production credit, 
section 45 also provides income tax credits for the production of 
Indian coal and refined coal at qualified facilities.
---------------------------------------------------------------------------
Energy credit
      An income tax credit is also allowed for certain energy 
property placed in service. Qualifying property includes 
certain fuel cell property, solar property, geothermal power 
production property, small wind energy property, combined heat 
and power system property, and geothermal heat pump 
property.\173\ The amounts of credit, definitions of qualifying 
property, and other rules governing this credit are described 
more fully in section D.3 of this document.
---------------------------------------------------------------------------
    \173\ Sec. 48.
---------------------------------------------------------------------------

                               HOUSE BILL

      The House bill allows the taxpayer to make an irrevocable 
election to have certain qualified facilities placed in service 
in 2009 and 2010 be treated as energy property eligible for a 
30-percent investment credit under section 48. For this 
purpose, qualified facilities are facilities otherwise eligible 
for the section 45 production tax credit (other than refined 
coal, Indian coal, and solar facilities) with respect to which 
no credit under section 45 has been allowed. A taxpayer 
electing to treat a facility as energy property may not claim 
the production credit under section 45.
      Effective date.--The provision applies to facilities 
placed in service after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is similar to the House bill, but 
with a modification with respect to the placed in service 
period that determines eligibility for the election. Under the 
Senate amendment, facilities are eligible if placed in service 
during the extension period of section 45 as provided in the 
Senate amendment (generally, through 2013; through 2012 for 
wind facilities), and with respect to which no credit under 
section 45 has been allowed.

                          CONFERENCE AGREEMENT

      The conference agreement generally follows the Senate 
amendment. Property eligible for the credit is tangible 
personal or other tangible property (not including a building 
or its structural components), and with respect to which 
depreciation or amortization is allowable but only if such 
property is used as an integral part of the qualified facility. 
For example, in the case of a wind facility, the conferees 
intend that only property eligible for five-year depreciation 
under section 168(e)(3)(b)(vi) is treated as credit-eligible 
energy property under the election.
3. Modification of energy credit \174\ (sec. 1603 of the House bill, 
        sec. 1103 of the Senate amendment, sec. 1103 of the conference 
        agreement, and sec. 48 of the Code)
---------------------------------------------------------------------------
    \174\ Additional provisions that (1) allow section 45 facilities to 
elect to be treated as section 48 energy property, and (2) allow 
section 45 and 48 facilities to elect to receive a grant from the 
Department of the Treasury rather than the section 45 production credit 
or the section 48 energy credit, are described in sections D.2 and D.4 
of this document.
---------------------------------------------------------------------------

                              PRESENT LAW

In general
      A nonrefundable, 10-percent business energy credit \175\ 
is allowed for the cost of new property that is equipment that 
either (1) uses solar energy to generate electricity, to heat 
or cool a structure, or to provide solar process heat, or (2) 
is used to produce, distribute, or use energy derived from a 
geothermal deposit, but only, in the case of electricity 
generated by geothermal power, up to the electric transmission 
stage. Property used to generate energy for the purposes of 
heating a swimming pool is not eligible solar energy property.
---------------------------------------------------------------------------
    \175\ Sec. 48.
---------------------------------------------------------------------------
      The energy credit is a component of the general business 
credit.\176\ An unused general business credit generally may be 
carried back one year and carried forward 20 years.\177\ The 
taxpayer's basis in the property is reduced by one-half of the 
amount of the credit claimed. For projects whose construction 
time is expected to equal or exceed two years, the credit may 
be claimed as progress expenditures are made on the project, 
rather than during the year the property is placed in service. 
The credit is allowed against the alternative minimum tax for 
credits determined in taxable years beginning after October 3, 
2008.
---------------------------------------------------------------------------
    \176\ Sec. 38(b)(1).
    \177\ Sec. 39.
---------------------------------------------------------------------------
      Property financed by subsidized energy financing or with 
proceeds from private activity bonds is subject to a reduction 
in basis for purposes of claiming the credit. The basis 
reduction is proportional to the share of the basis of the 
property that is financed by the subsidized financing or 
proceeds. The term ``subsidized energy financing'' means 
financing provided under a Federal, State, or local program a 
principal purpose of which is to provide subsidized financing 
for projects designed to conserve or produce energy.
Special rules for solar energy property
      The credit for solar energy property is increased to 30 
percent in the case of periods prior to January 1, 2017. 
Additionally, equipment that uses fiber-optic distributed 
sunlight to illuminate the inside of a structure is solar 
energy property eligible for the 30-percent credit.
Fuel cells and microturbines
      The energy credit applies to qualified fuel cell power 
plants, but only for periods prior to January 1, 2017. The 
credit rate is 30 percent.
      A qualified fuel cell power plant is an integrated system 
composed of a fuel cell stack assembly and associated balance 
of plant components that (1) converts a fuel into electricity 
using electrochemical means, and (2) has an electricity-only 
generation efficiency of greater than 30 percent and a capacity 
of at least one-half kilowatt. The credit may not exceed $1,500 
for each 0.5 kilowatt of capacity.
      The energy credit applies to qualifying stationary 
microturbine power plants for periods prior to January 1, 2017. 
The credit is limited to the lesser of 10 percent of the basis 
of the property or $200 for each kilowatt of capacity.
      A qualified stationary microturbine power plant is an 
integrated system comprised of a gas turbine engine, a 
combustor, a recuperator or regenerator, a generator or 
alternator, and associated balance of plant components that 
converts a fuel into electricity and thermal energy. Such 
system also includes all secondary components located between 
the existing infrastructure for fuel delivery and the existing 
infrastructure for power distribution, including equipment and 
controls for meeting relevant power standards, such as voltage, 
frequency and power factors. Such system must have an 
electricity-only generation efficiency of not less than 26 
percent at International Standard Organization conditions and a 
capacity of less than 2,000 kilowatts.
Geothermal heat pump property
      The energy credit applies to qualified geothermal heat 
pump property placed in service prior to January 1, 2017. The 
credit rate is 10 percent. Qualified geothermal heat pump 
property is equipment that uses the ground or ground water as a 
thermal energy source to heat a structure or as a thermal 
energy sink to cool a structure.
Small wind property
      The energy credit applies to qualified small wind energy 
property placed in service prior to January 1, 2017. The credit 
rate is 30 percent. The credit is limited to $4,000 per year 
with respect to all wind energy property of any taxpayer. 
Qualified small wind energy property is property that uses a 
qualified wind turbine to generate electricity. A qualifying 
wind turbine means a wind turbine of 100 kilowatts of rated 
capacity or less.
Combined heat and power property
      The energy credit applies to combined heat and power 
(``CHP'') property placed in service prior to January 1, 2017. 
The credit rate is 10 percent.
      CHP property is property: (1) that uses the same energy 
source for the simultaneous or sequential generation of 
electrical power, mechanical shaft power, or both, in 
combination with the generation of steam or other forms of 
useful thermal energy (including heating and cooling 
applications); (2) that has an electrical capacity of not more 
than 50 megawatts or a mechanical energy capacity of no more 
than 67,000 horsepower or an equivalent combination of 
electrical and mechanical energy capacities; (3) that produces 
at least 20 percent of its total useful energy in the form of 
thermal energy that is not used to produce electrical or 
mechanical power, and produces at least 20 percent of its total 
useful energy in the form of electrical or mechanical power (or 
a combination thereof); and (4) the energy efficiency 
percentage of which exceeds 60 percent. CHP property does not 
include property used to transport the energy source to the 
generating facility or to distribute energy produced by the 
facility.
      The otherwise allowable credit with respect to CHP 
property is reduced to the extent the property has an 
electrical capacity or mechanical capacity in excess of any 
applicable limits. Property in excess of the applicable limit 
(15 megawatts or a mechanical energy capacity of more than 
20,000 horsepower or an equivalent combination of electrical 
and mechanical energy capacities) is permitted to claim a 
fraction of the otherwise allowable credit. The fraction is 
equal to the applicable limit divided by the capacity of the 
property. For example, a 45 megawatt property would be eligible 
to claim 15/45ths, or one-third, of the otherwise allowable 
credit. Again, no credit is allowed if the property exceeds the 
50 megawatt or 67,000 horsepower limitations described above.
      Additionally, the provision provides that systems whose 
fuel source is at least 90 percent open-loop biomass and that 
would qualify for the credit but for the failure to meet the 
efficiency standard are eligible for a credit that is reduced 
in proportion to the degree to which the system fails to meet 
the efficiency standard. For example, a system that would 
otherwise be required to meet the 60-percent efficiency 
standard, but which only achieves 30-percent efficiency, would 
be permitted a credit equal to one-half of the otherwise 
allowable credit (i.e., a 5-percent credit).

                               HOUSE BILL

      The House bill eliminates the credit cap applicable to 
qualified small wind energy property. The House bill also 
removes the rule that reduces the basis of the property for 
purposes of claiming the credit if the property is financed in 
whole or in part by subsidized energy financing or with 
proceeds from private activity bonds.
      Effective date.--The provision applies to periods after 
December 31, 2008, under rules similar to the rules of section 
48(m) of the Code (as in effect on the day before the enactment 
of the Revenue Reconciliation Act of 1990).

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
      4. Grants for specified energy property in lieu of tax 
credits (secs. 1604 and 1721 of the House bill, secs. 1104 and 
1603 of the conference agreement, and secs. 45 and 48 of the 
Code)

                              PRESENT LAW

Renewable electricity production credit
      An income tax credit is allowed for the production of 
electricity from qualified energy resources at qualified 
facilities (the ``renewable electricity production 
credit'').\178\ Qualified energy resources comprise wind, 
closed-loop biomass, open-loop biomass, geothermal energy, 
solar energy, small irrigation power, municipal solid waste, 
qualified hydropower production, and marine and hydrokinetic 
renewable energy. Qualified facilities are, generally, 
facilities that generate electricity using qualified energy 
resources. To be eligible for the credit, electricity produced 
from qualified energy resources at qualified facilities must be 
sold by the taxpayer to an unrelated person. The credit 
amounts, credit periods, definitions of qualified facilities, 
and other rules governing this credit are described more fully 
in section D.1 of this document.
---------------------------------------------------------------------------
    \178\ Sec. 45. In addition to the renewable electricity production 
credit, section 45 also provides income tax credits for the production 
of Indian coal and refined coal at qualified facilities.
---------------------------------------------------------------------------
Energy credit
      An income tax credit is also allowed for certain energy 
property placed in service. Qualifying property includes 
certain fuel cell property, solar property, geothermal power 
production property, small wind energy property, combined heat 
and power system property, and geothermal heat pump 
property.\179\ The amounts of credit, definitions of qualifying 
property, and other rules governing this credit are described 
more fully in section D.3 of this document.
---------------------------------------------------------------------------
    \179\ Sec. 48.
---------------------------------------------------------------------------

                               HOUSE BILL

      The provision authorizes the Secretary of Energy to 
provide a grant to each person who places in service during 
2009 or 2010 energy property that is either (1) an electricity 
production facility otherwise eligible for the renewable 
electricity production credit or (2) qualifying property 
otherwise eligible for the energy credit. In general, the grant 
amount is 30 percent of the basis of the property that would 
(1) be eligible for credit under section 48 or (2) comprise a 
section 45 credit-eligible facility. For qualified 
microturbine, combined heat and power system, and geothermal 
heat pump property, the amount is 10 percent of the basis of 
the property.
      It is intended that the grant provision mimic the 
operation of the credit under section 48. For example, the 
amount of the grant is not includable in gross income. However, 
the basis of the property is reduced by fifty percent of the 
amount of the grant. In addition, some or all of each grant is 
subject to recapture if the grant eligible property is disposed 
of by the grant recipient within five years of being placed in 
service.\180\
---------------------------------------------------------------------------
    \180\ Section 1604 of the House bill.
---------------------------------------------------------------------------
      Nonbusiness property and property that would not 
otherwise be eligible for credit under section 48 or part of a 
facility that would be eligible for credit under section 45 is 
not eligible for a grant under the provision. The grant may be 
paid to whichever party would have been entitled to a credit 
under section 48 or section 45, as the case may be.
      Under the provision, if a grant is paid, no renewable 
electricity credit or energy credit may be claimed with respect 
to the grant eligible property. In addition, no grant may be 
awarded to any Federal, State, or local government (or any 
political subdivision, agency, or instrumentality thereof) or 
any section 501(c) tax-exempt entity.
      The provision appropriates to the Secretary of Energy the 
funds necessary to make the grants. No grant may be made unless 
the application for the grant has been received before October 
1, 2011.
      Effective date.--The provision is effective on date of 
enactment.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement generally follows the House bill 
with the following modifications. The conference agreement 
clarifies that qualifying property must be depreciable or 
amortizable to be eligible for a grant. The conference 
agreement also permits taxpayers to claim the credit with 
respect to otherwise eligible property that is not placed in 
service in 2009 and 2010 so long as construction begins in 
either of those years and is completed prior to 2013 (in the 
case of wind facility property), 2014 (in the case of other 
renewable power facility property eligible for credit under 
section 45), or 2017 (in the case of any specified energy 
property described in section 48). The conference agreement 
also provides that the grant program be administered by the 
Secretary of the Treasury.
5. Expand new clean renewable energy bonds (sec. 1611 of the House 
        bill, sec. 1111 of the Senate amendment, sec. 1111 of the 
        conference agreement, and sec. 54C of the Code)

                              PRESENT LAW

New Clean Renewable Energy Bonds
      New clean renewable energy bonds (``New CREBs'') may be 
issued by qualified issuers to finance qualified renewable 
energy facilities.\181\ Qualified renewable energy facilities 
are facilities that: (1) qualify for the tax credit under 
section 45 (other than Indian coal and refined coal production 
facilities), without regard to the placed-in-service date 
requirements of that section; and (2) are owned by a public 
power provider, governmental body, or cooperative electric 
company.
---------------------------------------------------------------------------
    \181\ Sec. 54C.
---------------------------------------------------------------------------
      The term ``qualified issuers'' includes: (1) public power 
providers; (2) a governmental body; (3) cooperative electric 
companies; (4) a not-for-profit electric utility that has 
received a loan or guarantee under the Rural Electrification 
Act; and (5) clean renewable energy bond lenders. The term 
``public power provider'' means a State utility with a service 
obligation, as such terms are defined in section 217 of the 
Federal Power Act (as in effect on the date of the enactment of 
this paragraph). A ``governmental body'' means any State or 
Indian tribal government, or any political subdivision thereof. 
The term ``cooperative electric company'' means a mutual or 
cooperative electric company (described in section 501(c)(12) 
or section 1381(a)(2)(C)). A clean renewable energy bond lender 
means a cooperative that is owned by, or has outstanding loans 
to, 100 or more cooperative electric companies and is in 
existence on February 1, 2002 (including any affiliated entity 
which is controlled by such lender).
      There is a national limitation for New CREBs of $800 
million. No more than one third of the national limit may be 
allocated to projects of public power providers, governmental 
bodies, or cooperative electric companies. Allocations to 
governmental bodies and cooperative electric companies may be 
made in the manner the Secretary determines appropriate. 
Allocations to projects of public power providers shall be 
made, to the extent practicable, in such manner that the amount 
allocated to each such project bears the same ratio to the cost 
of such project as the maximum allocation limitation to 
projects of public power providers bears to the cost of all 
such projects.
      New CREBs are a type of qualified tax credit bond for 
purposes of section 54A of the Code. As such, 100 percent of 
the available project proceeds of New CREBs must be used within 
the three-year period that begins on the date of issuance. 
Available project proceeds are proceeds from the sale of the 
bond issue less issuance costs (not to exceed two percent) and 
any investment earnings on such sale proceeds. To the extent 
less than 100 percent of the available project proceeds are 
used to finance qualified projects during the three-year 
spending period, bonds will continue to qualify as New CREBs if 
unspent proceeds are used within 90 days from the end of such 
three-year period to redeem bonds. The three-year spending 
period may be extended by the Secretary upon the qualified 
issuer's request demonstrating that the failure to satisfy the 
three-year requirement is due to reasonable cause and the 
projects will continue to proceed with due diligence.
      New CREBs generally are subject to the arbitrage 
requirements of section 148. However, available project 
proceeds invested during the three-year spending period are not 
subject to the arbitrage restrictions (i.e., yield restriction 
and rebate requirements). In addition, amounts invested in a 
reserve fund are not subject to the arbitrage restrictions to 
the extent: (1) such fund is funded at a rate not more rapid 
than equal annual installments; (2) such fund is funded in a 
manner reasonably expected to result in an amount not greater 
than an amount necessary to repay the issue; and (3) the yield 
on such fund is not greater than the average annual interest 
rate of tax-exempt obligations having a term of 10 years or 
more that are issued during the month the New CREBs are issued.
      As with other tax credit bonds, a taxpayer holding New 
CREBs on a credit allowance date is entitled to a tax credit. 
However, the credit rate on New CREBs is set by the Secretary 
at a rate that is 70 percent of the rate that would permit 
issuance of such bonds without discount and interest cost to 
the issuer.\182\ The Secretary determines credit rates for tax 
credit bonds based on general assumptions about credit quality 
of the class of potential eligible issuers and such other 
factors as the Secretary deems appropriate. The Secretary may 
determine credit rates based on general credit market yield 
indexes and credit ratings.\183\
---------------------------------------------------------------------------
    \182\ Given the differences in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
    \183\ See Internal Revenue Service, Notice 2009-15, Credit Rates on 
Tax Credit Bonds, 2009-6 I.R.B. 1 (January 22, 2009).
---------------------------------------------------------------------------
      The amount of the tax credit is determined by multiplying 
the bond's credit rate by the face amount of the holder's bond. 
The credit accrues quarterly, is includible in gross income (as 
if it were an interest payment on the bond), and can be claimed 
against regular income tax liability and alternative minimum 
tax liability. Unused credits may be carried forward to 
succeeding taxable years. In addition, credits may be separated 
from the ownership of the underlying bond similar to how 
interest coupons can be stripped for interest-bearing bonds.
      An issuer of New CREBs is treated as meeting the 
``prohibition on financial conflicts of interest'' requirement 
in section 54A(d)(6) if it certifies that it satisfies (i) 
applicable State and local law requirements governing conflicts 
of interest and (ii) any additional conflict of interest rules 
prescribed by the Secretary with respect to any Federal, State, 
or local government official directly involved with the 
issuance of New CREBs.

                               HOUSE BILL

In general
      The provision expands the New CREBs program. The 
provision authorizes issuance of up to an additional $1.6 
billion of New CREBs.
Effective date
      The provision applies to obligations issued after the 
date of enactment.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
6. Expand qualified energy conservation bonds (sec. 1612 of the House 
        bill, sec. 1112 of the Senate amendment, sec. 1112 of the 
        conference agreement, and sec. 54D of the Code)

                              PRESENT LAW

      Qualified energy conservation bonds may be used to 
finance qualified conservation purposes.
      The term ``qualified conservation purpose'' means:
            1. Capital expenditures incurred for purposes of 
        reducing energy consumption in publicly owned buildings 
        by at least 20 percent; implementing green community 
        programs; rural development involving the production of 
        electricity from renewable energy resources; or any 
        facility eligible for the production tax credit under 
        section 45 (other than Indian coal and refined coal 
        production facilities);
            2. Expenditures with respect to facilities or 
        grants that support research in: (a) development of 
        cellulosic ethanol or other nonfossil fuels; (b) 
        technologies for the capture and sequestration of 
        carbon dioxide produced through the use of fossil 
        fuels; (c) increasing the efficiency of existing 
        technologies for producing nonfossil fuels; (d) 
        automobile battery technologies and other technologies 
        to reduce fossil fuel consumption in transportation; 
        and (E) technologies to reduce energy use in buildings;
            3. Mass commuting facilities and related facilities 
        that reduce the consumption of energy, including 
        expenditures to reduce pollution from vehicles used for 
        mass commuting;
            4. Demonstration projects designed to promote the 
        commercialization of: (a) green building technology; 
        (b) conversion of agricultural waste for use in the 
        production of fuel or otherwise; (c) advanced battery 
        manufacturing technologies; (D) technologies to reduce 
        peak-use of electricity; and (d) technologies for the 
        capture and sequestration of carbon dioxide emitted 
        from combusting fossil fuels in order to produce 
        electricity; and
            5. Public education campaigns to promote energy 
        efficiency (other than movies, concerts, and other 
        events held primarily for entertainment purposes).
      There is a national limitation on qualified energy 
conservation bonds of $800 million. Allocations of qualified 
energy conservation bonds are made to the States with sub-
allocations to large local governments. Allocations are made to 
the States according to their respective populations, reduced 
by any sub-allocations to large local governments (defined 
below) within the States. Sub-allocations to large local 
governments shall be an amount of the national qualified energy 
conservation bond limitation that bears the same ratio to the 
amount of such limitation that otherwise would be allocated to 
the State in which such large local government is located as 
the population of such large local government bears to the 
population of such State. The term ``large local government'' 
means: any municipality or county if such municipality or 
county has a population of 100,000 or more. Indian tribal 
governments also are treated as large local governments for 
these purposes (without regard to population).
      Each State or large local government receiving an 
allocation of qualified energy conservation bonds may further 
allocate issuance authority to issuers within such State or 
large local government. However, any allocations to issuers 
within the State or large local government shall be made in a 
manner that results in not less than 70 percent of the 
allocation of qualified energy conservation bonds to such State 
or large local government being used to designate bonds that 
are not private activity bonds (i.e., the bond cannot meet the 
private business tests or the private loan test of section 
141).
      Qualified energy conservation bonds are a type of 
qualified tax credit bond for purposes of section 54A of the 
Code. As a result, 100 percent of the available project 
proceeds of qualified energy conservation bonds must be used 
for qualified conservation purposes. In the case of qualified 
conservation bonds issued as private activity bonds, 100 
percent of the available project proceeds must be used for 
capital expenditures. In addition, qualified energy 
conservation bonds only may be issued by Indian tribal 
governments to the extent such bonds are issued for purposes 
that satisfy the present law requirements for tax-exempt bonds 
issued by Indian tribal governments (i.e., essential 
governmental functions and certain manufacturing purposes).
      Under present law, 100 percent of the available project 
proceeds of qualified energy conservation bonds to be used 
within the three-year period that begins on the date of 
issuance. Available project proceeds are proceeds from the sale 
of the issue less issuance costs (not to exceed two percent) 
and any investment earnings on such sale proceeds. To the 
extent less than 100 percent of the available project proceeds 
are used to finance qualified conservation purposes during the 
three-year spending period, bonds will continue to qualify as 
qualified energy conservation bonds if unspent proceeds are 
used within 90 days from the end of such three-year period to 
redeem bonds. The three-year spending period may be extended by 
the Secretary upon the issuer's request demonstrating that the 
failure to satisfy the three-year requirement is due to 
reasonable cause and the projects will continue to proceed with 
due diligence.
      Qualified energy conservation bonds generally are subject 
to the arbitrage requirements of section 148. However, 
available project proceeds invested during the three-year 
spending period are not subject to the arbitrage restrictions 
(i.e., yield restriction and rebate requirements). In addition, 
amounts invested in a reserve fund are not subject to the 
arbitrage restrictions to the extent: (1) such fund is funded 
at a rate not more rapid than equal annual installments; (2) 
such fund is funded in a manner reasonably expected to result 
in an amount not greater than an amount necessary to repay the 
issue; and (3) the yield on such fund is not greater than the 
average annual interest rate of tax-exempt obligations having a 
term of 10 years or more that are issued during the month the 
qualified energy conservation bonds are issued.
      The maturity of qualified energy conservation bonds is 
the term that the Secretary estimates will result in the 
present value of the obligation to repay the principal on such 
bonds being equal to 50 percent of the face amount of such 
bonds, using as a discount rate the average annual interest 
rate of tax-exempt obligations having a term of 10 years or 
more that are issued during the month the qualified energy 
conservation bonds are issued.
      As with other tax credit bonds, the taxpayer holding 
qualified energy conservation bonds on a credit allowance date 
is entitled to a tax credit. The credit rate on the bonds is 
set by the Secretary at a rate that is 70 percent of the rate 
that would permit issuance of such bonds without discount and 
interest cost to the issuer.\184\ The Secretary determines 
credit rates for tax credit bonds based on general assumptions 
about credit quality of the class of potential eligible issuers 
and such other factors as the Secretary deems appropriate. The 
Secretary may determine credit rates based on general credit 
market yield indexes and credit ratings.\185\ The amount of the 
tax credit is determined by multiplying the bond's credit rate 
by the face amount on the holder's bond. The credit accrues 
quarterly, is includible in gross income (as if it were an 
interest payment on the bond), and can be claimed against 
regular income tax liability and alternative minimum tax 
liability. Unused credits may be carried forward to succeeding 
taxable years. In addition, credits may be separated from the 
ownership of the underlying bond similar to how interest 
coupons can be stripped for interest-bearing bonds.
---------------------------------------------------------------------------
    \184\ Given the difference in credit quality and other 
characteristics of individual issuers, the Secretary cannot set credit 
rates in a manner that will allow each issuer to issue tax credit bonds 
at par.
    \185\ See Internal Revenue Services, Notice 2009-15, Credit Rates 
on Tax Credit Bonds, 2009-6 I.R.B. 1 (January 22, 2009).
---------------------------------------------------------------------------
      Issuers of qualified energy conservation bonds are 
required to certify that the financial disclosure requirements 
that applicable State and local law requirements governing 
conflicts of interest are satisfied with respect to such issue, 
as well as any other additional conflict of interest rules 
prescribed by the Secretary with respect to any Federal, State, 
or local government official directly involved with the 
issuance of qualified energy conservation bonds.

                               HOUSE BILL

In general
      The provision expands the present-law qualified energy 
conservation bond program. The provision authorizes issuance of 
an additional $2.4 billion of qualified energy conservation 
bonds. The provision expands eligibility for these tax credit 
bonds to include loans and grants for capital expenditures as 
part of green community programs. For example, this expansion 
will enable States to issue these tax credit bonds to finance 
loans and/or grants to individual homeowners to retrofit 
existing housing. The use of bond proceeds for such loans and 
grants will not cause such bond to be treated as a private 
activity bond for purposes of the private activity bond 
restrictions contained in the qualified energy conservation 
bond provisions.
Effective date
      The provision is effective for bonds issued after the 
date of enactment.

                            SENATE AMENDMENT

In general
      The provision expands the present-law qualified energy 
conservation bond program. The provision authorizes issuance of 
an additional $2.4 billion of qualified energy conservation 
bonds. The provision clarifies that capital expenditures to 
implement green community programs, includes grants, loans and 
other repayment mechanisms for capital expenditures to 
implement such programs.
Effective date
      The provision is effective for bonds issued after the 
date of enactment.

                          CONFERENCE AGREEMENT

In general
      The provision expands the present-law qualified energy 
conservation bond program. The provision authorizes issuance of 
an additional $2.4 billion of qualified energy conservation 
bonds. Also, the provision clarifies that capital expenditures 
to implement green community programs includes grants, loans 
and other repayment mechanisms to implement such programs. For 
example, this expansion will enable States to issue these tax 
credit bonds to finance retrofits of existing private buildings 
through loans and/or grants to individual homeowners or 
businesses, or through other repayment mechanisms. Other 
repayment mechanisms can include periodic fees assessed on a 
government bill or utility bill that approximates the energy 
savings of energy efficiency or conservation retrofits. 
Retrofits can include heating, cooling, lighting, water-saving, 
storm water-reducing, or other efficiency measures.
      Finally, the provision clarifies that any bond used for 
the purpose of providing grants, loans or other repayment 
mechanisms for capital expenditures to implement green 
community programs is not treated as a private activity bond 
for purposes of determining whether the requirement that not 
less than 70 percent of allocations within a State or large 
local government be used to designate bonds that are not 
private activity bonds (sec. 54D(e)(3)) has been satisfied.
Effective date
      The conference agreement follows the House bill and the 
Senate amendment.
7. Modification to high-speed intercity rail facility bonds (sec. 1504 
        of the Senate amendment, sec. 1504 of the conference agreement, 
        and sec. 142(i) of the Code)

                              PRESENT LAW

In general
      Under present law, gross income does not include interest 
on State or local bonds. State and local bonds are classified 
generally as either governmental bonds or private activity 
bonds. Governmental bonds are bonds the proceeds of which are 
primarily used to finance governmental functions or which are 
repaid with governmental funds. Private activity bonds are 
bonds in which the State or local government serves as a 
conduit providing financing to nongovernmental persons (e.g., 
private businesses or individuals). The exclusion from income 
for State and local bonds does not apply to private activity 
bonds unless the bonds are issued for certain permitted 
purposes (``qualified private activity bonds'') and other Code 
requirements are met.
High-speed rail
      An exempt facility bond is a type of qualified private 
activity bond. Exempt facility bonds can be issued for high-
speed intercity rail facilities. A facility qualifies as a 
high-speed intercity rail facility if it is a facility (other 
than rolling stock) for fixed guideway rail transportation of 
passengers and their baggage between metropolitan statistical 
areas. The facilities must use vehicles that are reasonably 
expected to operate at speeds in excess of 150 miles per hour 
between scheduled stops and the facilities must be made 
available to members of the general public as passengers. If 
the bonds are to be issued for a nongovernmental owner of the 
facility, such owner must irrevocably elect not to claim 
depreciation or credits with respect to the property financed 
by the net proceeds of the issue.
      The Code imposes a special redemption requirement for 
these types of bonds. Any proceeds not used within three years 
of the date of issuance of the bonds must be used within the 
following six months to redeem such bonds.
      Seventy-five percent of the principal amount of the bonds 
issued for high-speed rail facilities is exempt from the volume 
limit. If all the property to be financed by the net proceeds 
of the issue is to be owned by a governmental unit, then such 
bonds are completely exempt from the volume limit.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

In general
      The provision modifies the requirement that high-speed 
intercity rail transportation facilities use vehicles that are 
reasonably expected to operate at speeds in excess of 150 miles 
per hour. Instead, under the provision such facilities must use 
vehicles capable of attaining a maximum speed in excess of 150 
miles per hour.
Effective date
      The provision is effective for obligations issued after 
the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
8. Extension and modification of credit for nonbusiness energy property 
        (sec. 1621 of the House bill, sec. 1121 of the Senate 
        amendment, sec. 1121 of the conference agreement, and sec. 25C 
        of the Code)

                              PRESENT LAW

      Section 25C provides a 10-percent credit for the purchase 
of qualified energy efficiency improvements to existing homes. 
A qualified energy efficiency improvement is any energy 
efficiency building envelope component (1) that meets or 
exceeds the prescriptive criteria for such a component 
established by the 2000 International Energy Conservation Code 
as supplemented and as in effect on August 8, 2005 (or, in the 
case of metal roofs with appropriate pigmented coatings, meets 
the Energy Star program requirements); (2) that is installed in 
or on a dwelling located in the United States and owned and 
used by the taxpayer as the taxpayer's principal residence; (3) 
the original use of which commences with the taxpayer; and (4) 
that reasonably can be expected to remain in use for at least 
five years. The credit is nonrefundable.
      Building envelope components are: (1) insulation 
materials or systems which are specifically and primarily 
designed to reduce the heat loss or gain for a dwelling; (2) 
exterior windows (including skylights) and doors; and (3) metal 
or asphalt roofs with appropriate pigmented coatings or cooling 
granules that are specifically and primarily designed to reduce 
the heat gain for a dwelling.
      Additionally, section 25C provides specified credits for 
the purchase of specific energy efficient property. The 
allowable credit for the purchase of certain property is (1) 
$50 for each advanced main air circulating fan, (2) $150 for 
each qualified natural gas, propane, or oil furnace or hot 
water boiler, and (3) $300 for each item of qualified energy 
efficient property.
      An advanced main air circulating fan is a fan used in a 
natural gas, propane, or oil furnace originally placed in 
service by the taxpayer during the taxable year, and which has 
an annual electricity use of no more than two percent of the 
total annual energy use of the furnace (as determined in the 
standard Department of Energy test procedures).
      A qualified natural gas, propane, or oil furnace or hot 
water boiler is a natural gas, propane, or oil furnace or hot 
water boiler with an annual fuel utilization efficiency rate of 
at least 95.
      Qualified energy-efficient property is: (1) an electric 
heat pump water heater which yields energy factor of at least 
2.0 in the standard Department of Energy test procedure, (2) an 
electric heat pump which has a heating seasonal performance 
factor (HSPF) of at least 9, a seasonal energy efficiency ratio 
(SEER) of at least 15, and an energy efficiency ratio (EER) of 
at least 13, (3) a central air conditioner with energy 
efficiency of at least the highest efficiency tier established 
by the Consortium for Energy Efficiency as in effect on Jan. 1, 
2006,\186\ (4) a natural gas, propane, or oil water heater 
which has an energy factor of at least 0.80 or thermal 
efficiency of at least 90 percent, and (5) biomass fuel 
property.
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    \186\ The highest tier in effect at this time was tier 2, requiring 
SEER of at least 15 and EER of at least 12.5 for split central air 
conditioning systems and SEER of at least 14 and EER of at least 12 for 
packaged central air conditioning systems.
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      Biomass fuel property is a stove that burns biomass fuel 
to heat a dwelling unit located in the United States and used 
as a principal residence by the taxpayer, or to heat water for 
such dwelling unit, and that has a thermal efficiency rating of 
at least 75 percent. Biomass fuel is any plant-derived fuel 
available on a renewable or recurring basis, including 
agricultural crops and trees, wood and wood waste and residues 
(including wood pellets), plants (including aquatic plants, 
grasses, residues, and fibers).
      Under section 25C, the maximum credit for a taxpayer with 
respect to the same dwelling for all taxable years is $500, and 
no more than $200 of such credit may be attributable to 
expenditures on windows.
      The taxpayer's basis in the property is reduced by the 
amount of the credit. Special proration rules apply in the case 
of jointly owned property, condominiums, and tenant-
stockholders in cooperative housing corporations. If less than 
80 percent of the property is used for nonbusiness purposes, 
only that portion of expenditures that is used for nonbusiness 
purposes is taken into account.
      For purposes of determining the amount of expenditures 
made by any individual with respect to any dwelling unit, there 
shall not be taken into account expenditures which are made 
from subsidized energy financing. The term ``subsidized energy 
financing'' means financing provided under a Federal, State, or 
local program a principal purpose of which is to provide 
subsidized financing for projects designed to conserve or 
produce energy.
      The credit applies to expenditures made after December 
31, 2008 for property placed in service after December 31, 
2008, and prior to January 1, 2010.

                               HOUSE BILL

      The House bill raises the 10 percent credit rate to 30 
percent. Additionally, all energy property otherwise eligible 
for the $50, $100, or $150 credits is instead eligible for a 30 
percent credit on expenditures for such property.
      The House bill additionally extends the provision for one 
year, through December 31, 2010. Finally, the $500 lifetime cap 
(and the $200 lifetime cap with respect to windows) is 
eliminated and replaced with an aggregate cap of $1,500 in the 
case of property placed in service after December 31, 2008 and 
prior to January 1, 2011.
      The present law rule related to subsidized energy 
financing is eliminated.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is similar to the House bill, but 
modifies the efficiency standards for qualifying property.
      Specifically, the Senate amendment updates the building 
insulation requirements to follow the prescriptive criteria of 
the 2009 International Energy Conservation Code. Additionally, 
qualifying exterior windows, doors, and skylights must have a 
U-factor at or below 0.30 and a seasonal heat gain coefficient 
(``SHGC'') at or below 0.30.
      Electric heat pumps must achieve the highest efficiency 
tier of Consortium for Energy Efficiency, as in effect on 
January 1, 2009. These standards are a SEER greater than or 
equal to 15, EER greater than or equal to 12.5, and HSPF 
greater than or equal to 8.5 for split heat pumps, and SEER 
greater than or equal to 14, EER greater than or equal to 12, 
and HSPF greater than or equal to 8.0 for packaged heat pumps.
      Central air conditioners must achieve the highest 
efficiency tier of Consortium for Energy Efficiency, as in 
effect on January 1, 2009. These standards are a SEER greater 
than or equal to 16 and EER greater than or equal to 13 for 
split systems, and SEER greater than or equal to 14 and EER 
greater than or equal to 12 for packaged systems.
      Natural gas, propane, or oil water heaters must have an 
energy factor greater than or equal to 0.82 or a thermal 
efficiency of greater than or equal to 90 percent. Natural gas, 
propane, or oil water boilers must achieve an annual fuel 
utilization efficiency rate of at least 90. Qualified oil 
furnaces must achieve an annual fuel utilization efficiency 
rate of at least 90.
      Lastly, the requirement that biomass fuel property have a 
thermal efficiency rating of at least 75 percent is modified to 
be a thermal efficiency rating of at least 75 percent as 
measured using a lower heating value.
      Effective date.--The provision is generally effective for 
taxable years beginning after December 31, 2008. The provisions 
that alter the efficiency standards of qualifying property, 
other than biomass fuel property, apply to property placed in 
service after December 31, 2009. The modification with respect 
to biomass fuel property is effective for taxable years 
beginning after December 31, 2008.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment, 
with the exception that the new efficiency standards for 
qualifying property, other than those for biomass fuel 
property, apply to property placed in service after the date of 
enactment.
9. Credit for residential energy efficient property (sec. 1622 of the 
        House bill, sec. 1122 of the Senate amendment, sec. 1122 of the 
        conference agreement, and sec. 25D of the Code)

                              PRESENT LAW

      Section 25D provides a personal tax credit for the 
purchase of qualified solar electric property and qualified 
solar water heating property that is used exclusively for 
purposes other than heating swimming pools and hot tubs. The 
credit is equal to 30 percent of qualifying expenditures, with 
a maximum credit of $2,000 with respect to qualified solar 
water heating property. There is no cap with respect to 
qualified solar electric property.
      Section 25D also provides a 30 percent credit for the 
purchase of qualified geothermal heat pump property, qualified 
small wind energy property, and qualified fuel cell power 
plants. The credit for geothermal heat pump property is capped 
at $2,000, the credit for qualified small wind energy property 
is limited to $500 with respect to each half kilowatt of 
capacity, not to exceed $4,000, and the credit for any fuel 
cell may not exceed $500 for each 0.5 kilowatt of capacity.
      The credit with respect to all qualifying property may be 
claimed against the alternative minimum tax.
      Qualified solar electric property is property that uses 
solar energy to generate electricity for use in a dwelling 
unit. Qualifying solar water heating property is property used 
to heat water for use in a dwelling unit located in the United 
States and used as a residence if at least half of the energy 
used by such property for such purpose is derived from the sun.
      A qualified fuel cell power plant is an integrated system 
comprised of a fuel cell stack assembly and associated balance 
of plant components that (1) converts a fuel into electricity 
using electrochemical means, (2) has an electricity-only 
generation efficiency of greater than 30 percent. The qualified 
fuel cell power plant must be installed on or in connection 
with a dwelling unit located in the United States and used by 
the taxpayer as a principal residence.
      Qualified small wind energy property is property that 
uses a wind turbine to generate electricity for use in a 
dwelling unit located in the U.S. and used as a residence by 
the taxpayer.
      Qualified geothermal heat pump property means any 
equipment which (1) uses the ground or ground water as a 
thermal energy source to heat the dwelling unit or as a thermal 
energy sink to cool such dwelling unit, (2) meets the 
requirements of the Energy Star program which are in effect at 
the time that the expenditure for such equipment is made, and 
(3) is installed on or in connection with a dwelling unit 
located in the United States and used as a residence by the 
taxpayer.
      The credit is nonrefundable, and the depreciable basis of 
the property is reduced by the amount of the credit. 
Expenditures for labor costs allocable to onsite preparation, 
assembly, or original installation of property eligible for the 
credit are eligible expenditures.
      Special proration rules apply in the case of jointly 
owned property, condominiums, and tenant-stockholders in 
cooperative housing corporations. If less than 80 percent of 
the property is used for nonbusiness purposes, only that 
portion of expenditures that is used for nonbusiness purposes 
is taken into account.
      For purposes of determining the amount of expenditures 
made by any individual with respect to any dwelling unit, there 
shall not be taken into account expenditures which are made 
from subsidized energy financing. The term ``subsidized energy 
financing'' means financing provided under a Federal, State, or 
local program a principal purpose of which is to provide 
subsidized financing for projects designed to conserve or 
produce energy.
      The credit applies to property placed in service prior to 
January 1, 2017.

                               HOUSE BILL

      The House bill eliminates the credit caps for solar hot 
water, geothermal, and wind property and eliminates the 
reduction in credits for property using subsidized energy 
financing.
      Effective date.--The provision applies to taxable years 
beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill and the 
Senate amendment.
10. Temporary increase in credit for alternative fuel vehicle refueling 
        property (sec. 1623 of the House bill, sec. 1123 of the Senate 
        amendment, sec. 1123 of the conference agreement, and sec. 30C 
        of the Code)

                              PRESENT LAW

      Taxpayers may claim a 30-percent credit for the cost of 
installing qualified clean-fuel vehicle refueling property to 
be used in a trade or business of the taxpayer or installed at 
the principal residence of the taxpayer.\187\ The credit may 
not exceed $30,000 per taxable year per location, in the case 
of qualified refueling property used in a trade or business and 
$1,000 per taxable year per location, in the case of qualified 
refueling property installed on property which is used as a 
principal residence.
---------------------------------------------------------------------------
    \187\ Sec. 30C.
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      Qualified refueling property is property (not including a 
building or its structural components) for the storage or 
dispensing of a clean-burning fuel or electricity into the fuel 
tank or battery of a motor vehicle propelled by such fuel or 
electricity, but only if the storage or dispensing of the fuel 
or electricity is at the point of delivery into the fuel tank 
or battery of the motor vehicle. The use of such property must 
begin with the taxpayer.
      Clean-burning fuels are any fuel at least 85 percent of 
the volume of which consists of ethanol, natural gas, 
compressed natural gas, liquefied natural gas, liquefied 
petroleum gas, or hydrogen. In addition, any mixture of 
biodiesel and diesel fuel, determined without regard to any use 
of kerosene and containing at least 20 percent biodiesel, 
qualifies as a clean fuel.
      Credits for qualified refueling property used in a trade 
or business are part of the general business credit and may be 
carried back for one year and forward for 20 years. Credits for 
residential qualified refueling property cannot exceed for any 
taxable year the difference between the taxpayer's regular tax 
(reduced by certain other credits) and the taxpayer's tentative 
minimum tax. Generally, in the case of qualified refueling 
property sold to a tax-exempt entity, the taxpayer selling the 
property may claim the credit.
      A taxpayer's basis in qualified refueling property is 
reduced by the amount of the credit. In addition, no credit is 
available for property used outside the United States or for 
which an election to expense has been made under section 179.
      The credit is available for property placed in service 
after December 31, 2005, and (except in the case of hydrogen 
refueling property) before January 1, 2011. In the case of 
hydrogen refueling property, the property must be placed in 
service before January 1, 2015.

                               HOUSE BILL

      For property placed in service in 2009 or 2010, the 
provision increases the maximum credit available for business 
property to $200,000 for qualified hydrogen refueling property 
and to $50,000 for other qualified refueling property. For 
nonbusiness property, the maximum credit is increased to 
$2,000. In addition, the credit rate is increased from 30 
percent to 50 percent, except in the case of hydrogen refueling 
property.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill, 
except that it adds interoperability, public access, and other 
standards to qualified refueling property that is used for 
recharging electric or hybrid-electric motor vehicles.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill.
11. Recovery period for depreciation of smart meters (sec. 1124 of the 
        Senate amendment)

                              PRESENT LAW

      A taxpayer generally must capitalize the cost of property 
used in a trade or business and recover such cost over time 
through annual deductions for depreciation or amortization. 
Tangible property generally is depreciated under the modified 
accelerated cost recovery system (``MACRS''), which determines 
depreciation by applying specific recovery periods, placed-in-
service conventions, and depreciation methods to the cost of 
various types of depreciable property.\188\ The class lives of 
assets placed in service after 1986 are generally set forth in 
Revenue Procedure 87-56.\189\ Present law provides a 10-year 
recovery period \190\ and the 150-percent declining balance 
method \191\ be used for smart meters.
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    \188\ Sec. 168.
    \189\ 1987-2 C.B. 674 (as clarified and modified by Rev. Proc. 88-
22, 1988-1 C.B. 785). Assets included in class 49.14, describing assets 
used in the transmission and distribution of electricity for sale and 
related land improvements, are assigned a class life of 30 years and a 
recovery period of 20 years.
    \190\ Sec. 168(e)(3)(D)(iii).
    \191\ Sec. 168(b)(2)(C).
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      A qualified smart electric meter means any time-based 
meter and related communication equipment which is placed in 
service by a taxpayer who is a supplier of electric energy or a 
provider of electric energy services and which is capable of 
being used by the taxpayer as part of a system that (1) 
measures and records electricity usage data on a time-
differentiated basis in at least 24 separate time segments per 
day; (2) provides for the exchange of information between the 
supplier or provider and the customer's smart electric meter in 
support of time-based rates or other forms of demand response; 
and (3) provides data to such supplier or provider so that the 
supplier or provider can provide energy usage information to 
customers electronically; and (4) provides all commercial and 
residential customers of such supplier or provider with net 
metering.\192\ The term ``net metering'' means allowing a 
customer a credit, if any, as complies with applicable Federal 
and State laws and regulations, for providing electricity to 
the supplier or provider.
---------------------------------------------------------------------------
    \192\ Sec. 168(i)(18).
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                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision provides a 5-year recovery period and 200 
percent declining balance method for any qualified smart 
electric meter placed in service before January 1, 2011.
      Effective date.--The provision is effective for property 
placed in service after the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the Senate 
amendment provision.
12. Energy research credit (sec. 1631 of the House bill and sec. 1131 
        of the Senate amendment)

                              PRESENT LAW

General rule
      A taxpayer may claim a research credit equal to 20 
percent of the amount by which the taxpayer's qualified 
research expenses for a taxable year exceed its base amount for 
that year.\193\ Thus, the research credit is generally 
available with respect to incremental increases in qualified 
research.
---------------------------------------------------------------------------
    \193\ Sec. 41.
---------------------------------------------------------------------------
      A 20-percent research tax credit is also available with 
respect to the excess of (1) 100 percent of corporate cash 
expenses (including grants or contributions) paid for basic 
research conducted by universities (and certain nonprofit 
scientific research organizations) over (2) the sum of (a) the 
greater of two minimum basic research floors plus (b) an amount 
reflecting any decrease in nonresearch giving to universities 
by the corporation as compared to such giving during a fixed-
base period, as adjusted for inflation. This separate credit 
computation is commonly referred to as the university basic 
research credit.\194\
---------------------------------------------------------------------------
    \194\ Sec. 41(e).
---------------------------------------------------------------------------
      Finally, a research credit is available for a taxpayer's 
expenditures on research undertaken by an energy research 
consortium. This separate credit computation is commonly 
referred to as the energy research credit. Unlike the other 
research credits, the energy research credit applies to all 
qualified expenditures, not just those in excess of a base 
amount.
      The research credit, including the university basic 
research credit and the energy research credit, expires for 
amounts paid or incurred after December 31, 2009.\195\
---------------------------------------------------------------------------
    \195\ Sec. 41(h).
---------------------------------------------------------------------------
Computation of allowable credit
      Except for energy research payments and certain 
university basic research payments made by corporations, the 
research tax credit applies only to the extent that the 
taxpayer's qualified research expenses for the current taxable 
year exceed its base amount. The base amount for the current 
year generally is computed by multiplying the taxpayer's fixed-
base percentage by the average amount of the taxpayer's gross 
receipts for the four preceding years. If a taxpayer both 
incurred qualified research expenses and had gross receipts 
during each of at least three years from 1984 through 1988, 
then its fixed-base percentage is the ratio that its total 
qualified research expenses for the 1984-1988 period bears to 
its total gross receipts for that period (subject to a maximum 
fixed-base percentage of 16 percent). All other taxpayers (so-
called start-up firms) are assigned a fixed-base percentage of 
three percent.\196\
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    \196\ The Small Business Job Protection Act of 1996 expanded the 
definition of start-up firms under section 41(c)(3)(B)(i) to include 
any firm if the first taxable year in which such firm had both gross 
receipts and qualified research expenses began after 1983. A special 
rule (enacted in 1993) is designed to gradually recompute a start-up 
firm's fixed-base percentage based on its actual research experience. 
Under this special rule, a start-up firm is assigned a fixed-base 
percentage of three percent for each of its first five taxable years 
after 1993 in which it incurs qualified research expenses. A start-up 
firm's fixed-base percentage for its sixth through tenth taxable years 
after 1993 in which it incurs qualified research expenses is a phased-
in ratio based on the firm's actual research experience. For all 
subsequent taxable years, the taxpayer's fixed-base percentage is its 
actual ratio of qualified research expenses to gross receipts for any 
five years selected by the taxpayer from its fifth through tenth 
taxable years after 1993. Sec. 41(c)(3)(B).
---------------------------------------------------------------------------
      In computing the credit, a taxpayer's base amount cannot 
be less than 50 percent of its current-year qualified research 
expenses.
      To prevent artificial increases in research expenditures 
by shifting expenditures among commonly controlled or otherwise 
related entities, a special aggregation rule provides that all 
members of the same controlled group of corporations are 
treated as a single taxpayer.\197\ Under regulations prescribed 
by the Secretary, special rules apply for computing the credit 
when a major portion of a trade or business (or unit thereof) 
changes hands, under which qualified research expenses and 
gross receipts for periods prior to the change of ownership of 
a trade or business are treated as transferred with the trade 
or business that gave rise to those expenses and receipts for 
purposes of recomputing a taxpayer's fixed-based 
percentage.\198\
---------------------------------------------------------------------------
    \197\ Sec. 41(f)(1).
    \198\ Sec. 41(f)(3).
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Alternative incremental research credit regime
      Taxpayers are allowed to elect an alternative incremental 
research credit regime.\199\ If a taxpayer elects to be subject 
to this alternative regime, the taxpayer is assigned a three-
tiered fixed-base percentage (that is lower than the fixed-base 
percentage otherwise applicable under present law) and the 
credit rate likewise is reduced.
---------------------------------------------------------------------------
    \199\ Sec. 41(c)(4).
---------------------------------------------------------------------------
      Generally, for amounts paid or incurred prior to 2007, 
under the alternative incremental credit regime, a credit rate 
of 2.65 percent applies to the extent that a taxpayer's 
current-year research expenses exceed a base amount computed by 
using a fixed-base percentage of one percent (i.e., the base 
amount equals one percent of the taxpayer's average gross 
receipts for the four preceding years) but do not exceed a base 
amount computed by using a fixed-base percentage of 1.5 
percent. A credit rate of 3.2 percent applies to the extent 
that a taxpayer's current-year research expenses exceed a base 
amount computed by using a fixed-base percentage of 1.5 percent 
but do not exceed a base amount computed by using a fixed-base 
percentage of two percent. A credit rate of 3.75 percent 
applies to the extent that a taxpayer's current-year research 
expenses exceed a base amount computed by using a fixed-base 
percentage of two percent. Generally, for amounts paid or 
incurred after 2006, the credit rates listed above are 
increased to three percent, four percent, and five percent, 
respectively.\200\
---------------------------------------------------------------------------
    \200\ A special transition rule applies for fiscal year 2006-2007 
taxpayers.
---------------------------------------------------------------------------
      An election to be subject to this alternative incremental 
credit regime can be made for any taxable year beginning after 
June 30, 1996, and such an election applies to that taxable 
year and all subsequent years unless revoked with the consent 
of the Secretary of the Treasury. The alternative incremental 
credit regime terminates for taxable years beginning after 
December 31, 2008.
Alternative simplified credit
      Generally, for amounts paid or incurred after 2006, 
taxpayers may elect to claim an alternative simplified credit 
for qualified research expenses.\201\ The alternative 
simplified research credit is equal to 12 percent (14 percent 
for taxable years beginning after December 31, 2008) of 
qualified research expenses that exceed 50 percent of the 
average qualified research expenses for the three preceding 
taxable years. The rate is reduced to six percent if a taxpayer 
has no qualified research expenses in any one of the three 
preceding taxable years.
---------------------------------------------------------------------------
    \201\ A special transition rule applies for fiscal year 2006-2007 
taxpayers.
---------------------------------------------------------------------------
      An election to use the alternative simplified credit 
applies to all succeeding taxable years unless revoked with the 
consent of the Secretary. An election to use the alternative 
simplified credit may not be made for any taxable year for 
which an election to use the alternative incremental credit is 
in effect. A transition rule applies which permits a taxpayer 
to elect to use the alternative simplified credit in lieu of 
the alternative incremental credit if such election is made 
during the taxable year which includes January 1, 2007. The 
transition rule applies only to the taxable year which includes 
that date.
Eligible expenses
      Qualified research expenses eligible for the research tax 
credit consist of: (1) in-house expenses of the taxpayer for 
wages and supplies attributable to qualified research; (2) 
certain time-sharing costs for computer use in qualified 
research; and (3) 65 percent of amounts paid or incurred by the 
taxpayer to certain other persons for qualified research 
conducted on the taxpayer's behalf (so-called contract research 
expenses).\202\ Notwithstanding the limitation for contract 
research expenses, qualified research expenses include 100 
percent of amounts paid or incurred by the taxpayer to an 
eligible small business, university, or Federal laboratory for 
qualified energy research.
---------------------------------------------------------------------------
    \202\ Under a special rule, 75 percent of amounts paid to a 
research consortium for qualified research are treated as qualified 
research expenses eligible for the research credit (rather than 65 
percent under the general rule under section 41(b)(3) governing 
contract research expenses) if (1) such research consortium is a tax-
exempt organization that is described in section 501(c)(3) (other than 
a private foundation) or section 501(c)(6) and is organized and 
operated primarily to conduct scientific research, and (2) such 
qualified research is conducted by the consortium on behalf of the 
taxpayer and one or more persons not related to the taxpayer. Sec. 
41(b)(3)(C).
---------------------------------------------------------------------------
      To be eligible for the credit, the research not only has 
to satisfy the requirements of present-law section 174 
(described below) but also must be undertaken for the purpose 
of discovering information that is technological in nature, the 
application of which is intended to be useful in the 
development of a new or improved business component of the 
taxpayer, and substantially all of the activities of which 
constitute elements of a process of experimentation for 
functional aspects, performance, reliability, or quality of a 
business component. Research does not qualify for the credit if 
substantially all of the activities relate to style, taste, 
cosmetic, or seasonal design factors.\203\ In addition, 
research does not qualify for the credit: (1) if conducted 
after the beginning of commercial production of the business 
component; (2) if related to the adaptation of an existing 
business component to a particular customer's requirements; (3) 
if related to the duplication of an existing business component 
from a physical examination of the component itself or certain 
other information; or (4) if related to certain efficiency 
surveys, management function or technique, market research, 
market testing, or market development, routine data collection 
or routine quality control.\204\ Research does not qualify for 
the credit if it is conducted outside the United States, Puerto 
Rico, or any U.S. possession.
---------------------------------------------------------------------------
    \203\ Sec. 41(d)(3).
    \204\ Sec. 41(d)(4).
---------------------------------------------------------------------------
Relation to deduction
      Under section 174, taxpayers may elect to deduct 
currently the amount of certain research or experimental 
expenditures paid or incurred in connection with a trade or 
business, notwithstanding the general rule that business 
expenses to develop or create an asset that has a useful life 
extending beyond the current year must be capitalized.\205\ 
However, deductions allowed to a taxpayer under section 174 (or 
any other section) are reduced by an amount equal to 100 
percent of the taxpayer's research tax credit determined for 
the taxable year.\206\ Taxpayers may alternatively elect to 
claim a reduced research tax credit amount under section 41 in 
lieu of reducing deductions otherwise allowed.\207\
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    \205\ Taxpayers may elect 10-year amortization of certain research 
expenditures allowable as a deduction under section 174(a). Secs. 
174(f)(2) and 59(e).
    \206\ Sec. 280C(c).
    \207\ Sec. 280C(c)(3).
---------------------------------------------------------------------------

                               HOUSE BILL

      The House bill creates a new 20 percent credit for all 
qualified energy research expenses paid or incurred in 2009 or 
2010. Qualified energy research expenses are qualified research 
expenses related to the fields of fuel cells and battery 
technology, renewable energy, energy conservation technology, 
efficient transmission and distribution of electricity, and 
carbon capture and sequestration.
      Effective date.--The provision is effective for taxable 
years beginning after December 31, 2008.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill, 
except that it adds expenses related to renewable fuels 
research to the list of qualified energy research expenses.

                          CONFERENCE AGREEMENT

      The conference agreement does not include either the 
House bill or the Senate amendment provision.
13. Modification of credit for carbon dioxide sequestration (sec. 1141 
        of the Senate amendment, sec. 1131 of the conference agreement, 
        and sec. 45Q of the Code)

                              PRESENT LAW

      A credit of $20 per metric ton is available for qualified 
carbon dioxide captured by a taxpayer at a qualified facility 
and disposed of by such taxpayer in secure geological storage 
(including storage at deep saline formations and unminable coal 
seams under such conditions as the Secretary may 
determine).\208\ In addition, a credit of $10 per metric ton is 
available for qualified carbon dioxide that is captured by the 
taxpayer at a qualified facility and used by such taxpayer as a 
tertiary injectant (including carbon dioxide augmented 
waterflooding and immiscible carbon dioxide displacement) in a 
qualified enhanced oil or natural gas recovery project. Both 
credit amounts are adjusted for inflation after 2009.
---------------------------------------------------------------------------
    \208\ Sec. 45Q.
---------------------------------------------------------------------------
      Qualified carbon dioxide is defined as carbon dioxide 
captured from an industrial source that (1) would otherwise be 
released into the atmosphere as an industrial emission of 
greenhouse gas, and (2) is measured at the source of capture 
and verified at the point or points of injection. Qualified 
carbon dioxide includes the initial deposit of captured carbon 
dioxide used as a tertiary injectant but does not include 
carbon dioxide that is recaptured, recycled, and re-injected as 
part of an enhanced oil or natural gas recovery project 
process. A qualified enhanced oil or natural gas recovery 
project is a project that would otherwise meet the definition 
of an enhanced oil recovery project under section 43, if 
natural gas projects were included within that definition.
      A qualified facility means any industrial facility (1) 
which is owned by the taxpayer, (2) at which carbon capture 
equipment is placed in service, and (3) which captures not less 
than 500,000 metric tons of carbon dioxide during the taxable 
year. The credit applies only with respect to qualified carbon 
dioxide captured and sequestered or injected in the United 
States \209\ or one of its possessions.\210\
---------------------------------------------------------------------------
    \209\ Sec. 638(1).
    \210\ Sec. 638(2).
---------------------------------------------------------------------------
      Except as provided in regulations, credits are 
attributable to the person that captures and physically or 
contractually ensures the disposal, or use as a tertiary 
injectant, of the qualified carbon dioxide. Credits are subject 
to recapture, as provided by regulation, with respect to any 
qualified carbon dioxide that ceases to be recaptured, disposed 
of, or used as a tertiary injectant in a manner consistent with 
the rules of the provision.
      The credit is part of the general business credit. The 
credit sunsets at the end of the calendar year in which the 
Secretary, in consultation with the Administrator of the 
Environmental Protection Agency, certifies that 75 million 
metric tons of qualified carbon dioxide have been captured and 
disposed of or used as a tertiary injectant.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision requires that carbon dioxide used as a 
tertiary injectant and otherwise eligible for a $10 per metric 
ton credit must be sequestered by the taxpayer in permanent 
geological storage in order to qualify for such credit. The 
Senate amendment also clarifies that the term permanent 
geological storage includes oil and gas reservoirs in addition 
to unminable coal seams and deep saline formations. In 
addition, the Senate amendment requires that the Secretary of 
the Treasury consult with the Secretary of Energy and the 
Secretary of the Interior, in addition to the Administrator of 
the Environmental Protection Agency, in promulgating 
regulations relating to the permanent geological storage of 
carbon dioxide.
      Effective date.--The provision is effective for carbon 
dioxide captured after the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
14. Modification of the plug-in electric drive motor vehicle credit 
        (secs. 1151 and 1152 of the Senate amendment, secs. 1141 
        through 1144 of the conference agreement, and secs. 30B and 30D 
        of the Code)

                              PRESENT LAW

Alternative motor vehicle credit
      A credit is available for each new qualified fuel cell 
vehicle, hybrid vehicle, advanced lean burn technology vehicle, 
and alternative fuel vehicle placed in service by the taxpayer 
during the taxable year.\211\ In general, the credit amount 
varies depending upon the type of technology used, the weight 
class of the vehicle, the amount by which the vehicle exceeds 
certain fuel economy standards, and, for some vehicles, the 
estimated lifetime fuel savings. The credit generally is 
available for vehicles purchased after 2005. The credit 
terminates after 2009, 2010, or 2014, depending on the type of 
vehicle. The alternative motor vehicle credit is not allowed 
against the alternative minimum tax.
---------------------------------------------------------------------------
    \211\ Sec. 30B.
---------------------------------------------------------------------------
Plug-in electric drive motor vehicle credit
      A credit is available for each qualified plug-in electric 
drive motor vehicle placed in service. A qualified plug-in 
electric drive motor vehicle is a motor vehicle that has at 
least four wheels, is manufactured for use on public roads, 
meets certain emissions standards (except for certain heavy 
vehicles), draws propulsion using a traction battery with at 
least four kilowatt-hours of capacity, and is capable of being 
recharged from an external source of electricity.
      The base amount of the plug-in electric drive motor 
vehicle credit is $2,500, plus another $417 for each kilowatt-
hour of battery capacity in excess of four kilowatt-hours. The 
maximum credit for qualified vehicles weighing 10,000 pounds or 
less is $7,500. This maximum amount increases to $10,000 for 
vehicles weighing more than 10,000 pounds but not more than 
14,000 pounds, to $12,500 for vehicles weighing more than 
14,000 pounds but not more than 26,000 pounds, and to $15,000 
for vehicles weighing more than 26,000 pounds.
      In general, the credit is available to the vehicle owner, 
including the lessor of a vehicle subject to lease. If the 
qualified vehicle is used by certain tax-exempt organizations, 
governments, or foreign persons and is not subject to a lease, 
the seller of the vehicle may claim the credit so long as the 
seller clearly discloses to the user in a document the amount 
that is allowable as a credit. A vehicle must be used 
predominantly in the United States to qualify for the credit.
      Once a total of 250,000 credit-eligible vehicles have 
been sold for use in the United States, the credit phases out 
over four calendar quarters. The phaseout period begins in the 
second calendar quarter following the quarter during which the 
vehicle cap has been reached. Taxpayers may claim one-half of 
the otherwise allowable credit during the first two calendar 
quarters of the phaseout period and twenty-five percent of the 
otherwise allowable credit during the next two quarters. After 
this, no credit is available. Regardless of the phase-out 
limitation, no credit is available for vehicles purchased after 
2014.
      The basis of any qualified vehicle is reduced by the 
amount of the credit. To the extent a vehicle is eligible for 
credit as a qualified plug-in electric drive motor vehicle, it 
is not eligible for credit as a qualified hybrid vehicle under 
section 30B. The portion of the credit attributable to vehicles 
of a character subject to an allowance for depreciation is 
treated as part of the general business credit; the nonbusiness 
portion of the credit is allowable to the extent of the excess 
of the regular tax over the alternative minimum tax (reduced by 
certain other credits) for the taxable year.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

Credit for electric drive low-speed vehicles, motorcycles, and three-
        wheeled vehicles
      The Senate amendment creates a new 10-percent credit for 
low-speed vehicles, motorcycles, and three-wheeled vehicles 
that would otherwise meet the criteria of a qualified plug-in 
electric drive motor vehicle but for the fact that they are 
low-speed vehicles or do not have at least four wheels. The 
maximum credit for such vehicles is $4,000. Basis reduction and 
other rules similar to those found in section 30 apply under 
the provision. The new credit is part of the general business 
credit. The new credit is not available for vehicles sold after 
December 31, 2011.
Credit for converting a vehicle into a plug-in electric drive motor 
        vehicle
      The Senate amendment also creates a new 10-percent 
credit, up to $4,000, for the cost of converting any motor 
vehicle into a qualified plug-in electric drive motor vehicle. 
To be eligible for the credit, a qualified plug-in traction 
battery module must have a capacity of at least 2.5 kilowatt-
hours. In the case of a leased traction battery module, the 
credit may be claimed by the lessor but not the lessee. The 
credit is not available for conversions made after December 31, 
2012.
Modification of plug-in electric drive motor vehicle credit
      The Senate amendment modifies the plug-in electric drive 
motor vehicle credit by increasing the 250,000 vehicle 
limitation to 500,000. It also modifies the definition of 
qualified plug-in electric drive motor vehicle to exclude low-
speed vehicles.
      Effective date.--The Senate amendment is generally 
effective for vehicles sold after December 31, 2009. The credit 
for plug-in vehicle conversion is effective for property placed 
in service after December 31, 2008, in taxable years beginning 
after such date.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment 
with substantial modifications.
Credit for electric drive low-speed vehicles, motorcycles, and three-
        wheeled vehicles
      With respect to electric drive low-speed vehicles, 
motorcycles, and three-wheeled vehicles, the conference 
agreement follows the Senate amendment with the following 
modifications. Under the conference agreement, the maximum 
credit available is $2,500. The conference agreement also makes 
other technical changes.
Credit for converting a vehicle into a plug-in electric drive motor 
        vehicle
      With respect to plug-in vehicle conversions, the 
conference agreement follows the Senate amendment but increases 
the minimum capacity of a qualified battery module to four 
kilowatt-hours, changes the effective date to property placed 
in service after the date of enactment, and eliminates the 
credit for plug-in conversions made after December 31, 2011. 
The conference agreement also removes the rule permitting 
lessors of battery modules to claim the plug-in conversion 
credit.
Modification of the plug-in electric drive motor vehicle credit
      The conference agreement modifies the plug-in electric 
drive motor vehicle credit by limiting the maximum credit to 
$7,500 regardless of vehicle weight. The conference agreement 
also eliminates the credit for low speed plug-in vehicles and 
for plug-in vehicles weighing 14,000 pounds or more.
      The conference agreement replaces the 250,000 total plug-
in vehicle limitation with a 200,000 plug-in vehicles per 
manufacturer limitation. The credit phases out over four 
calendar quarters beginning in the second calendar quarter 
following the quarter in which the manufacturer limit is 
reached. The conference agreement also makes other technical 
changes.
      The changes to the plug-in electric drive motor vehicle 
credit are effective for vehicles acquired after December 31, 
2009.
Treatment of alternative motor vehicle credit as a personal credit 
        allowed against the alternative minimum tax
      The conference agreement provides that the alternative 
motor vehicle credit is a personal credit allowed against the 
alternative minimum tax. The provision is effective for taxable 
years beginning after December 31, 2008.
15. Parity for qualified transportation fringe benefits (sec. 1251 of 
        the Senate amendment, sec. 1151 of the conference agreement, 
        and sec. 132 of the Code)

                              PRESENT LAW

      Qualified transportation fringe benefits provided by an 
employer are excluded from an employee's gross income for 
income tax purposes and from an employee's wages for payroll 
tax purposes.\212\ Qualified transportation fringe benefits 
include parking, transit passes, vanpool benefits, and 
qualified bicycle commuting reimbursements. Up to $230 (for 
2009) per month of employer-provided parking is excludable from 
income. Up to $120 (for 2009) per month of employer-provided 
transit and vanpool benefits are excludable from gross income. 
These amounts are indexed annually for inflation, rounded to 
the nearest multiple of $5. No amount is includible in the 
income of an employee merely because the employer offers the 
employee a choice between cash and qualified transportation 
fringe benefits. Qualified transportation fringe benefits also 
include a cash reimbursement by an employer to an employee. 
However, in the case of transit passes, a cash reimbursement is 
considered a qualified transportation fringe benefit only if a 
voucher or similar item which may be exchanged only for a 
transit pass is not readily available for direct distribution 
by the employer to the employee.
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    \212\ Code secs. 132(f), 3121(b)(2), 3306(b)(16), and 3401(a)(19).
---------------------------------------------------------------------------

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision increases the monthly exclusion for 
employer-provided transit and vanpool benefits to the same 
level as the exclusion for employer-provided parking.
      Effective date.--The provision is effective for months 
beginning on or after date of enactment. The proposal does not 
apply to tax years beginning after December 31, 2010.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
16. Credit for investment in advanced energy property (sec. 1302 of the 
        Senate amendment, sec. 1302 of the conference agreement, and 
        new sec. 48C of the Code)

                              PRESENT LAW

      An income tax credit is allowed for the production of 
electricity from qualified energy resources at qualified 
facilities.\213\ Qualified energy resources comprise wind, 
closed-loop biomass, open-loop biomass, geothermal energy, 
solar energy, small irrigation power, municipal solid waste, 
qualified hydropower production, and marine and hydrokinetic 
renewable energy. Qualified facilities are, generally, 
facilities that generate electricity using qualified energy 
resources.
---------------------------------------------------------------------------
    \213\ Sec. 45. In addition to the electricity production credit, 
section 45 also provides income tax credits for the production of 
Indian coal and refined coal at qualified facilities.
---------------------------------------------------------------------------
      An income tax credit is also allowed for certain energy 
property placed in service. Qualifying property includes 
certain fuel cell property, solar property, geothermal power 
production property, small wind energy property, combined heat 
and power system property, and geothermal heat pump 
property.\214\
---------------------------------------------------------------------------
    \214\ Sec. 48.
---------------------------------------------------------------------------
      In addition to these, numerous other credits are 
available to taxpayers to encourage renewable energy production 
and energy conservation, including, among others, credits for 
certain biofuels, plug-in electric vehicles, and energy 
efficient appliances, and for improvements to heating, air 
conditioning, and insulation.
      No credit is specifically designed under present law to 
encourage the development of a domestic manufacturing base to 
support the industries described above.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment establishes a 30 percent credit for 
investment in qualified property used in a qualified advanced 
energy manufacturing project. A qualified advanced energy 
project is a project that re-equips, expands, or establishes a 
manufacturing facility for the production: (1) property 
designed to be used to produce energy from the sun, wind, or 
geothermal deposits (within the meaning of section 613(e)(2)), 
or other renewable resources; (2) fuel cells, microturbines, or 
an energy storage system for use with electric or hybrid-
electric motor vehicles; (3) electric grids to support the 
transmission of intermittent sources of renewable energy, 
including storage of such energy; (4) property designed to 
capture and sequester carbon dioxide; (5) property designed to 
refine or blend renewable fuels (but not fossil fuels) or to 
produce energy conservation technologies (including energy-
conserving lighting technologies and smart grid technologies; 
or (6) other advanced energy property designed to reduce 
greenhouse gas emissions as may be determined by the Secretary.
      Qualified property must be depreciable (or amortizable) 
property used in a qualified advanced energy project. Qualified 
property does not include property designed to manufacture 
equipment for use in the refining or blending of any 
transportation fuel other than renewable fuels. The basis of 
qualified property must be reduced by the amount of credit 
received.
      Credits are available only for projects certified by the 
Secretary of Treasury, in consultation with the Secretary of 
Energy. The Secretary of Treasury must establish a 
certification program no later than 180 days after date of 
enactment, and may allocate up to $2 billion in credits.
      In selecting projects, the Secretary may consider only 
those projects where there is a reasonable expectation of 
commercial viability. In addition, the Secretary must consider 
other selection criteria, including which projects (1) will 
provide the greatest domestic job creation; (2) will provide 
the greatest net impact in avoiding or reducing air pollutants 
or anthropogenic emissions of greenhouse gases; (3) have the 
greatest readiness for commercial employment, replication, and 
further commercial use in the United States; (4) will provide 
the greatest benefit in terms of newness in the commercial 
market; (5) have the lowest levelized cost of generated or 
stored energy, or of measured reduction in energy consumption 
or greenhouse gas emission; and (6) have the shortest project 
time from certification to completion.
      Each project application must be submitted during the 
three-year period beginning on the date such certification 
program is established. An applicant for certification has two 
years from the date the Secretary accepts the application to 
provide the Secretary with evidence that the requirements for 
certification have been met. Upon certification, the applicant 
has five years from the date of issuance of the certification 
to place the project in service. Not later than six years after 
the date of enactment of the credit, the Secretary is required 
to review the credit allocations and redistribute any credits 
that were not used either because of a revoked certification or 
because of an insufficient quantity of credit applications.
      Effective date.--The provision is effective on the date 
of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment 
with the following modifications. The conference agreement 
increases by $300 million (to $2.3 billion) the amount of 
credits that may be allocated by the Secretary. The conference 
agreement expands the list of qualifying advance energy 
projects to include projects designed to manufacture any new 
qualified plug-in electric drive motor vehicle (as defined by 
section 30D(c)), any specified vehicle (as defined by section 
30D(f)(2)), or any component which is designed specifically for 
use with such vehicles, including any electric motor, 
generator, or power control unit. The conference agreement also 
replaces the third and fourth project selection criteria with a 
requirement that the Secretary, in addition to the remaining 
criteria, consider projects that have the greatest potential 
for technological innovation and commercial deployment.
      In addition, the conference agreement shortens to two 
years the period during which project applications may be 
submitted, shortens to one year the period during which the 
project applicants must provide evidence that the certification 
requirements have been met, and shortens to three years the 
period during which certified projects must be placed in 
service. The conference agreement also shortens the period 
after which the Secretary must review the credit allocations 
from six to four years. Finally, the conference agreement 
clarifies that only tangible personal property and other 
tangible property (not including a building or its structural 
components) is credit-eligible.
17. Incentives for manufacturing facilities producing plug-in electric 
        drive motor vehicles and components (sec. 1303 of the Senate 
        amendment)

                              PRESENT LAW

Depreciation rules
      A taxpayer is allowed to recover through annual 
depreciation deductions the cost of certain property used in a 
trade or business or for the production of income. The amount 
of the depreciation deduction allowed with respect to tangible 
property for a taxable year is determined under the modified 
accelerated cost recovery system (``MACRS''). Under MACRS, 
different types of property generally are assigned applicable 
recovery periods and depreciation methods. The recovery periods 
applicable to most tangible personal property range from 3 to 
25 years. The depreciation methods generally applicable to 
tangible personal property are the 200-percent and 150-percent 
declining balance methods, switching to the straight-line 
method for the taxable year in which the taxpayer's 
depreciation deduction would be maximized.
Bonus depreciation
      For property placed in service in calendar year 2009, an 
additional first-year depreciation deduction is available equal 
to 50 percent of the adjusted basis of qualified property.\215\ 
The additional first-year depreciation deduction is allowed for 
both regular tax and alternative minimum tax (``AMT'') 
purposes.\216\ Certain other rules and limitations apply.
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    \215\ Sec. 168(k). The additional first-year depreciation deduction 
is subject to the general rules regarding whether an item is deductible 
under section 162 or instead is subject to capitalization under section 
263 or section 263A.
    \216\ However, the additional first-year depreciation deduction is 
not allowed for purposes of computing earnings and profits.
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Election to claim additional research or minimum tax credits in lieu of 
        claiming bonus depreciation
      Corporations otherwise eligible for bonus depreciation 
under section 168(k) may elect to claim additional research or 
minimum tax credits in lieu of claiming depreciation under 
section 168(k) for ``eligible qualified property'' placed in 
service after March 31, 2008.\217\ A corporation making the 
election forgoes the depreciation deductions allowable under 
section 168(k) and instead increases the limitation under 
section 38(c) on the use of research credits or section 53(c) 
on the use of minimum tax credits.\218\ The increases in the 
allowable credits are treated as refundable for purposes of 
this provision. The depreciation for qualified property is 
calculated for both regular tax and AMT purposes using the 
straight-line method in place of the method that would 
otherwise be used absent the election under this provision.
---------------------------------------------------------------------------
    \217\ Sec. 168(k)(4). In the case of an electing corporation that 
is a partner in a partnership, the corporate partner's distributive 
share of partnership items is determined as if section 168(k) does not 
apply to any eligible qualified property and the straight line method 
is used to calculate depreciation of such property.
    \218\ Special rules apply to an applicable partnership.
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      The research credit or minimum tax credit limitation is 
increased by the bonus depreciation amount, which is equal to 
20 percent of bonus depreciation \219\ for certain eligible 
qualified property that could be claimed absent an election 
under this provision. Generally, eligible qualified property 
included in the calculation is bonus depreciation property that 
meets the following requirements: (1) the original use of the 
property must commence with the taxpayer after March 31, 2008; 
(2) the taxpayer must purchase the property either (a) after 
March 31, 2008, and before January 1, 2009, but only if no 
binding written contract for the acquisition is in effect 
before April 1, 2008,\220\ or (b) pursuant to a binding written 
contract which was entered into after March 31, 2008, and 
before January 1, 2009; \221\ and (3) the property must be 
placed in service after March 31, 2008, and before January 1, 
2009 (January 1, 2010 for certain longer-lived and 
transportation property).
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    \219\ For this purpose, bonus depreciation is the difference 
between (i) the aggregate amount of depreciation for all eligible 
qualified property determined if section 168(k)(1) applied using the 
most accelerated depreciation method (determined without regard to this 
provision), and shortest life allowable for each property, and (ii) the 
amount of depreciation that would be determined if section 168(k)(1) 
did not apply using the same method and life for each property.
    \220\ In the case of passenger aircraft, the written binding 
contract limitation does not apply.
    \221\ Special rules apply to property manufactured, constructed, or 
produced by the taxpayer for use by the taxpayer.
---------------------------------------------------------------------------
      The bonus depreciation amount is limited to the lesser 
of: (1) $30 million, or (2) six percent of the sum of research 
credit carryforwards from taxable years beginning before 
January 1, 2006 and minimum tax credits allocable to the 
adjusted minimum tax imposed for taxable years beginning before 
January 1, 2006. All corporations treated as a single employer 
under section 52(a) are treated as one taxpayer for purposes of 
the limitation, as well as for electing the application of this 
provision.
Credit for plug-in vehicles
      A credit is available for each qualified plug-in electric 
drive motor vehicle placed in service. A qualified plug-in 
electric drive motor vehicle is a motor vehicle that has at 
least four wheels, is manufactured for use on public roads, 
meets certain emissions standards (except for certain heavy 
vehicles), draws propulsion using a traction battery with at 
least four kilowatt-hours of capacity, and is capable of being 
recharged from an external source of electricity.
      The base amount of the plug-in electric drive motor 
vehicle credit is $2,500, plus another $417 for each kilowatt-
hour of battery capacity in excess of four kilowatt-hours. The 
maximum credit for qualified vehicles weighing 10,000 pounds or 
less is $7,500. This maximum amount increases to $10,000 for 
vehicles weighing more than 10,000 pounds but not more than 
14,000 pounds, to $12,500 for vehicles weighing more than 
14,000 pounds but not more than 26,000 pounds, and to $15,000 
for vehicle weighing more than 26,000 pounds.
      In general, the credit is available to the vehicle owner, 
including the lessor of a vehicle subject to lease. If the 
qualified vehicle is used by certain tax-exempt organizations, 
governments, or foreign persons and is not subject to a lease, 
the seller of the vehicle may claim the credit so long as the 
seller clearly discloses to the user in a document the amount 
that is allowable as a credit. A vehicle must be used 
predominantly in the United States to qualify for the credit.
      Once a total of 250,000 credit-eligible vehicles have 
been sold for use in the United States, the credit phases out 
over four calendar quarters. The phaseout period begins in the 
second calendar quarter following the quarter during which the 
vehicle cap has been reached. Taxpayers may claim one-half of 
the otherwise allowable credit during the first two calendar 
quarters of the phaseout period and twenty-five percent of the 
otherwise allowable credit during the next two quarters. After 
this, no credit is available. Regardless of the phase-out 
limitation, no credit is available for vehicles purchased after 
2014.
      The basis of any qualified vehicle is reduced by the 
amount of the credit. To the extent a vehicle is eligible for 
credit as a qualified plug-in electric drive motor vehicle, it 
is not eligible for credit as a qualified hybrid vehicle under 
section 30B. The portion of the credit attributable to vehicles 
of a character subject to an allowance for depreciation is 
treated as part of the general business credit; the nonbusiness 
portion of the credit is allowable to the extent of the excess 
of the regular tax over the AMT (reduced by certain other 
credits) for the taxable year.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment permits taxpayers to elect to 
expense one hundred percent of the cost of any electric drive 
motor vehicle manufacturing facility property placed in service 
before 2012 and fifty percent of the cost of such property 
placed in service after 2011 and before 2015. For purposes of 
this election, qualified property is property which is a 
facility or a portion of a facility used for the production of 
any new qualified plug-in electric drive motor vehicle \222\ or 
any eligible component. Eligible components are any battery, 
any electric motor or generator, or any power control unit 
which is designed specifically for use with a new qualified 
plug-in electric drive motor vehicle.
---------------------------------------------------------------------------
    \222\ As defined by section 30D(c).
---------------------------------------------------------------------------
      The original use of any qualified property must begin 
with the taxpayer. In the case of dual use property, the amount 
of cost eligible to be expensed is reduced by the total cost of 
the facility multiplied by the percentage of property expected 
to be produced that is not qualified property.
      The Senate amendment permits taxpayers to waive this 
election in favor of a loan equal to thirty-five percent of the 
amount eligible to be expensed under the general provision. The 
loan is in the form of a senior note, with a 20-year term and 
an interest rate payable at the applicable Federal rate, issued 
by the taxpayer to the Secretary of Treasury and secured by the 
qualified manufacturing property. Upon repayment of the loan, 
the taxpayer's tax liability limitations are increased for the 
research credit \223\ and the alternative minimum tax credit 
\224\ by the amount of the loan.
---------------------------------------------------------------------------
    \223\ Sec. 38(c).
    \224\ Sec. 53(c).
---------------------------------------------------------------------------
      Effective date.--The provision is effective for taxable 
years beginning after the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the Senate 
amendment provision.

                          E. Other Provisions

1. Application of certain labor standards to projects financed with 
        certain tax-favored bonds (sec. 1701 of the House bill, sec. 
        1901 of the Senate amendment, and sec. 1601 of the conference 
        agreement)

                              PRESENT LAW

      The United States Code (Subchapter IV of Chapter 31 of 
Title 40) applies a prevailing wage requirement to certain 
contracts to which the Federal Government is a party.

                               HOUSE BILL

      The provision provides that Subchapter IV of Chapter 31 
of Title 40 of the U.S. Code shall apply to projects financed 
with the proceeds of:
            1. any qualified clean renewable energy bond (as 
        defined in sec. 54C of the Code) issued after the date 
        of enactment;
            2. any qualified energy conservation bond (as 
        defined in sec. 54D of the Code) issued after the date 
        of enactment;
            3. any qualified zone academy bond (as defined in 
        sec. 54E of the Code) issued after the date of 
        enactment;
            4. any qualified school construction bond (as 
        defined in sec. 54F of the Code); and
            5. any recovery zone economic development bond (as 
        defined in sec. 1400U-2 of the Code).
      Effective date.--The provision is effective on the date 
of enactment.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill except 
it makes a technical correction to change ``qualified clean 
renewable energy bond'' to ``new clean renewable energy bond.''

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment.
2. Increase in the public debt limit (sec. 1902 of the Senate amendment 
        and sec. 1604 of the conference agreement)

                              PRESENT LAW

      The statutory limit on the public debt is 
$11,315,000,000,000.

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The Senate amendment increases the statutory limit on the 
public debt by $825,000,000,000 to $12,140,000,000,000.
      Effective date.--The provision is effective on the date 
of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement increases the statutory limit on 
the public debt by $789,000,000,000 to $12,104,000,000,000.
      Effective date. The provision is effective on the date of 
enactment.
3. Failure to redeem certain securities from the United States (sec. 
        6021 of the Senate amendment)

                              PRESENT LAW

      An employer generally may deduct reasonable compensation 
for personal services as an ordinary and necessary business 
expense. Section 162(m) (relating to remuneration expenses for 
certain executives that are in excess of $1 million) and 
section 280G (relating to excess parachute payments) provide 
explicit limitations on the deductibility of certain 
compensation expenses in the case of corporate employers, and 
section 4999 imposes an additional tax of 20 percent on the 
recipient of an excess parachute payment. The Emergency 
Economic Stabilization Act of 2008 (``EESA'') limits the amount 
of payments that may be deducted as reasonable compensation by 
certain financial institutions that receive financial 
assistance from the United States pursuant to the troubled 
asset relief program (``TARP'') established under EESA by 
modifying the section 162(m) and section 280G limits. EESA also 
provided non-tax rules relating to the compensation that is 
payable by such a financial institution (the ``TARP executive 
compensation rules'').

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

In general
      The provision amends the TARP executive compensation 
rules to limit payment of ``excessive bonuses'' to ``covered 
individuals'' by financial institutions whose preferred stock 
was purchased by the United States using funds provided under 
TARP. Excessive bonuses are defined as the portion of an 
``applicable bonus payment'' made to a covered individual in 
excess of $100,000.
      An applicable bonus payment is any bonus payment that is 
(1) paid, or payable, for services performed by a covered 
individual in a tax year of the financial institution ending in 
2008, and (2) the amount of which was communicated to the 
covered individual at some time between January 1, 2008, and 
January 31, 2009, or was based on a resolution of the financial 
institution's board of directors and adopted before the end of 
the financial institution's 2008 taxable year. For purposes of 
determining an applicable bonus, any bonus payments that relate 
to a taxable year prior to 2008, but which are wholly or 
partially contingent on the performance of services in the 2008 
taxable year, are disregarded. In addition, any conditions on 
2008 bonuses that require the covered individual to perform 
services in a subsequent taxable year are also disregarded 
(e.g., if a 2008 bonus is dependent on the performance of 
services in 2009, the bonus is still considered to be an 
applicable bonus if it meets all of the other requirements for 
such status).
      The definition of bonus includes discretionary payments 
for services provided that are in addition to amounts payable 
for regular services performed and is payable in cash or 
property other than (1) the stock of the financial institution 
or (2) an interest in a troubled asset (within the meaning of 
EESA) held directly or indirectly by the financial institution. 
Bonuses do not include commissions, welfare and fringe 
benefits, or expense reimbursements.
      A covered individual is any director, officer, or other 
employee of a financial institution or its controlled group of 
corporations.\225\
---------------------------------------------------------------------------
    \225\ Members of a controlled group of corporations are determined 
as provided under section 52(a).
---------------------------------------------------------------------------
Stock redemption
      If a financial institution pays one or more excessive 
bonuses to one or more covered individuals, the financial 
institution must redeem from the government an amount of 
preferred stock equal to the aggregate amount of all excessive 
bonuses paid or payable to such covered individual or 
individuals. The redemption obligation exists notwithstanding 
any otherwise applicable restrictions on the redeemability of 
the preferred stock. The preferred stock must be redeemed by 
the later of: 120 days after date of enactment (for excessive 
bonuses that had already been paid) or the day before the 
excessive bonus (or a portion thereof) is paid.
Excise tax
      An excise tax is imposed on any financial institution 
that pays one or more excessive bonuses but does not redeem its 
preferred stock from the government in a timely manner. The tax 
is equal to 35 percent of the amount of preferred stock that 
the financial institution should have redeemed from the 
government (i.e., the amount of the excessive bonus). For 
example, if a financial institution granted a 2008 bonus of $1 
million to its chief executive officer, and the financial 
institution did not redeem $900,000 worth of preferred stock 
from the United States, it must pay a tax of $315,000 ($1 
million minus $100,000 times 35 percent). Once a financial 
institution pays the 35 percent tax, the institution is no 
longer required to redeem from the government an amount of 
preferred stock equal to the amount of the excessive bonus. 
That is, a financial institution that pays an excessive bonus 
must either redeem stock or pay an excise tax on that bonus but 
it will not be required to do both for any single bonus.
      Payment of the excise tax does not have any effect on 
otherwise applicable agreements to redeem preferred stock 
purchased by the Federal Government using funds provided by 
TARP.
Effective Date
      The provision applies to a failure to redeem preferred 
stock that occurs after the date of enactment.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the Senate 
amendment provision.

                      F. Trade Related Provisions

                  1. TRADE ADJUSTMENT ASSISTANCE \226\
---------------------------------------------------------------------------

    \226\ Descriptions prepared by the majority staffs of the House 
Committee on Ways and Means and the Senate Committee on Finance.
---------------------------------------------------------------------------

                              I. OVERVIEW

      The conference report amends the Trade Act of 1974 (``the 
Trade Act'') to reauthorize trade adjustment assistance 
(``TAA''), to extend trade adjustment assistance to service 
workers, communities, firms, and farmers, and for other 
purposes.

                             II. HOUSE BILL

      No provision.

                            III. SENATE BILL

      First, the Senate bill amends section 245(a) of the Trade 
Act of 1974 to extend the authorization for the TAA for Workers 
program until December 31, 2010. Second, the proposal amends 
section 246(b)(1) of the Trade Act of 1974 to extend the 
authorization for Alternative Trade Adjustment Assistance 
program by two years. Third, the proposal amends section 256(b) 
of the Trade Act of 1974 to extend the authorization for the 
TAA for Firms program until December 31, 2010. Fourth, the 
proposal amends section 298(a) of the Trade Act of 1974 to 
extend the TAA for Farmers program until December 31, 2010. 
Fifth, the proposal amends section 285 of the Trade Act of 1974 
to extend the overall termination date of the TAA programs 
until December 31, 2010. Sixth, the proposal provides that 
these amendments shall have an effective date of January 1, 
2008. Seventh, the proposal includes a Sense of the Senate that 
a TAA for Communities program should be revived.

                         IV. CONFERENCE REPORT

           A. Part I--Trade Adjustment Assistance for Workers

  1. SUBPART A--TRADE ADJUSTMENT ASSISTANCE FOR SERVICE SECTOR WORKERS

Extension of Trade Adjustment Assistance to Service Sector and Public 
        Agency Workers; Shifts in Production (Section 1701 (amending 
        Sections 221, 222, 231, 244, and 247 of the Trade Act of 1974))
Present Law
      Section 222 of the Trade Act provides trade adjustment 
assistance to workers in a firm or an appropriate subdivision 
of a firm if (1) a significant number or proportion of the 
workers in the firm or subdivision have become (or are 
threatened to become) totally or partially separated; (2) the 
firm produces an article; and (3) the separation or threat of 
same is due to trade with foreign countries.
      There are three ways to demonstrate the connection 
between job separation and trade. The Secretary of Labor (``the 
Secretary'') must determine either (1) that increased imports 
of articles ``like or directly competitive'' with articles 
produced by the firm have contributed importantly to the 
separation and to an absolute decrease in the firm's sales or 
production, or both; (2) that the workers' firm has shifted its 
production of articles ``like or directly competitive'' with 
articles produced by the firm to a trade agreement partner of 
the United States or a beneficiary country under the Andean 
Trade Preference Act, the African Growth and Opportunity Act, 
or the Caribbean Basin Economic Recovery Act; or (3) that the 
firm has shifted production of such articles to another country 
and there has been or is likely to be an increase in imports of 
like or directly competitive articles.
      Section 222 of the Trade Act also provides TAA to 
adversely affected secondary workers. Eligible secondary 
workers include (1) secondary workers that supply directly to 
another firm component parts for articles that were the basis 
for a certification of eligibility for TAA benefits; and (2) 
downstream workers that were affected by trade with Mexico or 
Canada.
      When the Department investigates workers' petitions, it 
requires firms and customers to certify the questionnaires that 
the workers' firm and the firm's customers submit. Present law 
also authorizes the Secretary to use subpoenas to obtain 
information in the course of its investigation of a petition. 
The law provides for the imposition of criminal and civil 
penalties for providing false information and failing to 
disclose material information, but the penalties apply only to 
petitioners.
Explanation of Provision
      The provision would amend section 222 of the Trade Act to 
expand the availability of TAA to include workers in firms in 
the services sector. Like workers in firms that produce 
articles, workers in firms that supply services would be 
eligible for TAA if a significant number or proportion of the 
workers have become (or are threatened to become) totally or 
partially separated, and if increased imports of services 
``contributed importantly'' to the workers' separation or 
threat of separation.
      As with articles, there would be three ways for service 
sector workers to demonstrate that they are eligible for TAA. 
First, TAA would be available if increased imports of services 
like or directly competitive with services supplied by the firm 
have contributed importantly to the separation and to an 
absolute decrease in the firm's sales or production, or both. 
Second, TAA would be available in ``shift in supply'' 
(``service relocation'') scenarios, if the workers' firm or 
subdivision established a facility in a foreign country to 
supply services like or directly competitive with the services 
supplied by the trade-impacted workers. Third, TAA would be 
available in ``foreign contracting'' scenarios, if the workers' 
firm or subdivision acquired from a service supplier in a 
foreign country services like or directly competitive with the 
services that the trade-impacted workers had supplied. In each 
scenario, the relevant activity would need to have contributed 
importantly to the workers' separation or threat of separation.
      The provision also expands the ``shift in production'' 
prong of present law by eliminating the requirement in section 
222 that the shift be to a trade agreement partner of the 
United States or a country that benefits from a unilateral 
preference program. Under the modified provision, if workers 
are separated because their firm shifts production from a 
domestic facility to any foreign country, the separated workers 
would potentially be eligible for TAA. Additionally, there 
would be no requirement to demonstrate separately that the 
shift was accompanied by an increase of imports of products 
like or directly competitive with those produced by the 
workers' firm or subdivision.
      The provision also amends section 222 to make workers at 
public agencies eligible for TAA. Under the modified provision, 
if a public agency acquires services from a foreign country 
that are like or directly competitive with the services that 
the public agency supplies, and if the acquisition contributed 
importantly to the workers' separation or threat thereof, the 
workers would be able to seek TAA benefits.
      The provision also amends section 222 to expand the 
universe of adversely affected secondary workers that could be 
eligible for TAA. First, the provision adds firms that supply 
testing, packaging, maintenance, and transportation services to 
the list of downstream producers whose workers potentially are 
eligible for TAA. Second, workers at firms that supply services 
used in the production of articles or in the supply of services 
would also become potentially eligible for benefits. Third, the 
provision permits downstream producers to be eligible for TAA 
if the primary firm's certification is linked to trade with any 
country, not just Canada or Mexico. The provision requires the 
Secretary to obtain information that the Secretary determines 
necessary to make certifications from workers' firms or 
customers of workers' firms through questionnaires and in such 
other manner as the Secretary considers appropriate. The 
provision also permits the Secretary to seek additional 
information from other sources, including (1) officials or 
employees of the workers' firm; (2) officials of customers of 
the firm; (3) officials of unions or other duly recognized 
representatives of the petitioning workers; and (4) one-stop 
operators. The provision states that the Secretary shall 
require a firm or customer to certify all information obtained 
through questionnaires, as well as other information that the 
Secretary relies upon in making a determination under section 
223, unless the Secretary has a reasonable basis for 
determining that the information is accurate and complete.
      The provision states that the Secretary shall require a 
worker's firm or a customer of a worker's firm to provide 
information by subpoena if the firm or customer fails to 
provide the information within 20 days after the date of the 
Secretary's request, unless the firm or customer demonstrates 
to the Secretary's satisfaction that the firm or customer will 
provide the information in a reasonable period of time. The 
Secretary retains the discretion to issue a subpoena sooner 
than 20 days if necessary. The provision also establishes 
standards for the protection of confidential business 
information submitted in response to a request made by the 
Secretary.
      The provision amends the penalties provision in section 
244 of the Trade Act to cover persons, including persons who 
are employed by firms and customers, who provide information 
during an investigation of a worker's petition.
      Finally, the provision amends section 247 of the Trade 
Act to add definitions for certain key terms and makes various 
conforming changes to sections 221 and 222.
Reasons for Change
      Most service sector workers presently are ineligible for 
TAA benefits because of a statutory requirement that the 
workers must have been employed by a firm that produces an 
``article.'' Of the 800 TAA petitions denied in FY2006, almost 
half were denied for this reason. Most of the denied service-
related petitions came from two service industries: business 
services (primarily computer-related) and airport-related 
services (e.g., aircraft maintenance). In April 2006, the 
Department of Labor issued a regulation expanding TAA 
eligibility to software workers that partially, but not fully, 
addresses the service worker coverage issue. See GAO Report 07-
702. The provision fully addresses the issue by making service 
sector workers eligible for TAA on equivalent terms to workers 
at firms that produce articles.
      The provision expands the ``shift in production'' prong 
of present law for similar reasons. Under present law, a worker 
whose firm relocates to China is not necessarily eligible for 
TAA; such worker must also show that the relocation to China 
will result in increased imports into the United States. In 
contrast, a worker whose firm relocates to a country with which 
the United States has a trade agreement (e.g., Mexico, Israel, 
Chile) does not need to show increased imports. The provision 
eliminates this disparate treatment by making TAA benefits 
available in both scenarios on the same terms.
      Present law also fails to cover foreign contracting 
scenarios, where a company closes a domestic operation and 
contracts with a company in a foreign country for the goods or 
services that had been produced in the United States. For 
example, if a U.S. airline lays off a number of its U.S.-based 
maintenance personnel and contracts with an independent 
aircraft maintenance company in a foreign country, the laid off 
personnel are not covered under present law, even if they lost 
their jobs because of foreign competition. The Conferees 
believe such workers should be potentially eligible for TAA 
benefits.
      Similarly, the Conferees believe that workers who supply 
services at public agencies should be treated the same as their 
private-sector counterparts: if such workers are laid off 
because their employer contracts with a supplier in a foreign 
country for the services that the workers had supplied, the 
workers should be able to seek TAA benefits.
      The provision provides that in cases involving production 
or service relocation or foreign contracting, a group of 
workers (including workers in a public agency) may be certified 
as eligible for adjustment assistance if the shift 
``contributed importantly'' to such workers' separation or 
threat of separation. This requirement is identical to the 
existing causal link requirement in section 222(a)(2)(A)(iii), 
which establishes the criteria for certifying workers on the 
basis of ``increased imports.''
      The Conferees understand that the Department of Labor has 
interpreted the ``contributed importantly'' requirement in 
section 222(a)(2)(A)(iii) to mean that imports must have been a 
factor in the layoffs or threat thereof. Or, in other words, 
under present law the Secretary of Labor will certify a group 
of workers as eligible for assistance if the facts demonstrate 
a causal nexus between increased imports and the workers' 
separation or threat thereof. The Conferees approve of the 
Department's interpretation of the ``contributed importantly'' 
requirement and expect that the Department will continue to 
apply it in future cases involving increased imports. 
Similarly, the Conferees also understand that the existing 
language in section 222(a)(2)(B) addressing production 
relocation contains an implicit causation requirement. Thus, 
the Department has required production relocation under section 
222(a)(2)(B) to be a factor in the workers' separation or 
threat thereof. The provision makes the requirement explicit. 
The Conferees emphasize that by making the ``contributed 
importantly'' requirement in section 222(a)(2)(B) explicit, no 
change in the Department's administration of cases involving 
production relocation is intended. The Conferees expect that 
this change in section 222 would not affect the outcomes that 
the Department has been reaching under present law in such 
cases, and will not alter outcomes in future cases. Thus, as 
has been the case, if the Department finds that production 
relocation was a factor in the layoff (or threat thereof) of a 
group of workers in the United States, the Conferees expect 
that the Secretary will certify such workers as eligible for 
adjustment assistance.
      Finally, with respect to certifications involving 
production or service relocations or foreign contracting, the 
Conferees recognize that there may be delays in time between 
when the domestic layoffs (or threat of layoffs) occur, and 
when the production or service relocation or foreign 
contracting occurs. The Conferees intend that the Department of 
Labor certify petitions where there is credible evidence that 
production or service relocation or foreign contracting will 
occur, and when the other requirements of the statute are met. 
Such evidence could include the conclusion of a contract 
relating to foreign production of the article, supply of 
services, or acquisition of the article or service at issue; 
the construction, purchase, or renting of foreign facilities 
for the production of the article, supply of the service, or 
acquisition of the article or service at issue; or certified 
statements by a duly authorized representative at the workers' 
firm that the firm intends to engage in production or service 
relocation or foreign contracting. The Conferees are aware of 
concerns that the Secretary may rely on inaccurate information 
in making its determinations, including when denying 
certification of petitions. The provision addresses these 
concerns by requiring the Secretary to obtain certifications of 
all information obtained from a firm or customer through 
questionnaires as well as other information from a firm or 
customer that the Secretary relies upon in making a 
determination under section 223, unless the Secretary has a 
reasonable basis for determining that the information is 
accurate and complete.
      The Conferees are also aware of concerns that some firms 
and customers fail to respond to the Secretary's requests for 
information or provide inaccurate or incomplete information. 
The subpoena, confidentiality of information, and penalty 
language included in this provision are designed to address 
these problems.
      The provision would also apply if the Secretary needs to 
obtain information from a customer's customer, such as in an 
investigation involving component part suppliers.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Group Eligibility--Component Parts (Section 1701 (amending Section 222 
        of the Trade Act of 1974))
Present Law
      Under present law, U.S. suppliers of inputs (i.e., 
component parts) may be certified for TAA benefits only 
pursuant to the secondary workers provision of section 222(b), 
which requires that the downstream producer have employed a 
group of workers that received TAA certification. Thus, for 
example, domestic producers of taconite have been unable to 
obtain certification for TAA benefits when downstream producers 
of steel slab have not obtained certification. Additionally, 
U.S. suppliers of inputs have been unable to obtain 
certification for TAA benefits in situations in which there is 
a shift in imports from articles incorporating their inputs to 
articles incorporating inputs produced outside the United 
States.
Explanation of Provision
      The provision allows for the certification of workers in 
a firm when imports of the finished article incorporating 
inputs produced outside the United States that are like or 
directly competitive with imports of the finished article 
produced using U.S. inputs have increased and the firm has met 
the other criteria for certification, including a significant 
number of workers being totally or partially separated, a 
decrease in sales or production, and the increase in imports 
has contributed importantly to the workers' separation.
      For example, under the new provision, workers in a U.S. 
fabric plant may be certified if the U.S. firm sold fabric to a 
Honduran apparel manufacturer for production of apparel 
subsequently imported into the United States and (1) the 
Honduran apparel manufacturer ceased purchasing, or decreased 
its purchasing, of fabric from the U.S. producer and, instead, 
used fabric from another country; or (2) imports of apparel 
from another country using non-U.S. fabric that are like or 
directly competitive with imports of Honduran apparel using 
U.S. fabric have increased.
      Prior to certification, the Department of Labor would 
also have to determine that the firm met the other statutory 
requirements for certification, including that a significant 
number of workers had been totally or partially separated, or 
are threatened to become totally or partially separated, the 
sales or production of the petitioning fabric firm had 
decreased, and the increased imports of apparel using non-U.S. 
fabric had contributed importantly to that decrease and to the 
workers' separation or threat thereof.
      Likewise, workers in a U.S. picture tube manufacturing 
plant that sells picture tubes to a Mexican television 
manufacturer for production of televisions subsequently 
imported into the United States would be certified under 
section 222 if the U.S. manufacturer's sales or production of 
picture tubes decreased and (1) the manufacturer of televisions 
located in Mexico switched to picture tubes produced in another 
country; or (2) imports of televisions from another country 
using non-U.S. picture tubes that are like or directly 
competitive with imports of Mexican televisions using U.S. 
picture tubes have increased.
      As in the apparel example above, prior to certification, 
the Department of Labor would also have to determine that the 
picture tube firm met the other statutory requirements for 
certification, including that a significant number of workers 
had been totally or partially separated, or are threatened to 
become totally or partially separated, the sales or production 
of the petitioning picture tube firm had decreased, and the 
increased imports of televisions using non-U.S. picture tubes 
had contributed importantly to that decrease and to the 
workers' separation or threat thereof.
Reasons for Change
      Section 222(a) is being amended to provide improved TAA 
coverage for U.S. suppliers of inputs, and to address 
situations where suppliers of component parts have been unable 
to obtain certification for TAA benefits because of gaps in 
coverage under present law.
      The amended language is broad enough to encompass both 
the situation in which the input producer's customer switches 
to inputs produced outside the United States, and the situation 
in which the input producer's customer is displaced by a third 
country producer, because both situations may equally impact 
the sales or production of the domestic input producer.
      Additionally, for purposes of section 
222(a)(2)(A)(ii)(III), as in other instances, when company-
specific data is unavailable, the Secretary may reasonably rely 
on such aggregate data or such other information as the 
Secretary deems appropriate.
      As reflected in the examples above, the Conferees intend 
that the Secretary of Labor should interpret the term component 
parts, as used in section 222(a)(2)(A)(ii)(III), flexibly. For 
example, the Conferees intend that uncut fabric would be 
considered to be a component part of apparel for purposes of 
this provision, even though, for purposes of other trade laws, 
U.S. Customs and Border Protection might not consider such 
fabric to be a component part.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Separate Basis for Certification (Section 1702 (amending Section 222 of 
        the Trade Act of 1974))
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision amends section 222(c) of the Trade Act by 
providing that a petition filed under section 221 of the Trade 
Act on behalf of a group of workers in a firm, or appropriate 
subdivision of a firm, meets the requirements of subsection 
222(a) of the Trade Act if the firm is publicly identified by 
name by the U.S. International Trade Commission (``ITC'') as a 
member of a domestic industry in (1) an affirmative 
determination of serious injury or threat thereof in a global 
safeguard investigation under section 202(b)(1) of the Trade 
Act; (2) an affirmative determination of market disruption or 
threat thereof in a China safeguard investigation under section 
421(b)(1) of the Trade Act; or (3) an affirmative final 
determination of material injury or threat thereof in an 
antidumping or countervailing duty investigation under section 
705(b)(1)(A) or 735(b)(1)(A) of the Tariff Act of 1930 (19 
U.S.C. 1671d(b)(1)(A) and 1673d(b)(1)(A)), but only if the 
petition is filed within 1 year of the date that notice of the 
affirmative ITC determination is published in the Federal 
Register (or, in the case of a global safeguard investigation 
under section 202(b)(1), a summary of the report submitted to 
the President by the ITC under section 202(f)(1) is published 
in the Federal Register under section 202(f)(3)) and the 
workers on whose behalf such petition was filed have become 
totally or partially separated from such workers' firm within 
either that 1-year period or the 1-year period preceding the 
date of such publication.
Reasons for Change
      The Conferees note that the provision allows workers in 
firms publicly identified by name in certain ITC investigations 
to be eligible for adjustment assistance on the basis of an 
affirmative injury determination by the ITC under certain 
circumstances, and without an additional determination by the 
Secretary of Labor that either increased imports of a like or 
directly competitive article contributed importantly to such 
workers' separation or threat of separation (and to an absolute 
decline in the sales or production, or both, of such workers' 
firm or subdivision), or that a shift in production of articles 
contributed importantly to such workers' separation or threat 
of separation.
      In order for workers to avail themselves of this 
provision, the petition must be filed with the Secretary (and 
with the Governor of the State in which such workers' firm or 
subdivision is located) within 1 year of the date of 
publication in the Federal Register of the applicable notice 
from the ITC and the workers on whose behalf such petition was 
filed must have become totally or partially separated from such 
workers' firm within either that 1-year period or the 1-year 
period preceding such date of publication.
      If a petition is filed on behalf of such workers more 
than 1 year after the date that the applicable notice from the 
ITC is published in the Federal Register, it will remain 
necessary for the Secretary of Labor to investigate the 
petition and determine that the statutory criteria for 
certifying such workers in section 222 are satisfied.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Determinations by the Secretary of Labor (Section 1703 (amending 
        Section 223 of the Trade Act of 1974))
Present Law
      The Secretary is required to investigate petitions filed 
by workers and determine whether such workers are eligible for 
TAA benefits. A summary of such group eligibility 
determination, together with the Secretary's reasons for making 
the determination, must be promptly published in the Federal 
Register. Similarly, a termination of a certification, together 
with the Secretary's reasons for the termination, must be 
promptly published in the Federal Register.
Explanation of Provision
      This section requires the Secretary to publish (1) a 
summary of a group eligibility determination, together with the 
Secretary's reasons for the determination; and (2) a 
certification termination, together with the Secretary's 
reasons for the termination, promptly on the Department's 
website (as well as in the Federal Register). The section also 
requires the Secretary to establish standards for investigating 
petitions, and criteria for making determinations. Moreover, 
the Secretary is required to consult with the Senate Committee 
on Finance (``Senate Finance Committee'') and the Committee on 
Ways and Means of the House of Representatives (``House 
Committee on Ways and Means'') 90 days prior to issuing a final 
rule on the standards.
Reasons for Change
      To improve accountability, transparency, and public 
access to this information, the Secretary should be required to 
post (1) a summary of a group eligibility determination, 
together with the Secretary's reasons for the determination; 
and (2) a certification termination, together with the 
Secretary's reasons for the termination, promptly on the 
Department's website (as well as in the Federal Register). The 
Secretary also should have objective and transparent standards 
for investigating petitions, and criteria for the basis on 
which an eligibility determination is made. The Secretary 
should consult with Senate Finance and House Ways and Means to 
ensure the intent of Congress is accurately reflected in such 
standards.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Monitoring and Reporting Relating to Service Sector (Section 1704 
        (amending Section 282 of the Trade Act of 1974))
Present Law
      Present law requires the Secretaries of Commerce and 
Labor to establish and maintain a program to monitor imports of 
articles into the United States, including (1) information 
concerning changes in import volume; (2) impacts on domestic 
production; and (3) impacts on domestic employment in 
industries producing like or competitive products. Summaries 
must be provided to the Adjustment Assistance Coordinating 
Committee, the ITC, and Congress.
Explanation of Provision
      The provision is renamed ``Trade Monitoring and Data 
Collection.'' The provision requires the Secretaries of 
Commerce and Labor to monitor imports of services (in addition 
to articles). To address data limitations, the provision 
requires the Secretary of Labor, not later than 90 days after 
enactment, to collect data on impacted service workers (by 
State, industry, and cause).
      Finally, it requires the Secretary of Commerce, in 
consultation with the Secretary of Labor, to report to 
Congress, not later than one year after enactment, on ways to 
improve the timeliness and coverage of data regarding trade in 
services.
Reasons for Change
      Existing data on trade in services are sparse. Because of 
the increases in trade in services, the Conferees believe that 
it is critical that the government collect data on imports of 
services and the impact of these imports on U.S. workers. Such 
information will be useful when considering any further 
refinement of TAA that Congress may contemplate. More 
generally, the additional data will give U.S. businesses and 
workers insight into trade in services, helping them better 
compete in the global marketplace.
Effective Date
      The provision goes into effect on the date of enactment 
of this Act.

  2. SUBPART B--INDUSTRY NOTIFICATIONS FOLLOWING CERTAIN AFFIRMATIVE 
                             DETERMINATIONS

Notifications following certain affirmative determinations (Section 
        1711 (amending Section 224 of the Trade Act of 1974))
Present Law
      Present law includes a provision requiring the ITC to 
notify the Secretary of Labor when it begins a section 201 
global safeguard investigation. The Secretary must then begin 
an investigation of (1) the number of workers in the relevant 
domestic industry; and (2) whether TAA will help such workers 
adjust to import competition. The Secretary of Labor must 
submit a report to the President within 15 days of the ITC's 
section 201 determination. The Secretary's report must be made 
public and a summary printed in the Federal Register.
Explanation of Provision
      The provision expands the notification requirement to 
instruct the ITC to notify the Secretary of Labor and the 
Secretary of Commerce, or the Secretary of Agriculture when 
dealing with agricultural commodities, when it issues an 
affirmative determination of injury or threat thereof under 
sections 202 or 421 of the Trade Act, an affirmative safeguard 
determination under a U.S. trade agreement, or an affirmative 
determination in a countervailing duty or dumping investigation 
under sections 705 or 735 of the Tariff Act of 1930. 
Additionally, the provision requires the President to notify 
the Secretaries of Labor and Commerce upon making an 
affirmative determination in a safeguard investigation relating 
to textile and apparel articles. Whenever an injury 
determination is made, the Secretary of Labor must notify 
employers, workers, and unions of firms covered by the 
determination of the workers' potential eligibility for TAA 
benefits and provide them with assistance in filing petitions. 
Similarly, the Secretary of Commerce must notify firms covered 
by the determination of their potential eligibility for TAA for 
Firms and provide them with assistance in filing petitions, and 
the Secretary of Agriculture must do the same for 
investigations involving agricultural commodities.
Reasons for Change
      A significant hurdle to ensuring that workers and firms 
avail themselves of TAA benefits is the lack of awareness about 
the program. In situations like these, where the ITC has made a 
determination that a domestic industry has been injured as a 
result of trade, giving notice to the workers and firms in that 
industry of TAA's potential benefits is warranted.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Notification to Secretary of Commerce (Section 1712 (amending Section 
        225 of the Trade Act of 1974))
Present Law
      Under present law, the Secretary of Labor must provide 
workers with information about TAA and provide whatever 
assistance is necessary to help petitioners apply for TAA. The 
Secretary must also reach out to State Vocational Education 
Boards and their equivalent agencies, as well as other public 
and private institutions, about affirmative group certification 
determinations and projections of training needs.
      The Secretary must also notify each worker who the State 
has reason to believe is covered by a group certification in 
writing via U.S. Mail of the benefits available under TAA. If 
the worker lost his job before group certification, then the 
notice occurs at the time of certification. If the worker lost 
her job after group certification, then the notice occurs at 
the time the worker loses her job. The Secretary must also 
publish notice in the newspapers circulating in the area where 
the workers reside.
Explanation of Provision
      The provision requires the Secretary of Labor, upon 
issuing a certification, to notify the Secretary of Commerce of 
the identity of the firms covered by a certification.
Reasons for Change
      Firms employing workers certified as eligible for TAA 
benefits may not be aware that they may be eligible for 
assistance under the TAA for Firms program. Requiring the 
Secretary of Labor to notify the Secretary of Commerce when 
workers at a firm are certified as TAA eligible will help put 
these firms on notice of their potential TAA for Firms 
eligibility.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.

                     3. SUBPART C--PROGRAM BENEFITS

Qualifying requirements for workers (Section 1721 (amending Section 231 
        of the Trade Act of 1974))
Present Law
      Present law authorizes a worker to receive TAA income 
support (known as ``Trade Readjustment Allowance'' or ``TRA'') 
for weeks of unemployment that begin 60 days after the date of 
filing the petition on which certification was granted.
      To qualify for TAA benefits, a worker must have (1) lost 
his job on or after the trade impact date identified in the 
certification, and within two years of the date of the 
certification determination; (2) been employed by the TAA 
certified firm for at least 26 of the 52 weeks preceding the 
layoff; and (3) earned at least $30 or more a week in that 
employment. A worker must qualify for, and exhaust, his State 
unemployment compensation (``UC'') benefits before receiving a 
weekly TRA.
      Further, to receive TRA, a worker must be enrolled in an 
approved training program by the later of 8 weeks after the TAA 
petition was certified, or 16 weeks after job loss (the ``8/
16'' deadline). The 8/16 deadline can be extended in certain 
limited circumstances. Workers may also receive limited waivers 
of the 8/16 training enrollment deadline.
      Present law provides for waivers in the following 
circumstances: (1) the worker has been or will be recalled by 
the firm; (2) the worker possesses marketable skills; (3) the 
worker is within 2 years of retirement; (4) the worker cannot 
participate in training because of health reasons; (5) training 
enrollment is unavailable; or (6) training is not reasonably 
available to the worker (nothing suitable, no reasonable cost, 
no training funds).
      Waivers last 6 months, unless the Secretary determines 
otherwise, and will be revoked if the basis for the waiver no 
longer exists. States have the authority to issue waivers. By 
regulation, State and local agencies must ``review'' the 
waivers every thirty days.
      If a worker fails to begin training or has stopped 
participating in training without justifiable cause or if the 
worker's waiver is revoked, the worker will receive no income 
support until the worker begins or resumes training.
Explanation of Provision
      The provision amends existing law to change the date on 
which a worker can receive TAA income support from 60 days from 
the date of the petition to the date of certification. The 
provision strikes the 8/16 rule and extends the deadline for 
trade-impacted workers. If a worker lost his job before the 
certification, then the worker has 26 weeks from the date of 
certification to enroll in training. If the worker lost his job 
after certification, he has 26 weeks from the date he lost his 
job to enroll in training.
      The provision also gives the Secretary the authority to 
waive the new 26-week training enrollment deadline if a worker 
was not given timely notice of the deadline.
      The provision clarifies that the ``marketable skills'' 
training waiver may apply to workers who have post-graduate 
degrees from accredited institutions of higher education. The 
provision requires the State to review training waivers 3 
months after such waiver is issued, and every month thereafter.
Reasons for Change
      The Conferees believe that the 60-day rule makes little 
sense and leads to the following scenario: a worker laid off 
well before certification could exhaust his unemployment 
insurance and yet have to wait to receive the trade 
readjustment assistance to which the worker was otherwise 
entitled.
      The Government Accountability Office, the Department of 
Labor, the states, and workers' advocacy groups have criticized 
the 8/16 deadline as being too short. First, these deadlines 
often occur while the worker is still on traditional UI (most 
workers receive up to 26 weeks of State UI compensation). 
During those 26 weeks, most workers are actively engaged in a 
job search and are not focused on retraining. Forcing workers 
to enroll in training at such an early stage can discourage 
active job search. Second, typically, a worker decides to 
consider training only after an extended period of unsuccessful 
job searching. Under present law, workers are only beginning to 
consider training options close to the 8/16 deadline, and often 
make hurried decisions about training merely to preserve their 
TAA eligibility. Third, when large numbers of certified workers 
are laid off all at once, it can be difficult for TAA 
administrators to perform adequate training assessments and 
meet the 8/16 deadline. See GAO Report 04-1012. Therefore, 
extending the enrollment deadlines to the later of 26 weeks 
after layoff or certification would provide a reasonable period 
for a worker to search for employment and consider training 
options, as well as for the State to assess workers and meet 
the enrollment deadlines.
      While recognizing the necessity of waivers in certain 
circumstances, states have identified the monthly review of 
waivers to be burdensome. Many states have complained that 
processing the sheer volume of waivers requires significant 
administrative time and cost. For example, according to GAO, 
59,375 waivers were issued in 2005 (and 60,948 in 2004). The 
new requirement that waivers be reviewed initially three months 
rather than one month after they are issued reduces the 
administrative burden while continuing to provide for 
appropriate review, thus allowing the State to ensure the 
worker continues to qualify for the waiver. The provision does 
not require a review of waivers issued on the basis that an 
adversely affected worker is within two years of being eligible 
for Social Security benefits or a private pension. The status 
of such workers is unlikely to change and thus, automatic 
review of their waivers is a waste of resources. States still 
retain the discretion to review such waivers if circumstances 
warrant. When a worker has failed to meet the training 
enrollment deadline through no fault of his own, the Conferees 
believe that there should be redress. Under present law, there 
is none. The Department of Labor has acknowledged that this is 
a problem.
 Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Weekly amounts (Section 1722 (amending Section 232 of the Trade Act of 
        1974))
Present Law
      TRA is the income support that workers receive weekly. It 
is equal to the worker's weekly UI benefit. TRA is divided into 
two main periods: ``Basic TRA'' and ``Additional TRA.'' Under 
present law, because of the operation of State UI laws, workers 
who are in training and working part-time run the risk of 
resetting their UI benefits (and their TRA benefit) at the 
lower part-time level which would leave them with insufficient 
income support to continue with training.
Explanation of Provision
      The provision amends existing law to (1) disregard, for 
purposes of determining a worker's weekly TRA amount, earnings 
from a week of work equal to or less than the worker's most 
recent unemployment insurance benefits where the worker is 
working part-time and participating in full-time training; and 
(2) ensure that workers will retain the amount of income 
support provided initially under TRA even if a new UI benefit 
period (with a lower weekly amount) is established due to the 
worker obtaining part-time or short-term full-time employment.
Reasons for Change
      The Conferees believe that the disincentive to combining 
full-time training and part-time work needs to be removed so 
that workers who might not otherwise be in training, but for 
the additional income they earn working part-time, are not 
excluded from the program.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Limitations on Trade Readjustment Allowances; Allowances for Extended 
        Training and Breaks in Training (Section 1723 (amending Section 
        233(a) of the Trade Act of 1974))
Present Law
      Basic TRA is available for 52 weeks minus the number of 
weeks of unemployment insurance for which the worker was 
eligible (usually 26 weeks). Basic TRA must be used within 104 
weeks after the worker lost his job (130 weeks for workers 
requiring remedial training). Any Basic TRA not used in that 
period is foregone.
      Additional TRA is available for up to 52 more weeks if 
the worker is enrolled in and participating in training. The 
worker receives Additional TRA only for weeks in training. A 
worker on an approved break in training of 30 days or less is 
considered to be participating in training and therefore 
eligible for TRA during that period. Additional TRA must 
otherwise be used over a consecutive period (e.g., 52 
consecutive weeks).
      Participation in remedial training makes a worker 
eligible for up to 26 more weeks of TRA.
Explanation of Provision
      The provision increases the number of weeks for which a 
worker can receive Additional TRA from 52 to 78 and expands the 
time within which a worker can receive such Additional TRA from 
52 weeks to 91 weeks.
Reasons for Change
      The Conferees believe that the program must provide 
incentives for eligible workers to participate in long term 
training, such as a two-year Associate's degree, a nursing 
certification, or completion of a four-year degree (if that 
four-year degree was previously initiated or if the worker will 
complete it using non-TAA funds).
      Typically, workers cannot participate in a training 
program without TAA income support. Thus, because many workers 
exhaust at least some of their basic TRA while they seek 
another job instead of beginning training, they are limited to 
shorter-term training options, both practically and because 
training approvals are usually tied to the period of TRA 
eligibility. The purpose of the additional 26 weeks of income 
support, for a total of 78 weeks of additional TRA, is to 
provide an opportunity for workers to engage in long term 
training that might not have otherwise been a viable option.
      The Conferees note that the Department of Labor's 
practice is to approve, before training begins, a training 
program consisting of a course or related group of courses 
designed for an individual to meet a specific occupational 
goal. 20 CFR 617.22(f)(3)(i). Nothing in this section is 
intended to change current Department of Labor practice. The 
additional 26 weeks of income support are intended to provide 
more options for long term training at the time when this 
individual training program is designed and approved.
      In short, the new, additional income support is available 
only for workers in long term training.
      The Conferees note that, at the same time, it is not 
their intent to limit the Secretary's ability, in certain, 
limited circumstances, to modify a worker's training program 
where the Secretary determines that the current training 
program is no longer appropriate for the individual.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Special Rules for Calculation of Eligibility Period (Section 1724 
        (amending Section 233 of the Trade Act of 1974))
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision states that periods during which an 
administrative or judicial appeal of a negative determination 
is pending will not be counted when calculating a worker's 
eligibility for TRA. Moreover, the provision also grants 
justifiable cause authority to the Secretary to extend certain 
applicable deadlines concerning receipt of Basic and Additional 
TRA. Further, the provision allows workers called up for active 
duty military or full-time National Guard service to restart 
the TAA enrollment process after completion of such service.
      The provision also strikes the 210-day rule, which 
mandates that a worker is not eligible for additional TRA 
payments if the worker has not applied for training 210 days 
from certification or job loss, whichever is later.
Reasons for Change
      The Conferees believe that tolling of deadlines is 
necessary; otherwise judicial relief obtained from a successful 
court challenge would be meaningless, as the decision of the 
court will inevitably take place after the TAA program 
eligibility deadlines have passed. The Department of Labor 
provides for similar tolling in its present and proposed 
regulations.
      Similarly, the Conferees believe that affording the 
Secretary flexibility in instances where a worker is ineligible 
through no fault of her own is consistent with the spirit of 
the program and will help ensure that workers get the 
retraining they need. The amendment permits the Secretary to 
extend the periods during which trade readjustment allowances 
may be paid to an individual if there is justifiable cause. The 
provision does not increase the amount of such allowances that 
are payable. The Conferees intend that the justifiable cause 
extension should allow the Secretary equitable authority to 
address unforeseen circumstances, such as a health emergency. 
The 210-day deadline is superseded by the 8/16 deadline in 
current law, the new 26/26 enrollment deadlines under these 
amendments, and the requirement that a worker be in training to 
receive additional TRA.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Application of State Laws and Regulations on Good Cause for Waiver of 
        Time Limits or Late Filing of Claims (Section 1725 (amending 
        Section 234 of the Trade Act of 1974))
Present Law
      A State's unemployment insurance laws apply to a worker's 
claims for TRA.
Explanation of Provision
      The provision makes a State's ``good cause'' law, 
regulations, policies, and practices applicable when the State 
is making determinations concerning a worker's claim for TRA or 
other adjustment assistance.
Reasons for Change
      Most States have ``good cause'' laws allowing the waiver 
of a statutory deadline when the deadline was missed because of 
agency error or for other reasons where the claimant was not at 
fault. These good cause laws apply to administration of State 
UI laws. The Department of Labor, by regulation, has precluded 
application of State good cause laws to TAA. This prohibition 
unjustifiably penalizes workers who miss a deadline through no 
fault of their own.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Employment and Case Management Services; Administrative Expenses and 
        Employment and Case Management Services (Sections 1726 and 1727 
        (amending Section 235 of the Trade Act of 1974))
Present Law
      Present law requires the Secretary of Labor to make 
``every reasonable effort'' to secure services for affected 
workers covered by a certification including ``counseling, 
testing, and placement services'' and ``[s]upportive and other 
services provided for under any other Federal law,'' including 
WIA one-stop services. Typically, the Secretary provides these 
services through agreements with the States.
Explanation of Provision
      The provisions require the Secretary and the States to, 
among other things (1) perform comprehensive and specialized 
assessments of enrollees' skill levels and needs; (2) develop 
individual employment plans for each impacted worker; and (3) 
provide enrollees with (a) information on available training 
and how to apply for such training, (b) information on how to 
apply for financial aid, (c) information on how to apply for 
such training, (d) short-term prevocational services, (e) 
individual career counseling, (f) employment statistics 
information, and (g) information on the availability of 
supportive services.
      The provision requires the Secretary, either directly or 
through the States (through cooperating agreements), to make 
the employment and case management services described in 
section 235 available to TAA eligible workers. TAA eligible 
workers are not required to accept or participate in such 
services, however, if they choose not to do so.
      These provisions provide for each State to receive funds 
equal to 15 percent of its training funding allocation on top 
of its training fund allocation. Not more than two-thirds of 
these additional funds may be used to cover administrative 
expenses, and not less than one-third of such funds may be used 
for the purpose of providing employment and case management 
services, as defined under section 235. Finally, the section 
provides for an additional $350,000 to be provided to each 
State annually for the purpose of providing employment and case 
management services. With respect to these latter funds, States 
may decline or otherwise return such funds to the Secretary.
Reasons for Change
      States incur costs to administer the TAA program, 
including for processing applications and providing employment 
and case management services. While appropriators customarily 
provide the Department of Labor with administrative funds equal 
to 15 percent of the total training funds for disbursement to 
the States, the Conferees believe that this practice should be 
codified, with the changes discussed above.
      The Conferees believe that the employment services and 
case management funding provided for in this section should be 
in addition to, and not offset, any funds that the State would 
otherwise receive under WIA or any other program.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Training Funding (Section 1728 (amending Section 236 of the Trade Act 
        of 1974))
Present Law
      The total amount of annual training funding provided for 
under present law is $220,000,000. During the year, if the 
Secretary determines that there is inadequate funding to meet 
the demand for training, the Secretary has the authority to 
decide how to apportion the remaining funds to the States.
      Based on internal department policy, at the beginning of 
each fiscal year, the Department of Labor allocates 75 percent 
of the training funds to States based on each State's training 
expenditures and the average number of training participants 
over the previous 2\1/2\ years. The previous year's allocation 
serves as a floor. The Department of Labor also has a ``hold 
harmless'' policy that ensures that each State's initial 
allocation can be no less than 85 percent of its initial 
allocation in the previous year. The Department of Labor holds 
the remaining 25 percent in reserve to distribute to States 
throughout the year according to need; most of the remaining 
funds are disbursed at the end of the fiscal year. States have 
3 years to spend their federal funds. If the funds are not 
spent, the money reverts back to the General Treasury.
      Under present law, the Secretary shall approve training 
if (1) there is no suitable employment; (2) the worker would 
benefit from appropriate training; (3) there is a reasonable 
expectation of employment following training (although not 
necessarily immediately available employment); (4) the approved 
training is reasonably available to the worker; (5) the worker 
is qualified for the training; and (6) training is suitable and 
available at a reasonable cost. ``Insofar as possible,'' the 
Secretary is supposed to ensure the provision of training on 
the job. Training will be paid for directly by the Secretary or 
using vouchers.
      One of the statutory criteria for approval of training is 
that the worker be qualified to undertake and complete such 
training. The statute doesn't specifically address how the 
income support available to a worker is to be considered in 
determining the length of training the worker is qualified to 
undertake. Another of the statutory training approval criteria 
is that the training is available at a reasonable cost. The 
statute doesn't specifically address if funds other than those 
available under TAA may be considered in making this 
determination.
Explanation of Provision
      The provision strikes the obsolete requirement that the 
Secretary of Labor shall ``assure the provision'' of training 
on the job.
      This provision increases the training cap from 
$220,000,000 to $575,000,000 in FY2009 and FY2010, prorated for 
the period beginning October 1, 2010 and ending December 31, 
2010. The provision requires the Secretary to make an initial 
distribution of training funds to the States as soon as 
practicable after the beginning of the fiscal year based on the 
following criteria: (1) the trend in numbers of certified 
workers; (2) the trend in numbers of workers participating in 
training; (3) the number of workers enrolled in training; (4) 
the estimated amount of funding needed to provide approved 
training; and (5) other factors the Secretary determines are 
appropriate. The provision specifies that initial distribution 
of training funds to a State may not be less than 25 percent of 
the initial distribution to that State in the previous fiscal 
year.
      The provision requires the Secretary to establish 
procedures for the distribution of the funds held in reserve, 
which may include the distribution of such funds in response to 
requests made by States in need of additional training funds. 
The provision also requires the Secretary to distribute 65 
percent of the training funds in the initial distribution, and 
to distribute at least 90 percent of training funds for a 
particular fiscal year by July 15 of that fiscal year.
      The provision directs the Secretary to decide how to 
distribute funds if training costs will exceed available funds.
      The provision would specify that in determining if a 
worker is qualified to undertake and complete training, the 
training may be approved for a period that is longer than the 
period for which TRA is available if the worker demonstrates 
the financial ability to complete the training after TRA is 
exhausted. It is intended that financial ability means the 
ability to pay living expenses while in TAA-funded training 
after the period of TRA eligibility.
      The provision would specify that in determining whether 
the costs of training are reasonable, the Secretary may 
consider whether other public or private funds are available to 
the worker, but may not require the worker to obtain such funds 
as a condition for approval of training. This means, for 
example, that if a training program would be determined not to 
have a reasonable cost if only the use of TAA training funds 
were considered, the Secretary may consider the availability of 
other public and private funds to the worker. If the worker 
voluntarily commits to using such funds to supplement the TAA 
training funds to pay for the training program, the training 
program may be approved. However, the Secretary may not require 
the worker to use the other public or private funds where the 
costs of the training program would be reasonable using only 
TAA training funds.
      Finally, the provision requires the Secretary to issue 
regulations in consultation with the Senate Finance Committee 
and the House Committee on Ways and Means.
Reasons for Change
      The Conferees believe that the training cap needs to be 
increased for two reasons. First, more funding is needed to 
cover the expanded group of TAA eligible workers because of 
changes made elsewhere in the bill (e.g., coverage of service 
workers, expanded coverage of manufacturing workers). Second, 
during high periods of TAA usage, the existing training funding 
has proved to be insufficient. Some states have run out of 
training funds, resulting in some States freezing enrollment of 
eligible workers in training. See GAO-04-1012.
      As the GAO has documented, there are significant problems 
with the Department's method of allocating training funds. The 
primary problem is that the Department of Labor's method of 
allocation appears to result in insufficient funds for some 
States. This appears to be occurring because of the 
Department's reliance on historical usage and a ``hold 
harmless'' policy. In particular, States that were experiencing 
heavy layoffs at the time the initial allocation formula was 
implemented may no longer be experiencing layoffs at the same 
rate, but still receive significant allocations from the 
Department. In contrast, a State experiencing relatively few 
layoffs several years ago may now have far greater numbers of 
layoffs, but still receive a limited amount in its 
distribution. In short, the allocation that States receive at 
the beginning of the fiscal year may not reflect their present 
demand for training services. The provision addresses these 
problems by lowering the ``hold harmless'' provision to 25 
percent, requiring initial and subsequent distributions to be 
based on need, and by requiring that 90 percent of the funds be 
allocated by July 15 of each fiscal year. Additionally, the 
Conferees expect the Secretary to distribute the remaining 
funds as soon as possible after that date.
      In order to facilitate the approval of longer-term 
training, the Conferees intend to ensure that the period of 
approved training is not necessarily limited to the duration of 
TRA. Where the worker demonstrates the ability to pay living 
expenses while in TAA funded training after TRA is exhausted, 
such training should be approved if the other training approval 
criteria are also met.
      The Conferees intend to ensure that training programs 
that would otherwise not be approved under TAA due to costs may 
be approved if a worker voluntarily commits to using 
supplemental public or private funds to pay a portion of the 
costs.
      It is also the intent that, together, these amendments to 
the training approval criteria allow training to be approved 
for a period that is longer than the period for which TRA and 
TAA-funded training is available if the worker demonstrates the 
financial ability to pay living expenses and pay for the 
additional training costs using other funds after TRA and the 
TAA-funded training are exhausted.
Effective Date
      The provision increasing the training cap goes into 
effect upon the date of enactment of this Act. The provisions 
relating to training fund distribution procedures go into 
effect October 1, 2009. The other provisions in this section go 
into effect upon expiration of the 90-day period beginning on 
the date of enactment of this Act, and apply to petitions filed 
on or after that date.
Prerequisite Education, Approved Training Programs (Section 1729 
        (amending Section 236 of the Trade Act of 1974))
Present Law
      Under present law, approvable training includes employer-
based training (on-the-job training/customized training), 
training approved under the Workforce Investment Act of 1998, 
training approved by a private industry council, any remedial 
education program, any training program whose costs are paid by 
another federal or State program, and any other program 
approved by the Secretary. Additionally, remedial training is 
approvable and participation in such training makes a worker 
eligible for up to 26 more weeks of TAA-related income support.
Explanation of Provision
      The provision clarifies that existing law allows training 
funds to be used to pay for apprenticeship programs, any 
prerequisite education required to enroll in training, and 
training at an accredited institution of higher education (such 
as those covered by 102 of the Higher Education Act), including 
training to obtain or complete a degree or certification 
program (where completion of the degree or certification can be 
reasonably expected to result in employment). The provision 
also prohibits the Secretary from limiting training approval to 
programs provided pursuant to the Workforce Investment Act of 
1998.
      The provision offers up to an additional 26 weeks of 
income support while workers take prerequisite training or 
remedial training necessary to enter a training program. A 
worker may enroll in remedial training or prerequisite 
training, or both, but may not receive more than 26 weeks of 
additional income support.
Reasons for Change
      Present law does not explicitly state whether TAA 
training funds may be used to obtain a college or advanced 
degree. Some States have interpreted this silence to preclude 
enrollment in a two-year community college or four-year college 
or university as a training option, even where a TAA 
participant was working towards completion of a degree prior to 
being laid off. The Conferees believe that States should be 
encouraged to approve the use of training funds by TAA 
enrollees to obtain training or a college or advanced degree, 
including degrees offered at two-year community colleges and 
four-year colleges or universities.
      While a worker can obtain additional income support while 
participating in remedial training, there is no corollary 
support for workers participating in prerequisite training 
(e.g., individuals enrolling in nursing usually need basic 
science prerequisites, which are not considered qualifying 
remedial training). States have requested additional income 
support for workers who participate in prerequisite training.
      The Conferees believe that while WIA-approved training is 
an approvable TAA training option, it should not be the only 
one that TAA enrollees are authorized to pursue. The Conferees 
are concerned that some States have restricted training 
opportunities to those approved under WIA. According to the 
Congressional Research Service, many community colleges, for 
instance, do not get WIA certification because of its costly 
reporting requirements. To limit TAA training opportunities in 
this way unacceptably curbs the scope of training that TAA 
enrollees might elect to participate in and potentially impairs 
their ability to get retrained and reemployed.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Pre-Layoff and Part-Time Training (Section 1730 (amending Section 236 
        of the Trade Act of 1974))
Present Law
      Present law does not permit pre-layoff or part-time 
training.
Explanation of Provision
      This provision specifies that the Secretary may approve 
training for a worker who (1) is a member of a group of workers 
that has been certified as eligible to apply for TAA benefits; 
(2) has not been totally or partially separated from 
employment; and (3) is determined to be individually threatened 
with total or partial separation. Such training may not include 
on-the-job training, or customized training unless such 
customized training is for a position other than the worker's 
current position.
      Additionally, the provision permits the Secretary to 
approve part-time training, but clarifies that a worker 
enrolled in part-time training is not eligible for a TRA.
Reasons for Chance
      This provision explicitly establishes Congress' intent 
that workers be eligible to receive pre-layoff and part-time 
training.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
On-the-Job Training (Section 1731 (amending Section 236 of the Trade 
        Act of 1974))
Present Law
      Current law provides that the Secretary may approve on-
the-job training (``OJT''), but does not govern the content of 
acceptable OJT.
Explanation of Provision
      This provision permits the Secretary to approve OJT for 
any adversely affected worker if the worker meets the training 
requirements, and the Secretary determines the OJT (1) can 
reasonably lead to employment with the OJT employer; (2) is 
compatible with the worker's skills; (3) will allow the worker 
to become proficient in the job for which the worker is being 
trained; and (4) the State determines the OJT meets necessary 
requirements. The Secretary may not enter into contracts with 
OJT employers that exhibit a pattern of failing to provide 
workers with continued long-term employment and adequate wages, 
benefits, and working conditions as regular employees.
Reasons for Change
      The provision incorporates requirements to ensure OJT is 
effective. Specifically, OJT must be (1) reasonably expected to 
lead to suitable employment; (2) compatible with the workers' 
skills; and (2) include a State-approved benchmark-based 
curriculum. Moreover, the provision is intended to prevent 
employers from treating workers participating in OJT 
differently in terms of wages, benefits, and working conditions 
from regular employees who have worked a similar period of time 
and are doing the same type of work.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Eligibility for Unemployment Insurance and Program Benefits While in 
        Training (Section 1732 (amending Section 236 of the Trade Act 
        of 1974))
Present Law
      Current law states that a worker may not be deemed 
ineligible for UI (and thus, TAA) if they are in training or 
leave unsuitable work to enter training.
Explanation of Provision
      The provision states that a worker will not be ineligible 
for UI or TAA if the worker (1) is in training, even if the 
worker does not meet the requirements of availability for work, 
active work search, or refusal to accept work under Federal and 
State UI law; (2) leaves work to participate in training, 
including temporary work during a break in training; or (3) 
leaves OJT that did not meet the requirements of this Act 
within 30 days of commencing such training.
Reasons for Change
      The Conferees are concerned that confusion in present UI 
law surrounding a worker's decision to quit work to enter 
training and the ramifications of that decision from a UI 
eligibility perspective may preclude a worker from being able 
to participate in TAA training. The provision is meant to 
eliminate that confusion.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Job Search and Relocation Allowances (Section 1733 (amending Section 
        237 of the Trade Act of 1974))
Present Law
      The Secretary may grant an application for a job search 
allowance where (1) the allowance will help the totally 
separated worker find a job in the United States; (2) suitable 
employment is not available in the local area; and (3) the 
application is filed by the later of (a) 1 year from 
separation, (b) 1 year from certification, or (c) 6 months 
after completing training (unless the worker received a waiver, 
in which case the worker must file by the later of one year 
after separation or certification). A worker may be reimbursed 
for 90 percent of his job search costs, up to $1,250.
      The Secretary may grant an application for a relocation 
allowance where: (1) the allowance will assist a totally 
separated worker relocate within the United States; (2) 
suitable employment is not available in the local area; (3) the 
affected worker has no job at the time of relocation; (4) the 
worker has found suitable employment that may reasonably be 
expected to be of long-term duration; (5) the worker has a bona 
fide offer of employment; and (6) the worker filed the 
application the later of (a) 425 days from separation, (b) 425 
days from certification, or (c) 6 months after completing 
training (unless the worker received a waiver, in which case 
the worker must file by the later of 425 days after separation 
or certification). A worker may be reimbursed for 90 percent of 
his relocation costs plus a lump sum payment of three times the 
worker's weekly wage up to $1,250.
Explanation of Provision
      The provision reimburses 100 percent of a worker's job 
search expenses, up to $1,500, and 100 percent of a worker's 
relocation expenses, and increases the additional lump sum 
payment for relocation to a maximum of $1,500. It also strikes 
the provision in existing law under which a worker who has 
completed training but who received a prior training waiver has 
a shorter period to apply for a job search allowance and 
relocation allowance than other workers who have completed 
training.
Reasons for Change
      The Conferees believe that the job search and relocation 
allowances need to be increased to reflect the cost of 
inflation and the cost and difficulty a worker faces when 
looking for work and taking a job outside the worker's local 
community.
      The Conferees believe that workers completing training 
should have the same periods after training to apply for job 
search and relocation allowances irrespective of whether a 
worker received a waiver from the enrollment in training 
requirements prior to undertaking and completing the training. 
This period allows workers a reasonable opportunity to obtain 
the same assistance as other workers needed to find and 
relocate to a new job after being trained.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.

     4. SUBPART D--REEMPLOYMENT TRADE ADJUSTMENT ASSISTANCE PROGRAM

Reemployment Trade Adjustment Assistance Program (Section 1741 
        (amending Section 246 of the Trade Act of 1974))
Present Law
      The Trade Act of 2002 created a demonstration project for 
alternative trade adjustment assistance for older workers (ATAA 
or ``wage insurance''). Through this program, some workers who 
are eligible for TAA and reemployed at lower wages may receive 
a partial wage subsidy. Under the program, States use Federal 
funds provided under the Trade Act to pay eligible workers up 
to 50 percent of the difference between reemployment wages and 
wages at the time of separation. Eligible workers may not earn 
more than $50,000 in reemployment wages, and total payments to 
a worker may not exceed $10,000 during a maximum period of two 
years. In addition to having been certified for TAA, such 
workers must be at least 50 years of age, obtain full-time 
reemployment with a new firm within 26 weeks of separation from 
employment, and have been separated from a firm that is 
specifically certified for ATAA. When considering certification 
of a firm for ATAA, the Secretary of Labor considers whether a 
significant number of workers in the firm are 50 years of age 
or older and possess skills that are not easily transferable. 
ATAA beneficiaries may not receive TAA benefits other than the 
Health Coverage Tax Credit (HCTC).
Explanation of Provision
      The provision renames ATAA ``reemployment TAA.'' The 
provision eliminates the requirement that a group of workers 
(in addition to individuals) be specifically certified for wage 
insurance in addition to TAA certification. The provision 
eliminates the current-law requirement that a worker must find 
employment within 26 weeks of being laid off to be eligible for 
the wage insurance benefit, and replaces it with a requirement 
that the clock on the two-year duration of the benefit begin at 
the sooner of exhaustion of regular unemployment benefits or 
reemployment, allowing initial receipt of the wage insurance 
benefit at any point during that two-year period. The provision 
allows workers to shift from receiving a TRA, while training, 
to receiving reemployment TAA, while employed, at any point 
during the two-year period. The provision increases the limit 
on wages in eligible reemployment from $50,000 a year to 
$55,000 a year. Similarly, it increases the maximum wage 
insurance benefit (over two years) from up to $10,000 to up to 
$12,000.
      The provision lifts the restriction on wage insurance 
recipients' participation in TAA-funded training. It also 
permits workers reemployed less than full-time, but at least 20 
hours a week, and in approved training, to receive the wage 
insurance benefit (which would be prorated if the worker is 
reemployed for fewer hours compared to previous employment).
Reasons for Change
      The Conferees believe that the reemployment TAA, or wage 
insurance, program is a potentially beneficial option for many 
older workers, but it includes unnecessary barriers to 
participation. The Conferees believe that changes to section 
246 of the Trade Act will make the wage insurance program a 
more viable option for many more potentially interested 
workers. Inflation has lessened the maximum value of the 
available benefit, and increasing personal, nominal, median 
income has lowered the share of workers eligible to participate 
in the program. Several other requirements make the program 
inaccessible and unattractive.
      Findings from the Government Accountability Office (GAO) 
highlight the need to reform specific aspects of the program. 
First, the 26-week reemployment deadline was cited by the GAO 
as one of ``two key factors [that] limit participation.'' The 
GAO went on to note that ``[o]fficials in States [the GAO] 
visited said that one of the greatest obstacles to 
participation was the requirement for workers to find a new job 
within 26 weeks after being laid off. For example, according to 
officials in one State, 80 percent of participants who were 
seeking wage insurance but were unable to obtain it failed 
because they could not find a job within the 26-week period. 
The challenges of finding a job within this time frame may be 
compounded by the fact that workers may actually have less than 
26 weeks to secure a job if they are laid off prior to becoming 
certified for TAA. For example, a local caseworker in one State 
[the GAO] visited said that ``the 26 weeks had passed 
completely before a worker was certified for the benefit.'' 
Additionally, the GAO found that automatically certifying 
workers for the wage insurance benefit would cut the Department 
of Labor's workload and promote program participation. 
Currently, workers opting for wage insurance must also 
surrender eligibility for TAA-funded training and be reemployed 
full-time. The provision eliminates these restrictions.
      The Conferees believe that eliminating the 26-week 
deadline for reemployment, eliminating the need for firms to be 
certified for wage insurance, eliminating the prohibition on 
wage insurance beneficiaries receiving TAA-funded training, and 
allowing part-time workers and former TRA recipients access to 
the wage insurance benefit should make the wage insurance 
program more accessible and attractive.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.

                      5. SUBPART E--OTHER MATTERS

Office of Trade Adjustment Assistance (Section 1751 (amending 
        Subchapter C of chapter 2 of title II of the Trade Act of 
        1974))
Present Law
      The TAA for Workers program is currently operated by the 
Employment and Training Administration at the Department of 
Labor.
Explanation of Provision
      The provision creates an Office of Trade Adjustment 
Assistance headed by an administrator who shall report directly 
to the Deputy Assistant Secretary for Employment and Training 
Administration. Under the provision, the administrator will be 
responsible for overseeing and implementing the TAA for Workers 
program and carrying out functions delegated to the Secretary 
of Labor, including: making group certification determinations; 
providing TAA information and assisting workers and others 
assisting such workers prepare petitions or applications for 
program benefits (including health care benefits); ensuring 
covered workers receive Section 235 employment and case 
management services; ensuring States comply with the terms of 
their Section 239 agreements; advocating for workers applying 
for benefits; and operating a hotline that workers and 
employers may call with questions about TAA benefits, 
eligibility requirements, and application procedures.
      The provision requires the administrator to designate an 
employee of the Department with appropriate experience and 
expertise to receive complaints and requests for assistance, 
resolve such complaints and requests, compile basic information 
concerning the same, and carry out other tasks that the 
Secretary specifies.
Reasons for Change
      It is the view of the Conferees that creating an Office 
of Trade Adjustment Assistance in the Department of Labor with 
primary accountability for the management and performance of 
the TAA for Workers program will improve the program's 
operation.
      The creation of the Office of Trade Adjustment Assistance 
should not interfere with the coordination of services provided 
by TAA, the National Emergency Grant program, and Department of 
Labor Rapid Response services.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act.
Accountability of State Agencies; Collection and Publication of Program 
        Data; Agreements with States (Section 1752 (amending Section 
        239 of the Trade Act of 1974))
Present Law
      Present law gives the Secretary of Labor the authority to 
delegate to the States through agreements many aspects of TAA 
implementation, including responsibilities to (1) receive 
applications for TAA and provide payments; (2) make 
arrangements to provide certain employment services through 
other Federal programs; and (3) issue waivers. It also mandates 
that any agreement entered into shall include sections 
requiring that the provision of TAA services and training be 
coordinated with the provision of Workforce Investment Act 
(WIA) services and training. In carrying out its 
responsibilities, each State must notify workers who apply for 
UI about TAA, facilitate early filing for TAA benefits, advise 
workers to apply for training when they apply for TRA, and 
interview affected workers as soon as possible for purposes of 
getting them into training. States must also submit to the 
Department of Labor information like that provided under a WIA 
State plan.
Explanation of Provision
      The provision requires the Secretary, either directly or 
through the States (through cooperating agreements), to make 
the employment and case management services described in the 
amended section 235 available to TAA eligible workers. TAA 
eligible workers are not required to accept or participate in 
such services, however, if they choose not to do so.
      The provision requires States and cooperating State 
agencies to implement effective control measures and to 
effectively oversee the operation and administration of the TAA 
program, including by monitoring the operation of control 
measures to improve the accuracy and timeliness of reported 
data.
      The provision also requires States and cooperating State 
agencies to report comprehensive performance accountability 
data to the Secretary, on a quarterly basis.
Reasons for Change
      To ensure that the employment and case management 
services described in the amended section 235 are made 
available to TAA enrollees as required under that section, the 
Conferees believe that it is necessary to incorporate those 
obligations into the agreements that the Department of Labor 
enters into with each of the States concerning the 
administration of TAA.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Verification of Eligibility for Program Benefits (Section 1753 
        (amending Section 239 of the Trade Act of 1974))
Present Law
      There is no provision in present law.
Explanation of Provision
      Section 1753 requires a State to re-verify the 
immigration status of a worker receiving TAA benefits using the 
Systematic Alien Verification for Entitlements (SAVE) Program 
(42 U.S.C. 1320b-7(d)) if the documentation provided during the 
worker's initial verification for the purposes of establishing 
the worker's eligibility for unemployment compensation would 
expire during the period in which that worker is potentially 
eligible to receive TAA benefits.
      The section also requires the Secretary to establish 
procedures to ensure that the re-verification process is 
implemented properly and uniformly from State to State.
Reasons for Change
      This provision is intended to ensure that workers 
maintain a satisfactory immigration status while receiving 
benefits. This section was included for the purposes of the TAA 
program only and should not be extended to other programs.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Collection of Data and Reports; Information to Workers (Section 1754 
        (amending Subchapter C of chapter 2 of title II of the Trade 
        Act of 1974))
Present Law
      Present law does not contain statutory language requiring 
the collection of data or performance goals and the TAA program 
has suffered a history of problems with its performance data 
that has undermined the data's credibility and limited their 
usefulness. Most of the outcome data reported in a given 
program year actually reflects participants who left the 
program up to 5 calendar quarters earlier. In addition, as of 
FY 2006, the Department of Labor does not consistently report 
TAA data by State or industry or by services or benefits 
received.
      While the Department of Labor has taken some steps aimed 
at improving performance data, the data remain suspect and fail 
to capture outcomes for some of the program's participants, and 
many participants are not included in the final outcomes at 
all.
Explanation of Provision
      The provision would require the Secretary of Labor to 
implement a system for collecting data on all workers who apply 
for or receive TAA. The system must include the following data 
classified by State, industry, and nationwide totals: number of 
petitions; number of workers covered; average processing time 
for petitions; a breakdown of certified petitions by the cause 
of job loss (increased imports etc.); the number of workers 
receiving benefits under any aspect of TAA (broken down by type 
of benefit); the average time during which workers receive each 
type of benefit; the number of workers enrolled in training, 
classified by type of training; the average duration of 
training; the number and type of training waiver granted; the 
number of workers who complete and do not complete training; 
data on outcomes, including the sectors in which workers are 
employed after receiving benefits; and data on rapid response 
activities.
      The provision would also require, by December 15 of each 
year, the Secretary to provide to the Senate Finance Committee 
and the House Committee on Ways and Means a report that 
includes a summary of the information above, information on 
distributions of training funds under section 236(a)(2), and 
any recommendations on whether changes to eligibility 
requirements, benefits, or training funding should be made 
based on the data collected. Those data must be made available 
to the public on the Department of Labor's website in a 
searchable format and must be updated quarterly.
Reasons for Change
      The Conferees believe that valuable information on TAA 
and its impact is neither being collected nor being made 
publicly available. This, in turn, inhibits the ability of 
Congress to perform its oversight responsibilities and, if 
necessary, to refine and improve the program, its performance, 
and worker outcomes. Additionally, the Conferees believe that 
all of the data that the Department of Labor gathers should be 
made available and posted on its website in a searchable 
format. This will enhance the accountability of the TAA program 
and the Department of Labor, not just to Congress, but to the 
American people as well.
Effective Date
      The provision goes into effect on the date of enactment 
of this Act.
Fraud and recovery of overpayments (Section 1755 (amending Section 
        243(a)(1) of the Trade Act of 1974))
Present Law
      An overpayment of TAA benefits may be waived if, in 
accordance with the Secretary's guidelines, the payment was 
made without fault on the part of such individual, and 
requiring such repayment would be contrary to ``equity and good 
conscience.''
Explanation of Provision
      The provision states that the Secretary shall waive 
repayment if the overpayment was made without fault on the part 
of such individual and if repayment ``would cause a financial 
hardship for the individual (or the individual's household, if 
applicable) when taking into consideration the income and 
resources reasonably available to the individual or household 
and other ordinary living expenses of the individual or 
household.''
Reasons for Change
      The Conferees believe that the Department of Labor has 
adopted a very strict standard for issuing overpayment waivers. 
In particular, 20 CFR 617.55(a)(2)(ii)(C) defines equity and 
good conscience to require ``extraordinary and lasting 
financial hardship'' that would ``result directly'' in the 
``loss of or inability to obtain minimal necessities of food, 
medicine, and shelter for a substantial period of time'' and 
``may be expected to endure for the foreseeable future.'' The 
Conferees understand that no worker has met this strict waiver 
standard. In including standard statutory waiver language in 
TAA, there is no indication that Congress intended to make 
waivers impossible to secure. To the contrary, the Conferees 
believe that Congress intended that overpaid individuals who 
are without fault and unable to repay their TAA overpayments 
should have a reasonable opportunity for waivers of the 
requirement to return those overpayments. The provision 
clarifies this intent.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Sense of Congress on Application of Trade Adjustment Assistance 
        (Section 1756 (amending Chapter 5 of title II of the Trade Act 
        of 1974))
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision expresses the Sense of Congress that the 
Secretaries of Labor, Commerce, and Agriculture should apply 
the provisions of their respective trade adjustment assistance 
programs with the utmost regard for the interests of workers, 
firms, communities, and farmers petitioning for benefits.
Reasons for Change
      Courts reviewing determinations by the Department of 
Labor regarding certification for trade adjustment assistance 
have stated that the Department is obliged to conduct its 
investigations with ``utmost regard for the interests of the 
petitioning workers.'' See, e.g., Former Employees of Komatsu 
Dresser v. United States Secretary of Labor, 16 C.I.T. 300, 303 
(1992) (citations omitted). The courts have explained that such 
statements flow from the ex parte nature of the Department's 
certification process (as opposed to a judicial or quasi-
judicial proceeding) and the remedial purpose of the trade 
adjustment assistance program. This section reflects such 
statements and extends them to the firms, farmers, and 
communities programs.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Consultations in Promulgation of Regulations (Section 1757 (amending 
        Section 248 of the Trade Act of 1974))
Present Law
      The Secretary is required to prescribe necessary 
regulations.
Explanation of Provision
      This provision requires the Secretary to consult with the 
Senate Finance Committee and the House Committee on Ways and 
Means 90 days prior to the issuance of a final rule or 
regulation.
Reasons for Change
      Requiring that the Secretary consult with the relevant 
committees 90 days prior to the issuance of a final rule or 
regulations will help ensure that such rules and regulations 
reflect Congress' intent.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.

           B. Part II--Trade Adjustment Assistance for Firms

Trade Adjustment Assistance for Firms (Section 1761-1767 (amending 
        Sections 251, 254, 255, 256, 257, and 258 of the Trade Act of 
        1974))
Present Law
      A firm may file a petition for certification with the 
Secretary of Commerce. Upon receipt of the petition, the 
Secretary shall publish a notice in the Federal Register that 
the petition has been received and is being investigated. The 
petitioner, or anyone else with a substantial interest, may 
request a public hearing concerning the petition.
      To be certified to receive TAA benefits, a firm must show 
(1) a ``significant'' number of workers became or are 
threatened to become totally or partially separated; (2) sales 
or production of an article, or both, decreased absolutely, or 
sales or production, or both, of an article that accounted for 
not less than 25 percent of the total production or sales of 
the firm during the 12-month period preceding the most recent 
12-month period for which data are available have decreased 
absolutely; and (3) increased imports of competing articles 
``contributed importantly'' to the decline in sales, 
production, and/or workforce.
      A firm certified under section 251 has two years in which 
to file an adjustment assistance application, which must 
include an economic adjustment proposal.
      In deciding whether to approve an application, the 
Secretary of Commerce must determine that the proposal (1) is 
reasonably calculated ``to materially contribute'' to the 
economic adjustment of the firm; (2) gives adequate 
consideration to the interests of the firm's workers; and (3) 
demonstrates that the firm will use its own resources for 
adjustment.
      Criminal and civil penalties are applicable for, among 
other things, making false statements or failing to disclose 
material facts. However, the penalties do not cover the acts 
and omissions of customers or others responding to queries made 
in the course of an investigation of a firm's petition.
      The Secretary must make its decisions within 60 days.
Explanation of Provision
      The provision makes service sector firms potentially 
eligible for benefits under the TAA for Firms program. It also 
expands the look back so that all firms can use the average of 
one, two, or three years of sales or production data, as 
opposed to one year, to show that the firm's sales, production, 
or both, have decreased absolutely or that the firm's sales, 
production, or both of an article or service that accounts for 
at least 25 percent of its total production, or sales have 
decreased absolutely.
      In determining eligibility, the provision makes clear 
that the Secretary may use data from the preceding 36 months to 
determine an increase in imports, and may determine that 
increased imports exist if customers accounting for a 
significant percentage of the decline in a firm's sales or 
production certify that their purchases of imported articles or 
services have increased absolutely or relative to the 
acquisition of such articles or services from suppliers in the 
United States.
      The provision requires the Secretary of Commerce, upon 
receiving information from the Secretary of Labor that the 
workers of a firm are TAA-covered, to notify the firm of its 
potential TAA eligibility.
      The provision requires the Secretary of Commerce to 
provide grants to intermediary organizations to deliver TAA 
benefits. The provision requires the Secretary to endeavor to 
align the contracting schedules for all such grants by 2010, 
and to provide annual grants to the intermediary organizations 
thereafter. The provision requires the Secretary to develop a 
methodology to ensure prompt initial distribution of a portion 
of the funds to each of the intermediary organizations, and to 
determine how the remaining funds will be allocated and 
distributed to them. The Secretary must develop the methodology 
in consultation with the Senate Finance Committee and the House 
Committee on Ways and Means.
      The provision amends the penalties provision in section 
259 to cover entities, including customers, providing 
information during an investigation of a firm's petition. 
Additionally, the provision requires the Secretary of Commerce 
to submit an annual report demonstrating the operation, 
effectiveness, and outcomes of the TAA for Firms program to the 
Senate Finance Committee and the House Committee on Ways and 
Means, and to make the report available to the public. The 
methodology for the distribution of funds to the intermediary 
organizations shall include criteria based on the data in the 
report. The provision creates rules relating to the disclosure 
of confidential business information included in this annual 
report.
Reasons for Change
      Most service sector firms are currently ineligible for 
the TAA for Firms program because of a statutory requirement 
that the workers must have been employed by a firm that 
produces an ``article.'' In an era when 80 percent of U.S. 
workers are employed in the service sector, the Conferees 
believe service sector firms should be eligible for TAA.
      The Conferees also note that firms currently have a 
limited ``look back'' under existing law, which unfairly 
restricts their ability to show that increased imports are 
hurting their businesses.
      Because data is not always readily available to 
demonstrate an increase in imports of articles or services, or 
to show how such increased imports compete with the articles or 
services of a particular firm, the Conferees believe that the 
Secretary should be able to utilize information from the 
customers of a firm that account for a significant percentage 
of the decline in the firm's sales or production to verify 
these customers have increased their imports of the relevant 
articles or services, either absolutely or relative to their 
purchases from domestic suppliers.
      Since a firm may not know that it could be eligible for 
TAA benefits, despite the fact that workers at the firm have 
qualified for the TAA for workers program, the Conferees 
believe it is important to give these firms notice of their 
potential eligibility for TAA benefits.
      The Conferees are concerned that at present, the Economic 
Development Administration (EDA) is entering into contracts 
with intermediary organizations that vary in length. Thus, the 
contracts begin and end at different times during the year. The 
provision requires the Secretary of Commerce to provide grants 
to intermediary organizations to deliver TAA benefits and, to 
the maximum extent practicable, that contracts with such 
organizations be for 12 month periods and have the same 
beginning and end dates. The Conferees will leave it to the 
discretion of the Secretary to determine the appropriate 12 
month contract cycle.
      The Conferees also believe that the methodology for 
distributing funds to intermediary organizations should be 
based in part on their performance, the number of firms they 
serve, and the outcomes of firms completing the program. The 
Secretary of Commerce should consult Congress before finalizing 
such methodology.
      The Conferees understand that some customers provide 
inaccurate or incomplete information in response to 
questionnaires posed by the Secretary. The penalty language 
included in this provision is designed to address this problem.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Extension of Authorization of Trade Adjustment Assistance for Firms 
        (Section 1764)
Present Law
      The authorization of the TAA for Firms program expired on 
December 31, 2007. The program is currently authorized at $16 
million per year.
Explanation of Provision
      The provision reauthorizes the program through December 
31, 2010, and increases its funding to $50 million per year for 
fiscal years 2009 and 2010, and prorates such funding for the 
period beginning October 1, 2010 and ending December 31, 2010. 
Of that amount, $350,000 is set aside each year to fund full-
time TAA for Firms positions at the Department of Commerce, 
including a director of the TAA for Firms program.
Reasons for Change
      The Conferees believe that the TAA for Firms program has 
been underfunded, as at least $15 million in approved projects 
lack funding. Additionally, the Firms team at the Department of 
Commerce lacks adequate full-time staff to administer the 
program.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.

        C. Part III--Trade Adjustment Assistance for Communities

Trade Adjustment Assistance for Communities (Section 1771-1773)
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision creates a Trade Adjustment Assistance for 
Communities program that will allow a community to apply for 
designation as a community affected by trade. A community may 
receive such designation from the Secretary of Commerce if the 
community demonstrates that (1) the Secretary of Labor has 
certified a group of workers in the community as eligible for 
TAA for Workers benefits, the Secretary of Commerce has 
certified a firm in the community as eligible for TAA for Firms 
benefits, or a group of agricultural producers in the community 
has been certified to receive benefits under the TAA for 
Farmers and Fishermen program; and (2) the Secretary determines 
that the community is significantly affected by the threat to, 
or the loss of, jobs associated with that certification. The 
Secretary of Commerce must notify the community and the 
Governor of the State in which the community is located upon 
making an affirmative determination that the community is 
affected by trade.
      The Secretary of Commerce shall provide technical 
assistance to a community affected by trade to assist the 
community to (1) diversify and strengthen its economy; (2) 
identify impediments to economic development that result from 
the impact of trade; and (3) develop a community strategic plan 
to address economic adjustment and workforce dislocation in the 
community. The Secretary of Commerce shall also identify 
Federal, State and local resources available to assist the 
community, and ensure that Federal assistance is delivered in a 
targeted, integrated manner. The Secretary shall establish an 
Interagency Community Assistance Working Group to assist in 
coordinating the Federal response.
      A community affected by trade may develop a strategic 
plan for the community's economic adjustment and submit the 
plan to the Secretary. The plan should be developed, to the 
extent possible, with participation from local, county, and 
State governments, local firms, local workforce investment 
boards, labor organizations, and educational institutions. The 
plan should include an analysis of the economic development 
challenges facing the community and the community's capacity to 
achieve economic adjustment to these challenges; an assessment 
of the community's long-term commitment to the plan and the 
participation of community members; a description of projects 
to be undertaken by the community; a description of educational 
opportunities and future employment needs in the community; and 
an assessment of the funding required to implement the 
strategic plan.
      Of the funds appropriated, the Secretary of Commerce may 
award up to $25 million in grants to assist the community in 
developing a strategic plan.
      The provision authorizes $150 million in discretionary 
grants to be awarded by the Secretary of Commerce. An eligible 
community may apply for a grant from the Secretary to implement 
a project or program included in the community's strategic 
plan. Grants may not exceed $5 million. The Federal share of 
the grant may not exceed 95 percent of the cost of the project 
and the community's share is an amount not less than 5 percent. 
Priority shall be given to grant applications submitted by 
small and medium-sized communities.
      Educational institutions may also apply for Community 
College and Career Training grants from the Secretary of Labor. 
Grant proposals must include information regarding (1) the 
manner in which the grant will be used to develop or improve an 
education or training program suited to workers eligible for 
the TAA for Workers program; (2) the extent to which the 
program will meet the needs of the workers in the community; 
(3) the extent to which the proposal fits into a community's 
strategic plan or relates to a Sector Partnership Grant 
received by the community; and (4) any previous experience of 
the institution in providing programs to workers eligible for 
TAA. Educational institutions applying for a grant must also 
reach out to employers in the community to assess current 
deficiencies in training and the future employment 
opportunities in the community.
      The provision authorizes $40 million in discretionary 
grants to be awarded by the Secretary of Labor for the 
Community College and Career Training Grant program. Priority 
shall be given to grant applications submitted by eligible 
institutions that serve communities that the Secretary of 
Commerce has certified under section 273.
      The provision also establishes a Sector Partnership Grant 
program that allows the Secretary of Labor to award industry or 
sector partnership grants to facilitate efforts of the 
partnership to strengthen and revitalize industries. The 
partnerships shall consist of representatives of an industry 
sector; local county, or State government; multiple firms in 
the industry sector; local workforce investment boards 
established under section 117 of the Workforce Investment Act 
of 1998 (29 U.S.C. 2832); local labor organizations, including 
State labor federations and labor-management initiatives, 
representing workers in the community; and educational 
institutions.
      The provision authorizes $40 million in discretionary 
grants to be awarded by the Secretary of Labor for the Sector 
Partnership Grant program. The Sector Partnership Grants may be 
used to help the partnerships identify the skill needs of the 
targeted industry or sector and any gaps in the available 
supply of skilled workers in the community impacted by trade; 
develop strategies for filling the gaps; assist firms, 
especially small- and medium-sized firms, in the targeted 
industry or sector increase their productivity and the 
productivity of their workers; and assist such firms to retain 
incumbent workers.
Reasons for Change
      The TAA for Workers program provides assistance to 
individual workers who lose their jobs because of trade with 
foreign countries. The program does not, however, provide 
broader assistance when the closure or downsizing of a key 
industry, company, or plant creates severe economic challenges 
for an entire community impacted by trade. The Conferees 
believe there is a need for additional programs and incentives 
to assist such communities. Accordingly, the provision creates 
a TAA for Communities program to provide a coordinated Federal 
response to eligible communities by identifying Federal, State 
and local resources and helping such communities to access 
available Federal assistance.
      The provision does not establish precise criteria for 
determining when a particular community is impacted by trade. 
In the view of the Conferees, this determination is better left 
to the discretion of the Secretary of Commerce, who can 
evaluate specific facts in specific cases. As a general matter, 
the Conferees believe the Secretary should review the 
underlying certification(s) that provide a basis for a 
community's application and evaluate the potential impact of 
the job losses (or threat thereof) associated with such 
certification(s) on the broader community, given the 
community's overall economic situation. The Conferees intend 
for the Secretary to focus grants on communities facing the 
most difficult hardships, to the extent practicable.
      The Conferees believe small- and medium-sized 
communities, and in particular, those in rural areas where the 
manufacturing sector has historically been a significant 
employer, would benefit from the technical assistance and 
grants available through this program. Such communities have 
been disproportionately impacted by the adverse effects of 
trade, where some lumber mills, factories and call centers, for 
instance, have scaled back operations or closed entirely in 
response to increased trade and globalization.
      The Conferees do not intend for the preference for such 
communities to result in all grants, or the majority of grants, 
going to such communities to the exclusion of other impacted 
communities.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act.
Authorization of Appropriations for Trade Adjustment Assistance for 
        Communities (Section 1772)
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision authorizes $150,000,000 to the Secretary of 
Commerce for each of fiscal years 2009 and 2010, and 
$37,500,000 for the period beginning October 1, 2010 through 
December 31, 2010 to carry out the TAA for Communities program.
      The provision authorizes $40,000,000 to the Secretary of 
Labor for each of fiscal years 2009 and 2010, and $10,000,000 
for the period beginning October 1, 2010 through December 31, 
2010 to carry out the Community College and Career Training 
Grant Program.
      The provision authorizes $40,000,000 to the Secretary of 
Labor for each of fiscal years 2009 and 2010, and $10,000,000 
for the period beginning October 1, 2010 through December 31, 
2010 to carry out the Sector Partnership Grant Program.
Effective Date
      The provision goes into effect on the date of enactment 
of this Act.

          D. Part IV--Trade Adjustment Assistance for Farmers

Trade Adjustment Assistance for Farmers (Section 1781-1786 (amending 
        sections 291, 292, 293, 296 and 297 of the Trade Act of 1974))
Present Law
      A group of agricultural producers or their representative 
may file a petition for certification with the Secretary of 
Agriculture. Upon receipt of the petition, the Secretary shall 
publish a notice in the Federal Register that the petition has 
been received and is being investigated. The petitioner, or 
anyone else with a substantial interest, may request a public 
hearing concerning the petition.
      To be certified to receive TAA benefits under this 
chapter, the group of producers must show (1) that the national 
average price of the agricultural commodity in the most recent 
marketing year is less than 80 percent of the national average 
price for the commodity for the 5 previous marketing years, and 
(2) that increased imports of articles like or directly 
competitive with the commodity contributed importantly to the 
decline in price.
      A group of producers certified under Section 291 has one 
year to receive TAA benefits, but may apply to be re-certified 
for a second year of benefits if the group can show a further 
20 percent price decline in the national average price of the 
commodity, and that imports continued to contribute importantly 
to that decline.
      To qualify to receive benefits, individual agricultural 
producers that are covered by a certified petition must show 
(1) that the individual producer produced the qualified 
commodity; and (2) the net income of the producer has 
decreased. Producers meeting these criteria are eligible to 
participate in an initial technical assistance course, and to 
receive cash benefits, not to exceed $10,000, based on their 
production and the decline in price for the commodity. Where 
available, the producer may also attend more intensive 
technical assistance.
Explanation of Provision
      The provision defines an agricultural commodity producer, 
for the purpose of the TAA for Farmers program, to include 
fishermen, as well as farmers.
      The provision allows a group of producers to petition the 
Secretary based on a 15 percent decline in price, value of 
production, quantity of production, or cash receipts for the 
commodity, rather than a 20 percent decline in price. The 
provision shortens the look back period, from an average of 5 
years to an average of the national average price for the 
previous three year period. Petitioning producers must also 
show that imports contributed importantly to the decline in 
price, production, value of production, or cash receipts.
      Once the Secretary certifies a group of commodity 
producers for TAA, individual producers can qualify for 
benefits if the producer shows (1) that they are producers of 
the commodity; and (2) that the price received, quantity of 
production, or value of production for the commodity has 
decreased.
      Producers deemed eligible to receive benefits by the 
Secretary are eligible to receive initial technical assistance, 
and may opt to receive intensive technical assistance, which 
consists of a series of courses designed for producers of the 
certified commodity. Upon completion of the series of courses, 
the producer develops an initial business plan which (1) 
reflects the skills gained by the producer during the courses; 
and (2) demonstrates how the producer intends to apply these 
skills to the producer's farming or fishing operation. Upon 
approval by the Secretary of the business plan described above, 
the producer is entitled to receive up to $4,000 to implement 
the business plan or to assist in the development of a long-
term business plan.
      Producers who complete an initial business plan may 
choose to receive assistance to develop a long-term business 
adjustment plan. The Secretary must review the plan to ensure 
that it (1) will contribute to the economic adjustment of the 
producer; (2) considers the interests of the producer's 
employees, if any; and (3) demonstrates that the producer has 
sufficient resources to implement the plan. If the Secretary 
approves the plan, the producer is eligible to receive up to 
$8,000 to implement the long-term business plan.
      Once a petition is certified for the group of producers, 
qualifying producers are eligible for benefits for a 36-month 
period. A producer may not receive more than $12,000 in any 36-
month period to develop and implement business plans under the 
program.
      The provision allows fishermen and aquaculture producers 
who are otherwise eligible to receive TAA benefits to 
demonstrate increased imports based on imports of farm-raised 
or wild-caught fish or seafood, or both.
Reasons for Change
      The Conferees believe that the 20 percent price decline 
currently required for a group of producers to be certified 
under the TAA for Farmers program is too high, and creates an 
unnecessary barrier for producers to qualify for TAA benefits. 
Further, producers and the Department of Agriculture were 
concerned that the current five-year look back period was too 
long and burdensome for producers.
      Additionally, since net farm income is a function of many 
factors, it has proven very difficult for producers to show the 
required decline in net income, even when the price for 
specific commodities had declined significantly. Several 
disputes regarding whether producers met the net income test 
were taken to the U.S. Court of International Trade, resulting 
in significant administrative expense for both the producers 
and the Department of Agriculture.
      The Conferees believe that demonstrating a decline in the 
production or price of the commodity facing import competition 
is a better measure of the impact of trade on the individual 
producer, rather than net income. The provision would allow 
farmers to demonstrate that either their production decisions 
or price received for the qualified commodity were affected.
      The Conferees also believe that the focus of the TAA for 
Farmers program should be adjustment assistance, rather than 
cash benefits. Under the current program, most producers 
received only initial technical assistance, with little 
opportunity for additional curricula. The Conferees believe 
that all producers eligible for TAA benefits should receive 
more thorough technical assistance and the opportunity for 
individualized business planning, with financial assistance 
provided to help the producer implement the business plans.
      Further, technical assistance should be provided by the 
Department of Agriculture through the National Institute on 
Food and Agriculture (``NIFA''), which may choose to make 
grants to land grant universities and other outside 
organizations to assist in the development and delivery of 
technical assistance. NIFA (formerly the Cooperative State 
Research, Education, and Extension Service) delivers technical 
assistance under the current Farmers program, and had 
successfully developed curricula to respond to producers' 
adjustment needs.
      The Conferees believe that the current one-year limit to 
obtain TAA benefits unnecessarily limits producers' ability to 
access technical assistance, particularly when farmers and 
fishermen must spend significant portions of each year in the 
fields or at sea. Extending the eligibility period to 36 months 
will allow producers to take advantage of all the benefits 
offered, and will eliminate the need for the current burdensome 
recertification process.
      The Conferees believe that fishermen and aquaculture 
producers who are otherwise eligible for TAA should be able to 
demonstrate an increase in imports of like or directly 
competitive products without regard to whether those imported 
products were wild-caught or farm-raised. Current law allows 
these producers to apply for benefits based on imports of farm 
raised fish and seafood only.
      The Conferees expect that the Department of Agriculture 
will fully fund and operate the TAA for Farmers and Fishermen 
program for the full duration of each fiscal year for which it 
is authorized.
Effective Date
      The provision goes into effect upon expiration of the 90-
day period beginning on the date of enactment of this Act, and 
applies to petitions filed on or after that date.
Extension of Authorization and Appropriation for Trade Adjustment 
        Assistance for Farmers (Section 1787 (amending Section 298 of 
        the Trade Act of 1974))
Present Law
      The authorization and appropriation for the TAA for 
Farmers program expired on December 31, 2007. The program is 
currently authorized at $90 million per year.
Explanation of Provision
      This provision reauthorizes the program through December 
30, 2010, and maintains its funding at $90 million per year for 
fiscal years 2009 and 2010. The provision further provides 
funding on a prorated basis for the period beginning October 1, 
2010, and ending December 31, 2010.
Effective Date
      The provision goes into effect on the date of enactment 
of this Act.

                      E. Part V--General Provision

Government Accountability Office Report (Section 1793)
Present Law
      There is no provision in present law.
Explanation of Provision
      The provision requires the Comptroller General of the 
United States to prepare and submit a report to the Senate 
Finance Committee and the House Committee on Ways and Means on 
the operation and effectiveness of these amendments to chapters 
2, 3, 4, and 6 of the Trade Act no later than September 30, 
2012.
Reasons for Change
      It is critical that GAO review and evaluate the TAA 
program to assess the changes made by this legislation to 
ensure that they have improved the effectiveness, operation, 
and performance of the program.
Effective Date
      The provision goes into effect on the date of enactment 
of this Act.

           2. CUSTOMS AND BORDER PROTECTION COLLECTIONS \227\
---------------------------------------------------------------------------

    \227\ Description prepared by the majority staffs of the House 
Committee on Ways and Means and the Senate Committee on Finance.
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                              I. OVERVIEW

      The conference report prevents U.S. Customs and Border 
Protection (``CBP'') from collecting over $92 million in 
antidumping and countervailing duties that CBP collected on 
imports from Canada and Mexico between 2001 and 2005, and later 
distributed to U.S. companies that petitioned the U.S. 
Government for relief.

                             II. HOUSE BILL

      No provision

                         III. SENATE AMENDMENT

      Section 1801 of the American Recovery and Reinvestment 
Act of 2009, as passed by the Senate, has four sections. First, 
it prohibits the Secretary of Homeland Security, or any other 
person, from requiring repayment of, or in any other way 
recouping, duties that were (1) distributed pursuant to the 
Continued Dumping and Subsidy Offset Act of 2000 (``CDSOA''); 
(2) assessed and paid on imports of goods from Canada and 
Mexico; and (3) distributed on or after January 1, 2001, and 
before January 1, 2006. Second, it prohibits CBP from 
offsetting any current or future duty distributions on goods 
from countries other than Canada and Mexico in an attempt to 
recoup duties described above. Third, the provision requires 
CBP to refund any such duty repayments or recoupments it has 
already received. Further, it requires CBP to fully distribute 
any duties it is withholding as an offset against current or 
future duty distributions. Fourth, the provision clarifies that 
CBP is not prohibited from collecting payments resulting from 
(1) false statements or other misconduct by a recipient of a 
duty payment or (2) re-liquidation of entries with respect to 
which duty payments were made.

                         IV. CONFERENCE REPORT

      The conferees adopted the Senate provision. The conferees 
do not intend this provision to amend the antidumping or 
countervailing duty laws of the United States.

                         TITLE II OF DIVISION B

       ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES

                          Conference Document

                                 H.R. 1

                           Table of Contents

Assistance for Unemployed Workers and Struggling 
    Families............................................               1
        Short Title (House bill Section 2000; Senate 
          bill Section 2000; Conference agreement 
          Section 2000).................................               1
    Subtitle A--Unemployment Insurance..................               1
        Extension of Emergency Unemployment Compensation 
          Program Benefits (House bill Sec. 2001; Senate 
          bill Sec. 2001; Conference agreement Sec. 
          2001).........................................               1
        Increase in Unemployment Compensation Benefits 
          (House bill Sec. 2002; Senate bill Sec. 2002; 
          Conference agreement Sec. 2002)...............               2
        Special Transfers for Unemployment Compensation 
          Modernization (House bill Sec. 2003; Senate 
          bill Sec. 2003; Conference agreement Sec. 
          2003).........................................               3
        Temporary Assistance for States with Advances 
          (House bill n.a.; Senate bill Sec. 2004; 
          Conference agreement Sec. 2004)...............               5
        Full Federal Funding of Extended Unemployment 
          Compensation for a Limited Period (House bill 
          n.a.; Senate bill n.a.; Conference agreement 
          Sec. 2005)....................................               6
        Temporary Increase in Extended Unemployment 
          Benefits under the Railroad Unemployment 
          Insurance Act (House bill n.a.; Senate bill 
          n.a.; Conference agreement Sec. 2006).........               7
    Subtitle B--Assistance for Vulnerable Individuals...               8
        Emergency Fund for TANF Program (House bill 
          Section 2101; Senate bill Sec. 2101; 
          Conference agreement Sec. 2101)...............               8
        Extension of Supplemental Grants (House bill 
          n.a.; Senate bill Sec. 2102; Conference 
          Agreement Sec. 2102)..........................               9
        Clarification of Authority of States to Use TANF 
          Funds Carried over From Prior Years To Provide 
          TANF Benefits and Services (House bill n.a.; 
          Senate bill Sec. 2103; Conference Agreement 
          Sec. 2103)....................................              10
        Temporary Resumption of Prior Child Support Law 
          (House bill Sec. 2103; Senate bill Sec. 2104; 
          Conference agreement Sec. 2104)...............              10
        One-Time Emergency Payments to Certain Social 
          Security, Supplemental Security Income, 
          Railroad Retirement, Veterans Beneficiaries, 
          and Certain Government Retirees (House bill 
          Sec. 2102; Senate bill Sec. 1601; Conference 
          agreement sections 2201 and 2202).............              11

       Assistance for Unemployed Workers and Struggling Families

Short Title (House bill Section 2000; Senate bill Section 2000; 
        Conference agreement Section 2000)
Current Law
      No provision.
House Bill
      The ``Assistance for Unemployed Workers and Struggling 
Families Act.''
Senate Bill
      Same as the House bill.
Conference Agreement
      The conference agreement is the same as the House and 
Senate bills.

                   Subtitle A--Unemployment Insurance

Extension of Emergency Unemployment Compensation Program Benefits 
        (House bill Sec. 2001; Senate bill Sec. 2001; Conference 
        agreement Sec. 2001)
Current Law
      Title IV, Emergency Unemployment Compensation, of the 
Supplemental Appropriations Act, 2008 (Public Law 110-252; 26 
U.S.C. 3304 note) as amended by the Unemployment Compensation 
Act of 2008 (Public Law 110-449) created a temporary emergency 
unemployment compensation program (EUC08). The program ends on 
the week ending on or before March 31, 2009. No compensation 
under the program is payable for any week beginning after 
August 27, 2009. Funds in the extended unemployment 
compensation account (EUCA) of the unemployment trust fund 
(UTF) are used for financing EUC08 payments. State 
administration funds are made from the employment security 
administration account (ESAA). Compensation for EUC08 payments 
to former employees of non-profits and governments are from the 
general fund of the Treasury.
House Bill
      The duration of the EUC08 program would extend through 
the week ending on or before December 31, 2009. No benefits 
would be payable for any week beginning after May 31, 2010. The 
extension would be financed through the general fund of the 
Treasury. The funds would not need to be repaid.
Senate Bill
      Same provision.
Conference Agreement
      The conference agreement includes the identical 
provisions of the House and Senate bills.
Increase in Unemployment Compensation Benefits (House bill Sec. 2002; 
        Senate bill Sec. 2002; Conference agreement Sec. 2002)
Current Law
      No such provision. Federal law does not provide formulas, 
floors, or ceilings of regular weekly State unemployment 
compensation amounts. In general, the States set weekly benefit 
amounts as a fraction of the individual's average weekly wage 
up to some State-determined maximum. Some States include 
dependents' allowances in addition to the underlying benefit.
House Bill
      The provision would create an additional, federally-
funded $25 weekly benefit that would be available to all 
individuals receiving regular unemployment compensation (UC) 
benefits. All the provisions of section 2002 would also apply 
to regular UC, extended benefits (EB), and EUC08 benefits. It 
would require States to not take the additional compensation 
into consideration when determining regular UC benefits 
(including any dependants' allowances). The additional benefit 
would be payable either at the same time and in the same manner 
as any regular UC payable for the week involved or payable 
separately but on the same weekly basis as any regular 
compensation otherwise payable. States would not be allowed to 
alter the method governing the computation of UC under State 
law in such a manner that the weekly benefit amount would be 
less than the benefit amount that would have been payable under 
State law as of December 31, 2008. Funding for the additional 
benefit would be appropriated from the general fund of the 
Treasury, without fiscal year limitation. The funds would not 
be required to be repaid.
      States would pay the additional compensation to 
individuals once the State entered into an agreement with the 
Labor Secretary and ending before January 1, 2010. The 
additional compensation would be ``grandfathered'' for 
individuals who had not exhausted the right to regular 
compensation as of January 1, 2010. No additional compensation 
would be payable for any week beginning after June 30, 2010.
      The additional benefit would be disregarded in 
considering the amount of income of any individual for any 
purposes under Medicaid and SCHIP.
Senate Bill
      Same provision.
Conference Agreement
      The conference agreement includes the identical 
provisions of the House and Senate bills.
Special Transfers for Unemployment Compensation Modernization (House 
        bill Sec. 2003; Senate bill Sec. 2003; Conference agreement 
        Sec. 2003)
Current Law
      Section 903 of the Social Security Act (SSA) describes 
the set of conditions under which funds are transferred to 
eligible State unemployment accounts from the federal accounts 
in the Unemployment Trust Fund (UTF) when those federal account 
balances exceed certain levels. Transfers of excess funds in 
the UTF to State accounts are called Reed Act distributions. No 
Reed Act distributions are expected in the next 5 years.
      Section 903(a)(2)(B) of the SSA describes the manner in 
which the distribution of Reed Act funds occurs. Funds are 
distributed to the State UTF accounts based on the State's 
share of estimated federal unemployment taxes (excluding 
reduced credit payments) made by the State's employers.
      Unemployment Insurance Policy Letter 44-97, which 
interpreted section 5401 of P.L. 105-33, the Balanced Budget 
Act of 1997, says that States are not required to offer an 
alternative base period (ABP) in determining eligibility for UC 
benefits.
      While federal laws and regulations provide broad 
guidelines on UC coverage, eligibility, and benefit 
determination, the specifics of regular UC benefits are 
determined by each State through State laws and regulations.
House Bill
      The House bill would provide a special transfer of UTF 
funds from the federal unemployment account (FUA) of up to $7 
billion to the State accounts within the UTF as ``incentive 
payments'' for changing or already having in place certain 
State UC laws. The maximum incentive payment allowable for a 
State would be calculated using the methods required by the 
Reed Act if a distribution were to have occurred on October 1, 
2008.
      One-third of the maximum payment would be contingent on 
State law calculating the base period by either:
      (A) allowing use of a base period that includes the most 
recently completed calendar quarter before the start of the 
benefit year for the purpose of determining UC eligibility; or
      (B) providing that, in the case of an individual who 
would not otherwise be UC-eligible under State law, eligibility 
shall be determined using a base period that includes the most 
recently completed calendar quarter.
      The remaining 2/3 of the incentive payment would be 
contingent on qualifying for the first 1/3 payment and the 
applicable State law containing at least two of the following 
four provisions:
      (A) No denial of UC under State law provisions relating 
to availability for work, active search for work, or refusal to 
accept work solely because the individual is seeking only part-
time work. States may exclude an individual if the majority of 
the weeks of work in the individual's base period do not 
include part-time work. The Labor Secretary would define part-
time.
      (B) No UC disqualification for separation from employment 
if it is for compelling family reasons. These reasons must 
include (i) domestic violence, (ii) illness or disability of an 
immediate family member, and (iii) the need to accompany a 
spouse to a place from where it is impractical to commute and 
due to a change in location of the spouse's employment. The 
Labor Secretary would define immediate family member.
      (C) Weekly UC continues for individuals who have 
exhausted all rights to regular benefits but are enrolled and 
making satisfactory progress in a State-approved training 
program or in a job training program authorized under the 
Workforce Investment Act of 1998. The benefit must be for at 
least an additional 26 weeks and be equivalent to the 
previously calculated UC benefit (including dependents' 
allowances) for the most recent benefit year. The training 
program must prepare the individual for entry into a ``high-
demand'' occupation.
      (D) UC Dependents' allowances are provided to all 
individuals with a dependent (as defined by State law) at a 
level equal to at least $15 per dependent per week. The 
aggregate limit on dependents' allowances must be not less than 
the lesser of $50 or 50% of the weekly benefit amount for the 
benefit year.
      Within 60 days after enactment, the Labor Secretary may 
prescribe (by regulation or otherwise) information required in 
relation to the compliance of the modernization requirements. 
The Labor Secretary would have 30 days after receiving a 
complete application to determine if modernization incentives 
are payable to the State.
      The Labor Secretary, while determining if State law meets 
the requirements for an incentive payment, would disregard any 
State law provisions that are not currently effective as 
permanent law or are subject to a discontinuation under certain 
circumstances. Once the Treasury Secretary has been notified of 
the certification of the incentive payment, the appropriate 
transfer to the State account would occur within seven days. 
State law provisions which are to take effect within 12 months 
after the date of their certification would be considered to be 
in effect for the purposes of certification. States must be 
eligible for certification under section 303 [of the Social 
Security Act] and under section 3304 of the Federal 
Unemployment Tax Act (FUTA) [section 3304 of the Internal 
Revenue Code of 1986].
      Applications submitted before enactment or after the 
latest date necessary (as determined by the Labor Secretary) 
will not be considered in order to ensure that all incentive 
payments are made before October 1, 2011. Incentive payments 
may be used only for the payment of UC benefits and dependents' 
allowances. An exception is made if the State appropriates the 
funds for administrative expenses. Funds that satisfy this 
exception may be used for the administration of UC law and for 
public employment offices.
      The Treasury Secretary would be required to reserve $7 
billion for incentive payments in the Federal Unemployment 
Account (FUA) of the UTF. Any amount so reserved for which the 
Secretary of the Treasury has not received a certification 
under the proposed paragraph (4)(B) of the bill by the deadline 
determined by the Secretary of Labor shall become unrestricted 
regarding its use as part of the FUA upon the close of fiscal 
year 2011.
      The bill would transfer a total of $500 million from the 
federal employment security administration account (ESAA) to 
the States' accounts in the UTF within 30 days of enactment. 
Each State's transfers would be calculated using the methods 
required by the Reed Act if a distribution were to have 
occurred on October 1, 2008. Any amount transferred to a State 
account as a result of this $500 million transfer would be 
required to be used by the State agency of such State only in 
(A) payment of expenses incurred through carrying out of the 
purposes in State law required to receive the incentive 
payments, (B) improved outreach to individuals who might be 
eligible for regular UC by virtue of the changes in State law, 
(C) improvement of unemployment benefit and unemployment tax 
operations, including responding to increased demand for 
unemployment compensation, and (D) staff-assisted reemployment 
services for UC claimants.
Senate Bill
      Same as the House bill, except that the Senate bill does 
not explicitly give the Secretary of Labor the ability to 
define part-time work.
      The Senate bill would require that all payments be made 
before October 1, 2010 (rather than October 1, 2011) except in 
those States where the first day of the first regularly 
scheduled session of the State legislature following enactment 
begins after December 31, 2010. Those States' payments would be 
made before October 1, 2011.
Conference Agreement
      The conference agreement follows the House bill with two 
exceptions.
      If in a training program (option C under the qualifying 
conditions of the remaining 2/3 incentive payment), the 
agreement would allow States to not pay UC benefit if the 
individual is receiving stipends or other training allowances. 
Under the same training program option, the agreement would 
also allow States to opt to take any deductible income (as 
determined under State law) into account and offset the UC 
payment.
Temporary Assistance for States with Advances (House bill n.a.; Senate 
        bill Sec. 2004; Conference agreement Sec. 2004)
Current Law
      Section 1202(b) of the Social Security Act (42 U.S.C. 
1322(b)) requires that States are charged interest on new loans 
that are not repaid by the end of the fiscal year in which they 
were obtained. The interest rate on the loans is the same rate 
as that paid by the federal government on State reserves in the 
UTF for the quarter ending December 31 of the preceding year, 
but not higher than 10% per annum. States may not pay the 
interest directly or indirectly from funds in their State 
account with the UTF.
      Section 1202(b)(2) allows a State to borrow funds without 
interest from the FUA during the year if the State repays the 
loans by September 30 of the calendar year in which the 
advances were made. No loans may be made in October, November, 
or December of the calendar year of such an interest-free loan. 
Otherwise, the ``interest-free'' loan will accrue interest 
charges.
House Bill
      No provision.
Senate Bill
      The Senate bill would temporarily waive interest payments 
and the accrual of interest on advances to State unemployment 
funds by amending section 1202(b) of the Social Security Act. 
The interest payments that come due from the time of enactment 
of the proposal until December 31, 2010 would be deemed to have 
been made by the State. No interest on advances accrues during 
the period.
Conference Agreement
      The conference agreement follows the Senate bill.
Full Federal Funding of Extended Unemployment Compensation for a 
        Limited Period (House bill n.a.; Senate bill n.a.; Conference 
        agreement Sec. 2005)
Current Law
      The Extended Benefit (EB) program, established by the 
Federal-State Extended Unemployment Compensation Act of 1970 
(EUCA), P.L. 91-373 (26 U.S.C. 3304, note), may extend receipt 
of unemployment benefits (extended benefits) at the State level 
if certain economic situations exist within the State.
      Extended benefits (EB) are funded half (50%) by the 
federal government through its account for that purpose in the 
UTF; States fund the other half (50%) through their State 
accounts in the UTF.
      Individual eligibility for EB payments, among other 
matters, requires that the worker has exhausted all rights to 
regular UC benefits and be within the State-determined benefit 
year (generally within 52 weeks of first claiming regular UC 
eligibility) when a State's EB program becomes active on 
account of economic conditions.
      States that do not require a one-week UC waiting period, 
or have an exception for any reason to the waiting period, must 
pay 100% of the first week of EB (rather than 50%). P.L. 110-
449, the Unemployment Compensation Extension Act of 2008, 
suspended this waiting week requirement from the time of its 
enactment until the week ending on or before December 8, 2009.
House Bill
      No provision.
Senate Bill
      No provision.
Conference Agreement
      The conference agreement would temporarily alter Federal-
State funding ratios. Extended benefits would be 100% federally 
financed from the date of enactment through January 1, 2010.
      The agreement also would temporarily allow States to 
ignore benefit year calculations but instead base EB 
eligibility upon having qualified for and exhausted EUC08 
benefits, disregarding benefit year calculations as long as the 
EB period fell between the date of enactment and before January 
1, 2010.
      The agreement would allow States to opt to grandfather 
those workers who received EUC08 payments and exhausted them on 
or after January 1, 2010. Those workers would be eligible to 
receive EB payments based on EUC08 exhaustion and disregarding 
benefit year determinations until the week ending on or before 
June 1, 2010.
      The agreement would continue the temporary suspension of 
the waiting week requirement for federal funding until the week 
ending before May 30, 2010.
Temporary Increase in Extended Unemployment Benefits under the Railroad 
        Unemployment Insurance Act. (House bill n.a.; Senate bill n.a.; 
        Conference agreement Sec. 2006)
Current Law
      The Railroad Unemployment Insurance Act (45 U.S.C. 351-
369) provides up to 26 weeks of normal unemployment benefits 
for railroad employees. It also provides up to 13 weeks of 
extended benefits for railroad employees with 10 or more years 
of service.
House Bill
      No provision.
Senate Bill
      No provision.
Conference Agreement
      The conference agreement would temporarily increase the 
duration of extended unemployment benefits for railroad 
workers. The agreement would add an additional 13 weeks to the 
maximum amount of time railroad workers may receive extended 
unemployment benefits, allowing for up to 26 weeks of extended 
benefits in addition to the 26 weeks of normal benefits 
provided under current law.
      The agreement would apply to all qualifying railroad 
employees, regardless of their years of service (i.e., it would 
apply to those with fewer than 10 years of service, who do not 
qualify for extended benefits under current law). The provision 
would apply to employees who received normal unemployment 
benefits during the benefit year beginning July 1, 2008 and 
ending June 30, 2009. No extended benefits under this bill 
would begin after December 31, 2009.
      The agreement would appropriate $20 million from the 
general fund of the Treasury to cover the cost of the 
additional extended unemployment benefits. Subsection 2006(b) 
would provide an additional $80,000 for administering the 
additional benefits. If the additional extended benefits were 
to reach $20 million in cost before December 31, 2009, the 
additional benefits would terminate.

           Subtitle B--Assistance for Vulnerable Individuals

Emergency Fund for TANF Program (House bill Section 2101; Senate bill 
        Sec. 2101; Conference agreement Sec. 2101)
Current Law
      TANF Recession-Related Funds. The 1996 welfare reform 
established a contingency fund under the Temporary Assistance 
for Needy Families (TANF) block grant. To qualify for 
contingency dollars, States must spend under the TANF program a 
sum of their own dollars equal to their pre-TANF FY1994 
spending and meet a test of economic need. Economic need is 
established by either: (1) Supplemental Nutrition Assistance 
Program (SNAP, formerly known as food stamps) participation for 
the most recent three months for which data are available that 
is at least 10% higher than it was during the corresponding 
three-month period in either FY1994 or FY1995; or (2) a three-
month average unemployment rate of at least 6.5% and that 
equals or exceeds 110% of the rate measured in the 
corresponding three-month period in either of the previous two 
years. Eligible expenditures above the pre-TANF level are 
matched at the Medicaid (Federal Medical Assistance Percentage 
or FMAP) rate. A state's annual contingency fund grant is 
capped at 20% of its basic TANF block grant. The 1996 welfare 
law appropriated $2 billion to the contingency fund. At the 
beginning of FY2009, about $1.3 billion remained in the 
contingency fund. The contingency fund is available to the 50 
States and the District of Columbia. The Commonwealth of Puerto 
Rico, Guam, the Virgin Islands, and tribes operating tribal 
TANF programs are not eligible for contingency funds.
      TANF Caseload Reduction Credit. TANF established federal 
work participation standards, which are numerical performance 
standards that States must meet or be subject to a financial 
penalty. A State must meet two standards--the all family 
standard of 50% and the two-parent standard of 90%. These 
standards may be met either by engaging participants in 
creditable activities or through reductions in the cash welfare 
caseload. States are given a caseload reduction credit toward 
the standards of one percentage point for each percent decline 
in the caseload from FY2005 to the preceding fiscal year. Under 
current law, the caseload reduction credit for FY2009 is based 
on caseload change from FY2005 to FY2008; the credit for FY2010 
will be based on caseload change from FY2005 to FY2009; the 
caseload reduction credit for FY2011 will be based on caseload 
change from FY2005 to FY2010.
House Bill
      TANF Recession Funds. The House bill retains the current 
TANF contingency fund and creates a new, temporary emergency 
contingency fund for FY2009 and FY2010. States with increased 
cash welfare caseloads under TANF or separate State programs 
funded with TANF State maintenance of effort dollars are 
eligible for capped grants from the fund. Also eligible are 
States with increased short-term non-recurrent benefit 
expenditures or increased subsidized employment expenditures 
under TANF and separate State programs. The fund reimburses 
States for 80% of the increased expenditures on basic 
assistance (cash welfare), short-term non-recurrent benefits, 
or subsidized employment in TANF and separate State programs, 
up to a cap. Increased caseloads and expenditures are measured 
on a quarterly basis, comparing each quarter in FY2009 and 
FY2010 to the corresponding quarter in the base years of FY2007 
and FY2008. The applicable base period for a State varies 
depending on whichever results in the greatest increase for 
each State for the cash assistance caseload and by expenditure 
category.
      Total combined State grants from the current law 
contingency fund and the emergency contingency fund are limited 
to 25% of a State's basic block grant. The emergency fund is 
appropriated such sums as necessary (no national funding cap, 
but total funding is limited by individual State caps discussed 
above). Puerto Rico, Guam, and the Virgin Islands are eligible 
for emergency contingency funds.
      Caseload Reduction Credit. The House bill gives States an 
optional measuring period for the caseload reduction credit 
that would apply to the FY2010 and FY2011 standards. States 
would have the option to measure caseload reduction from FY2005 
to either FY2007 or FY2008 when determining the caseload 
reduction credit toward the TANF work participation standards 
for those two years.
Senate Bill
      The Senate bill includes all the provisions of the House 
bill, with modifications. The Senate bill caps the 
appropriation to the TANF emergency contingency fund at $3 
billion. For the Commonwealth of Puerto Rico, Guam, and the 
Virgin Islands, any payments from the emergency contingency 
fund are excluded from the overall limit on federal funding for 
public assistance programs, including TANF, that applies to 
these jurisdictions. The Senate bill also gives States an 
optional measuring period for the caseload reduction credit for 
the FY2009 standards, allowing States to measure caseload 
reduction from FY2005 to FY2007 for that year.
Conference Agreement
      The conference agreement follows the House and Senate 
bills, with some modifications. It sets the appropriation for 
the emergency contingency fund at $5 billion. The cap on each 
State's grant is modified, from a cap on each year's grant, to 
a cap on cumulative grants over the two years that the 
emergency fund will operate. Cumulative, combined grants from 
the existing contingency fund and the emergency fund are 
limited to 50% of a state's annual basic block grant for FY2009 
and FY2010.
      The agreement also makes tribes that operate tribal TANF 
programs eligible for the emergency fund. Tribes will be able 
to access the fund in the same manner as the States, and are 
similarly limited to cumulative emergency fund grants equal to 
50% of its annual tribal family assistance grant.
      The agreement follows the Senate bill for the temporary 
modifications to the caseload reduction credit. It also 
clarifies that all temporary provisions will be repealed. The 
emergency fund is repealed as of October 1, 2010. The change to 
the caseload reduction credit is repealed as of October 1, 
2011.
Extension of Supplemental Grants (House bill n.a.; Senate bill Sec. 
        2102; Conference Agreement Sec. 2102).
Current Law
      TANF provides supplemental grants to 17 States that met 
historical criteria of low federal grants for welfare per poor 
person and/or high population growth. Supplemental grants total 
$319 million, but are set to expire at the end of FY2009.
House Bill
      No provision.
Senate Bill
      The Senate bill extends supplemental grants through 
FY2010.
Conference Agreement
      The conference agreement includes the Senate provision, 
extending supplemental grants through FY2010.
Clarification of Authority of States to Use TANF Funds Carried Over 
        From Prior Years To Provide TANF Benefits and Services (House 
        bill n.a.; Senate bill Sec. 2103; Conference Agreement Sec. 
        2103)
Current Law
      States and tribes may reserve unused TANF funds without 
fiscal year limit. However, the use of these reserves is 
restricted to providing assistance (essentially cash welfare).
House Bill
      No provision.
Senate Bill
      Allows States to use reserve TANF funds for any TANF 
benefit, service, or activity.
Conference Agreement
      The conference agreement includes the Senate provision.
Temporary Resumption of Prior Child Support Law (House bill Sec. 2103; 
        Senate bill Sec. 2104; Conference agreement Sec. 2104)
Current Law
      The federal government reimburses each State 66% of its 
expenditures on Child Support Enforcement (CSE) activities. The 
federal government also provides States with an incentive 
payment to encourage them to operate effective CSE programs. 
Federal law requires States to reinvest CSE incentive payments 
back into the CSE program or related activities. P.L. 109-171 
(the Deficit Reduction Act of 2005) prohibited federal 
matching/reimbursement of CSE incentive payments that are 
reinvested in the CSE program.
House Bill
      The House bill requires HHS to temporarily provide 
federal matching funds on CSE incentive payments that States 
reinvest back into the CSE program. This means that CSE 
incentive payments that are/were received by States and 
reinvested in the CSE program can be used to draw down federal 
funds. Federal matching funds for CSE incentive payments are to 
be provided for FY2009 and FY2010 (i.e., from October 1, 2008 
through September 30, 2010).
Senate Bill
      Same as the House bill, except that federal matching 
funds for CSE incentive payments are to be provided for the 
period October 1, 2008 through December 31, 2010 (i.e., from 
October 1, 2008 through December 31, 2010).
Conference Agreement
      The conference agreement follows the House bill.
One-Time Emergency Payments to Certain Social Security, Supplemental 
        Security Income, Railroad Retirement, Veterans Beneficiaries, 
        and Certain Government Retirees (House bill Sec. 2102; Senate 
        bill Sec. 1601; Conference agreement sections 2201 and 2202).

   Section 2201. Economic Recovery Payments to Recipients of Social 
Security, Supplement Security Income, Railroad Retirement Benefits, and 
         Veterans Disability Compensation or Pension Benefits.

Current Law
      Title II of the Social Security Act authorizes cash 
benefits for retired and disabled workers and their dependents 
and survivors under the Old Age and Survivors Insurance (OASI) 
and Disability Insurance (DI) programs. Title XVI of the Social 
Security Act authorizes monthly cash benefits for blind and 
disabled persons and persons age 65 or over who have limited 
income and resources under the Supplemental Security Income 
(SSI) program.
      The Railroad Retirement Act of 1974 authorizes cash 
benefits for retired and disabled railroad workers and their 
dependents and survivors.
      Title 38 of the United States Code authorizes cash 
benefits for certain veterans and their dependents and 
survivors.
      Current law does not authorize any one-time emergency 
payments for any of these programs.
      Under Title II of the Social Security Act, a person is 
eligible for Social Security benefits only if he or she has 
insured status as the result of sufficient employment that was 
covered by the Social Security system and for which Social 
Security payroll taxes were paid. Federal employees hired 
before 1983 were covered by the Civil Service Retirement System 
(CSRS) and, unless they were eligible for the CSRS-Offset or 
elected to enroll in the Federal Employees Retirement System 
(FERS), they are not eligible for Social Security benefits on 
the basis of their federal service. In addition, some state and 
local government employees are not covered by the Social 
Security system and thus are not eligible for Social Security 
benefits on the basis of their public service.
      Current law does not authorize any one-time tax credit 
for government retirees who are not eligible for Social 
Security benefits.
House Bill
      The House bill authorizes a one-time emergency payment to 
be made to SSI recipients. This payment must be made by the 
Social Security Administration (SSA) at the earliest practical 
date and no more than 120 days after enactment of the law. The 
amount of this one-time emergency payment would be equal to the 
average monthly amount of federal SSI benefits paid to an 
individual (approximately $456) or a married couple 
(approximately $637) in the most recent month for which data 
are available.
      To be eligible for the one-time emergency payment, a 
person must be eligible for an SSI benefit, other than a 
personal needs allowance, for at least one day during the month 
of the payment. A person who was eligible for an SSI benefit, 
other than a personal needs allowance, for at least one day 
during the two-month period preceding the month of the 
emergency payment and their SSI eligibility ended during the 
two-month period solely because their income exceeded the SSI 
income guidelines is also eligible for the one-time emergency 
payment.
      Only persons who are determined by the Commissioner of 
Social Security in calendar year 2009 to fall into one of the 
categories described above are eligible for the emergency 
payment. Thus, a person who is awarded SSI benefits anytime 
after 2009 would not be eligible for the emergency payment, 
even if he or she is awarded benefits retroactive to a date 
before the date of the emergency payment.
      The one-time emergency payment would be protected from 
garnishment and assignment and would not be considered income 
in the month of receipt and the following 6 months for the 
purposes of determining eligibility of the recipient (or the 
recipient's spouse or family) for any means-tested program 
funded entirely or in part with federal funds.
      The House bill provides an appropriation of such sums as 
may be necessary to carry out this section, including any 
administrative costs associated with the payment.
Senate Bill
      The Senate bill provides for a one-time economic recovery 
payment of $300 to adult Social Security (Old Age and Survivors 
Insurance and Disability Insurance) and Railroad Retirement 
beneficiaries, Supplemental Security Income (SSI) recipients, 
and veterans receiving compensation or pension benefits from 
the Department of Veterans Affairs.
      The economic recovery payment would be made by the 
Secretary of the Treasury after eligible beneficiaries are 
identified by the Social Security Administration (SSA), the 
Railroad Retirement Board, and the Department of Veterans 
Affairs. Payments are to be made at the earliest practicable 
date and in no event later than 120 days after enactment.
      To be eligible for the economic recovery payment, a 
person must have been during the three-month period prior to 
the month of the enactment: an adult Social Security Old Age 
and Survivors Insurance (OASI) or Disability Insurance (DI) 
beneficiary (including adults eligible for child's benefits on 
the basis of as disability that began before the age of 22, 
persons eligible under transitional insured status, and persons 
eligible under special rules for uninsured persons over the age 
of 72), an adult Railroad Retirement or disability beneficiary 
(including dependents, survivors, and disabled adult children), 
a veterans pension or compensation beneficiary, or an SSI 
recipient (excluding persons who only receive a personal needs 
allowance).
      The Senate bill requires that economic recovery payment 
recipients live in the United States or its territories. The 
Senate bill prohibits any person from receiving more than one 
economic recovery payment regardless of whether the individual 
is entitled to, or eligible for, more than one benefit or cash 
payment under this section.
      The Senate bill prohibits the payment of an economic 
recovery payment to any Social Security beneficiary or person 
eligible for Social Security benefits paid by the Railroad 
Retirement Board, or SSI recipient, if, for the most recent 
month of the three-month period prior to enactment the person's 
benefits were not payable due to his or her status as a 
prisoner, inmate in a public institute, illegal alien, or 
fugitive felon.
      The bill prohibits an economic recovery payment to any 
veterans compensation or pension beneficiary if, for the most 
recent month of the three-month period prior to enactment, the 
person's benefits were not payable due to his or her status as 
a prisoner or fugitive felon. It also prohibits the payment of 
an economic recovery payment to any person who dies before the 
date he or she is certified as eligible to receive a payment.
      The bill limits the applicability of the economic 
recovery payments to retroactive beneficiaries by providing 
that no payment may be made for any reason after December 31, 
2010.
      The economic recovery payment would not be considered 
income in the month of receipt and the following 9 months for 
the purposes of determining eligibility of the recipient (or 
the recipient's spouse or family) for any means-tested program 
funded entirely or in part with federal funds. The payment 
would not be considered income for the purposes of taxation and 
would be protected from garnishment and assignment. However, 
the payment could be used to collect debts owed to the federal 
government. Electronic payments and payments to representative 
payees and fiduciaries would be authorized.
      The Senate bill provides additional appropriations for 
the period from fiscal year 2009 through fiscal year 2011 in 
the amounts of: $57,000,000 to the Department of the Treasury; 
$90,000,000 to the SSA; $1,000,000 to the Railroad Retirement 
Board; and $7,200,000 to the Department of Veterans Affairs for 
administrative expenses associated with the one-time economic 
recovery payment. Of the money appropriated to the Department 
of Veterans Affairs, $100,000 shall be for the Information 
Systems Technology Account and $7,100,000 for general expenses 
related to the administration of the economic recovery payment. 
It also appropriates to the Department of the Treasury such 
sums as may be necessary for making economic recovery payments.
      The Senate bill provides that the amount of a person's 
Making Work Pay tax credit authorized by Section 1001 of 
Division A of the Senate bill would be offset by the amount of 
any economic recovery payment that person receives.
Conference Agreement
      The conference agreement follows the Senate bill, with 
some modifications. The conference agreement directs the 
Secretary of the Treasury to disburse a onetime Economic 
Recovery Payment of $250 to adults who were eligible for Social 
Security benefits, Railroad Retirement benefits, or veteran's 
compensation or pension benefits; or individuals who were 
eligible for Supplemental Security Income (SSI) benefits 
(excluding individuals who receive SSI while in a Medicaid 
institution). Only individuals who were eligible for one of the 
four programs for any of the three months prior to the month of 
enactment shall receive an Economic Recovery Payment.
      The provision stipulates that Economic Recovery Payments 
will only be made to individuals whose address of record is in 
1 of the 50 states, the District of Columbia, Puerto Rico, 
Guam, the United States Virgin Islands, American Samoa, or the 
Northern Mariana Islands.
      An individual shall only receive one $250 Economic 
Recovery Payment under this section regardless of whether the 
individual is eligible for a benefit from more than one of the 
four federal programs. If the individual is also eligible for 
the ``Making Work Pay'' credit from Section 1001, that credit 
shall be reduced by the Economic Recovery Payment made under 
this section.
      Individuals who are otherwise eligible for an Economic 
Recovery Payment will not receive a payment if their federal 
program benefits have been suspended because they are in 
prison, a fugitive, a probation or parole violator, have 
committed fraud, or are no longer lawfully present in the 
United States.
      The provision directs the Commissioner of Social 
Security, the Railroad Retirement Board, and the Secretary of 
Veterans Affairs to provide the Secretary of the Treasury with 
information and data to send the payments to eligible 
individuals and to disburse the payments.
      The provision provides that the Economic Recovery 
Payments shall not be taken into account as income, or taken 
into account as resources for the month of receipt and the 
following 9 months, for purposes of determining the eligibility 
of such individual or any other individual for benefits or 
assistance, or the amount or extent of benefits or assistance, 
under any Federal program or under any State or local program 
financed in whole or in part with Federal funds.
      The provision provides that Economic Recovery Payments 
shall not be considered gross income for income tax purposes 
and that the payments are protected by the assignment and 
garnishment provisions of the four federal benefit programs. 
The payments will be subject to the Treasury Offset Program.
      The provision stipulates that if an individual who is 
eligible for an Economic Recovery Payment has a representative 
payee, the payment shall be made to the representative payee 
and the entire payment shall only be used for the benefit of 
the individual who is entitled to the Economic Recovery 
Payment.
      The provision appropriates the following amounts for 
FY2009 through FY2011: to the Secretary of the Treasury, $131 
million for administrative costs to carry out the provisions of 
this section and the new Section 36A (the Making Work Pay 
credit); to the Commissioner of Social Security, such funds as 
are necessary to make the payments and $90 million to carry out 
the provisions of this section; to the Railroad Retirement 
Board, such funds as are necessary to make the payments and 
$1.4 million to carry out the provisions of this section; and 
to the Secretary of Veterans Affairs, such funds as are 
necessary to make the payments, $100,000 for the Information 
Systems Technology account and $7,100,000 to the General 
Operating Expenses account.
      The Secretary of the Treasury shall commence making 
payments as soon as possible, but no later than 120 days after 
the date of enactment. No Economic Recovery Payments shall be 
made after December 31, 2010.

     Section 2202. Special Credit for Certain Government Retirees.

Current Law
      No provision.
House Bill
      No provision.
Senate Bill
      No provision.
Conference Agreement
      The conference agreement creates a $250 credit ($500 for 
a joint return where both spouses are eligible) against income 
taxes owed for tax year 2009 for individuals who receive a 
government pension or annuity from work not covered by Social 
Security, and were not eligible to receive a payment under 
section 2201. If the individual is also eligible for the 
``Making Work Pay'' credit from Section 1001, that credit shall 
be reduced by the credit made under this section. Each tax 
return on which this credit is claimed must include the social 
security number of the taxpayer (in the case of a joint return, 
the social security number of at least one spouse).  The 
provision states that the credit under this section shall be a 
refundable credit.
      The provision provides that any credit or refund allowed 
or made by this provision shall not be taken into account as 
income and shall not be taken into account as resources for the 
month of receipt and the following two months for purposes of 
determining the eligibility of such individual or any other 
individual for benefits or assistance, or the amount or extent 
of benefits or assistance, under any Federal program or under 
any State or local program financed in whole or in part with 
Federal funds.
      The provision is effective on the date of enactment.

                 TITLE III--HEALTH INSURANCE ASSISTANCE

  A. Assistance for COBRA Continuation Coverage (sec. 3002(a) of the 
    House bill, sec. 3001 of the Senate amendment, sec. 3001 of the 
  conference agreement, and sec. 4980B and new secs. 139C, 6432, and 
                           6720C of the Code)

                              PRESENT LAW

In general
      The Code contains rules that require certain group health 
plans to offer certain individuals (``qualified 
beneficiaries'') the opportunity to continue to participate for 
a specified period of time in the group health plan 
(``continuation coverage'') after the occurrence of certain 
events that otherwise would have terminated such participation 
(``qualifying events'').\228\ These continuation coverage rules 
are often referred to as ``COBRA continuation coverage'' or 
``COBRA,'' which is a reference to the acronym for the law that 
added the continuation coverage rules to the Code.\229\
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    \228\ Sec. 4980B.
    \229\ The COBRA rules were added to the Code by the Consolidated 
Omnibus Budget Reconciliation Act of 1985, Pub. L. No. 99-272. The 
rules were originally added as Code sections 162(i) and (k). The rules 
were later restated as Code section 4980B, pursuant to the Technical 
and Miscellaneous Revenue Act of 1988, Pub. L. No. 100-647.
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      The Code imposes an excise tax on a group health plan if 
it fails to comply with the COBRA continuation coverage rules 
with respect to a qualified beneficiary. The excise tax with 
respect to a qualified beneficiary generally is equal to $100 
for each day in the noncompliance period with respect to the 
failure. A plan's noncompliance period generally begins on the 
date the failure first occurs and ends when the failure is 
corrected. Special rules apply that limit the amount of the 
excise tax if the failure would not have been discovered 
despite the exercise of reasonable diligence or if the failure 
is due to reasonable cause and not willful neglect.
      In the case of a multiemployer plan, the excise tax 
generally is imposed on the group health plan. A multiemployer 
plan is a plan to which more than one employer is required to 
contribute, that is maintained pursuant to one or more 
collective bargaining agreements between one or more employee 
organizations and more than one employer, and that satisfies 
such other requirements as the Secretary of Labor may prescribe 
by regulation. In the case of a plan other than a multiemployer 
plan (a ``single employer plan''), the excise tax generally is 
imposed on the employer.
Plans subject to COBRA
      A group health plan is defined as a plan of, or 
contributed to by, an employer (including a self-employed 
person) or employee organization to provide health care 
(directly or otherwise) to the employees, former employees, the 
employer, and others associated or formerly associated with the 
employer in a business relationship, or their families. A group 
health plan includes a self-insured plan. The term group health 
plan does not, however, include a plan under which 
substantially all of the coverage is for qualified long-term 
care services.
      The following types of group health plans are not subject 
to 
the Code's COBRA rules: (1) a plan established and maintained 
for 
its employees by a church or by a convention or association of 
churches which is exempt from tax under section 501 (a ``church 
plan''); (2) a plan established and maintained for its 
employees by the Federal government, the government of any 
State or political subdivision thereof, or by any 
instrumentality of the foregoing (a ``governmental plan''); 
\230\ and (3) a plan maintained by an employer that normally 
employed fewer than 20 employees on a typical business day 
during the preceding calendar year \231\ (a ``small employer 
plan'').
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    \230\ A governmental plan also includes certain plans established 
by an Indian tribal government.
    \231\ If the plan is a multiemployer plan, then each of the 
employers contributing to the plan for a calendar year must normally 
employ fewer than 20 employees during the preceding calendar year.
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Qualifying events and qualified beneficiaries
      A qualifying event that gives rise to COBRA continuation 
coverage includes, with respect to any covered employee, the 
following events which would result in a loss of coverage of a 
qualified beneficiary under a group health plan (but for COBRA 
continuation coverage): (1) death of the covered employee; (2) 
the termination (other than by reason of such employee's gross 
misconduct), or a reduction in hours, of the covered employee's 
employment; (3) divorce or legal separation of the covered 
employee; (4) the covered employee becoming entitled to 
Medicare benefits under title XVIII of the Social Security Act; 
(5) a dependent child ceasing to be a dependent child under the 
generally applicable requirements of the plan; and (6) a 
proceeding in a case under the U.S. Bankruptcy Code commencing 
on or after July 1, 1986, with respect to the employer from 
whose employment the covered employee retired at any time.
      A ``covered employee'' is an individual who is (or was) 
provided coverage under the group health plan on account of the 
performance of services by the individual for one or more 
persons maintaining the plan and includes a self-employed 
individual. A ``qualified beneficiary'' means, with respect to 
a covered employee, any individual who on the day before the 
qualifying event for the employee is a beneficiary under the 
group health plan as the spouse or dependent child of the 
employee. The term qualified beneficiary also includes the 
covered employee in the case of a qualifying event that is a 
termination of employment or reduction in hours.
Continuation coverage requirements
      Continuation coverage that must be offered to qualified 
beneficiaries pursuant to COBRA must consist of coverage which, 
as of the time coverage is being provided, is identical to the 
coverage provided under the plan to similarly situated non-
COBRA beneficiaries under the plan with respect to whom a 
qualifying event has not occurred. If coverage under a plan is 
modified for any group of similarly situated non-COBRA 
beneficiaries, the coverage must also be modified in the same 
manner for qualified beneficiaries. Similarly situated non-
COBRA beneficiaries means the group of covered employees, 
spouses of covered employees, or dependent children of covered 
employees who (i) are receiving coverage under the group health 
plan for a reason other than pursuant to COBRA, and (ii) are 
the most similarly situated to the situation of the qualified 
beneficiary immediately before the qualifying event, based on 
all of the facts and circumstances.
      The maximum required period of continuation coverage for 
a qualified beneficiary (i.e., the minimum period for which 
continuation coverage must be offered) depends upon a number of 
factors, including the specific qualifying event that gives 
rise to a qualified beneficiary's right to elect continuation 
coverage. In the case of a qualifying event that is the 
termination, or reduction of hours, of a covered employee's 
employment, the minimum period of coverage that must be offered 
to the qualified beneficiary is coverage for the period 
beginning with the loss of coverage on account of the 
qualifying event and ending on the date that is 18 months \232\ 
after the date of the qualifying event. If coverage under a 
plan is lost on account of a qualifying event but the loss of 
coverage actually occurs at a later date, the minimum coverage 
period may be extended by the plan so that it is measured from 
the date when coverage is actually lost.
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    \232\ In the case of a qualified beneficiary who is determined, 
under Title II or XVI of the Social Security Act, to have been disabled 
during the first 60 days of continuation coverage, the 18 month minimum 
coverage period is extended to 29 months with respect to all qualified 
beneficiaries if notice is given before the end of the initial 18 month 
continuation coverage period.
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      The minimum coverage period for a qualified beneficiary 
generally ends upon the earliest to occur of the following 
events: (1) the date on which the employer ceases to provide 
any group health plan to any employee, (2) the date on which 
coverage ceases under the plan by reason of a failure to make 
timely payment of any premium required with respect to the 
qualified beneficiary, and (3) the date on which the qualified 
beneficiary first becomes (after the date of election of 
continuation coverage) either (i) covered under any other group 
health plan (as an employee or otherwise) which does not 
include any exclusion or limitation with respect to any 
preexisting condition of such beneficiary or (ii) entitled to 
Medicare benefits under title XVIII of the Social Security Act. 
Mere eligibility for another group health plan or Medicare 
benefits is not sufficient to terminate the minimum coverage 
period. Instead, the qualified beneficiary must be actually 
covered by the other group health plan or enrolled in Medicare. 
Coverage under another group health plan or enrollment in 
Medicare does not terminate the minimum coverage period if such 
other coverage or Medicare enrollment begins on or before the 
date that continuation coverage is elected.
Election of continuation coverage
      The COBRA rules specify a minimum election period under 
which a qualified beneficiary is entitled to elect continuation 
coverage. The election period begins not later than the date on 
which coverage under the plan terminates on account of the 
qualifying event, and ends not earlier than the later of 60 
days or 60 days after notice is given to the qualified 
beneficiary of the qualifying event and the beneficiary's 
election rights.
Notice requirements
      A group health plan is required to give a general notice 
of COBRA continuation coverage rights to employees and their 
spouses at the time of enrollment in the group health plan.
      An employer is required to give notice to the plan 
administrator of certain qualifying events (including a loss of 
coverage on account of a termination of employment or reduction 
in hours) generally within 30 days of the qualifying event. A 
covered employee or qualified beneficiary is required to give 
notice to the plan administrator of certain qualifying events 
within 60 days after the event. The qualifying events giving 
rise to an employee or beneficiary notification requirement are 
the divorce or legal separation of the covered employee or a 
dependent child ceasing to be a dependent child under the terms 
of the plan. Upon receiving notice of a qualifying event from 
the employer, covered employee, or qualified beneficiary, the 
plan administrator is then required to give notice of COBRA 
continuation coverage rights within 14 days to all qualified 
beneficiaries with respect to the event.
Premiums
      A plan may require payment of a premium for any period of 
continuation coverage. The amount of such premium generally may 
not exceed 102 percent \233\ of the ``applicable premium'' for 
such period and the premium must be payable, at the election of 
the payor, in monthly installments.
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    \233\ In the case of a qualified beneficiary whose minimum coverage 
period is extended to 29 months on account of a disability 
determination, the premium for the period of the disability extension 
may not exceed 150 percent of the applicable premium for the period.
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      The applicable premium for any period of continuation 
coverage means the cost to the plan for such period of coverage 
for similarly situated non-COBRA beneficiaries with respect to 
whom a qualifying event has not occurred, and is determined 
without regard to whether the cost is paid by the employer or 
employee. The determination of any applicable premium is made 
for a period of 12 months (the ``determination period'') and is 
required to be made before the beginning of such 12 month 
period.
      In the case of a self-insured plan, the applicable 
premium for any period of continuation coverage of qualified 
beneficiaries is equal to a reasonable estimate of the cost of 
providing coverage during such period for similarly situated 
non-COBRA beneficiaries which is determined on an actuarial 
basis and takes into account such factors as the Secretary of 
Treasury prescribes in regulations. A self-insured plan may 
elect to determine the applicable premium on the basis of an 
adjusted cost to the plan for similarly situated non-COBRA 
beneficiaries during the preceding determination period.
      A plan may not require payment of any premium before the 
day which is 45 days after the date on which the qualified 
beneficiary made the initial election for continuation 
coverage. A plan is required to treat any required premium 
payment as timely if it is made within 30 days after the date 
the premium is due or within such longer period as applies to, 
or under, the plan.
Other continuation coverage rules
      Continuation coverage rules which are parallel to the 
Code's continuation coverage rules apply to group health plans 
under the Employee Retirement Income Security Act of 1974 
(ERISA).\234\ ERISA generally permits the Secretary of Labor 
and plan participants to bring a civil action to obtain 
appropriate equitable relief to enforce the continuation 
coverage rules of ERISA, and in the case of a plan 
administrator who fails to give timely notice to a participant 
or beneficiary with respect to COBRA continuation coverage, a 
court may hold the plan administrator liable to the participant 
or beneficiary in the amount of up to $110 a day from the date 
of such failure.
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    \234\ Secs. 601 to 608 of ERISA.
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      Although the Federal government and State and local 
governments are not subject to the Code and ERISA's 
continuation coverage rules, other laws impose similar 
continuation coverage requirements with respect to plans 
maintained by such governmental employers.\235\ In addition, 
many States have enacted laws or promulgated regulations that 
provide continuation coverage rights that are similar to COBRA 
continuation coverage rights in the case of a loss of group 
health coverage. Such State laws, for example, may apply in the 
case of a loss of coverage under a group health plan maintained 
by a small employer.
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    \235\ Continuation coverage rights similar to COBRA continuation 
coverage rights are provided to individuals covered by health plans 
maintained by the Federal government. 5 U.S.C. sec. 8905a. Group health 
plans maintained by a State that receives funds under Chapter 6A of 
Title 42 of the United States Code (the Public Health Service Act) are 
required to provide continuation coverage rights similar to COBRA 
continuation coverage rights for individuals covered by plans 
maintained by such State (and plans maintained by political 
subdivisions of such State and agencies and instrumentalities of such 
State or political subdivision of such State). 42 U.S.C. sec. 300bb-1.
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                               HOUSE BILL

Reduced COBRA premium
      The provision provides that, for a period not exceeding 
12 months, an assistance eligible individual is treated as 
having paid any premium required for COBRA continuation 
coverage under a group health plan if the individual pays 35 
percent of the premium.\236\ Thus, if the assistance eligible 
individual pays 35 percent of the premium, the group health 
plan must treat the individual as having paid the full premium 
required for COBRA continuation coverage, and the individual is 
entitled to a subsidy for 65 percent of the premium. An 
assistance eligible individual is any qualified beneficiary who 
elects COBRA continuation coverage and satisfies two additional 
requirements. First, the qualifying event with respect to the 
covered employee for that qualified beneficiary must be a loss 
of group health plan coverage on account of an involuntary 
termination of the covered employee's employment. However, a 
termination of employment for gross misconduct does not qualify 
(since such a termination under present law does not qualify 
for COBRA continuation coverage). Second, the qualifying event 
must occur during the period beginning September 1, 2008 and 
ending with December 31, 2009 and the qualified beneficiary 
must be eligible for COBRA continuation coverage during that 
period and elect such coverage.
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    \236\ For this purpose, payment by an assistance eligible 
individual includes payment by another individual paying on behalf of 
the individual, such as a parent or guardian, or an entity paying on 
behalf of the individual, such as a State agency or charity. Further, 
the amount of the premium used to calculate the reduced premium is the 
premium amount that the employee would be required to pay for COBRA 
continuation coverage absent this premium reduction (e.g. 102 percent 
of the ``applicable premium'' for such period).
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      An assistance eligible individual can be any qualified 
beneficiary associated with the relevant covered employee 
(e.g., a dependent of an employee who is covered immediately 
prior to a qualifying event), and such qualified beneficiary 
can independently elect COBRA (as provided under present law 
COBRA rules) and independently receive a subsidy. Thus, the 
subsidy for an assistance eligible individual continues after 
an intervening death of the covered employee.
      Under the provision, any subsidy provided is excludible 
from the gross income of the covered employee and any 
assistance eligible individuals. However, for purposes of 
determining the gross income of the employer and any welfare 
benefit plan of which the group health plan is a part, the 
amount of the premium reduction is intended to be treated as an 
employee contribution to the group health plan. Finally, under 
the provision, notwithstanding any other provision of law, the 
subsidy is not permitted to be considered as income or 
resources in determining eligibility for, or the amount of 
assistance or benefits under, any public benefit provided under 
Federal or State law (including the law of any political 
subdivision).
Eligible COBRA continuation coverage
      Under the provision, continuation coverage that qualifies 
for the subsidy is not limited to coverage required to be 
offered under the Code's COBRA rules but also includes 
continuation coverage required under State law that requires 
continuation coverage comparable to the continuation coverage 
required under the Code's COBRA rules for group health plans 
not subject to those rules (e.g., a small employer plan) and 
includes continuation coverage requirements that apply to 
health plans maintained by the Federal government or a State 
government. Comparable continuation coverage under State law 
does not include every State law right to continue health 
coverage, such as a right to continue coverage with no rules 
that limit the maximum premium that can be charged with respect 
to such coverage. To be comparable, the right generally must be 
to continue substantially similar coverage as was provided 
under the group health plan (or substantially similar coverage 
as is provided to similarly situated beneficiaries) at a 
monthly cost that is based on a specified percentage of the 
group health plan's cost of providing such coverage.
      The cost of coverage under any group health plan that is 
subject to the Code's COBRA rules (or comparable State 
requirements or continuation coverage requirement under health 
plans maintained by the Federal government or any State 
government) is eligible for the subsidy, except contributions 
to a health flexible spending account.
Termination of eligibility for reduced premiums
      The assistance eligible individual's eligibility for the 
subsidy terminates with the first month beginning on or after 
the earlier of (1) the date which is 12 months after the first 
day of the first month for which the subsidy applies, (2) the 
end of the maximum required period of continuation coverage for 
the qualified beneficiary under the Code's COBRA rules or the 
relevant State or Federal law (or regulation), or (3) the date 
that the assistance eligible individual becomes eligible for 
Medicare benefits under title XVIII of the Social Security Act 
or health coverage under another group health plan (including, 
for example, a group health plan maintained by the new employer 
of the individual or a plan maintained by the employer of the 
individual's spouse). However, eligibility for coverage under 
another group health plan does not terminate eligibility for 
the subsidy if the other group health plan provides only 
dental, vision, counseling, or referral services (or a 
combination of the foregoing), is a health flexible spending 
account or health reimbursement arrangement, or is coverage for 
treatment that is furnished in an on-site medical facility 
maintained by the employer and that consists primarily of 
first-aid services, prevention and wellness care, or similar 
care (or a combination of such care).
      If a qualified beneficiary paying a reduced premium for 
COBRA continuation coverage under this provision becomes 
eligible for coverage under another group health plan or 
Medicare, the provision requires the qualified beneficiary to 
notify, in writing, the group health plan providing the COBRA 
continuation coverage with the reduced premium of such 
eligibility under the other plan or Medicare. The notification 
by the assistance eligible individual must be provided to the 
group health plan in the time and manner as is specified by the 
Secretary of Labor. If an assistance eligible individual fails 
to provide this notification at the required time and in the 
required manner, and as a result the individual's COBRA 
continuation coverage continues to be subsidized after the 
termination of the individual's eligibility for such subsidy, a 
penalty is imposed on the individual equal to 110 percent of 
the subsidy provided after termination of eligibility.
      This penalty only applies if the subsidy in the form of 
the premium reduction is actually provided to a qualified 
beneficiary for a month that the beneficiary is not eligible 
for the reduction. Thus, for example, if a qualified 
beneficiary becomes eligible for coverage under another group 
health plan and stops paying the reduced COBRA continuation 
premium, the penalty generally will not apply. As discussed 
below, under the provision, the group health plan is reimbursed 
for the subsidy for a month (65 percent of the amount of the 
premium for the month) only after receipt of the qualified 
beneficiary's portion (35 percent of the premium amount). Thus, 
the penalty generally will only arise when the qualified 
beneficiary continues to pay the reduced premium and does not 
notify the group health plan providing COBRA continuation 
coverage of the beneficiary's eligibility under another group 
health plan or Medicare.
Special COBRA election opportunity
      The provision provides a special 60-day election period 
for a qualified beneficiary who is eligible for a reduced 
premium and who has not elected COBRA continuation coverage as 
of the date of enactment. The 60-day election period begins on 
the date that notice is provided to the qualified beneficiary 
of the special election period. However, this special election 
period does not extend the period of COBRA continuation 
coverage beyond the original maximum required period (generally 
18 months after the qualifying event) and any COBRA 
continuation coverage elected pursuant to this special election 
period begins on the date of enactment and does not include any 
period prior to that date. Thus, for example, if a covered 
employee involuntarily terminated employment on September 10, 
2008, but did not elect COBRA continuation coverage and was not 
eligible for coverage under another group health plan, the 
employee would have 60 days after date of notification of this 
new election right to elect the coverage and receive the 
subsidy. If the employee made the election, the coverage would 
begin with the date of enactment and would not include any 
period prior to that date. However, the coverage would not be 
required to last for 18 months. Instead the maximum required 
COBRA continuation coverage period would end not later than 18 
months after September 10, 2008.
      The special enrollment provision applies to a group 
health plan that is subject to the COBRA continuation coverage 
requirements of the Code, ERISA, Title 5 of the United States 
Code (relating to plans maintained by the Federal government), 
or the Public Health Service Act (``PHSA'').
      With respect to an assistance eligible individual who 
elects coverage pursuant to the special election period, the 
period beginning on the date of the qualifying event and ending 
with the day before the date of enactment is disregarded for 
purposes of the rules that limit the group health plan from 
imposing pre-existing condition limitations with respect to the 
individual's coverage.\237\
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    \237\ Section 9801 provides that a group health plan may impose a 
pre-existing condition exclusion for no more than 12 months after a 
participant or beneficiary's enrollment date. Such 12-month period must 
be reduced by the aggregate period of creditable coverage (which 
includes periods of coverage under another group health plan). A period 
of creditable coverage can be disregarded if, after the coverage period 
and before the enrollment date, there was a 63-day period during which 
the individual was not covered under any creditable coverage. Similar 
rules are provided under ERISA and PHSA.
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Reimbursement of group health plans
      The provision provides that the entity to which premiums 
are payable (determined under the applicable COBRA continuation 
coverage requirement) \238\ shall be reimbursed by the amount 
of the premium for COBRA continuation coverage that is not paid 
by an assistance eligible individual on account of the premium 
reduction. An entity is not eligible for subsidy reimbursement, 
however, until the entity has received the reduced premium 
payment from the assistance eligible individual. To the extent 
that such entity has liability for income tax withholding from 
wages \239\ or FICA taxes \240\ with respect to its employees, 
the entity is reimbursed by treating the amount that is 
reimbursable to the entity as a credit against its liability 
for these payroll taxes.\241\ To the extent that such amount 
exceeds the amount of the entity's liability for these payroll 
taxes, the Secretary shall reimburse the entity for the excess 
directly. The provision requires any entity entitled to such 
reimbursement to submit such reports as the Secretary of the 
Treasury may require, including an attestation of the 
involuntary termination of employment of each covered employee 
on the basis of whose termination entitlement to reimbursement 
of premiums is claimed, and a report of the amount of payroll 
taxes offset for a reporting period and the estimated offsets 
of such taxes for the next reporting period. This report is 
required to be provided at the same time as the deposits of the 
payroll taxes would have been required, absent the offset, or 
such times as the Secretary specifies.
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    \238\ Applicable continuation coverage that qualifies for the 
subsidy and thus for reimbursement is not limited to coverage required 
to be offered under the Code's COBRA rules but also includes 
continuation coverage required under State law that requires 
continuation coverage comparable to the continuation coverage required 
under the Code's COBRA rules for group health plans not subject to 
those rules (e.g., a small employer plan) and includes continuation 
coverage requirements that apply to health plans maintained by the 
Federal government or a State government.
    \239\ Sec. 3401.
    \240\ Sec. 3102 (relating to FICA taxes applicable to employees) 
and sec. 3111 (relating to FICA taxes applicable to employers).
    \241\ In determining any amount transferred or appropriated to any 
fund under the Social Security Act, amounts credited against an 
employer's payroll tax obligations pursuant to the provision shall not 
be taken into account.
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Notice requirements
      The notice of COBRA continuation coverage that a plan 
administrator is required to provide to qualified beneficiaries 
with respect to a qualifying event under present law must 
contain, under the provision, additional information including, 
for example, information about the qualified beneficiary's 
right to the premium reduction (and subsidy) and the conditions 
on the subsidy, and a description of the obligation of the 
qualified beneficiary to notify the group health plan of 
eligibility under another group health plan or eligibility for 
Medicare benefits under title XVIII of the Social Security Act, 
and the penalty for failure to provide this notification. The 
provision also requires a new notice to be given to qualified 
beneficiaries entitled to a special election period after 
enactment. In the case of group health plans that are not 
subject to the COBRA continuation coverage requirements of the 
Code, ERISA, Title 5 of the United States Code (relating to 
plans maintained by the Federal government), or PHSA, the 
provision requires that notice be given to the relevant 
employees and beneficiaries as well, as specified by the 
Secretary of Labor. Within 30 days after enactment, the 
Secretary of Labor is directed to provide model language for 
the additional notification required under the provision. The 
provision also provides an expedited 10-day review process by 
the Department of Labor, under which an individual may request 
review of a denial of treatment as an assistance eligible 
individual by a group health plan.
Regulatory authority
      The provision provides authority to the Secretary of the 
Treasury to issue regulations or other guidance as may be 
necessary or appropriate to carry out the provision, including 
any reporting requirements or the establishment of other 
methods for verifying the correct amounts of payments and 
credits under the provision. For example, the Secretary of the 
Treasury might require verification on the return of an 
assistance eligible individual who is the covered employee that 
the individual's termination of employment was involuntary. The 
provision directs the Secretary of the Treasury to issue 
guidance or regulations addressing the reimbursement of the 
subsidy in the case of a multiemployer group health plan. The 
provision also provides authority to the Secretary of the 
Treasury to promulgate rules, procedures, regulations, and 
other guidance as is necessary and appropriate to prevent fraud 
and abuse in the subsidy program, including the employment tax 
offset mechanism.
Reports
      The provision requires the Secretary of the Treasury to 
submit an interim and a final report regarding the 
implementation of the premium reduction provision. The interim 
report is to include information about the number of 
individuals receiving assistance, and the total amount of 
expenditures incurred, as of the date of the report. The final 
report, to be issued as soon as practicable after the last 
period of COBRA continuation coverage for which premiums are 
provided, is to include similar information as provided in the 
interim report, with the addition of information about the 
average dollar amount (monthly and annually) of premium 
reductions provided to such individuals. The reports are to be 
given to the Committee on Ways and Means, the Committee on 
Energy and Commerce, the Committee on Health, Education, Labor 
and Pensions and the Committee on Finance.
Effective date
      The provision is effective for premiums for months of 
coverage beginning on or after the date of enactment. However, 
it is intended that a group health plan will not fail to 
satisfy the requirements for COBRA continuation coverage merely 
because the plan accepts payment of 100 percent of the premium 
from an assistance eligible employee during the first two 
months beginning on or after the date of enactment while the 
premium reduction is being implemented, provided the amount of 
the resulting premium overpayment is credited against the 
individual's premium (35 percent of the premium) for future 
months or the overpayment is otherwise repaid to the employee 
as soon as practical.

                            SENATE AMENDMENT

      The Senate amendment is the same as the House bill with 
certain modifications. The amount of the COBRA premium 
reduction (or subsidy) is 50 percent of the required premium 
under the Senate amendment (rather than 65 percent as provided 
under the House bill).
      In addition, a group health plan is permitted to provide 
a special enrollment right to assistance eligible individuals 
to allow them to change coverage options under the plan in 
conjunction with electing COBRA continuation coverage. Under 
this special enrollment right, the assistance eligible 
individual must only be offered the option to change to any 
coverage option offered to employed workers that provides the 
same or lower health insurance premiums than the individual's 
group health plan coverage as of the date of the covered 
employee's qualifying event. If the individual elects a 
different coverage option under this special enrollment right 
in conjunction with electing COBRA continuation coverage, this 
is the coverage that must be provided for purposes of 
satisfying the COBRA continuation coverage requirement. However 
the coverage plan option into which the individual must be 
given the opportunity to enroll under this special enrollment 
right does not include the following: a coverage option 
providing only dental, vision, counseling, or referral services 
(or a combination of the foregoing); a health flexible spending 
account or health reimbursement arrangement; or coverage for 
treatment that is furnished in an on-site medical facility 
maintained by the employer and that consists primarily of 
first-aid services, prevention and wellness care, or similar 
care (or a combination of such care).
      Effective date.--The provision is effective for months of 
coverage beginning after the date of enactment. In addition, 
the Senate amendment specifically provides rules for 
reimbursement of an assistance eligible individual if such 
individual pays 100 percent of the premium required for COBRA 
continuation coverage for any month during the 60-day period 
beginning on the first day of the first month after the date of 
enactment. The person who receives the premium overpayment is 
permitted to provide a credit to the assistance eligible 
individual for the amount overpaid against one or more 
subsequent premiums (subject to the 50-percent payment rule) 
for COBRA continuation coverage, but only if it is reasonable 
to believe that the credit for the excess will be used by the 
assistance eligible individual within 180 days of the 
individual's overpayment. Otherwise, the person must make a 
reimbursement payment to the individual for the amount of the 
premium overpayment within 60 days of receiving the 
overpayment. Further, if as of any day during the 180-day 
period it is no longer reasonable to believe that the credit 
will be used during that period by the assistance eligible 
individual (e.g., the individual ceases to be eligible for 
COBRA continuation coverage), payment equal to the remainder of 
the credit outstanding must be made to the individual within 60 
days of such day.

                          CONFERENCE AGREEMENT

In general
      The conference agreement generally follows the House 
bill. Thus, as under the House bill, the rate of the premium 
subsidy is 65 percent of the premium for a period of coverage. 
However, the period of the premium subsidy is limited to a 
maximum of 9 months of coverage (instead of a maximum of 12 
months). As under the House bill and Senate amendment, the 
premium subsidy is only provided with respect to involuntary 
terminations that occur on or after September 1, 2008, and 
before January 1, 2010.
      The conference agreement includes the provision in the 
Senate amendment that permits a group health plan to provide a 
special enrollment right to assistance eligible individuals to 
allow them to change coverage options under the plan in 
conjunction with electing COBRA continuation coverage.\242\ 
This provision only allows a group health plan to offer 
additional coverage options to assistance eligible individuals 
and does not change the basic requirement under Federal COBRA 
continuation coverage requirements that a group health plan 
must allow an assistance eligible individual to choose to 
continue with the coverage in which the individual is enrolled 
as of the qualifying event.\243\ However, once the election of 
the other coverage is made, it becomes COBRA continuation 
coverage under the applicable COBRA continuation provisions. 
Thus, for example, under the Federal COBRA continuation 
coverage provisions, if a covered employee chooses different 
coverage pursuant to being provided this option, the different 
coverage elected must generally be permitted to be continued 
for the applicable required period (generally 18 months or 36 
months, absent an event that permits coverage to be terminated 
under the Federal COBRA continuation provisions) even though 
the premium subsidy is only for nine months.
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    \242\ An employer can make this option available to covered 
employees under current law.
    \243\ All references to ``Federal COBRA continuation coverage'' 
mean the COBRA continuation coverage provisions of the Code, ERISA, and 
PHSA.
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      The conference agreement adds an income threshold as an 
additional condition on an individual's entitlement to the 
premium subsidy during any taxable year. The income threshold 
applies based on the modified adjusted gross income for an 
individual income tax return for the taxable year in which the 
subsidy is received (i.e., either 2009 or 2010) with respect to 
which the assistance eligible individual is the taxpayer, the 
taxpayer's spouse or a dependent of the taxpayer (within the 
meaning of section 152 of the Code, determined without regard 
to sections 152(b)(1), (b)(2) and (d)(1)(B)). Modified adjusted 
gross income for this purpose means adjusted gross income as 
defined in section 62 of the Code increased by any amount 
excluded from gross income under section 911, 931, or 933 of 
the Code. Under this income threshold, if the premium subsidy 
is provided with respect to any COBRA continuation coverage 
which covers the taxpayer, the taxpayer's spouse, or any 
dependent of the taxpayer during a taxable year and the 
taxpayer's modified adjusted gross income exceeds $145,000 (or 
$290,000 for joint filers), then the amount of the premium 
subsidy for all months during the taxable year must be repaid. 
The mechanism for repayment is an increase in the taxpayer's 
income tax liability for the year equal to such amount. For 
taxpayers with adjusted gross income between $125,000 and 
$145,000 (or $250,000 and $290,000 for joint filers), the 
amount of the premium subsidy for the taxable year that must be 
repaid is reduced proportionately.
      Under this income threshold, for example, an assistance 
eligible individual who is eligible for Federal COBRA 
continuation coverage based on the involuntary termination of a 
covered employee in August 2009 but who is not entitled to the 
premium subsidy for the periods of coverage during 2009 due to 
having income above the threshold, may nevertheless be entitled 
to the premium subsidy for any periods of coverage in the 
remaining period (e.g. 5 months of coverage) during 2010 to 
which the subsidy applies if the modified adjusted gross income 
for 2010 of the relevant taxpayer is not above the income 
threshold.
      The conference report allows an individual to make a 
permanent election (at such time and in such form as the 
Secretary of the Treasury may prescribe) to waive the right to 
the premium subsidy for all periods of coverage. For the 
election to take effect, the individual must notify the entity 
(to which premiums are reimbursed under section 6432(a) of the 
Code) of the election. This waiver provision allows an 
assistance eligible individual who is certain that the modified 
adjusted gross income limit prevents the individual from being 
entitled to any premium subsidy for any coverage period to 
decline the subsidy for all coverage periods and avoid being 
subject to the recapture tax. However, this waiver applies to 
all periods of coverage (regardless of the tax year of the 
coverage) for which the individual might be entitled to the 
subsidy. The premium subsidy for any period of coverage cannot 
later be claimed as a tax credit or otherwise be recovered, 
even if the individual later determines that the income 
threshold was not exceeded for a relevant tax year. This waiver 
is made separately by each qualified beneficiary (who could be 
an assistance eligible individual) with respect to a covered 
employee.
Technical changes
      The conference agreement makes a number of technical 
changes to the COBRA premium subsidy provisions in the House 
bill. The conference agreement clarifies that a reference to a 
period of coverage in the provision is a reference to the 
monthly or shorter period of coverage with respect to which 
premiums are charged with respect to such coverage. For 
example, the provision is effective for a period of coverage 
beginning after the date of enactment. In the case of a plan 
that provides and charges for COBRA continuation coverage on a 
calendar month basis, the provision is effective for the first 
calendar month following date of enactment.
      The conference agreement specifically provides that if a 
person other than the individual's employer pays on the 
individual's behalf then the individual is treated as paying 35 
percent of the premium, as required to be entitled to the 
premium subsidy. Thus, the conference agreement makes clear 
that, for this purpose, payment by an assistance eligible 
individual includes payment by another individual paying on 
behalf of the individual, such as a parent or guardian, or an 
entity paying on behalf of the individual, such as a State 
agency or charity.
      The conference agreement clarifies that, for the special 
60 day election period for a qualified beneficiary who is 
eligible for a reduced premium and who has not elected COBRA 
continuation coverage as of the date of enactment provided in 
the House bill, the election period begins on the date of 
enactment and ends 60 days after the notice is provided to the 
qualified beneficiary of the special election period. In 
addition, the conference agreement clarifies that coverage 
elected under this special election right begins with the first 
period of coverage beginning on or after the date of enactment. 
The conference agreement also extends this special COBRA 
election opportunity to a qualified beneficiary who elected 
COBRA coverage but who is no longer enrolled on the date of 
enactment, for example, because the beneficiary was unable to 
continue paying the premium.
      The conference agreement clarifies that a violation of 
the new notice requirements is also a violation of the notice 
requirements of the underlying COBRA provision. As under the 
House bill, a notice must be provided to all individuals who 
terminated employment during the applicable time period, and 
not just to individuals who were involuntarily terminated.
      As under the House bill, coverage under a flexible 
spending account (``FSA'') is not eligible for the subsidy. The 
conference agreement clarifies that a FSA is defined as a 
health flexible spending account offered under a cafeteria plan 
within the meaning of section 125 of the Code.\244\
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    \244\ Other FSA coverage does not terminate eligibility for 
coverage. Coverage under another group Health Reimbursement Account 
(``HRA'') will not terminate an individual's eligibility for the 
subsidy as long as the HRA is properly classified as an FSA under 
relevant IRS guidance. See Notice 2002-45, 2002-2 CB 93.
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      As under the House bill, there is a provision for 
expedited review, by the Secretary of Labor or Health and Human 
Services (in consultation with the Secretary of the Treasury), 
of denials of the premium subsidy. Under the conference 
agreement, such reviews must be completed within 15 business 
days (rather than 10 business days as provided in the House 
bill) after receipt of the individual's application for review. 
The conference agreement is intended to give the Secretaries 
the flexibility necessary to make determinations within 15 
business days based upon evidence they believe, in their 
discretion, to be appropriate. Additionally, the conference 
agreement intends that, if an individual is denied treatment as 
an assistance eligible individual and also submits a claim for 
benefits to the plan that would be denied by reason of not 
being eligible for Federal COBRA continuation coverage (or 
failure to pay full premiums), the individual would be eligible 
to proceed with expedited review irrespective of any claims for 
benefits that may be pending or subject to review under the 
provisions of ERISA 503. Under the conference agreement, either 
Secretary's determination upon review is de novo and is the 
final determination of such Secretary.
      The conference agreement clarifies the reimbursement 
mechanism for the premium subsidy in several respects. First, 
it clarifies that the person to whom the reimbursement is 
payable is either (1) the multiemployer group health plan, (2) 
the employer maintaining the group health plan subject to 
Federal COBRA continuation coverage requirements, and (3) the 
insurer providing coverage under an insured plan. Thus, this is 
the person who is eligible to offset its payroll taxes for 
purposes of reimbursement. It also clarifies that the credit 
for the reimbursement is treated as a payment of payroll taxes. 
Thus, it clarifies that any reimbursement for an amount in 
excess of the payroll taxes owed is treated in the same manner 
as a tax refund. Similarly, it clarifies that overstatement of 
reimbursement is a payroll tax violation. For example, IRS can 
assert appropriate penalties for failing to truthfully account 
for the reimbursement. However, it is not intended that any 
portion of the reimbursement is taken into account when 
determining the amount of any penalty to be imposed against any 
person, required to collect, truthfully account for, and pay 
over any tax under section 6672 of the Code.
      It is intended that reimbursement not be mirrored in the 
U.S. possessions that have mirror income tax codes (the 
Commonwealth of the Northern Mariana Islands, Guam, and the 
Virgin Islands). Rather, the intent of Congress is that 
reimbursement will have direct application to persons in those 
possessions. Moreover, it is intended that income tax 
withholding payable to the government of any possession 
(American Samoa, the Commonwealth of the Northern Mariana 
Islands, the Commonwealth of Puerto Rico, Guam, or the Virgin 
Islands) (in contrast with FICA withholding payable to the U.S. 
Treasury) will not be reduced as a result of the application of 
this provision. A person liable for both FICA withholding 
payable to the U.S. Treasury and income tax withholding payable 
to a possession government will be credited or refunded any 
excess of (1) the amount of FICA taxes treated as paid under 
the reimbursement rule of the provision over (2) the amount of 
the person's liability for those FICA taxes.
Effective date
      The provision is effective for periods of coverage 
beginning after the date of enactment. In addition, specific 
rules are provided in the case of an assistance eligible 
individual who pays 100 percent of the premium required for 
COBRA continuation coverage for any coverage period during the 
60-day period beginning on the first day of the first coverage 
period after the date of enactment. Such rules follow the 
Senate amendment.

 B. Extension of Minimum COBRA Continuation Coverage (sec. 3002(b) of 
                            the House Bill)

                              PRESENT LAW

      A covered employee's termination of employment (other 
than for gross misconduct), whether voluntary or involuntary, 
is a COBRA qualifying event.\245\ A covered employee's 
reduction in hours of employment, whether voluntary or 
involuntary, is also a COBRA qualifying event if the reduction 
results in a loss of employer sponsored group health plan 
coverage.\246\
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    \245\ Sec. 4980B(f)(3)(B); Treas. Reg. 54.4980B-4.
    \246\ Sec. 4980(f)(3)(B).
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      The minimum length of coverage continuation that must be 
offered to a qualified beneficiary depends upon a number of 
factors, including the specific qualifying event that gives 
rise to a qualified beneficiary's right to elect coverage 
continuation. In the case of a qualifying event that is the 
termination, or reduction of hours, of a covered employee's 
employment, the minimum period of coverage that must be offered 
to each qualified beneficiary generally must extend until 18 
months after the date of the qualifying event.\247\ Under 
certain circumstances, however, the coverage continuation 
period can be extended up to a maximum total of 36 months. For 
example, if a second qualifying event occurs within the initial 
18 month continuation period the initial period will be 
extended up to an additional 18 months (for a total of 36 
months) for qualified beneficiaries other than the covered 
employee. Similarly, if a qualified beneficiary is determined 
to be disabled for purposes of Social Security during the first 
60 days of the initial 18 month continuation coverage period, 
the initial 18 month period may be extended up to an additional 
11 months (for a total of 29 months) for the disabled 
beneficiary and all of his or her covered family members. If a 
second qualifying event then occurs during the additional 11 
month coverage period, the continuation period may be extended 
for another seven months, for a total of 36 months of 
continuation coverage.
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    \247\ Sec. 4980B(f)(2)(B)(i)(I). If coverage under a plan is lost 
on account of a qualifying event but the loss of coverage actually 
occurs at a later date, the minimum coverage period may be extended by 
the plan so that it is measured from the date when coverage is actually 
lost.
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                               HOUSE BILL

      The provision amends section 4980B(f)(2)(B) to provide 
extended COBRA coverage periods for covered employees who 
qualify for COBRA continuation coverage due to termination of 
employment or reduction in hours and who (a) are age 55 or 
older, or (b) have 10 or more years of service with the 
employer, at the time of the qualifying event. Such individuals 
would be permitted to continue their COBRA coverage until the 
earlier of enrollment for Medicare benefits under title XVIII 
of the Social Security Act, becomes covered under another group 
health plan (described in section 4980B(f)(2)(B)(iv)), or 
termination of all health plans sponsored by the employer 
offering the COBRA coverage. The extended coverage period would 
apply to all qualified beneficiaries of the covered employee.
      The provision makes parallel changes to ERISA and PHSA.
      Effective date.--The provision is effective for periods 
of coverage which would (without regard to any amendments made 
by the provision) end on or after the date of enactment.

                            SENATE AMENDMENT

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement does not include the House bill 
provision.

 C. Modify the Health Coverage Tax Credit (secs. 1899 to 1899L of the 
 conference agreement and secs. 35, 4980B, 7527, and 9801 of the Code)

                              PRESENT LAW

In general
      Under the Trade Act of 2002,\248\ in the case of 
taxpayers who are eligible individuals, a refundable tax credit 
is provided for 65 percent of the taxpayer's premiums for 
qualified health insurance of the taxpayer and qualifying 
family members for each eligible coverage month beginning in 
the taxable year. The credit is commonly referred to as the 
health coverage tax credit (``HCTC''). The credit is available 
only with respect to amounts paid by the taxpayer. The credit 
is available on an advance basis.\249\
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    \248\ Pub. L. No. 107-210 (2002).
    \249\ An individual is eligible for the advance payment of the 
credit once a qualified health insurance costs credit eligibility 
certificate is in effect. Sec. 7527. Unless otherwise indicated, all 
``section'' references are to the Internal Revenue Code of 1986, as 
amended.
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      Qualifying family members are the taxpayer's spouse and 
any dependent of the taxpayer with respect to whom the taxpayer 
is entitled to claim a dependency exemption. Any individual who 
has other specified coverage is not a qualifying family member.
Persons eligible for the credit
      Eligibility for the credit is determined on a monthly 
basis. In general, an eligible coverage month is any month if, 
as of the first day of the month, the taxpayer (1) is an 
eligible individual, (2) is covered by qualified health 
insurance, (3) does not have other specified coverage, and (4) 
is not imprisoned under Federal, State, or local 
authority.\250\ In the case of a joint return, the eligibility 
requirements are met if at least one spouse satisfies the 
requirements.
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    \250\ An eligible month must begin after November 4, 2002. This 
date is 90 days after the date of enactment of the Trade Act of 2002, 
which was August 6, 2002.
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      An eligible individual is an individual who is (1) an 
eligible TAA recipient, (2) an eligible alternative Trade 
Adjustment Assistance (``TAA'') recipient, or (3) an eligible 
Pension Benefit Guaranty Corporation (``PBGC'') pension 
recipient.
      An individual is an eligible TAA recipient during any 
month the individual (1) is receiving for any day of such month 
a trade readjustment allowance \251\ or who would be eligible 
to receive such an allowance but for the requirement that the 
individual exhaust unemployment benefits before being eligible 
to receive an allowance and (2) with respect to such allowance, 
is covered under a certification issued under subchapter A or D 
of chapter 2 of title II of the Trade Act of 1974. An 
individual is treated as an eligible TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
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    \251\ The eligibility rules and conditions for such an allowance 
are specified in chapter 2 of title II of the Trade Act of 1974. Among 
other requirements, payment of a trade readjustment allowance is 
conditioned upon the individual enrolling in certain training programs 
or receiving a waiver of training requirements.
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      An individual is an eligible alternative TAA recipient 
during any month if the individual (1) is a worker described in 
section 246(a)(3)(B) of the Trade Act of 1974 who is 
participating in the program established under section 
246(a)(1) of such Act, and (2) is receiving a benefit for such 
month under section 246(a)(2) of such Act. An individual is 
treated as an eligible alternative TAA recipient during the 
first month that such individual would otherwise cease to be an 
eligible TAA recipient.
      An individual is a PBGC pension recipient for any month 
if he or she (1) is age 55 or over as of the first day of the 
month, and (2) is receiving a benefit any portion of which is 
paid by the PBGC. The IRS has interpreted the definition of 
PBGC pension recipient to also include certain alternative 
recipients and recipients who have received certain lump-sum 
payments on or after August 6, 2002. A person is not an 
eligible individual if he or she may be claimed as a dependent 
on another person's tax return.
      An otherwise eligible taxpayer is not eligible for the 
credit for a month if, as of the first day of the month, the 
individual has other specified coverage. Other specified 
coverage is (1) coverage under any insurance which constitutes 
medical care (except for insurance substantially all of the 
coverage of which is for excepted benefits) \252\ maintained by 
an employer (or former employer) if at least 50 percent of the 
cost of the coverage is paid by an employer \253\ (or former 
employer) of the individual or his or her spouse or (2) 
coverage under certain governmental health programs. 
Specifically, an individual is not eligible for the credit if, 
as of the first day of the month, the individual is (1) 
entitled to benefits under Medicare Part A, enrolled in 
Medicare Part B, or enrolled in Medicaid or SCHIP, (2) enrolled 
in a health benefits plan under the Federal Employees Health 
Benefit Plan, or (3) entitled to receive benefits under chapter 
55 of title 10 of the United States Code (relating to military 
personnel). An individual is not considered to be enrolled in 
Medicaid solely by reason of receiving immunizations.
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    \252\ Excepted benefits are: (1) coverage only for accident or 
disability income or any combination thereof; (2) coverage issued as a 
supplement to liability insurance; (3) liability insurance, including 
general liability insurance and automobile liability insurance; (4) 
worker's compensation or similar insurance; (5) automobile medical 
payment insurance; (6) credit-only insurance; (7) coverage for on-site 
medical clinics; (8) other insurance coverage similar to the coverages 
in (1)-(7) specified in regulations under which benefits for medical 
care are secondary or incidental to other insurance benefits; (9) 
limited scope dental or vision benefits; (10) benefits for long-term 
care, nursing home care, home health care, community-based care, or any 
combination thereof; and (11) other benefits similar to those in (9) 
and (10) as specified in regulations; (12) coverage only for a 
specified disease or illness; (13) hospital indemnity or other fixed 
indemnity insurance; and (14) Medicare supplemental insurance.
    \253\ An amount is considered paid by the employer if it is 
excludable from income. Thus, for example, amounts paid for health 
coverage on a salary reduction basis under an employer plan are 
considered paid by the employer. A rule aggregating plans of the same 
employer applies in determining whether the employer pays at least 50 
percent of the cost of coverage.
---------------------------------------------------------------------------
      A special rule applies with respect to alternative TAA 
recipients. For eligible alternative TAA recipients, an 
individual has other specified coverage if the individual is 
(1) eligible for coverage under any qualified health insurance 
(other than coverage under a COBRA continuation provision, 
State-based continuation coverage, or coverage through certain 
State arrangements) under which at least 50 percent of the cost 
of coverage is paid or incurred by an employer of the taxpayer 
or the taxpayer's spouse or (2) covered under any such 
qualified health insurance under which any portion of the cost 
of coverage is paid or incurred by an employer of the taxpayer 
or the taxpayer's spouse.
Qualified health insurance
      Qualified health insurance eligible for the credit is: 
(1) COBRA continuation \254\ coverage; (2) State-based 
continuation coverage provided by the State under a State law 
that requires such coverage; (3) coverage offered through a 
qualified State high risk pool; (4) coverage under a health 
insurance program offered to State employees or a comparable 
program; (5) coverage through an arrangement entered into by a 
State and a group health plan, an issuer of health insurance 
coverage, an administrator, or an employer; (6) coverage 
offered through a State arrangement with a private sector 
health care coverage purchasing pool; (7) coverage under a 
State-operated health plan that does not receive any Federal 
financial participation; (8) coverage under a group health plan 
that is available through the employment of the eligible 
individual's spouse; and (9) coverage under individual health 
insurance if the eligible individual was covered under 
individual health insurance during the entire 30-day period 
that ends on the date the individual became separated from the 
employment which qualified the individual for the TAA 
allowance, the benefit for an eligible alternative TAA 
recipient, or a pension benefit from the PBGC, whichever 
applies.\255\
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    \254\ COBRA continuation is defined in section 9832(d)(1).
    \255\ For this purpose, ``individual health insurance'' means any 
insurance which constitutes medical care offered to individuals other 
than in connection with a group health plan. Such term does not include 
Federal- or State-based health insurance coverage.
---------------------------------------------------------------------------
      Qualified health insurance does not include any State-
based coverage (i.e., coverage described in (2)-(7) in the 
preceding paragraph), unless the State has elected to have such 
coverage treated as qualified health insurance and such 
coverage meets certain requirements.\256\ Such State coverage 
must provide that each qualifying individual is guaranteed 
enrollment if the individual pays the premium for enrollment or 
provides a qualified health insurance costs eligibility 
certificate and pays the remainder of the premium. In addition, 
the State-based coverage cannot impose any pre-existing 
condition limitation with respect to qualifying individuals. 
State-based coverage cannot require a qualifying individual to 
pay a premium or contribution that is greater than the premium 
or contribution for a similarly situated individual who is not 
a qualified individual. Finally, benefits under the State-based 
coverage must be the same as (or substantially similar to) 
benefits provided to similarly situated individuals who are not 
qualifying individuals.
---------------------------------------------------------------------------
    \256\ For guidance on how a State elects a health program to be 
qualified health insurance for purposes of the credit, see Rev. Proc. 
2004-12, 2004-1 C.B. 528.
---------------------------------------------------------------------------
      A qualifying individual is an eligible individual who 
seeks to enroll in the State-based coverage and who has 
aggregate periods of creditable coverage \257\ of three months 
or longer, does not have other specified coverage, and who is 
not imprisoned. In general terms, creditable coverage includes 
health care coverage without a gap of more than 63 days. 
Therefore, if an individual's qualifying coverage were 
terminated more than 63 days before the individual enrolled in 
the State-based coverage, the individual would not be a 
qualifying individual and would not be entitled to the State-
based protections. A qualifying individual also includes 
qualified family members of such an eligible individual.
---------------------------------------------------------------------------
    \257\ Creditable coverage is determined under the Health Insurance 
Portability and Accountability Act. Sec. 9801(c).
---------------------------------------------------------------------------
      Qualified health insurance does not include coverage 
under a flexible spending or similar arrangement or any 
insurance if substantially all of the coverage is for excepted 
benefits.
Other rules
      Amounts taken into account in determining the credit may 
not be taken into account in determining the amount allowable 
under the itemized deduction for medical expenses or the 
deduction for health insurance expenses of self-employed 
individuals. Amounts distributed from a medical savings account 
or health savings accounts are not eligible for the credit. The 
amount of the credit available through filing a tax return is 
reduced by any credit received on an advance basis. Married 
taxpayers filing separate returns are eligible for the credit; 
however, if both spouses are eligible individuals and the 
spouses file separate returns, then the spouse of the taxpayer 
is not a qualifying family member.
      The Secretary of the Treasury is authorized to prescribe 
such regulations and other guidance as may be necessary or 
appropriate to carry out the credit provision.
COBRA
      The Consolidated Omnibus Reconciliation Act of 1985 
(``COBRA'') requires that a group health plan must offer 
continuation coverage to qualified beneficiaries in the case of 
a qualifying event. An excise tax under the Code applies on the 
failure of a group health plan to meet the requirement.\258\ 
Qualifying events include the death of the covered employee, 
termination of the covered employee's employment, divorce or 
legal separation of the covered employee, and certain 
bankruptcy proceedings of the employer. In the case of 
termination from employment, the coverage must be extended for 
a period of not less than 18 months. In certain other cases, 
coverage must be extended for a period of not less than 36 
months. Under such period of continuation coverage, the plan 
may require payment of a premium by the beneficiary of up to 
102 percent of the applicable premium for the period.
---------------------------------------------------------------------------
    \258\ Sec. 4980B.
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                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      No provision.\259\
---------------------------------------------------------------------------
    \259\ The Senate amendment did not amend the HCTC, but section 1701 
of the Senate amendment provided for a temporary extension of the Trade 
Adjustment Assistance Program (generally until December 31, 2010). 
Certain beneficiaries of this program are eligible for the HCTC.
---------------------------------------------------------------------------

                          CONFERENCE AGREEMENT

Increase in credit percentage amount
      The provision increases the amount of the HCTC to 80 
percent of the taxpayer's premiums for qualified health 
insurance of the taxpayer and qualifying family members.
      Effective date.--The provision is effective for coverage 
months beginning on or after the first day of the first month 
beginning 60 days after date of enactment. The increased credit 
rate does not apply to months beginning after December 31, 
2010.
Payment for monthly premiums paid prior to commencement of advance 
        payment of credit
      The provision provides that the Secretary of the Treasury 
shall make one or more retroactive payments on behalf of 
certified individuals equal to 80 percent of the premiums for 
coverage of the taxpayer and qualifying family members for 
qualified health insurance for eligible coverage months 
occurring prior to the first month for which an advance payment 
is made on behalf of such individual. The amount of the payment 
must be reduced by the amount of any payment made to the 
taxpayer under a national emergency grant pursuant to section 
173(f) of the Workforce Investment Act of 1998 for a taxable 
year including such eligible coverage months.
      Effective date.--The provision is effective for eligible 
coverage months beginning after December 31, 2008. The 
Secretary of the Treasury, however, is not required to make any 
payments under the provision until after the date that is six 
months after the date of enactment. The provision does not 
apply to months beginning after December 31, 2010.
TAA recipients not enrolled in training programs eligible for credit
      The provision modifies the definition of an eligible TAA 
recipient to eliminate the requirement that an individual be 
enrolled in training in the case of an individual receiving 
unemployment compensation. In addition, the provision clarifies 
that the definition of an eligible TAA recipient includes an 
individual who would be eligible to receive a trade 
readjustment allowance except that the individual is in a break 
in training that exceeds the period specified in section 233(e) 
of the Trade Act of 1974, but is within the period for 
receiving the allowance.
      Effective date.--The provision is effective for months 
beginning after the date of enactment in taxable years ending 
after such date. The provision does not apply to months 
beginning after December 31, 2010.
TAA pre-certification period rule for purposes of determining whether 
        there is a 63-day lapse in creditable coverage
      Under the provision, in determining if there has been a 
63-day lapse in coverage (which determines, in part, if the 
State-based consumer protections apply), in the case of a TAA-
eligible individual, the period beginning on the date the 
individual has a TAA-related loss of coverage and ending on the 
date which is seven days after the date of issuance by the 
Secretary (or by any person or entity designated by the 
Secretary) of a qualified health insurance costs credit 
eligibility certificate (under section 7527) for such 
individual is not taken into account.
      Effective date.--The provision is effective for plan 
years beginning after the date of enactment. The provision does 
not apply to plan years beginning after December 31, 2010.
Continued qualification of family members after certain events
      The provision provides continued eligibility for the 
credit for family members after certain events. The rule 
applies in the case of (1) the eligible individual becoming 
entitled to Medicare, (2) divorce and (3) death.
      In the case of a month which would be an eligible 
coverage month with respect to an eligible individual except 
that the individual is entitled to benefits under Medicare Part 
A or enrolled in Medicare Part B, the month is treated as an 
eligible coverage month with respect to the individual solely 
for purposes of determining the amount of the credit with 
respect to qualifying family members (i.e., the credit is 
allowed for expenses paid for qualifying family members after 
the eligible individual is eligible for Medicare). Such 
treatment applies only with respect to the first 24 months 
after the eligible individual is first entitled to benefits 
under Medicare Part A or enrolled in Medicare Part B.
      In the case of the finalization of a divorce between an 
eligible individual and the individual's spouse, the spouse is 
treated as an eligible individual for a period of 24 months 
beginning with the date of the finalization of the divorce. 
Under such rule, the only family members that may be taken into 
account with respect to the spouse as qualifying family members 
are those individuals who were qualifying family members 
immediately before such divorce finalization.
      In the case of the death of an eligible individual, the 
spouse of such individual (determined at the time of death) is 
treated as an eligible individual for a period of 24 months 
beginning with the date of death. Under such rule, the only 
qualifying family members that may be taken into account with 
respect to the spouse are those individuals who were qualifying 
family members immediately before such death. In addition, any 
individual who was a qualifying family member of the decedent 
immediately before such death \260\ treated as an eligible 
individual for a period of 24 months beginning with the date of 
death, except that in determining the amount of the HCTC only 
such qualifying family member may be taken into account.
---------------------------------------------------------------------------
    \260\ In the case of a dependent, the rule applies to the taxpayer 
to whom the personal exemption deduction under section 151 is 
allowable.
---------------------------------------------------------------------------
      Effective date.--The provision is effective for months 
beginning after December 31, 2009. The provision does not apply 
to months that begin after December 31, 2010.
Alignment of COBRA coverage
      The maximum required COBRA continuation coverage period 
is modified by the provision with respect to certain 
individuals whose qualifying event is a termination of 
employment or a reduction in hours. First, in the case of such 
a qualifying event with respect to a covered employee who has a 
nonforfeitable right to a benefit any portion of which is paid 
by the PBGC, the maximum coverage period must end not earlier 
than the date of death of the covered employee (or in the case 
of the surviving spouse or dependent children of the covered 
employee, not earlier than 24 months after the date of death of 
the covered employee). Second, in the case of such a qualifying 
event where the covered employee is a TAA eligible individual 
as of the date that the maximum coverage period would otherwise 
terminate, the maximum coverage period must extend during the 
period that the individual is a TAA eligible individual.
      Effective date.--The provision is effective for periods 
of coverage that would, without regard to the provision, end on 
or after the date of enactment, provided that the provision 
does not extend any periods of coverage beyond December 31, 
2010.
Addition of coverage through voluntary employees' beneficiary 
        associations
      The provision expands the definition of qualified health 
insurance by including coverage under an employee benefit plan 
funded by a voluntary employees' beneficiary association 
(``VEBA'', as defined in section 501(c)(9)) established 
pursuant to an order of a bankruptcy court, or by agreement 
with an authorized representative, as provided in section 1114 
of title 11, United States Code.
      Effective date.--The provision is effective on the date 
of enactment. The provision does not apply with respect to 
certificates of eligibility issued after December 31, 2010.
Notice requirements
      The provision requires that the qualified health 
insurance costs credit eligibility certificate provided in 
connection with the advance payment of the HCTC must include 
(1) the name, address, and telephone number of the State office 
or offices responsible for providing the individual with 
assistance with enrollment in qualified health insurance, (2) a 
list of coverage options that are treated as qualified health 
insurance by the State in which the individual resides, (3) in 
the case of a TAA-eligible individual, a statement informing 
the individual that the individual has 63 days from the date 
that is seven days after the issuance of such certificate to 
enroll in such insurance without a lapse in creditable 
coverage, and (4) such other information as the Secretary may 
provide.
      Effective date.--The provision is effective for 
certificates issued after the date that is six months after the 
date of enactment. The provision does not apply to months 
beginning after December 31, 2010.
Survey and report on enhanced health coverage tax credit program
            Survey
      The provision requires that the Secretary of the Treasury 
must conduct a biennial survey of eligible individuals 
containing the following information:
      1. In the case of eligible individuals receiving the HCTC 
(including those participating in the advance payment program 
(the ``HCTC program'')) (A) demographic information of such 
individuals, including income and education levels, (B) 
satisfaction of such individuals with the enrollment process in 
the HCTC program, (C) satisfaction of such individuals with 
available health coverage options under the credit, including 
level of premiums, benefits, deductibles, cost-sharing 
requirements, and the adequacy of provider networks, and (D) 
any other information that the Secretary determines is 
appropriate.
      2. In the case of eligible individuals not receiving the 
HCTC (A) demographic information on each individual, including 
income and education levels, (B) whether the individual was 
aware of the HCTC or the HCTC program, (C) the reasons the 
individual has not enrolled in the HCTC program, including 
whether such reasons include the burden of process of 
enrollment and the affordability of coverage, (D) whether the 
individual has health insurance coverage, and, if so, the 
source of such coverage, and (E) any other information that the 
Secretary determines is appropriate.
      Not later than December 31 of each year in which a survey 
described above is conducted (beginning in 2010), the Secretary 
of the Treasury must report to the Committee on Finance and the 
Committee on Health, Education, Labor, and Pensions of the 
Senate and the Committee on Ways and Means and the Committee on 
Education and Labor of the House of Representatives the 
findings of the most recent survey.
            Report
      Not later than October 1 of each year (beginning in 
2010), the Secretary of the Treasury must report to the 
Committee on Finance and the Committee on Health, Education, 
Labor, and Pensions of the Senate and the Committee on Ways and 
Means and the Committee on Education and Labor of the House of 
Representatives the following information with respect to the 
most recent taxable year ending before such date:
      1. In each State and nationally (A) the total number of 
eligible individuals and the number of eligible individuals 
receiving the HCTC, (B) the total number of such eligible 
individuals who receive an advance payment of the HCTC through 
the HCTC program, (C) the average length of the time period of 
participation of eligible individuals in the HCTC program, and 
(D) the total number of participating eligible individuals in 
the HCTC program who are enrolled in each category of qualified 
health insurance with respect to each category of eligible 
individuals.
      2. In each State and nationally, an analysis of (A) the 
range of monthly health insurance premiums, for self-only 
coverage and for family coverage, for individuals receiving the 
benefit of the HCTC and (B) the average and median monthly 
health insurance premiums, for self-only coverage and for 
family coverage, for individuals receiving the HCTC with 
respect to each category of qualified health insurance.
      3. In each State and nationally, an analysis of the 
following information with respect to the health insurance 
coverage of individuals receiving the HCTC who are enrolled in 
State-based coverage: (A) deductible amounts, (B) other out-of-
pocket cost-sharing amounts, and (C) a description of any 
annual or lifetime limits on coverage or any other significant 
limits on coverage services or benefits. The information must 
be reported with respect to each category of coverage.
      4. In each State and nationally, the gender and average 
age of eligible individuals who receive the HCTC in each 
category of qualified health insurance with respect to each 
category of eligible individuals.
      5. The steps taken by the Secretary of the Treasury to 
increase the participation rates in the HCTC program among 
eligible individuals, including outreach and enrollment 
activities.
      6. The cost of administering the HCTC program by 
function, including the cost of subcontractors, and 
recommendations on ways to reduce the administrative costs, 
including recommended statutory changes.
      7. After consultation with the Secretary of Labor, the 
number of States applying for and receiving national emergency 
grants under section 173(f) of the Workforce Investment Act of 
1998, the activities funded by such grants on a State-by-State 
basis, and the time necessary for application approval of such 
grants.
Other non-revenue provisions
      The provision also authorizes appropriations for 
implementation of the revenue provisions of the provision and 
provides grants under the Workforce Investment Act of 1998 for 
purposes related to the HCTC.
GAO study
      The provision requires the Comptroller General of the 
United States to conduct a study regarding the HCTC to be 
submitted to Congress no later than March 31, 2010. The study 
is to include an analysis of (1) the administrative costs of 
the Federal government with respect to the credit and the 
advance payment of the credit and of providers of qualified 
health insurance with respect to providing such insurance to 
eligible individuals and their families, (2) the health status 
and relative risk status of eligible individuals and qualified 
family members covered under such insurance, (3) participation 
in the credit and the advance payment of the credit by eligible 
individuals and their qualifying family members, including the 
reasons why such individuals did or did not participate and the 
effects of the provision on participation, and (4) the extent 
to which eligible individuals and their qualifying family 
members obtained health insurance other than qualifying 
insurance or went without insurance coverage. The provision 
provides the Comptroller General access to the records within 
the possession or control of providers of qualified health 
insurance if determined relevant to the study. The Comptroller 
General may not disclose the identity of any provider of 
qualified health insurance or eligible individual in making 
information available to the public.

                             EFFECTIVE DATE

      The provision is generally effective upon the date of 
enactment, except as otherwise noted above.

                TITLE IV--HEALTH INFORMATION TECHNOLOGY

Subtitle C--Incentives for the Use of Health Information 
    Technology....................................................     1
Part II--Medicare Program.........................................     1
    Incentives for Eligible Professionals. (House bill Sec. 4311; 
      Senate bill Sec. 4201; Conference agreement Sec. 4201)......     1
    Incentives for Hospitals. (House bill Sec. 4312; Senate bill 
      Sec. 4202; Conference agreement Sec. 4202)..................     1
    Treatment Of Payments And Savings; Implementation Funding. 
      (House bill Sec. 4313; Senate bill Sec. 4203; Conference 
      agreement Sec. 4203)........................................     1
    Study on Application of HIT Payment Incentives For Providers 
      Not Receiving Other Incentive Payments. (House bill Sec. 
      4314; Senate bill Sec. 4205; Conference agreement Sec. 4204)     1
    Study on Availability of Open Source Health Information 
      Technology Systems. (Senate bill Sec. 4206).................     1
Part III--Medicaid Funding........................................     1
    Medicaid Provider HIT Adoption and Operation Payments; 
      Implementation Funding. (House bill Sec. 4321; Senate bill 
      Sec. 4211; Conference agreement Sec. 4211)..................     1
    Medicaid Nursing Home Grant Program. (House bill Sec. 4322)...     1
Subtitle E--Miscellaneous Medicare Provisions.....................     1
    Moratoria on Certain Medicare Regulations. (House bill Sec. 
      4501; Senate bill Sec. 4204; Conference agreement Sec. 4301)     1
    Long-term Care Hospital Technical Corrections. (House bill 
      Sec. 4502; Conference agreement Sec. 4302)..................     1

                       Part II--Medicare Program


 Incentives for Eligible Professionals. (House bill Sec. 4311; Senate 
            bill Sec. 4201; Conference agreement Sec. 4101)


                              CURRENT LAW

      There are several current legislative and administrative 
initiatives to promote the use of Health Information Technology 
(HIT) and Electronic Health Records (EHRs) in the Medicare 
program. The Medicare Modernization Act of 2003 (MMA; P.L. 108-
173) established a timetable for the Centers for Medicare and 
Medicaid Services (CMS) to develop e-prescribing standards, 
which provide for the transmittal of such information as 
eligibility and benefits (including formulary drugs), 
information on the drug being prescribed and other drugs listed 
in the patient's medication history (including drug-drug 
interactions), and information on the availability of lower-
cost, therapeutically appropriate alternative drugs. CMS issued 
a set of foundation standards in 2005, then piloted and tested 
additional standards in 2006, several of which were part of a 
2008 final rule. The final Medicare e-prescribing standards, 
which become effective on April 1, 2009, apply to all Part D 
sponsors, as well as to prescribers and dispensers that 
electronically transmit prescriptions and prescription-related 
information about Part D drugs prescribed for Part D eligible 
individuals. The MMA did not require Part D drug prescribers 
and dispensers to e-prescribe. Under its provisions, only those 
who choose to e-prescribe must comply with the new standards. 
However, the Medicare Improvement for Patients and Providers 
Act of 2008 (MIPPA; P.L. 110-275) included an e-prescribing 
mandate and authorized incentive bonus payments for e-
prescribers between 2009 and 2013. Beginning in 2012, payments 
will be reduced for those who fail to e-prescribe.
      CMS is administering a number of additional programs to 
promote EHR adoption. The MMA mandated a three-year pay-for-
performance demonstration in four states (AR, CA, MA, UT) to 
encourage physicians to adopt and use EHR to improve care for 
chronically ill Medicare patients. Physicians participating in 
the Medicare Care Management Performance (MCMP) demonstration 
receive bonus payments for reporting clinical quality data and 
meeting clinical performance standards for treating patients 
with certain chronic conditions. They are eligible for an 
additional incentive payment for using a certified EHR and 
reporting the clinical performance data electronically.
      CMS has developed a second demonstration to promote EHR 
adoption using its Medicare waiver authority. The five-year 
Medicare EHR demonstration is intended to build on the 
foundation created by the MCMP program. It will provide 
financial incentives to as many as 1,200 small- to medium-sized 
physician practices in 12 communities across the country for 
using certified EHRs to improve quality, as measured by their 
performance on specific clinical quality measures. Additional 
bonus payments will be made based on the number of EHR 
functionalities a physician group has incorporated into its 
practice.
      The Tax Relief and Health Care Act of 2006 (P.L. 109-432) 
established a voluntary physician quality reporting system, 
including an incentive payment for Medicare providers who 
report data on quality measures. The Medicare Physician Quality 
Reporting Initiative (PQRI) was expanded by the Medicare, 
Medicaid, and SCHIP Extension Act of 2007 (P.L. 110-173) and by 
MIPPA, which authorized the program indefinitely and increased 
the incentive that eligible physicians can receive for 
satisfactorily reporting quality measures. In 2009, eligible 
physicians may earn a bonus payment equivalent to 2.0% of their 
total allowed charges for covered Medicare physician fee 
schedule services. The PQRI quality measures include a 
structural measure that conveys whether a physician has and 
uses an EHR.

                               HOUSE BILL

      The House bill would add an incentive payment to certain 
eligible professionals for the adoption and ``meaningful use,'' 
defined below, of a certified EHR system. Professionals 
eligible for the incentive payments are those who participate 
in Medicare and who are defined under Sec. 1861(r) of the 
Social Security Act.
      Incentive payments. The amount of EHR incentive payments 
that eligible providers could receive would be capped, based on 
the amount of Medicare-covered professional services furnished 
during the year in question, and the total possible amount of 
the incentive payment would decrease over time. The bill 
permits a rolling implementation period, with cohorts starting 
in 2011, 2012, and 2013, respectively, being eligible for the 
entire five years of incentives. For example, incentives that 
start in 2011 would continue through 2015, while those that 
begin in 2012 would run through 2016 and those starting in 2013 
would run through 2017.
      For the first calendar year of the designated period 
described above, the limit would be $15,000. Over the next four 
calendar years, the total possible amount would decrease 
respectively by year to $12,000, $8,000, $4,000, and $2,000. 
The phase-down is different for eligible professionals first 
adopting EHR after 2013. For these eligible providers, the 
limit on the amount of the incentive payment would equal the 
limit in the first payment year for someone whose first payment 
year is 2013. For example, if the first payment year is after 
2014 then the limit on the incentive payments for that year 
would be $12,000 rather than $15,000. The EHR incentive 
payments for professionals would not be available to a 
hospital-based eligible physician, such as a pathologist, 
anesthesiologist or emergency physician who furnishes 
substantially all such services in a hospital setting using the 
hospital's facilities and equipment, including computer 
equipment. However, health IT incentive payments are made 
available to hospitals in Sec. 4312.
      The payments could be in the form of a single 
consolidated payment or in periodic installments, as determined 
by the Secretary. The Secretary would establish rules to 
coordinate the limits on the incentive payments for eligible 
professionals who provide covered professional services in more 
than one practice. The Secretary would seek to avoid 
duplicative requirements from federal and state governments to 
demonstrate meaningful use of certified EHR technology under 
the Medicare and Medicaid programs. The Secretary would be 
allowed to adjust the reporting periods in order to carry out 
this clause.
      Meaningful use. For purposes of the EHR incentive 
payment, an eligible professional would be treated as a 
``meaningful user'' of EHR technology if the eligible 
professional meets the following three criteria: (1) the 
eligible professional demonstrates to the satisfaction of the 
Secretary that during the period the professional is using a 
certified EHR technology in a meaningful manner, which would 
include the use of electronic prescribing as determined to be 
appropriate by the Secretary; (2) the eligible professional 
demonstrates to the satisfaction of the Secretary that during 
such period such certified EHR technology is connected in a 
manner that provides, in accordance with law and standards 
applicable to the exchange of information, for the electronic 
exchange of health information to improve the quality of health 
care, such as promoting care coordination; and (3) the eligible 
professional submits information on clinical quality measures.
      The Secretary could provide for the use of alternative 
means for meeting the above requirements in the case of an 
eligible professional furnishing covered professional services 
in a group practice (as defined by the Secretary). The 
Secretary would seek to improve the use of electronic health 
records and health care quality by requiring more stringent 
measures of meaningful use over time.
      Clinical quality measures. The Secretary would select the 
clinical quality measures and other measures but must be 
consistent with the following: (1) the Secretary would provide 
preference to clinical quality measures that have been endorsed 
by the consensus-based entity regarding performance measurement 
with which the Secretary has a contract under Sec. 1890(a) of 
the Social Security Act; and (2) prior to any measure being 
selected for the purposes of this provision, the Secretary 
would publish the measure in the Federal Register and provide 
for a period of public comment. The Secretary could not require 
the electronic reporting of information on clinical quality 
measures unless the Secretary has the capacity to accept the 
information electronically, which may be on a pilot basis. In 
selecting the measures and in establishing the form and manner 
for reporting these measures, the Secretary would seek to avoid 
redundant or duplicative reporting otherwise required, 
including reporting under the physician quality reporting 
initiative.
      A professional could satisfy the demonstration 
requirement above through means specified by the Secretary, 
which may include the following: (1) an attestation; (2) the 
submission of claims with appropriate coding (such as a code 
indicating that a patient encounter was documented using 
certified EHR technology); (3) a survey response; (4) reporting 
the clinical quality and other measures mentioned above; and 
(5) other means specified by the Secretary. Notwithstanding 
other provisions of law that place restrictions on the use of 
Part D data, the Secretary could use data regarding drug claims 
submitted for purposes of determining payment under Part D for 
purposes of determining the EHR incentive payments under this 
legislation.
      Payment adjustments. Fee schedule payments to eligible 
professionals would be adjusted under certain conditions. For 
covered professional services furnished by an eligible 
professional during 2016 or any subsequent payment year, if the 
professional is not a meaningful EHR user during the previous 
year's reporting period, the fee schedule amount would be 
reduced to 99% in 2016, 98% in 2017, and 97% in 2018 and in 
each subsequent year.
      For 2019 and each subsequent year, if the Secretary finds 
that the proportion of eligible professionals who are 
meaningful EHR users is less than 75%, the applicable fee 
schedule amount would be decreased by 1 percentage point from 
the applicable percent in the preceding year, but in no case 
would the applicable percent be less than 95%.
      Hardship exemption. The Secretary could, on a case-by-
case basis, exempt an eligible professional from the 
application of the payment adjustment above if the Secretary 
determines, subject to annual renewal, that being a meaningful 
EHR user would result in a significant hardship, such as in the 
case of an eligible professional who practices in a rural area 
without sufficient Internet access. In no case would an 
eligible professional be granted such an exemption for more 
than five years.
      Medicare Advantage. In general, Medicare incentives 
created under this section are not available to Medicare 
Advantage (MA) plans, and both the payments and penalties made 
under this section are exempt from the MA benchmark 
determinations. However, the legislation establishes conditions 
under which the EHR bonus payments and penalties for the 
adoption and meaningful use of certified EHR technology would 
apply to certain HMO-affiliated eligible professionals. In 
general, with respect to eligible professionals in a qualifying 
MA organization for whom the organization attests to the 
Secretary as meaningful users of EHR, the incentive payments 
and adjustments would apply in a similar manner as they apply 
to other eligible professionals. Incentive payments would be 
made to, and payment adjustments would apply to, the qualifying 
organizations. With respect to a qualifying MA organization, an 
eligible professional would be an eligible professional who (i) 
is employed by the organization or is employed by or is a 
partner of an entity that through contract furnishes at least 
80% of the entity's patient care services to enrollees of the 
organization; and furnishes at least 80% of the professional 
services of the eligible professional to enrollees of the 
organization; and (ii) furnishes, on average, at least 20 hours 
per week of patient care services. For these MA-affiliated 
eligible professionals, the Secretary would determine the 
incentive payments which should be similar to the payments that 
would have been available to the professionals under FFS.
      To avoid duplication of payments, if an eligible 
professional is both an MA-affiliated professional and eligible 
for the maximum payment under the fee-for-service program 
(FFS), the payment incentive would be made only under FFS. 
Otherwise, the incentive payment would be made to the plan. The 
Secretary would develop a process to ensure that duplicate 
payments are not made. A qualifying MA organization would 
specify a year (not earlier than 2011) that would be treated as 
the first payment year for all eligible professionals with 
respect to the MA organization.
      In applying the applicable percentage payment adjustment 
to MA-affiliated eligible professionals, instead of the payment 
adjustment being an applicable percent of the fee schedule 
amount for a year, the payment adjustment to the payment to the 
MA organization would be a proportional amount based on the 
payment adjustment applicable to FFS providers and the fraction 
of the organization's eligible professionals who are not 
meaningfully using EHRs.

                              SENATE BILL

      The Senate bill is mostly the same as the House bill, but 
with the following exceptions. The Senate bill does not provide 
for any incentive payments to eligible professionals who first 
adopt EHR in 2014 or in subsequent years but does provide a 
greater incentive for early adoption of EHR, with payments of 
$18,000 if the first payment year under the EHR incentive 
program is 2011 or 2012.
      Certain rural eligible providers would receive larger 
incentive payments in the Senate bill. The incentive payment 
would be increased by 25% if the provider predominantly serves 
beneficiaries in a rural area designated as a health 
professional shortage area.
      Under the Senate bill, the Secretary would also be given 
the authority to deem providers who satisfy state requirements 
for demonstrating meaningful use of EHR technology as meeting 
the criteria for meaningful use under the Medicare EHR 
incentive program. No similar authority or provision is 
included in the House bill.
      The incentive adjustment (penalty) would begin a year 
earlier in 2015 under the Senate bill as opposed to 2016 in the 
House bill. The schedule of reductions over time in the 
applicable percentage also reflects this difference, so that 
the applicable percent under the Senate bill would be 99% in 
2015, 98% in 2016, and 97% in 2017.
      With respect to the application of the incentive payment 
program to managed care organizations, the Senate bill differs 
from the House bill in two areas. First, the Senate bill 
applies a slightly different requirement to determine an 
eligible professional. Under the Senate bill, a professional 
who furnishes at least 75% (vs. 80% in the House bill) of his 
or her professional services to enrollees of the managed care 
organization and who also met the additional criteria noted 
above would be eligible for this incentive program. Second, the 
Senate bill includes a cap on large managed care organizations 
that limits incentive payments to no more than 5,000 eligible 
professionals of the organization in recognition of economies 
of scale in such organizations. This difference is also 
reflected in the payment adjustment penalty calculation in the 
Senate bill.
      The Senate bill would require that the names, business 
addresses, and business phone numbers of each qualifying 
managed care organization and the associated eligible 
professionals receiving EHR incentive payments be posted on the 
CMS website in an easily understandable format.
      Finally, the Senate bill would require the HHS Secretary 
to provide assistance to eligible professionals, Medicaid 
providers, and eligible hospitals located in rural or other 
medically underserved areas to successfully choose, implement, 
and use certified EHR technology. To the extent practicable, 
the assistance would be through entities that have expertise in 
this area.

                          CONFERENCE AGREEMENT

      With regard to eligible professionals, the conference 
agreement includes provisions from the House and Senate bills.
      The conference agreement provides eligible professionals 
who show meaningful use of an EHR in 2011 or 2012 with 
incentive payments of $18,000 in the first year; provides no 
payment incentives after 2016; and does not provide incentive 
payments to eligible professionals who first adopt an EHR in 
2015 or subsequent years.
      Incentive payments would be increased by 10% if the 
provider predominately serves beneficiaries in any area 
designated as a health professional shortage area. The 
conference agreement mirrors the Senate bill in that payment 
adjustments for eligible professionals not demonstrating 
meaningful use of an EHR would begin in 2015.
      The conference agreement, like the House and Senate-
passed bills, prohibits payments to hospital-based 
professionals (because such professionals are generally 
expected to use the EHR system of that hospital). This policy 
does not disqualify otherwise eligible professionals merely on 
the basis of some association or business relationship with a 
hospital. Common examples of such arrangements include 
professionals who are employed by a hospital to work in an 
ambulatory care clinic or billing arrangements in which 
physicians submit claims to Medicare together with hospitals or 
other entities. The change in the conference agreement 
clarifies that this test will be based on the setting in which 
a provider furnishes services rather than any billing or 
employment arrangement between a provider and hospital or other 
provider entity.
      For MA organizations, the conference agreement reflects 
the Senate bill with the following exceptions. The agreement 
requires MA-affiliated professionals to provide 80 percent of 
their Medicare services to the enrollees of the qualifying MA 
organization and removes the payment incentive cap on eligible 
professionals affiliated with health maintenance organizations. 
It also extends the language of limitations on review for 
eligible professionals to professionals eligible under the 
managed care section and makes several technical corrections.
      In addition, the conference report requires the Secretary 
to report to Congress on methods of making payment incentives 
and adjustments with respect to eligible professionals who (1) 
contract with one or more MA organizations or with intermediary 
organizations that contracts with one or more MA organizations 
and (2) are not eligible for incentive payments under this 
legislation. The report is due to Congress within 120 days of 
enactment and shall include recommendations for legislation as 
appropriate. The agreement reflects the Congress's intent to 
provide payment incentives and adjustments towards the 
meaningful use of certified EHRs with respect to all physicians 
who treat Medicare patients without regard to practice 
organization.

Incentives for Hospitals. (House bill Sec. 4312; Senate bill Sec. 4202; 
                    Conference agreement Sec. 4102)

                              CURRENT LAW

      Medicare pays acute care hospitals using a prospectively 
determined payment for each discharge. These payment rates are 
increased annually by an update factor that is established, in 
part, by the projected increase in the hospital market basket 
(MB) index. However, starting in FY2007, hospitals that do not 
submit required quality data will have the applicable MB 
percentage reduced by two percentage points. The reduction 
would apply for that year and would not be taken into account 
in subsequent years. Currently, Medicare's payments to acute 
care hospitals under the inpatient prospective payment system 
(IPPS) are not affected by the adoption of EHR technology. 
Critical access hospitals (CAHs) receive cost-plus 
reimbursement under Medicare. Under current law, Medicare 
reimburses CAHs at 101% of their Medicare costs. These 
reimbursements include payments for Medicare's share of CAH 
expenditures on health IT, plus an additional 1%.

                               HOUSE BILL

      The bill would establish incentives, starting in FY2011, 
within Medicare's IPPS for eligible hospitals that are 
meaningful EHR users. Generally, these hospitals would receive 
diminishing additional payments over a four-year period. 
Starting in FY2016, eligible hospitals that do not become 
meaningful EHR users could receive lower payments because of 
reductions to their annual MB updates.
      Incentive payments. Subject to certain limitations, each 
qualified hospital would receive an incentive payment 
calculated as the sum of a base amount ($2 million) added to 
its discharge related payment, which would then be multiplied 
by its Medicare's share. These payments would be reduced over a 
four-year transition period. A qualified hospital would receive 
$200 for each discharge paid under the inpatient prospective 
payment system (IPPS) starting with its 1,150th discharge 
through its 23,000th discharge.
      A hospital's Medicare share would be calculated according 
to a specified formula. The numerator would equal inpatient bed 
days attributable to individuals for whom a Part A payment may 
be made, either under traditional Medicare or for those who are 
enrolled in Medicare Advantage (MA) organizations. The 
denominator would equal the total number of inpatient bed days 
in the hospital adjusted by a hospital's share of charges 
attributed to charity care. Specifically, the hospital's total 
days would be multiplied by a fraction calculated by dividing 
the hospital's total charges minus its charges attributed to 
charity care by its total charges. If a hospital's charge data 
on charity care is not available, the Secretary would be 
required to use the hospital's uncompensated care data which 
may be adjusted to eliminate bad debt. If hospital data to 
construct the charity care factor is unavailable, the fraction 
would be set at one. If hospital data necessary to include MA 
days is not available, that component of the formula would be 
set at zero.
      The legislation establishes a four-year incentive payment 
transition schedule. A hospital that is a meaningful EHR user 
would receive the full amount of the incentive payment in its 
first payment year; 75% of the amount in its second payment 
year; 50% of the amount in its third payment year; and finally, 
25% of the amount in its fourth payment year. The first payment 
year for a meaningful EHR user would be FY2011 or, 
alternatively, the first fiscal year for which an eligible 
hospital would qualify for an incentive payment. Hospitals that 
first qualify for the incentive payments after FY2013, would 
receive incentive payments on the transition schedule as if 
their first payment year is FY2013. Hospitals that become 
meaningful EHR users after FY2015 would not receive incentive 
payments. The incentive payments may be made as a single 
consolidated payment or may be made as periodic payments, as 
determined by the Secretary.
      Meaningful use. An eligible hospital would be treated as 
a meaningful EHR user if it demonstrates that it uses certified 
EHR technology in a meaningful manner and provides for the 
electronic exchange of health information (in accordance with 
applicable legal standards) to improve the quality of care. A 
hospital would satisfy the demonstration requirements through 
an attestation; the submission of appropriately coded claims; a 
survey response; EHR reporting on certain measures; or other 
means specified by the Secretary.
      Clinical quality measures. EHR measures would include 
clinical quality measures and other measures selected by the 
Secretary. Prior to implementation, the measures would be 
published in the Federal Register and subject to public 
comment. The electronic reporting of the clinical quality 
measures would not be required unless the Secretary has the 
capacity to accept the information electronically, which may be 
on a pilot basis. When establishing the measures, the Secretary 
shall provide preference to clinical quality measures that have 
been selected for the Reporting Hospital Quality Data for 
Annual Payment Update program (RHQDAPU) established at 
1886(b)(3)(B)(viii) of the Social Security Act or that have 
been endorsed by the entity with a contract with the Secretary 
under Sec. 1890(a), which is currently the National Quality 
Forum. The Secretary shall seek to avoid redundant measures or 
duplicative reporting. Not withstanding restrictions placed on 
the use and disclosure of Medicare Part D information, the 
Secretary would be able to use data regarding drug claims.
      Miscellaneous. There would be no administrative or 
judicial review of the determination of any incentive payment 
or payment update adjustment (described subsequently), 
including, the determination of a meaningful EHR user, the 
determination of the measures, or the determination of an 
exception to the payment update adjustment.
      The Secretary would post listings of the eligible 
hospitals that are meaningful EHR users or that are subject to 
the penalty and other relevant data on the CMS website. 
Hospitals would have the opportunity to review the other 
relevant data prior to the data being made publicly available.
      Penalties. Starting in FY2016, eligible IPPS hospitals 
that do not submit the required quality data would be subject 
to a 25% reduction in their annual update, rather than the 2 
percentage point reduction under current law. Those hospitals 
that are not meaningful EHR users would be subject to a 
reduction in their annual MB update for the remaining three-
quarters of the update. This reduction would be implemented 
over a three-year period. In FY2016, one-quarter of the update 
will be at risk for quality reporting and one-quarter at risk 
for meaningful use of EHR. In FY2017, one-quarter of the update 
will be at risk for quality reporting and one-half will be at 
risk for meaningful use of EHR. In FY2018 and subsequent years, 
one-quarter of the update will be at risk for quality reporting 
and three-quarters will be at risk for meaningful use of EHR. 
These reductions would apply only to the fiscal year involved 
and would not be taken into account in subsequent fiscal years. 
Starting in FY2016, payments to acute care hospitals that are 
not meaningful EHR users in a state operating under a Medicare 
waiver under section 1814(b)(3) of the Social Security Act 
would be subject to comparable aggregate reductions. The state 
would be required to report its payment adjustment methodology 
to the Secretary.
      Hardship exemption. The Secretary would be able to exempt 
certain IPPS hospitals from these payment adjustments for a 
fiscal year if the Secretary determines that requiring a 
hospital to be a meaningful EHR user during that year would 
result in significant hardship, such as a hospital in a rural 
area without adequate Internet access. Such determinations 
would be subject to annual renewal. In no case would a hospital 
be granted an exemption for more than five years.
      Medicare Advantage. In general, Medicare incentives 
created under this section are not available to Medicare 
Advantage (MA) plans and the payments made under this section 
are exempt from the benchmark determinations. However, payment 
incentives and penalties would be established for certain 
qualifying MA organizations to ensure maximum capture of 
relevant data relating to Medicare beneficiaries. An eligible 
hospital would be one that is under common corporate governance 
with a qualifying MA organization and serves enrollees in an MA 
plan offered by the organization. The Secretary would be 
required to determine incentive payment amounts similar to the 
estimated amount in the aggregate that would be paid if the 
hospital services had been payable under Part A as described 
above. The Secretary would be required to avoid duplicative EHR 
incentive payments to hospitals. If an eligible hospital under 
Medicare Part C was also eligible for EHR incentive payments 
under Medicare Part A, and for which at least 33% of hospital 
discharges (or bed days) were covered under Medicare Part A, 
the EHR incentive payment would only be made under Part A and 
not Part C. If fewer than 33% of discharges are covered under 
Part A, the Secretary would be required to develop a process to 
ensure that duplicative payments were not made and to collect 
data from MA organizations to ensure against duplicative 
payments.
      If one or more eligible hospitals under a common 
corporate governance with a qualifying MA Health Maintenance 
Organization are not meaningful EHR users, the incentive 
payment to the organization would be reduced by a specified 
percentage. The percentage is defined as 100% minus the product 
of (a) the percentage point reduction to the payment update for 
the period described above and (b) the Medicare hospital 
expenditure proportion. This hospital expenditure proportion is 
defined as the Secretary's estimate of the portion of 
expenditures under Parts A and B that are not attributable to 
this part, that are attributable to expenditures for inpatient 
hospital services. The Secretary would be required to apply the 
payment adjustment based on a methodology specified by the 
Secretary, taking into account the proportion of eligible 
hospitals or discharges from eligible hospitals that are not 
meaningful EHR users for the period.

                              SENATE BILL

      The Senate bill is largely the same as the House bill, 
but with the following differences. First, instead of a fixed 
amount per discharge, a qualified hospital would receive $200 
per discharge for the 1,150th through the 9,200th discharge, 
$100 per discharge for the 9,201st through the 13,800th 
discharge, and $60 per discharge for the 13,801st through the 
23,000th discharge. Second, the Senate bill would include CAHs 
as eligible hospitals, and limit the total amount of payments 
to a CAH for all payment years to $1.5 million. CAHs would 
continue to also receive their cost-plus reimbursement 
available under current law. Third, the penalties would begin a 
year earlier in FY2015; in the House bill the penalties begin 
in FY2016. Fourth, beginning in FY2015, a CAH that is not a 
meaningful EHR user would have its Medicare reimbursement rate 
as a percentage of its Medicare costs reduced to the following: 
FY2015, 100.66%; FY2016, 100.33%; FY2017 and each subsequent 
fiscal year, 100%. The Secretary would be permitted, on a case-
by-case basis, to exempt a CAH from the penalties due to 
significant hardship. Finally, the Senate bill would require 
that the names, business addresses, and business phone numbers 
of each qualifying MA organization receiving EHR incentive 
payments be posted on the CMS website in an easily 
understandable format.

                          CONFERENCE AGREEMENT

      The Conference Agreement follows the House bill, but with 
the following differences. First, the Conference agreement 
includes bonus payments for CAHs that are meaningful users of 
EHR technology. These bonus payments are capped at an enhanced 
Medicare share of 101 percent of those reasonable costs that 
are normally subject to depreciation and that are for the 
purchase of certified EHR. The enhanced Medicare share will 
equal the Medicare share calculated for 1886(d) hospitals, for 
EHR bonuses, including an adjustment for charity care, plus an 
additional 20 percentage points, except that the Medicare share 
may not exceed 100 percent. CAHs that are meaningful users of 
EHR technology will be able to expense these costs in a single 
payment year and receive prompt interim payments, rather than 
receiving reimbursement over a multi-year depreciation 
schedule. Beginning in 2011, if a CAH is a meaningful EHR user, 
they are eligible for four consecutive years of these bonuses, 
regardless of the year they meet the meaningful user standard, 
except that a CAH cannot get bonuses after 2015, similar to the 
bonus timeframe for a 1886(d) hospital. CAHs will continue to 
receive cost-plus reimbursement for their remaining costs, such 
as for ongoing maintenance or other costs that are not subject 
to depreciation. This cost-plus reimbursement continues beyond 
the bonus period, consistent with current law. Normal cost 
reporting rules would apply for the purchase of certified EHR 
technology until the CAH becomes a meaningful EHR user. CAHs 
are eligible for the same hardship exemption that is available 
to 1886(d) hospitals. Second, the conference agreement adopts 
the Senate's penalty schedule for both 1886(d) hospitals and 
CAHs. Third, the conference agreement includes the Senate 
provision requiring CMS to post information about qualifying MA 
hospitals on the website. Fourth, the conference agreement 
clarifies which provisions are subject to limitations on review 
for hospitals and extends appropriate limitations to CAHs and 
MA hospitals.

Treatment of Payments and Savings; Implementation Funding. (House Bill 
   Sec. 4313; Senate bill Sec. 4203; Conference Agreement Sec. 4103)

                              CURRENT LAW

      Physician and outpatient services provided under Medicare 
Part B are financed through a combination of beneficiary 
premiums, deductibles, and federal general revenues. In 
general, Part B beneficiary premiums are set to equal 25% of 
estimated program costs for the aged, with federal general 
revenues accounting for the remainder. The Part B premium 
fluctuates along with total Part B expenditures.
      Absent specific legislation to exempt premiums from 
policy effects, the recent growth in expenditures for physician 
services, led by the increase in imaging and diagnostic 
services, generally results in premium increases to cover the 
beneficiaries 25% share of total expenditures. While an 
individual's Social Security payment cannot decrease from one 
year to the next as a result of an increase in the Part B 
premium (except for those subject to the income-related 
premium), current law does permit the entire cost-of-living 
(COLA) increase to be consumed by Medicare premium increases.
      MIPPA established the Medicare Improvement Fund (MIF), 
available to the Secretary to make improvements under the 
original fee-for-service program under parts A and B for 
Medicare beneficiaries.
      For FY2009 through FY2013, the Secretary of Health and 
Human Services would transfer $140 million from the Federal 
Hospital Insurance Trust Fund and the Federal Supplementary 
Medical Insurance Trust Fund to the CMS Program Management 
Account. The amounts drawn from the funds would be in the same 
proportion as for Medicare managed care payments (Medicare 
Advantage), that is, in a proportion that reflects the relative 
weight that benefits under part A and under part B represent of 
the actuarial value of the total benefits.

                               HOUSE BILL

      The House bill would exempt spending under this title 
from the annual amount of Medicare physician expenditures used 
to calculate the Part B premium; beneficiaries would be held 
harmless from potential premium increases due to the increased 
Part B expenditures that result from this added payment. 
Further, the bill would authorize the transfer of funds from 
the Treasury to the Supplementary Medical Insurance (Part B) 
Trust Fund to cover the amount of EHR payment incentives that 
would otherwise be offset by Part B premiums.
      The bill would modify the purposes of the Medicare 
Improvement Fund by allowing the monies to be used to adjust 
Medicare part B payments to protect against projected 
shortfalls due to any increase in the conversion factor used to 
calculate the Medicare Part B fee schedule.
      The amount in the fund in FY2014, after taking into 
account the transfer directed by this section, would be 
modified to be $22.29 billion. For FY2020 and each subsequent 
fiscal year, the amount in the fund would be the Secretary's 
estimate, as of July 1 of the fiscal year, of the aggregate 
reduction in Medicare expenditures directly resulting from the 
penalties imposed as a result of various Medicare providers not 
using HIT in a meaningful fashion.
      To implement the provisions in and amendments made by 
this section, $60 million for each of FY2009 through FY2015 and 
$30 million for each succeeding fiscal year through FY2019 
would be appropriated to the Secretary for the CMS Program 
Management Account. The amounts appropriated would be available 
until expended.

                              SENATE BILL

      The premium hold-harmless provisions in the Senate bill 
are identical to those in the House. However, the Senate bill 
does not include the provisions regarding the Medicare 
Improvement Fund including the transfers of aggregate 
reductions resulting from the penalties into the MIF. The two 
bills also differ in the funding amounts to CMS for 
implementation. Whereas the House bill would appropriate $60 
million for each of FY2009-FY2015 and $30 million for FY2016 
through FY2019, the Senate bill would appropriate $100 million 
for each of FY2009-FY2015 and $45 million for FY2016 through 
FY2018.

                          CONFERENCE AGREEMENT

      The conference agreement includes the premium hold-
harmless, as well as changes contained in the House bill to the 
Medicare Improvement Fund. The agreement also appropriates $100 
million in FY2009-FY2015 and $45 million in FY 2016.

   Study on Application of HIT Payment Incentives for Providers Not 
Receiving Other Incentive Payments. (House bill Sec. 4314; Senate bill 
               Sec. 4205; Conference Agreement Sec. 4104)

                              CURRENT LAW

      No current law.

                               HOUSE BILL

      The House bill would require the Secretary to conduct a 
study to determine whether payment incentives to implement and 
use qualified HIT should be made available to health care 
providers who are receiving minimal or no payment incentives or 
other funding under this Act, including from Medicare or 
Medicaid, or any other funding. These health care providers 
could include skilled nursing facilities, home health agencies, 
hospice programs, laboratories, federally qualified health 
centers, and non-physician professionals.
      The study would include an examination of the following: 
(1) the adoption rates of qualified HIT by such health care 
providers; (2) the clinical utility of HIT by such health care 
providers; (3) whether the services furnished by such health 
care providers are appropriate for or would benefit from the 
use of such technology; (4) the extent to which such health 
care providers work in settings that might otherwise receive an 
incentive payment or other funding under this Act, Medicare or 
Medicaid, or otherwise; (5) the potential costs and the 
potential benefits of making payment incentives and other 
funding available to such health care providers; and (6) any 
other issues the Secretary deems to be appropriate. The 
Secretary would be required to submit a report to Congress on 
the findings and conclusions of the study by June 30, 2010.

                              SENATE BILL

      Same provision.

                          CONFERENCE AGREEMENT

      The conference report includes the study contained in the 
House and Senate bills on providing incentive payments to 
encourage use of health IT to providers who are receiving 
minimal or no payment incentives or other funding under this 
Act. It also includes a study in Section 4206 of the Senate 
bill on the availability of open source health IT systems.

  Study on Availability of Open Source Health Information Technology 
                    Systems. (Senate bill Sec. 4206)

                              CURRENT LAW

      No provision.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      The Senate bill would require the Secretary, in 
consultation with other federal agencies, to study and report 
to Congress by October 1, 2010, on the availability of open 
source HIT systems to safety net providers.

                          CONFERENCE AGREEMENT

      This study is included in Section 4104 of the conference 
agreement.

                       Part III--Medicaid Funding

 Medicaid Provider HIT Adoption and Operation Payments; Implementation 
   Funding. (House bill Sec. 4321; Senate bill Sec. 4211; Conference 
                          agreement Sec. 4201)

                              CURRENT LAW

      The federal government pays a share of every state's 
spending on Medicaid services and program administration. The 
federal match for administrative expenditures does not vary by 
state and is generally 50%, but certain functions receive a 
higher amount. Section 1903(a)(3) of the Social Security Act 
authorizes a 90% match for expenditures attributable to the 
design, development, or installation of mechanized claims 
processing and information retrieval systems--referred to as 
Medicaid Management Information Systems (MMISs)--and a 75% 
match for the operation of MMISs that are approved by the 
Secretary of Health and Human Services (HHS). A 50% match is 
available for non-approved MMISs under Section 1903(a)(7). In 
order to receive payments under Section 1903(a) for the use of 
automated data systems in the administration of their Medicaid 
programs, states are required under Section 1903(r) to have an 
MMIS that meets specified requirements and that the Secretary 
has found (among other things) is compatible with the claims 
processing and information retrieval systems used in the 
administration of the Medicare program.
      State expenditures to encourage the purchase, adoption, 
and use of electronic health records do not receive federal 
financial participation, nor do State expenditures for the 
operation and maintenance of such systems.

                               HOUSE BILL

      The House Bill would amend Title XIX of the Social 
Security Act to authorize a 100% Federal match for a portion of 
payments to encourage the adoption of EHR technology (including 
support services and maintenance) to certain Medicaid providers 
who meet certain requirements. The state must prove to the 
Secretary that allowable costs are paid directly to the 
provider without any deduction or rebate; that the provider is 
responsible for payment of the EHR technology costs not 
provided for; and, that for costs not associated with purchase 
and initial implementation, the provider certifies meaningful 
use of the EHR technology. Finally, the certified EHR 
technology should be compatible with state or Federal 
administrative management systems.
      Eligible providers would include physicians, nurse mid-
wives, and nurse practitioners who are not hospital-based, and 
who have patient volume of at least 30% attributable to 
Medicaid patients. In order to qualify as a Medicaid provider, 
the professional would have to waive any right to Medicare EHR 
incentive payments for professionals detailed in the bill. This 
group of providers would be eligible for a payment equal to 85% 
of their net allowable technology costs. However, the allowable 
costs for the purchase and initial implementation of EHR 
technology cannot exceed $25,000 or include costs over a period 
of more than 5 years. Annual allowable costs not associated 
with initial implementation or purchase of the EHR technology 
could not exceed $10,000 per year or be made over a period of 
more than 5 years. Aggregate allowable costs for these eligible 
professionals, after application of the 85% adjustment, could 
not exceed $63,750.
      Acute care hospitals with at least 10% Medicaid patient 
volume would be eligible for payments, as would children's 
hospitals of any Medicaid patient volume. Payments to hospitals 
would be limited to amounts analogous to those specified for 
eligible hospitals in Medicare in Section 4312. The payment 
limit for such hospitals is calculated as a base amount plus an 
amount related to the total number of discharges for such a 
hospital. The hospital's patient share attributable to Medicaid 
is then multiplied by that amount to calculate the limit of the 
payment an eligible hospital can receive. Unlike the Medicare 
hospital amount, the Medicaid hospital amount in the House bill 
is available, subject to State administration, without 
restriction as to the schedule of payments over time. That 
amount may not exceed the total amount described above.
      Rural health clinics and Federally-Qualified Health 
Centers with at least 30% patient volume attributable to 
Medicaid patients would also be eligible for a payment for the 
costs of adoption and use of certified EHR technology, limited 
to amounts to be determined by the Secretary.
      In counting towards patient volume thresholds, patients 
in Medicaid managed care plans are to be counted equivalently 
to other individuals in Medicaid in all circumstances. 
Individuals enrolled in optional Medicaid expansion programs 
financed through title XXI of the Social Security Act also must 
be counted.
      Because the payments to eligible professionals would be 
sufficient to cover most or all of the costs of acquiring and 
operating a certified EHR, providers eligible under for both 
Medicare and Medicaid payments are required to choose one. The 
Secretary would be required to ensure that eligible 
professionals do not receive payments from both Medicare and 
Medicaid. The Secretary would also be instructed to attempt to 
avoid duplicative requirements for Federal and state 
governments to demonstrate meaningful use of EHR technology 
under Medicaid and Medicare, and may deem demonstration of 
meaningful use of certified EHRs in Medicare to be sufficient 
for demonstration of meaningful use of such technology in 
Medicaid.
      By contrast, hospital limitations for Medicare and 
Medicaid are assessed on a proportional basis depending upon a 
hospital's patient volume from each payer, so hospitals could 
receive funding from both sources.
      The House bill would authorize a 90% Federal match for 
payment to the states for administrative expenses related to 
EHR technology payments. In order for a state to receive the 
match it must show that: it is using the funds provided for 
these purposes to administer these systems including tracking 
of meaningful use by providers; conducting adequate oversight 
of meaningful use of the systems; and pursuing initiatives to 
encourage the adoption of certified EHR technology to promote 
health care quality and the appropriate exchange of 
information.
      The House bill would appropriate $40 million for each of 
FY2009 through FY2015 and $20 million for each succeeding 
fiscal year through FY2019 to the Centers for Medicare & 
Medicaid Services for the costs of administering the provisions 
of this section.

                              SENATE BILL

      The Senate bill is very similar to the House bill, with 
the following differences. First, in measuring meaningful use, 
which may include the reporting of clinical quality measures, a 
State would be required to ensure that populations with unique 
needs, such as children, are appropriately addressed. Second, 
rural health clinics and Federally-Qualified Health Centers 
that have at least 30% of their patient volume attributable to 
Medicaid patients would face a somewhat higher required 
contribution to the costs of adoption and use of certified 
EHRs. Finally, the Senate bill would require that the Secretary 
submit a report to Congress no later than July 1, 2012, that 
details the process developed to ensure coordination of the 
different health information technology program payments.

                          CONFERENCE AGREEMENT

      The Conference agreement mirrors both the House-passed 
and Senate-passed bills. Across all eligible provider 
categories, the conference agreement provides Medicaid 
incentives towards the use of certified EHR technology based on 
a provider's involvement in the Medicaid program or other care 
for the uninsured and low-income populations. In addition to 
payment incentives for eligible professionals and hospitals 
contained in both bills, the agreement also provides for 
expanded funding to pediatricians, federally qualified health 
clinics (FQHCs), rural health clinics (RHCs), and physician 
assistants in physician assistant-led rural health clinics.
      Specifically, eligible pediatricians with 20 to 30 
percent patient volume attributable to patients receiving 
assistance through Medicaid would be eligible to receive up to 
two-thirds of the amount of eligible professionals with 30 
percent patient volume attributable to such individuals 
(approximately $42,500 over a period of six years).
      Federally qualified health centers and rural health 
clinics would be able to count additional patients towards the 
30 percent qualifying threshold for Medicaid payments, 
including Medicaid patients; individuals receiving assistance 
through the Children's Health Insurance Program; individuals 
receiving charity care; and individuals receiving care for 
which payment is made on a sliding scale basis according to a 
patient's ability to pay. In addition, FQHCs and RHCs would be 
paid an amount for the adoption and use of certified EHRs 
proportional to the number of eligible professionals practicing 
predominantly in such settings according to the payment amounts 
determined for other eligible professionals (typically, up to 
$63,750 in federal contributions over a period of six years).
      Additionally, the conference agreement provides that 
physician assistants practicing in RHCs and FQHCs that are led 
by physician assistants may receive Medicaid payments related 
to certified EHRs, provided that the facility meets the 30% 
facility threshold described above.
      Like both the House-passed and Senate-passed bills, the 
conference agreement provides for up to $63,750 in federal 
contributions towards the adoption, implementation, upgrade, 
maintenance, and operation of certified EHR technology for 
eligible professionals. Up to 85% of $25,000, or $21,250, 
subject to a cap on average allowable costs, would be provided 
to eligible professionals to aid in adopting, implementing, and 
upgrading certified EHR systems. And up to 85% of $10,000, or 
$8,500, would be provided to eligible professionals for 
purposes of operation and maintenance of such systems over a 
period of up to 5 years.
      Payments to hospitals would be limited to amounts 
analogous to those specified for eligible hospitals in Medicare 
in Section 4102. The payment limit for such hospitals is 
calculated as a base amount plus an amount related to the total 
number of discharges for such a hospital. The hospital's 
patient share attributable to Medicaid is then multiplied by 
that amount to calculate the limit of the payment an eligible 
hospital can receive. Relative to both the House and Senate-
passed bills, the conference agreement provides additional 
specificity on the spending limitations for eligible hospitals 
in Medicaid. States may not pay more than 50% of the aggregate 
amount to a hospital in any year, and must spread payments to 
hospitals out over at least three years (contingent on 
demonstration of meaningful use of certified electronic health 
records).
      Like both the House-passed and Senate-passed bills, the 
conference agreement prohibits payments to hospital-based 
professionals (because such professionals are generally 
expected to use the EHR system of that hospital). This policy 
does not disqualify otherwise eligible professionals merely on 
the basis of some association or business relationship with a 
hospital. Common examples of such arrangements include 
professionals who are employed by a hospital to work in an 
ambulatory care clinic or billing arrangements in which 
physicians submit claims to Medicare together with hospitals or 
other entities. The conference agreement clarifies that this 
test will be based on the setting in which a provider furnishes 
services rather than any billing or employment arrangement 
between a provider and hospital or other provider entity.
      The agreement requires coordination of payments to 
eligible professionals with Medicare payments under sections 
1848(o) and 1853(l) in order to assure no duplication of 
funding. The provision requires that such coordination include, 
to the extent practicable, a data matching process between 
State Medicaid agencies and the CMS using national provider 
numbers. The Congress intends that such process be used to 
identify providers who have received funding from either 
Medicare or Medicaid so as to prevent such providers from 
accessing incentives in the other program.

      Medicaid Nursing Home Grant Program. (House bill Sec. 4322)

                              CURRENT LAW

      No provision.

                               HOUSE BILL

      The House bill would authorize the appropriation of $600, 
to remain available until expended, for the Secretary to 
establish a Medicaid grant program for the purpose of making 
incentive payments, through States, to nursing facilities to 
encourage the meaningful use of certified EHR technology in 
nursing facilities. The program would require nursing 
facilities to engage in quality improvement programs in 
addition to demonstrating meaningful use of certified EHR 
technology. The Secretary would be authorized to award grants 
to not more than 10 states. Incentive payments would cover up 
to 90% of a facility's EHR adoption and operation costs.

                              SENATE BILL

      No provision.

                          CONFERENCE AGREEMENT

      No provision.

             Subtitle E--Miscellaneous Medicare Provisions

   Moratoria on Certain Medicare Regulations. (House bill Sec. 4501; 
         Senate bill Sec. 4204; Conference agreement Sec. 4301)

(a) Delay in phase out of Medicare hospice budget neutrality adjustment 
        factor during Fiscal Year 2009

                              CURRENT LAW

      The prospective payment methodology for hospice was 
established in 1983. This prospective payment system (PPS) pays 
hospices according to the general type of care provided to a 
beneficiary on a daily basis. This rate attempts to adjust for 
geographic differences through a wage index adjustment. The 
current hospice wage index methodology was implemented in 1997 
through the rulemaking process. The hospice wage index is 
updated annually and based upon the most current hospital wage 
data and any changes to the Office of Management and Budget's 
(OMB) Metropolitan Statistical Areas (MSA) definitions. Prior 
to this date, the wage adjustment used a hospice wage index 
based upon 1981 hospital data collected by the Bureau of Labor 
Statistics (BLS). The change in 1997 was intended to improve 
the data used to account for disparities in geographic location 
and improve accuracy, reliability, and equity of Medicare 
payments to hospices across the country.
      When the data source used to adjust hospice payments for 
differences in the cost of labor across geographic area was 
changed in 1997 from the BLS data to the hospital wage data, a 
budget neutrality adjustment factor (BNAF) was instituted as 
part of the payment system. The BNAF prevents participating 
hospices from experiencing reductions in total payments as a 
result of the wage data change. The BNAF increases payments to 
those hospices that would otherwise experience a payment 
reduction by boosting hospice payments to these providers by 
amounts that would make overall payments budget neutral to the 
levels they would have received had the BLS based wage 
adjustment data been used. On August 8, 2008, in a final rule, 
published by HHS, the BNAF would be phased-out over three 
years, beginning with a 25% reduction in FY2009, an additional 
50% reduction (totaling 75%) in FY2010, and a final 100%, or 
elimination, in FY2011. The phase-out of the BNAF went into 
effect on October 1, 2008.

                               HOUSE BILL

      The House bill would require that the Secretary not 
phase-out or eliminate the budget neutrality adjustment factor 
before October 1, 2009. The hospice wage index used for FY2009 
would be recomputed as if there had been no reduction in the 
budget neutrality factor.

                              SENATE BILL

      No provision.

                          CONFERENCE AGREEMENT

      The Conference Agreement recedes to the House provision. 
The Conferees do not anticipate extending this provision as 
they expect the hospice community to seek a permanent fix in 
the annual rulemaking cycle for Medicare hospice payments.
(b) Non-application of phased-out Indirect Medical Education (IME) 
        adjustment factor for Fiscal Year 2009

                              CURRENT LAW

      Medicare sets separate per discharge payment rates to 
cover the costs for depreciation, interest, rent and other 
property-related expenses in acute care hospitals. Due to a 
regulatory change implemented by the Centers for Medicare and 
Medicaid Services (CMS), Medicare's indirect medical education 
(IME) adjustment in its capital inpatient prospective payment 
system (IPPS) is scheduled to be phased out over a 2-year 
period starting in FY2009. In FY2009, teaching hospitals will 
receive half of the IME adjustment in Medicare's capital IPPS; 
in FY2010 and in subsequent years, the capital IME adjustment 
will be eliminated.

                               HOUSE BILL

      The FY2009 adjustment to 50% of the capital IME 
adjustment would not be implemented. Medicare payments would be 
recomputed for discharges after October 1, 2008. The 
elimination of capital IME in FY2010 would not be affected. To 
implement this provision, $2 million would be transferred from 
Medicare's Federal Hospital Insurance Trust Fund into the CMS 
Program Management Account for FY2009.

                              SENATE BILL

      The Senate bill includes the same IME adjustment 
provision, but without implementation funding.

                          CONFERENCE AGREEMENT

      The Conference Agreement recedes to the House provision. 
The Conferees do not anticipate extending this provision as 
they expect the hospital community to seek a permanent fix in 
the annual IPPS rulemaking cycle.

 Long-term Care Hospital Technical Corrections. (House bill Sec. 4502; 
                    Conference agreement Sec. 4302)

                              CURRENT LAW

      Long-term care hospitals (LTCHs) are generally defined as 
hospitals that have an average Medicare inpatient length of 
stay greater than 25 days. LTCHs are designed to provide 
extended medical and rehabilitative care for patients who are 
clinically complex and have multiple acute or chronic 
conditions.
      Starting October 1, 2004, CMS established limits on the 
number of discharged Medicare patients that an LTCH hospital-
within-hospital (HwH) or satellite LTCH could admit from its 
co-located host hospital. In general, CMS applied a payment 
adjustment for discharges in excess of a 25% threshold that an 
LTCH HwH or satellite admitted from its co-located host 
hospital. After that threshold had been reached, generally, the 
LTCH would receive a lower payment for subsequent patient 
admissions that had been discharged from the host hospital. The 
adjustment was not applied to ``grandfathered'' HwHs or 
``grandfathered'' LTCH satellites. Beginning in rate year 2008, 
CMS extended the 25% threshold payment adjustment for 
discharges from co-located host hospitals to grandfathered HwHs 
and LTCH satellite facilities. CMS also extended the 25% 
threshold payment adjustment to LTCH discharges admitted from 
hospitals with which the LTCH or satellite facility was not co-
located, also referred to as freestanding LTCHs. The regulatory 
policy setting forth the payment adjustment policy for 
referrals from co-located hospitals is in 42 CFR 412.534. The 
regulatory policy setting forth the payment adjustment policy 
for referrals from non-co-located hospitals is in 42 CFR 
412.536.
      The Medicare, Medicaid and SCHIP Extension Act of 2007 
(MMSEA) provided for a three-year delay for grandfathered LTCH 
HwHs of the 25% threshold for discharges admitted from a co-
located host (42 CFR 412.534). MMSEA also provided for a three-
year delay for grandfathered LTCH HwHs and freestanding LTCHs 
of the 25% threshold payment adjustment for referrals from non-
co-located hospitals (42 CFR 412.536). These provisions in 
MMSEA became effective for cost reporting periods beginning on 
or after December 29, 2007.
      MMSEA also increased the patient percentage thresholds 
from 25% to 50% for certain LTCH HwH and non-grandfathered 
satellite discharges admitted from a co-located hospital (CFR 
412.534), and from 50% to 75% for certain LTCH HwH and 
satellite discharges admitted from a co-located rural, MSA-
dominant, or urban single hospital for a three-year period. 
These provisions were effective for cost reporting periods 
beginning on or after December 29, 2007.
      MMSEA provided a three-year moratorium on new LTCHs or 
satellite LTCHs, with exceptions for an LTCH that, as of the 
date of enactment: (1) began its qualifying payment period as 
an LTCH; (2) had binding written agreements and had expended a 
certain percent of estimated cost or dollar amount for the 
purpose of construction, renovation, lease or demolition; and, 
(3) had an approved certificate of need from a State where one 
is required.

                               HOUSE BILL

      The House bill would align the start date of the three-
year delay in the implementation of the 25% patient threshold 
adjustment for referrals from non-co-located facilities for 
freestanding LTCHs and grandfathered HwHs with the original 
effective date for the phase-in of this regulatory policy. This 
new effective date is July 1, 2007. The bill also would align 
the start date of the three-year delay in the implementation of 
the 25% patient threshold for referrals from co-located 
hospitals with the original effective date for the phase-in of 
this regulatory policy (at 42 CFR 412.534(g)). The new 
effective date is October 1, 2007. For grandfathered LTCH 
satellite facilities, the effective date is July 1, 2007.
      The bill would clarify that the 3-year delay from the 25% 
threshold policy for referrals from non-co-located facilities 
applies to LTCH or LTCH satellites that are co-located with an 
entity that is a provider-based, off-campus location of a 
subsection (d) hospital which did not provide 1886(d) services 
at the off-campus location. It also clarifies that 
grandfathered satellite facilities receive the same relief as 
non-grandfathered satellites from 42 CFR 412.534 pertaining to 
applicable patient percentage thresholds.
      The bill would clarify that the exception from the LTCH 
moratorium applies to LTCHs with certificates of need for bed 
expansions prior to date of enactment but no earlier than April 
1, 2005.

                              SENATE BILL

      No provision.

                          CONFERENCE AGREEMENT

      The Conference Agreement recedes to the House provision.

                      TITLE V--STATE FISCAL RELIEF

           Sec. 5000. Purposes (Sec. 5000 of the Senate Bill)

                              CURRENT LAW

      No provision.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      The Senate bill sets forth the purposes of the State 
Fiscal Relief title as: (1) to provide fiscal relief to states 
in a period of economic downturn, and (2) to protect and 
maintain state Medicaid programs during a period of economic 
downturn, including by helping to avert cuts to provider 
payment rates and benefits or services, and to prevent 
constrictions of income eligibility requirements for such 
programs, but not to promote increases in such requirements.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill.

Sec. 5001. Temporary Increase of Medicaid FMAP (Sec. 5001 of the House 
                  Bill; Sec. 5001 of the Senate Bill)

                              CURRENT LAW

      The federal medical assistance percentage (FMAP) is the 
rate at which states are reimbursed by the federal government 
for most Medicaid service expenditures. It is based on a 
formula that provides higher reimbursement to states with lower 
per capita incomes relative to the national average (and vice 
versa); it has a statutory minimum of 50% and maximum of 83%. 
Exceptions to the FMAP formula have been made for certain 
states and situations. For example, the District of Columbia's 
Medicaid FMAP is set in statute at 70%, and the territories 
have FMAPs set at 50% (they are also subject to federal 
spending caps). During the last economic downturn under the 
Jobs and Growth Tax Relief Reconciliation Act of 2003 (P.L. 
108-27), all states received a temporary increase in Medicaid 
FMAPs for the last two quarters of FY2003 and the first three 
quarters of FY2004 as part of a fiscal relief package. In 
addition to Medicaid, the FMAP is used in determining the 
federal share of certain other programs (e.g., foster care and 
adoption assistance under Title IV-E of the Social Security 
Act) and serves as the basis for calculating an enhanced FMAP 
that applies to the Children's Health Insurance Program.

                               HOUSE BILL

      The House bill provides a temporary adjustment FMAP 
during a recession adjustment period that begins with the first 
quarter of FY2009 and runs through the first quarter of FY2011. 
The House provision would hold all states harmless from any 
scheduled decline in their regular FMAPs, provide all states 
with an across-the-board increase of 4.9 percentage points, and 
provide high unemployment states with an additional increase. 
It would also allow each territory to choose between an FMAP 
increase of 4.9 percentage points along with a 10% increase in 
its spending cap, or its regular FMAP along with a 20% increase 
in its spending cap. It is estimated that the House provision 
would provide about half of its spending via the hold harmless 
and across-the-board increases, and about half via the 
unemployment-related increase which is targeted to the states 
hit hardest by job loss.
      States would be evaluated on a quarterly basis for the 
additional unemployment-related FMAP increase, which would 
equal a percentage reduction in the state share. The percentage 
reduction would be applied to the state share after the hold 
harmless increase and before the 4.9 percentage point increase. 
For example, after applying the 4.9 point increase provided to 
all states, a state with a regular FMAP of 50% (state share of 
50%) would have an FMAP of 54.90%. If the state share were 
further reduced by 6%, the state would receive an additional 
FMAP increase of 3 points (50 * 0.06 = 3). The state's total 
FMAP increase would be 7.9 points (4.9 + 3 = 7.9), providing an 
FMAP of 57.90%.
      The additional unemployment-related FMAP increase would 
be based on a state's unemployment rate in the most recent 3-
month period for which data are available (except for the first 
two and last two quarters of the recession adjustment period, 
for which the 3-month period would be specified) compared to 
its lowest unemployment rate in any 3-month period beginning on 
or after January 1, 2006. The criteria would be as follows:
             unemployment rate increase of at least 1.5 
        but less than 2.5 percentage points = 6% reduction in 
        state share;
             unemployment rate increase of at least 2.5 
        but less than 3.5 percentage points = 12% reduction in 
        state share; and
             unemployment rate increase of at least 3.5 
        percentage points = 14% reduction in state share.
      If a state qualifies for the additional unemployment-
related FMAP increase and later has a decrease in its 
unemployment rate, its percentage reduction in state share 
could not decrease until the fourth quarter of FY2010 (for most 
states, this corresponds with the first quarter of SFY2011). If 
a state qualifies for the additional unemployment-related FMAP 
increase and later has an increase in its unemployment rate, 
its percentage reduction in state share could increase.
      The full amount of the temporary FMAP increase would only 
apply to Medicaid (excluding disproportionate share hospital 
payments). A portion of the temporary FMAP increase (hold 
harmless plus 4.9 percentage points) would apply to Title IV-E 
foster care and adoption assistance. States would be required 
to maintain their Medicaid eligibility standards, 
methodologies, and procedures as in effect on July 1, 2008, in 
order to be eligible for the increase. They would be prohibited 
from depositing or crediting the additional federal funds paid 
as a result of the temporary FMAP increase to any reserve or 
rainy day fund. States would also be required to ensure that 
local governments do not pay a larger percentage of the state's 
nonfederal Medicaid expenditures than otherwise would have been 
required on September 30, 2008.

                              SENATE BILL

      Similar to the House provision, the Senate provision 
would hold all states harmless from any decline in their 
regular FMAPs. However, it would provide a larger across-the-
board increase of 7.6 percentage points and a smaller 
unemployment-related increase. It would apply the 7.6 
percentage point increase and raise the territories' spending 
caps in the territories by 15.2%. It is estimated that the 
Senate provision would provide about 80% of its spending via 
the hold harmless and across-the-board increases, and about 20% 
via the unemployment-related increase.
      As in the House provision, the Senate provision would 
calculate the unemployment-related increase as a percentage 
reduction in the state share. However, the percentage reduction 
would be applied to the state share after both the hold 
harmless increase and the across-the-board increase of 7.6 
percentage points. The Senate provision would evaluate states 
based on the same unemployment data, except that it would not 
specify the three-month period to be used for the first two and 
last two quarters of the temporary FMAP increase. The criteria 
would be as follows: unemployment rate increase of at least 1.5 
but less than 2.5 percentage points = 2.5% reduction in state 
share; increase of at least 2.5 but less than 3.5 percentage 
points = 4.5% reduction; increase of at least 3.5 percentage 
points = 6.5% reduction. Like the House provision, a state's 
percentage reduction could increase over time as its 
unemployment rate increases, but it would not be allowed to 
decrease until the last quarter of FY2010.
      Unlike the House provision, the Senate provision would 
not apply the temporary FMAP increase to expenditures for 
individuals who are eligible for Medicaid because of an 
increase in a state's income eligibility standards above what 
was in effect on July 1, 2008. It would also prohibit states 
from receiving the temporary increase if they are not in 
compliance with existing requirements for prompt payment of 
health care providers under Medicaid and would extend this 
requirement to nursing facilities. States would be required to 
report to the Secretary of HHS on their compliance with such 
requirements. Otherwise, the Senate provision is similar to the 
House provision.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with 
modifications. The across-the-board increase in FMAP would be 
6.2 percentage points. The reductions in state share for states 
with increases in unemployment rates would be 5.5%, 8.5%, and 
11.5%. These percent reductions would be applied against the 
state share after the hold harmless reduction and after an 
across-the-board increase of 3.1 percentage points. Each 
territory would be allowed to choose between an FMAP increase 
of 6.2 percentage points along with a 15% increase in its 
spending cap, or its regular FMAP along with a 30% increase in 
its spending cap. It is estimated that the conference agreement 
would provide about 65% of its spending via the hold harmless 
and across-the-board increases, and about 35% via the 
unemployment-related increase.
      The conference agreement would also prohibit states from 
receiving the temporary increase if they are not in compliance 
with existing requirements for prompt payment of practitioners 
under Medicaid and would extend this requirement to nursing 
facilities and hospitals. States would be required to report to 
the Secretary of HHS on their compliance with such 
requirements.

Sec. 5001(f)(2). Compliance With Prompt Pay Requirements (Sec. 3304 of 
                            the Senate Bill)

                              CURRENT LAW

      Under SSA Sec. 1902(a)(37)(A) states are to reimburse 
providers for services within 30 days of the receipt of a 
reimbursement claim. State Medicaid programs are to reimburse 
providers for 90% of claims submitted for payment within 30 
days of receipt of the claim. Medicaid also is to process and 
pay 99% of claims within 90 days from the date of receipt of 
such claims. These requirements allow states additional time to 
process claims that are inaccurate, incomplete, or otherwise 
cannot be processed in a timely manner.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      Under this provision, for states to qualify for the 
temporary enhanced FMAP funding under section 5001, states 
would have to meet current prompt payment requirements under 
section 1902(a)(37)(A), as well as a temporary extension of 
those requirements to nursing facilities, which are not 
currently subject to the prompt pay requirements in title XIX.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with 
modifications to the reporting requirements, to temporarily 
extend application of the prompt pay requirements to hospitals, 
and to provide a grace period before states become ineligible 
for increased FMAP as a result of failure to comply with the 
requirements as relate to nursing facilities and hospitals.

Sec. 5002. Temporary Increase in DSH Allotments During Recession (Sec. 
         5006 of the House Bill; Sec. 5002 of the Senate Bill)

                              CURRENT LAW

      Medicaid law requires that states make Medicaid payment 
adjustments for hospitals that serve a disproportionate share 
of low-income patients with special needs. Payments to these 
hospitals known as disproportionate share hospital (DSH) 
payments, are specifically defined in Medicaid law. They are 
subject to aggregate annual state-specific limits on federal 
financial participation. States are required to provide an 
annual report to the Secretary describing the payment 
adjustments made to each DSH hospital.

                               HOUSE BILL

      This provision would increase states' FY2009 annual 
Disproportionate Share Hospital (DSH) allotments by 2.5% above 
the allotment they would have received in FY2009 under current 
law. In addition, states' DSH allotments in FY2010 would be 
equal to the FY2009 DSH allotment (with the adjustment) 
increased by 2.5%. After FY2010, states' annual DSH allotments 
would be determined as under current law. If, under current 
law, states' annual DSH allotments are higher in either FY 2009 
or FY 2010 than they would have been with the 2.5% adjustment, 
then states would receive the higher DSH allotments without the 
recession adjustment.

                              SENATE BILL

      Under this provision, states that reported to the Health 
and Human Services Secretary, as of August 31, 2009, FY2006 
total (federal and state) DSH allotments of less than 3% of the 
state's total state plan medical assistance expenditures would 
receive special DSH allotments established under the Medicare 
Modernization Act of 2003 (MMA, P.L. 108-391). This new 
provision may affect the number of states that are determined 
to be low-DSH states since the provision would rely on a 
different base year than that used under MMA. Under this 
provision, low-DSH states would receive the following revised 
DSH allotments:
             for FY2009, the DSH allotment would be the 
        FY2008 DSH allotment increased by 16%;
             for FY2010, the DSH allotment would be the 
        FY2009 DSH allotment increased by 16%;
             for the first quarter of FY2011(through 
        December 31, 2010), the DSH allotment would be \1/4\ of 
        the DSH allotment for FY2010 increased by 16%;
             for the remainder of FY2011 (January 1, 
        2011-September 30, 2011), the DSH allotment would be 
        \3/4\ of the FY2010 DSH allotment for each qualified 
        state without the changes contained in this provision;
             for FY2012, qualified states' DSH 
        allotments would be FY2010 DSH allotment (as if this 
        provision had not been enacted);
             for FY2013 and subsequent years, qualified 
        states would receive the DSH allotment for the previous 
        fiscal year with an inflation adjustment, as described 
        in the Social Security Act (SSA), Section 1923(f)(5).

                          CONFERENCE AGREEMENT

      The conference agreement follows the House provision.

 Sec. 5003. Moratoria on Certain Medicaid Final Regulations (Sec. 5002 
            of the House Bill; Sec. 5002 of the Senate Bill)

                              CURRENT LAW

      In 2007 and 2008, the Centers for Medicare and Medicaid 
Services (CMS) issued seven Medicaid regulations that generated 
controversy during the 110th Congress. To address concerns with 
the impact of the regulations, Congress passed a law that 
imposed moratoria on six of the Medicaid regulations until 
April 1, 2009 (excluding the rule on outpatient hospital 
facility and clinic services). The seven Medicaid regulations 
covered the following Medicaid areas:
       Graduate Medical Education,
       Cost Limit for Public Providers,
       Rehabilitation Services,
       Targeted Case Management,
       School-Based Services,
       Provider Taxes, and
       Outpatient Hospital Services.

                               HOUSE BILL

      This provision would extend the moratoria on the first 
six regulations beyond April 1, 2009, when the current 
moratoria expire, to July 1, 2009. The regulations covered 
under the extension would include: (1) Graduate Medical 
Education, (2) Cost Limit for Public Providers, (3) 
Rehabilitative Services, (4) Targeted Case Management, (5) 
School-Based Services, and (6) Provider Taxes. In addition, 
this provision would specifically prohibit the Health and Human 
Services Secretary from taking any action until after June 30, 
2009 (through regulation, regulatory guidance, use of federal 
payment audit procedures, or other administrative action, 
policy, or practice, including Medical Assistance Manual 
transmittal or state Medicaid director letter) to implement a 
final regulation covering Outpatient Hospital facility 
services.

                              SENATE BILL

      No provision.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill with a 
modification limiting the application of the moratoria to the 
four regulations that have been published as final: (1) 
Targeted Case Management, (2) School-Based Services, (3) 
Provider Taxes, and (4) Outpatient Hospital Services. The 
conference agreement also states the sense of the Congress that 
the Secretary of HHS should not promulgate as final the 
proposed regulations relating to Graduate Medical Education, 
Cost Limit for Public Providers, and Rehabilitative Services.

  Sec. 5004. Extension of Transitional Medical Assistance (TMA) (Sec. 
         5003 of the House Bill; Sec. 3101 of the Senate Bill)

                              CURRENT LAW

      States are required to continue Medicaid benefits for 
certain low-income families who would otherwise lose coverage 
because of changes in their income. This continuation is called 
transitional medical assistance (TMA). Federal law permanently 
requires four months of TMA for families who lose Medicaid 
eligibility due to increased child or spousal support 
collections, as well as those who lose eligibility due to an 
increase in earned income or hours of employment. However, 
Congress expanded work-related TMA under Section 1925 of the 
Social Security Act in 1988, requiring states to provide at 
least six, and up to 12, months of coverage. Since 2001, these 
work-related TMA requirements have been funded by a series of 
short-term extensions, most recently through June 30, 2009.
      To qualify for work-related TMA under Section 1925, a 
family must have received Medicaid in at least three of the six 
months preceding the month in which eligibility is lost and 
have a dependent child in the home. During the initial 6-month 
period of TMA, states must provide the same benefits the family 
was receiving, although this requirement may be met by paying a 
family's premiums, deductibles, coinsurance, and similar costs 
for employer-based health coverage. An additional 6-month 
extension of TMA (for a total of up to 12 months) is available 
for families who continue to have a dependent child in the 
home, who meet reporting requirements, and whose average gross 
monthly earnings (less work-related child care costs) are below 
185% of the federal poverty line. States may impose a premium, 
limit the scope of benefits, and use an alternative service 
delivery system during the second six months of TMA.

                               HOUSE BILL

      The provision would extend work-related TMA under Section 
1925 for 18 months through December 31, 2010. The provision 
also would give States the flexibility to extend an initial 
eligibility period of 12 months of Medicaid coverage to 
families transitioning from welfare to work, in which case the 
additional 6-month extension would not apply. The House bill 
also gives states the option of waiving the requirement that a 
family must have received Medicaid in at least three of the 
last six months in order to qualify.
      Under the House provision, states would be required to 
collect and submit to the Secretary of Health and Human 
Services (and make publicly available) information on average 
monthly enrollment and participation rates for adults and 
children under work-related TMA; states would also be required 
to collect and submit information on the number and percentage 
of children who become ineligible for work-related TMA, but who 
continue to be eligible under another Medicaid eligibility 
category or who are enrolled in the Children's Health Insurance 
Program.

                              SENATE BILL

      The Senate bill is the same as the House bill.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House and Senate 
bills.

 Sec. 5005. Extension of the qualifying individual (QI) program (Sec. 
                        3201 of the Senate Bill)

                              CURRENT LAW

      Certain low-income individuals who are aged or have 
disabilities, as defined under the Supplemental Security Income 
(SSI) program, and who are eligible for Medicare, are also 
eligible to have their Medicare Part B premiums paid for by 
Medicaid under the Medicare Savings Program (MSP). Eligible 
groups include Qualified Medicare Beneficiaries (QMBs), 
Specified Low-Income Medicare Beneficiaries (SLMBs), and 
Qualifying Individuals (QIs). QMBs have incomes no greater than 
100% of the federal poverty level (FPL) and assets no greater 
than $4,000 for an individual and $6,000 for a couple. SLMBs 
meet QMB criteria, except that their incomes are greater than 
100% of FPL but do not exceed 120% FPL. QIs meet the QMB 
criteria, except that their income is between 120% and 135% of 
FPL. Further, they are not otherwise eligible for Medicaid. The 
QI program is currently slated to terminate December 2009.
      In general, Medicaid payments are shared between federal 
and state governments according to a matching formula. Unlike 
the QMB and SLMB programs, the QI program is paid 100% by the 
federal government from the Part B Trust fund. The total amount 
of federal QI spending is limited each year and allocated among 
the states. States are required to cover only the number of 
people that would bring their annual spending on these 
population groups to their allocation levels. For the period 
beginning on January 1, 2009 and ending on September 30, 2009, 
the total allocation amount for all states was $350 million. 
For the period that begins on October 1, 2009 and ends on 
December 31, 2009, the total allocation is $150 million.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      This provision would extend the QI program an additional 
year from December 2009 to December 2010. It establishes 
specific funding limits:
             from January 1, 2010, through September 
        30, 2010, the total allocation amount would be $412.5 
        million, and
             from October 1, 2010, through December 31, 
        2010, the total allocation amount would be $150 
        million.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill.

Sec. 5006(a), (b), (c). Protections for Indians Under Medicaid and CHIP 
      (Sec. 5004 of the House Bill; Sec. 3301 of the Senate Bill)

                              CURRENT LAW

      Premiums and Cost Sharing. In Medicaid, premiums and 
enrollment fees generally are prohibited for most 
beneficiaries. Nominal premiums and enrollment fees specified 
in regulations may be imposed on selected groups (e.g., 
medically needy, certain families qualifying for transitional 
Medicaid, pregnant women and infants with income over 150% 
FPL). Premiums and enrollment fees can exceed these nominal 
amounts for other selected groups (e.g., certain workers with 
disabilities and individuals covered under Section 1115 
demonstrations).
      Service-related cost-sharing (e.g., deductibles, 
copayments, co-insurance) is prohibited for selected groups 
(e.g., children under 18, pregnant women) and for selected 
benefits (e.g., hospice care, emergency services, family 
planning services and supplies). For most other groups and 
services, nominal cost-sharing amounts specified in regulations 
may be applied at state option. For other selected groups 
(e.g., workers with disabilities and individuals covered under 
Section 1115 demonstrations), cost-sharing can exceed nominal 
amounts.
      The Deficit Reduction Act of 2005 (P.L. 109-171) added a 
new Medicaid state option for alternative premiums and cost-
sharing for certain subgroups. Applicable maximum amounts vary 
by income level (as a percent of the federal poverty level). 
Special rules apply to prescription drugs and to non-emergency 
services provided in hospital emergency rooms.
      Indians are not explicitly exempted from cost-sharing and 
premium charges in Medicaid. When an Indian Medicaid 
beneficiary receives services from a contract health services 
(CHS) provider, Medicaid pays for the service. Any copayment 
that Medicaid does not pay must be paid by the Indian Health 
Service (IHS) or the Tribe from its CHS budget, since the CHS 
provider may not bill the Indian patient. The practical effect 
of this is simply to reduce the amount of appropriated funds 
available for health care from IHS or CHS for Tribes that 
already lack sufficient resources. CHIP programs are already 
prohibited from imposing cost-sharing on eligible Indians.
      Eligibility Determinations under Medicaid and CHIP. The 
federal Medicaid statute defines more than 50 eligibility 
pathways. For some pathways, states are required to apply an 
assets test. For other pathways, assets tests are a state 
option. When assets tests apply, some pathways give states 
flexibility to define specific assets that are to be counted 
and which can be disregarded. For other pathways, primarily for 
people qualifying on the basis of having a disability or who 
are elderly, assets tests are required. States generally follow 
asset guidelines specified for the Supplementary Security 
Income (SSI) program. Medicaid also defines the rules for the 
counting of certain assets. Under SSI law, several types of 
assets are excluded, including: (1) any land held in trust by 
the United States for a member of a federally-recognized tribe, 
or any land held by an individual Indian or tribe and which can 
only be sold, transferred, or otherwise disposed of with the 
approval of other individuals, his or her tribe, or an agency 
of the federal government; and (2) certain distributions 
(including land or an interest in land) received by an 
individual Alaska Native or descendant of an Alaska Native from 
an Alaska Native Regional and Village Corporation pursuant to 
the Alaska Native Claims Settlement Act. Most other property is 
required to be counted. There is no similar provision in 
current CHIP law.
      Estate Recovery. The Omnibus Budget Reconciliation Act of 
1993 requires all states to recover property and assets of 
deceased Medicaid beneficiaries for the cost of certain 
services provided by Medicaid. At a minimum, states must seek 
recovery for certain services provided, including nursing home 
care, services provided by an intermediate care facility for 
the mentally retarded or other similar medical institutions, 
and Medicaid payments to Medicare for cost-sharing related 
benefits. The state has discretion to recover further assets to 
cover the costs for all Medicaid services provided to the 
beneficiary. The state also has the authority to grant an 
exemption if the recovery would place undue hardship against 
the estate. The Secretary specifies the standards for a state 
hardship waiver for Medicaid estate recovery purposes.

                               HOUSE BILL

      Premiums and Cost Sharing. The provision would specify 
that no enrollment fee, premium or similar charge, and no 
deduction, co-payment, cost-sharing, or similar charge shall be 
imposed against an Indian who receives Medicaid-coverable 
services or items directly from the Indian Health Service 
(IHS), an Indian Tribe (IT), Tribal Organization (TO), or Urban 
Indian Organization (UIO), or through referral under the 
contract health services (CHS) program. In addition, Medicaid 
payments due to the IHS, an IT, TO, or UIO, or to a health care 
provider through referral under the CHS program for providing 
services to a Medicaid-eligible Indian, could not be reduced by 
the amount of any enrollment fee, premium or similar charge, as 
well as any cost-sharing or similar charge that would otherwise 
be due from an Indian, if such charges were permitted. A rule 
of construction would specify that nothing in this provision 
could be construed as restricting the application of any other 
limitations on the imposition of premiums or cost-sharing that 
may apply to a Medicaid-enrolled Indian. This language would 
also add Indians receiving services through Indian entities to 
the list of individuals exempt from paying premiums or cost-
sharing under the DRA option for alternative premiums and cost-
sharing under Medicaid. The effective date of this provision 
would be October 1, 2009.
      Eligibility Determinations under Medicaid and CHIP. The 
provision would prohibit consideration of four different 
classes of property from resources in determining Medicaid 
eligibility of an Indian. These classes include: (1) property, 
including real property and improvements, that is held in trust 
(subject to federal restrictions or otherwise under the 
supervision of the Secretary of the Interior), located on a 
reservation, including any federally recognized Indian Tribes 
reservation, Pueblo, or Colony, including former reservations 
in Oklahoma, Alaska Native regions established by the Alaska 
Native Claims Settlement Act (ANCSA), and Indian allotments on 
or near a reservation as designated and approved by the Bureau 
of Indian Affairs; (2) for any federally recognized Tribe not 
described in the first class, property located within the most 
recent boundaries of a prior federal reservation; (3) ownership 
interests in rents, leases, royalties, or usage rights related 
to natural resources, including extraction of natural resources 
or harvesting of timber, other plants and plant products, 
animals, fish, and shellfish, resulting from the exercise of 
federally protected rights; and (4) ownership interest in or 
usage rights to items not covered in the previous classes that 
have unique religious, spiritual, traditional, or cultural 
significance or rights that support subsistence or a 
traditional life style according to applicable tribal law or 
custom. This provision is modeled on the provisions of the 
Centers for Medicare & Medicaid Services (CMS) State Medicaid 
Manual that exempt the same type of Indian property from 
Medicaid estate recovery. The House bill would also apply this 
new language to CHIP in the same manner in which it applies to 
Medicaid.
      Estate Recovery. The provision would provide that certain 
income, resources, and property would remain exempt from 
Medicaid estate recovery if they were exempted under Section 
1917(b)(3) of the Social Security Act (allowing the Secretary 
to specify standards for a state hardship waiver of asset 
criteria) under instructions regarding Indian tribes and 
Alaskan Native Villages as of April 1, 2003. The provision also 
would allow the Secretary to provide for additional estate 
recovery exemptions for Indians under Medicaid.

                              SENATE BILL

      Same as House bill, except that these provisions would 
sunset on December 31, 2010. The Senate bill did not specify an 
effective date for the premiums and cost sharing provision, 
meaning those provisions would take effect upon enactment.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with 
modifications for the provisions to be permanently effective 
July 1, 2009.

Sec. 5006(d). Rules Applicable Under Medicaid and CHIP to Managed Care 
   Entities With Respect to Indian Enrollees and Indian Health Care 
  Providers and Indian Managed Care Entities (Sec. 3302 of the Senate 
                                 Bill)

                              CURRENT LAW

      Section 1903(m)(1) of Title XIX defines: (1) the term 
Medicaid managed care organization (MCO), (2) requirements 
regarding accessibility of services for Medicaid MCO 
beneficiaries vis-a-vis non-MCO Medicaid beneficiaries within 
the area served by the MCO; (3) solvency standards in general 
and specific to different types of organizations; and (4) the 
duties and functions of the Secretary with respect to the 
status of an organization as a Medicaid MCO.
      Section 1905(t) of Title XIX defines another type of 
managed care arrangement called primary care case management 
(PCCM). Under such arrangements, states contract with primary 
care case managers who are responsible for locating, 
coordinating and monitoring covered primary care (and other 
services stipulated in contracts) provided to all individuals 
enrolled in such PCCM programs.
      Title XIX contains a number of additional provisions 
regarding managed care under Medicaid. Section 1932(a)(5) 
specifies rules regarding the provision of information about 
managed care to beneficiaries and potential enrollees. Such 
information must be in an easily understood form, and must 
address the following topics: (1) who providers are and where 
they are located, (2) enrollee rights and responsibilities, (3) 
grievance and appeal procedures, (4) covered items and 
services, (5) comparative information for available MCOs 
regarding benefits, cost-sharing, service area and quality and 
performance, and (6) information on benefits not covered under 
managed care arrangements. In addition, Section 1932(d)(2)(B) 
requires managed care entities to distribute marketing 
materials to their entire service areas.
      Sections 1903(m) and 1932 provide cross-referencing 
definitions for the term ``Medicaid managed care 
organization.'' Under Title XIX, section 1932(a)(2)(C) 
stipulates the rules regarding Indian enrollment in Medicaid 
managed care. A state may not require an Indian (as defined in 
Section 4(c) of the Indian Health Care Improvement Act (IHCIA) 
to enroll in a managed care entity unless the entity is one of 
the following (and only if such entity is participating under 
the plan): (1) the IHS, (2) an IHP operated by an Indian tribe 
or tribal organization pursuant to a contract, grant, 
cooperative agreement, or compact with the IHS pursuant to the 
Indian Self-Determination Act, or (3) an urban IHP operated by 
a UIO pursuant to a grant or contract with the IHS pursuant to 
Title V of IHCIA.
      In general, Federally Qualified Health Centers (FQHCs) 
are paid on a per visit basis, using a prospective payment 
system that takes into account costs incurred and changes in 
the scope of services provided. Per visit payment rates are 
also adjusted annually by the Medicare Economic Index 
applicable to primary care services. When an FQHC is a 
participating provider with a Medicaid managed care entity 
(MCE), the state must make supplemental payments to the center 
in an amount equal to any difference between the rate paid by 
the MCE and the per visit amount determined under the 
prospective payment system.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      Under this provision, Medicaid managed care contracts 
with Managed Care Entities (MCEs) and Primary Care Case 
Management (PCCMs) companies would be required to meet certain 
conditions relating to access for Indian Medicaid beneficiaries 
in order to receive Medicaid payments, including:
           MCEs and PCCMs would need to demonstrate 
        that the number of participating Indian health care 
        providers was sufficient to ensure timely access to 
        covered Medicaid managed care services for eligible 
        enrollees, and
           MCEs and PCCMs would need to agree to pay 
        Indian health care providers (IHPs) at rates equal to 
        the rates negotiated between these organizations and 
        the provider involved, or, if such a rate has not been 
        negotiated, at a rate that is not less than the level 
        and amount of payment which the MCE or PCCM would make 
        for services rendered by a participating non-Indian 
        health care provider.
      In addition, this provision would specify that MCEs and 
PCCMs must agree to make prompt payment, as required under 
Medicaid rules for all providers, to participating Indian 
health care providers, and states would be prohibited from 
waiving requirements relating to assurance that payments are 
consistent with efficiency, economy, and quality.
      Further, this provision would apply special payment 
provisions to certain Indian health care providers that are 
Federally Qualified Health Centers (FQHCs). For non-
participating Indian FQHCs that provide covered Medicaid 
managed care services to Indian MCE enrollees, the MCE must pay 
a rate equal to the payment that would apply to a participating 
non-Indian FQHC. When payments to such participating and non-
participating providers by an MCE for services rendered to an 
Indian enrollee with the MCE are less than the rate under the 
state plan, the state must pay such providers the difference 
between the rate and the MCE payment. Likewise, if the amount 
paid to a non-FQHC Indian provider (whether or not the provider 
participates with the MCE) is less than the rate that applies 
under the state plan, the state must pay the difference between 
the applicable rate and the amount paid by MCEs. Under this 
provision, Indian Medicaid MCEs would be permitted to restrict 
enrollment to Indians and to members of specific tribes in the 
same manner as IHPs may restrict the delivery of services to 
such Indians and tribal members.
      Finally, the provision would apply specific sections 
affecting Medicaid to the CHIP program, including (1) Section 
1932(a)(2)(C) in current law regarding enrollment of Indians in 
Medicaid managed care (e.g., states cannot require Indians to 
enroll in a MCE unless the entity is the IHS, certain IHPs 
operated by tribes or tribal organizations, or certain urban 
IHPs operated by Urban Indian Organizations (UIOs), and (2) the 
new Section 1932(h) as described above.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with a 
modification deleting the sunset date clarifying that Indian 
Medicaid MCEs would be permitted to restrict enrollment to 
Indians but not to members of specific tribes, and clarifying 
access standards in states where there are no Indian providers. 
The provision would be effective July 1, 2009.

  Sec. 5006(e). Consultation on Medicaid, CHIP, and Other Health Care 
 Programs Funded Under the Social Security Act Involving Indian Health 
 Programs and Urban Indian Organizations (Sec. 5005 of the House Bill; 
                     Sec. 3303 of the Senate Bill)

                              CURRENT LAW

      There are no provisions in current Medicaid or CHIP 
statutes regarding a Tribal Technical Advisory Group (TTAG) 
within the Centers for Medicare and Medicaid Services (CMS), 
the federal agency that oversees the Medicare, Medicaid and 
CHIP programs. CMS currently maintains a TTAG for consultation 
on matters relating to Indian health care, but it is not 
codified in law.

                               HOUSE BILL

      The provision would require the Secretary to maintain 
within CMS a Tribal TAG, previously established in accordance 
with requirements of a charter dated September 30, 2003. The 
provision also would require that the TAG include a 
representative of the UIOs and IHS. The UIO representative 
would be deemed an elected official of a tribal government for 
the purposes of applying Section 204(b) of the Unfunded 
Mandates Reform Act of 1995, which exempts elected tribal 
officials from the Federal Advisory Committee Act for certain 
meetings with federal officials.
      The provision would also require states in which one or 
more IHPs or UIOs provide health services to establish a 
process for obtaining advice on a regular, on-going basis from 
designees of IHPs and UIOs regarding Medicaid law and its 
direct effects on those entities. This process must include 
seeking advice prior to submission of state Medicaid plan 
amendments, waiver requests or proposed demonstrations likely 
to directly affect Indians, IHPs, or UIOs. This process may 
include appointment of an advisory panel and of a designee of 
IHPs and UIOs to the Medicaid medical care advisory committee 
advising the state on its state Medicaid plan. The provision 
would also apply this new language to CHIP in the same manner 
in which it applies to Medicaid. Finally, the provision would 
prohibit construing these amendments as superseding existing 
advisory committees, working groups, guidance or other advisory 
procedures established by the Secretary or any state with 
respect to the provision of health care to Indians.

                              SENATE BILL

      This provision is similar to the House provision. Both 
versions would require the Secretary to maintain within CMS a 
Tribal Technical Advisory Group (TTAG), previously established 
in accordance with requirements of a charter dated September 
30, 2003. The provision also would require that the TTAG 
include a IHS representative. Unlike the House bill, however, 
under this provision in S.Amdt. 570, the TTAG also would 
include a representative of a national urban Indian Health 
organization, rather than a representative of the UIOs. The 
non-application of Federal Advisory Committee Act (FACA) would 
still hold for a representative of a national UIO.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with a 
modification deleting the sunset date. The provision would be 
effective July 1, 2009.

 Sec. 5007. Funding for Oversight and Implementation (Sec. 5004 of the 
                              Senate Bill)

                              CURRENT LAW

      The Office of Inspector General (OIG) of the Department 
of Health and Human Services is responsible for ensuring 
program integrity of over 300 programs in the Department, 
including the Medicaid program. The OIG's program integrity 
activities are funded through a combination of discretionary 
appropriations and mandatory funding through the Health Care 
Fraud and Abuse Control Program. The Centers for Medicare & 
Medicaid Services (CMS) in the Department of Health and Human 
Services administers the Medicaid program at the federal level. 
These administrative activities are funded through 
discretionary appropriations.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      Under this provision, the Health and Human Services 
Office of the Inspector General (HHS OIG) is to receive $31.25 
million to ensure the proper expenditure of federal Medicaid 
funds. These funds are appropriated from any money in the 
Treasury not otherwise appropriated and are available 
throughout the recession period (defined as October 1, 2008 
through December 31, 2010). Amounts appropriated under this 
provision would be available until September 30, 2012, without 
further appropriation, and would be in addition to any other 
amounts appropriated or made available to HHS OIG.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill with a 
modification. The funds for the HHSOIG would be appropriated in 
FY2009 and would be available for expenditure until September 
30, 2011. The conference agreement would also appropriate $5 
million in FY2009 to CMS for the implementation and oversight 
of the state fiscal relief provisions relating to Medicaid. 
These funds would remain available until expended.

Sec. 5008. GAO Study and Report Regarding State Needs During Periods of 
       National Economic Downturn (Sec. 5005 of the Senate Bill)

                              CURRENT LAW

      No provision.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      Under this provision, the Comptroller General of the 
United States, would study the current (as of the date of 
enactment of the legislation) economic recession as well as 
previous national economic downturns since 1974. GAO would 
develop recommendations to address states' needs during 
economic recessions, including the past and projected effects 
of temporary increases in the federal medical assistance 
percentage (FMAP) during these recessions. By April 1, 2011, 
GAO would submit a report to appropriate congressional 
committees that would include the following:
           Recommendations for modifying the national 
        economic downturn assistance formula for temporary 
        Medicaid FMAP adjustments (a ``countercyclical FMAP,'' 
        as described in GAO report number, GAO-07-97), to 
        improve the effectiveness of the countercyclical FMAP 
        for addressing states' needs during national economic 
        downturns:
                     what improvements are needed to 
                identify factors to begin and end the 
                application of a countercyclical FMAP;
                     how to adjust the amount of a 
                countercyclical FMAP to account for state and 
                regional variations; and
                     how a countercyclical FMAP could 
                be adjusted to better account for actual 
                Medicaid costs incurred by states during 
                economic recessions.
             Analysis of the impact on states of 
        recessions, including declines in private health 
        insurance benefits coverage; declines in state 
        revenues; and maintenance and growth of caseloads under 
        Medicaid, CHIP, or any other publicly funded programs 
        that provide health benefits coverage to state 
        residents.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate bill.

  Payment of Medicare Liability to States as a Result of the Special 
       Disability Workload Project (Sec. 5003 of the Senate Bill)

                              CURRENT LAW

      No provision.

                               HOUSE BILL

      No provision.

                              SENATE BILL

      Under this provision, within three months after enactment 
of this law, the Secretary, in consultation with the 
Commissioner of Social Security, would negotiate an agreement 
on a payment amount to be made to each state for the Medicare 
Special Disability Workload (SDW) project. Payments to states 
would be subject to certain conditions:
                     states would waive the right to 
                file or be a part of any civil action in any 
                federal or state court where payment was sought 
                for liability related to the Medicare SDW 
                project;
                     states would release the federal 
                government from any further claims for 
                reimbursement of state expenditures arising 
                from the SDW project;
                     states that are parties to civil 
                actions in any federal or state court seeking 
                reimbursement for the SDW project, would be 
                ineligible to receive payment under this 
                provision while such action is pending or if it 
                is resolved in a state's favor.
      In negotiating with states, the Secretary and SSA 
Commissioner would use the most recent federal data available, 
including estimates, to determine the amount of payment to be 
offered to each state that elects to enter into an agreement 
with the Secretary. The payment methodology would consist of 
the following factors:
                     the number of SDW cases that were 
                eligible for benefits under Medicare and the 
                month when these cases initially became 
                eligible;
                     the applicable non-federal share 
                of Medicaid expenditures made by states during 
                the period these cases were eligible; and
                     other factors determined 
                appropriate by the Secretary and the SSA 
                Commissioner in consultation with states.
      However, as a condition of payment under a negotiated 
agreement for SDW cases, states would not be required to submit 
individual paid Medicaid claims data.
      To make payments to states for the SDW project, $3 
billion would be appropriated for FY2009 from money in the 
treasury not otherwise appropriated. Aggregate payments to 
states could not exceed $3 billion. Payments to states would be 
provided within four months from the date of enactment of ARRA.
      An SDW case would be defined as an individual determined 
by the SSA Commissioner to have been eligible for benefits 
under Title II of the SSA for a period during which such 
benefits were not provided to the individual and who was, 
during all or part of such period, enrolled in Medicaid.

                          CONFERENCE AGREEMENT

      The conference agreement follows the House bill.

          TITLE VI--BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM

                               HOUSE BILL

      Section 6001 of the House bill directs the National 
Telecommunications and Information Administration (``NTIA'') to 
develop and maintain a broadband inventory map of the United 
States that identifies and depicts broadband service 
availability and capability and directs the NTIA to make the 
map accessible on the NTIA's website no later than 2 years 
after the date of enactment of this Act. It authorizes the 
creation of grant programs for the deployment of wireless and 
wireline broadband infrastructure to be administered by the 
NTIA. It also authorizes a state to submit a priority report to 
the NTIA that identifies the geographic areas within that state 
that have greatest need for new or additional 
telecommunications infrastructure. A state may not identify 
areas encompassing more than 20% of that state's population.
      Section 6002 of the House bill authorizes the NTIA to 
award wireless deployment grants and broadband deployment 
grants to eligible entities for the non-recurring costs of 
deploying broadband infrastructure in qualified urban, 
suburban, and rural areas. Section 6002 directs the NTIA to 
seek to distribute wireless grants, to the extent possible, so 
that 25% of the available funds go to ``unserved areas'' for 
basic wireless voice services and 75% to ``underserved areas'' 
for advanced wireless broadband services. It also directs that 
the NTIA shall seek to distribute broadband deployment grants, 
to the extent possible, so that 25% of the available funds go 
to ``unserved areas'' for basic broadband services and 75% to 
``underserved areas'' for advanced broadband services. Section 
6002 directs the NTIA to establish certain grant requirements, 
including that grant recipients are not unjustly enriched by 
the program, adhere to the FCC's August 5, 2005, broadband 
Internet policy statement, operate networks on an open access 
basis, and adhere to a build out schedule.
      Section 6002 of the House bill sets forth the 
requirements of the grant application and grant selection 
criteria. The NTIA is required to consider certain public 
policy goals (e.g., public safety benefits and enhancement of 
computer ownership or literacy) before awarding grants. It 
requires the NTIA to coordinate with the FCC and to consult 
with other agencies as necessary. Section 6002 requires the 
NTIA to submit an annual report to Congress assessing the 
impact of the grants on the policy objectives and criteria 
contained in this Section and grants the NTIA authority to 
prescribe rules as necessary to implement this Section. Section 
6002 also contains definitions of terms used in this Section, 
and directs the FCC to develop definitions for the terms 
unserved, underserved, and open access.
      Section 6002 defines ``basic broadband service'' as a 
service delivering data to the end user at a speed of at least 
5 megabits per second downstream and 1 megabit per second 
upstream. The term ``advanced broadband service'' means a 
service capable of delivering at least 45 megabits per second 
downstream and 15 megabits per second upstream. The term 
advanced wireless broadband service means a service capable of 
delivering at least 3 megabits downstream and 1 megabit 
upstream.
      Section 6003 of the House bill requires the FCC to, not 
later than one year after the date of enactment of this 
section, develop and submit to Congress a report containing a 
national broadband plan and specifies what the plan should 
include.

                              SENATE BILL

      Section 201 of the Senate bill authorizes the NTIA to 
create a grant program entitled the Broadband Technology 
Opportunity Program to award competitive grants to State and 
local governments, nonprofits, and public-private partnerships 
to: (1) accelerate broadband deployment in unserved and 
underserved areas and to strategic institutions that are likely 
to create jobs or provide significant public benefits; (2) 
increase sustained broadband adoption; and (3) upgrade 
technology and capacity for public safety entities and at 
public computing centers, which are a key source of access to 
the Internet for lower income users, such as libraries and 
community colleges.
      Section 201 gives the NTIA the authority to impose grant 
conditions with regard to interconnection and nondiscrimination 
requirements that apply to facilities funded in part by this 
program, regardless of who operates those facilities.
      Section 201 also (1) imposes a 20-percent match 
requirement for grants, which may be satisfied by the grant 
applicant or any third-party partnering with the grant 
applicant, and may be waived only under special circumstances; 
(2) requires specific commitments from grantees on scheduled 
progress for meeting the goals of the grant; (3) requires that 
grant applications show that the proposed broadband deployment 
would not occur during the grant period without this Federal 
investment; (4) requires quarterly reporting by any entity 
receiving funds regarding how funds are spent and progress 
meeting the schedule, as well as quarterly reporting to 
Congress by Federal agencies making grants regarding how funds 
are being spent; (5) requires strong public transparency 
regarding how funds are spent under the program and grantees' 
progress fulfilling specific commitments to deploy facilities, 
increase broadband adoption or deploy computer infrastructure; 
and (6) empowers the NTIA to revoke funding in any case of 
misspending, and to recapture funds in certain circumstances.

                          CONFERENCE AGREEMENT

Summary
      The Conference substitute retains the general structure 
and language of the Senate bill, while incorporating a series 
of amendments related to the priorities of the House.
      Section 6001. Section 6001 establishes the Broadband 
Technology Opportunities Program within the NTIA. The Conferees 
intend that the NTIA has discretion in selecting the grant 
recipients that will best achieve the broad objectives of the 
program. The Conferees also intend that the NTIA select grant 
recipients that it judges will best meet the broadband access 
needs of the area to be served, whether by a wireless provider, 
a wireline provider, or any provider offering to construct 
last-mile, middle-mile, or long haul facilities. The Conferees 
intend that the NTIA award grants serving all parts of the 
country, including rural, suburban, and urban areas. The 
Conferees intend that the NTIA seek to ensure, to the extent 
practicable, that grant funds be used to assist infrastructure 
investments that would not otherwise be made by the entity 
applying, or, secondarily, that might not be made as quickly.
      Part of the program is directed towards competitive 
grants for innovative programs to encourage sustainable 
adoption of broadband service in particular by vulnerable 
populations. The Conferees note the success of such programs in 
several States, and hope that these grantees will be involved 
in aggregating demand, ensuring community involvement, and 
fostering useful technology applications, thereby stimulating 
economic growth and job creation.
      Eligible Entities. The Conference substitute creates a 
new, broad definition of entities that are eligible to receive 
grants. It is the intent of the Conferees that, consistent with 
the public interest and purposes of this section, as many 
entities as possible be eligible to apply for a competitive 
grant, including wireless carriers, wireline carriers, backhaul 
providers, satellite carriers, public-private partnerships, and 
tower companies.
      Grant Distribution Considerations and Broadband Speeds. 
The Conference substitute inserts a new Section 6001(h) that 
incorporates several of the grant distribution considerations 
from the House bill. In particular, new Section 6001(h)(3) 
requires the NTIA to consider whether a grant applicant is a 
socially and economically disadvantaged small business, as 
defined under the Small Business Act.
      New Section 6001(h)(2)(B) also requires the NTIA to 
consider whether an application will result in the greatest 
possible broadband speeds being delivered to consumers. While 
the House bill had included specific speed thresholds that an 
applicant must have met to be eligible for a grant, the 
substitute requires only that the NTIA consider the speeds that 
would be delivered to consumers in awarding grants. The 
Conferees are mindful that a specific speed threshold could 
have the unintended result of thwarting broadband deployment in 
certain areas. The Conferees are also mindful that the 
construction of broadband facilities capable of delivering 
next-generation broadband speeds is likely to result in greater 
job creation and job preservation than projects centered on 
current-generation broadband speeds. Therefore, the Conferees 
instruct the NTIA to seek to fund, to the extent practicable, 
projects that provide the highest possible, next-generation 
broadband speeds to consumers.
      Broadband Policy Statement. The Conference substitute 
inserts the House language that requires grant recipients to 
adhere to the principles contained in the Federal 
Communications Commission's Broadband Policy Statement.
      National Broadband Plan. The Conference substitute adopts 
the House language on the creation of a national broadband 
plan, with some minor modifications.
      Federal/State Cooperation. Section 6001(c) directs the 
NTIA to consult with States on: (1) the identification of 
unserved and underserved areas within their borders; and (2) 
the allocation of grants funds to projects affecting each 
State. The Conferees recognize that States have resources and a 
familiarity with local economic, demographic, and market 
conditions that could contribute to the success of the 
broadband grant program. States are encouraged to coalesce 
stakeholders and partners, assess community needs, aggregate 
demand for services, and evaluate demand for technical 
assistance. The Conferees therefore expect and intend that the 
NTIA, at its discretion, will seek advice and assistance from 
the States in reviewing grant applications, as long as the NTIA 
retains the sole authority to approve the awards. The Conferees 
further intend that the NTIA will, in its discretion, assist 
the States in post-grant monitoring to ensure that recipients 
comply fully with the terms and conditions of their grants.
      Definitions. The substitute does not define such terms as 
``unserved area'' ``underserved areas'' and ``broadband.'' The 
Conferees instruct the NTIA to coordinate its understanding of 
these terms with the FCC, so that the NTIA may benefit from the 
FCC's considerable expertise in these matters. In defining 
``broadband service,'' the Conferees intend that the NTIA take 
into consideration the technical differences between wireless 
and wireline networks, and consider the actual speeds that 
broadband networks are able to deliver to consumers under a 
variety of circumstances.

              TITLE VII--LIMITS ON EXECUTIVE COMPENSATION


 A. Executive Compensation Oversight (Secs. 6001 to 6006 of the Senate 
          Amendment and Sec. 7001 of the Conference Agreement)


                              PRESENT LAW

      An employer generally may deduct reasonable compensation 
for personal services as an ordinary and necessary business 
expense. Section 162(m) (relating to remuneration expenses for 
certain executives that are in excess of $1 million) and 
section 280G (relating to excess parachute payments) provide 
explicit limitations on the deductibility of certain 
compensation expenses in the case of corporate employers, and 
section 4999 imposes an additional tax of 20 percent on the 
recipient of an excess parachute payment. The Emergency 
Economic Stabilization Act of 2008 (``EESA'') limits the amount 
of payments that may be deducted as reasonable compensation by 
certain financial institutions (``TARP recipients'') that 
receive financial assistance from the United States pursuant to 
the troubled asset relief program (``TARP'') established under 
EESA by modifying the section 162(m) and section 280G limits. 
EESA also provided non-tax rules relating to the compensation 
that is payable by such a financial institution (the ``TARP 
executive compensation rules'').

                               HOUSE BILL

      No provision.

                            SENATE AMENDMENT

      The provision modifies and expands the present law non-
tax TARP executive compensation rules. The modifications 
include: (1) expanding the requirement of recovery of a bonus, 
retention award, or incentive compensation paid to a senior 
executive officer based on statements of earnings, revenues, 
gains, or other criteria that are found to be materially 
inaccurate to the next 20 most highly compensated employees of 
a TARP recipient; (2) expanding the prohibition on the payment 
of golden parachute payments from senior executive officers to 
the next five most highly compensated employees of the TARP 
recipient, and defining the term ``golden parachute payment'' 
as any payment to a senior executive officer for departure from 
a company for any reason, except for payments for services 
performed or benefits accrued; and (3) prohibiting a TARP 
recipient from paying or accruing any bonus, retention award, 
or incentive compensation to at least the 25 most highly 
compensated employees; and (4) prohibiting any compensation 
plan that would encourage manipulation of the reported earnings 
of a TARP recipient to enhance the compensation of any of its 
employees. The provision also provides rules relating to the 
compensation committees of TARP recipients, nonbinding 
shareholder votes on executive compensation payable by a TARP 
recipient, and the adoption by TARP recipients of policies 
regarding luxury expenditures such as entertainment, aviation, 
and office renovation expenses.

                          CONFERENCE AGREEMENT

      The conference agreement follows the Senate amendment 
with several modifications. Among the modifications are (1) a 
rule that provides that financial assistance under TARP is not 
treated as outstanding for a period in which the United States 
only holds warrants to purchase common stock of the TARP 
recipient; (2) rules that phase-in the restriction on bonuses, 
retention awards, and other incentive compensation by the 
amount of financial assistance received by the entity receiving 
TARP assistance, and that permit compensation to be paid in the 
form of restricted stock; and (3) and a directive to the 
Secretary of the Treasury to review compensation paid to senior 
executive officers and the next 20 most highly compensated 
employees of an entity receiving TARP assistance before the 
date of enactment to determine whether such payments were 
inconsistent with the provision, the TARP, or public interest.

                        TAX COMPLEXITY ANALYSIS

      Section 4022(b) of the Internal Revenue Service Reform 
and Restructuring Act of 1998 (the ``IRS Reform Act'') requires 
the staff of the Joint Committee on Taxation (in consultation 
with the Internal Revenue Service and the Treasury Department) 
to provide a tax complexity analysis. The complexity analysis 
is required for all legislation reported by the Senate 
Committee on Finance, the House Committee on Ways and Means, or 
any committee of conference if the legislation includes a 
provision that directly or indirectly amends the Internal 
Revenue Code and has widespread applicability to individuals or 
small businesses. For each such provision identified by the 
staff of the Joint Committee on Taxation a summary description 
of the provision is provided along with an estimate of the 
number and type of affected taxpayers, and a discussion 
regarding the relevant complexity and administrative issues.
      Following the analysis of the staff of the Joint 
Committee on Taxation are the comments of the IRS and Treasury 
regarding each of the provisions included in the complexity 
analysis.

                        1. Make Work Pay Credit


                  SUMMARY DESCRIPTION OF THE PROVISION

      The provision creates a refundable tax credit for taxable 
years beginning in 2009 and 2010 equal to the lesser of (1) 6.2 
percent of an individual's earned income or (2) $400 ($800 in 
the case of a joint return). The credit is phased out at a rate 
of two percent of the eligible individual's modified adjusted 
gross income above $75,000 ($150,000 in the case of a joint 
return).

                      NUMBER OF AFFECTED TAXPAYERS

      It is estimated that the provision will affect in excess 
of 100 million individual tax returns.

                               DISCUSSION

      The provision will require additional paperwork for 
taxpayers and additional processing burdens for IRS. It is 
expected that taxpayers will need to complete additional 
worksheets and or forms to compute the amount of the credit. 
Taxpayers may also wish to adjust their income tax withholding 
by filing the appropriate forms before the end of 2009. The IRS 
is anticipated to revise income tax withholding schedules and 
publish new schedules. These revised income tax withholding 
schedules should be designed to reduce taxpayers' income tax 
withheld for each remaining pay period in the remainder of 2009 
so that the full benefit of the provision is reflected in the 
income tax withholding schedules during the balance of 2009.

     2. Extension of Alternative Minimum Tax Relief for Individuals


                  SUMMARY DESCRIPTION OF THE PROVISION

      The provision increases the individual AMT exemption 
amount for taxable years beginning in 2009 to $70,950 in the 
case of married individuals filing a joint return and surviving 
spouses; $46,700 in the case of other unmarried individuals; 
and $35,475 in the case of married individuals filing separate 
returns. In addition, for taxable years beginning in 2009, the 
provision allows an individual to offset the entire regular tax 
liability and alternative minimum tax liability by the 
nonrefundable personal credits.

                      NUMBER OF AFFECTED TAXPAYERS

      It is estimated that the provision will affect 
approximately 25 million individual tax returns.

                               DISCUSSION

      Many individuals will not have to compute their 
alternative minimum tax and file the IRS forms relating to that 
tax.

     3. Special Allowance for Certain Property Acquired During 2009


                  SUMMARY DESCRIPTION OF THE PROVISION

      The provision extends the additional first-year 
depreciation deduction for one year, generally through 2009 
(through 2010 for certain longer-lived and transportation 
property).

                      NUMBER OF AFFECTED TAXPAYERS

      It is estimated that more than 10 percent of small 
businesses will be affected by the provision.

                               DISCUSSION

      It is not anticipated that small businesses will have to 
keep additional records due to this provision, nor will 
additional regulatory guidance be necessary to implement this 
provision. It is not anticipated that the provision will result 
in an increase in disputes between small businesses and the 
IRS. However, small businesses will have to perform additional 
analysis to determine whether property qualifies for the 
provision. In addition, for qualified property, small 
businesses will be required to perform additional calculations 
to determine the proper amount of allowable depreciation. 
Complexity may also be increased because the provision is 
temporary. For example, different tax treatment will apply for 
identical equipment based on the acquisition and placed in 
service date. Further, the Secretary of the Treasury is 
expected to have to make appropriate revisions to the 
applicable depreciation tax forms.

                4. Premium Assistance for COBRA Benefits


                  SUMMARY DESCRIPTION OF THE PROVISION

      The provision reimburses employers providing COBRA 
continuation health coverage to employees to the extent of 65 
percent of the premium amount for up to nine months and 
requires the eligible individual to pay 35 percent of the 
premium. The program is mandatory for employers required to 
offer COBRA continuation health coverage. Eligible individuals 
must have a qualifying event between September 1, 2008 and 
December 31, 2009, and must have been terminated involuntarily. 
Firms providing COBRA benefits will be able to allow those 
electing COBRA to choose from other insurance options at the 
time of the qualifying event, and firms will be able to 
contribute to the individual portion of the premium. Lastly, 
the benefit phases out for single taxpayers with modified 
adjusted gross incomes between $125,000 and $145,000 ($250,000 
and $290,000 for joint filers) for the taxable year.
      Employers will pay reduced payroll taxes in the aggregate 
amount of 65 percent of the premium for all individuals who opt 
into the provision, or, if COBRA subsidy exceeds payroll taxes, 
employers will be reimbursed directly through a program 
established by the Department of Treasury. COBRA continuation 
health coverage for this purpose includes not only coverage 
that applies to private, nongovernmental employers with 20 or 
more employees but also coverage rules that apply to Federal 
and State and local governmental employers pursuant to Federal 
law, and to State law mandates that apply to small employers 
(employers with less than 20 employees) and other employers not 
covered by Federal law, provided that such State law mandates 
require an employer or other entity to offer comparable 
continuation health coverage. The social security trust fund is 
held harmless from payroll tax offsets that are permitted under 
the program.

                      NUMBER OF AFFECTED TAXPAYERS

      It is estimated that more than 10 percent of small 
businesses will be affected by the provision.

                               DISCUSSION

      This provision will require additional processing by the 
IRS in three areas; accounting, income eligibility and 
provision enforcement. First, for all firms with eligible 
employees, the firm must deduct that amount from their payroll 
taxes, so IRS must be aware of the number of employees eligible 
for the reimbursement and the average monthly premium at the 
firm to properly assess the amount of the deduction from 
payroll taxes. The Department of the Treasury must then 
transfer the appropriate amount of funds back into the social 
security trust fund. All employers bound by COBRA or COBRA-type 
legislation described above, and who terminate individuals from 
employment between September 1, 2008, and December 31, 2009, 
are affected by this provision. In addition, firms are 
permitted to collect full premiums from individuals for 60 days 
in accordance with their current premium billing cycles, but 
must then credit back the difference in later payments or if 
later payments are insufficient to credit back all funds, the 
employer will submit payment to the individual. The IRS must 
also distinguish between the 65 percent of subsidy contribution 
mandated and any optional firm contribution to the remaining 35 
percent of premium.
      Second, the income eligibility provision in the bill 
limits eligibility for the modified adjusted gross income limit 
of the provision phasing out between $125,000 and $145,000 for 
single filers ($250,000 and $290,000 for joint filers) for the 
taxable year. While individuals may waive the subsidy if they 
believe their earnings will exceed the limit, if an individual 
accepts the subsidy and earns over the limit the individual 
will be responsible for paying the subsidy back to Treasury. 
For married individuals filing separately, if any family member 
is over the single modified adjusted gross income limit of 
$125,000, the entire non-subsidized portion (this accounts for 
the phase out) must be repaid. This clause requires IRS to 
match the incomes of spouses filing separately and determine if 
the modified adjusted gross income of either spouse 
disqualifies both for the subsidy received. Children not 
claimed as dependents, however, who are still on family plans 
have their incomes excluded from this limitation.
      Third, the IRS must create rules and regulations to 
prevent fraud and abuse of this provision. For example, 
taxpayers may be required to provide evidence of eligibility 
for the subsidy including evidence of involuntary separation 
from work, which can include attestation from the former 
employer or certification from state unemployment insurance 
agencies. If a premium assistance eligible individual becomes 
eligible for other group coverage while receiving premium 
assistance, that individual must forfeit the subsidy or face a 
penalty and the IRS must attempt to prevent individuals from 
claiming the subsidy while eligible for other group coverage 
either through a spouse or through a new employer.

            COMPLIANCE WITH CLAUSE 9 OF RULE XXI (EARMARKS)

      Pursuant to clause 9 of rule XXI of the Rules of the 
House of Representatives, neither this conference report nor 
the accompanying joint statement of managers contains any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of rule XXI.

                                   David Obey,
                                   Charles Rangel,
                                   Henry Waxman,
                                 Managers on the Part of the House.

                                   Daniel K. Inouye,
                                   Max Baucus,
                                   Harry Reid,
                                Managers on the Part of the Senate.

                                  
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