[Congressional Record Volume 155, Number 29 (Thursday, February 12, 2009)]
[House]
[Pages H1307-H1516]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
CONFERENCE REPORT ON H.R. 1, AMERICAN RECOVERY AND REINVESTMENT ACT OF
2009
Mr. OBEY submitted the following conference report and statement on
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:
Conference Report (H. Rept. 111-16)
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
[[Page H1308]]
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.
[[Page H1309]]
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' 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
[[Page H1310]]
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' 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:
[[Page H1311]]
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
[[Page H1312]]
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
[[Page H1313]]
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,
[[Page H1314]]
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:
[[Page H1315]]
``(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
[[Page H1316]]
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, hereafter, 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
[[Page H1317]]
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.
[[Page H1318]]
(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 4119a)(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 ``$5,00,000'';
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
[[Page H1319]]
(1) by striking subsection (c) and inserting the following:
``(c) 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:
(2) an assessment of whether surety companies and small
business concerns could benefit from an alternative funding
structure; and
(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.
(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 promulgate regulations under this section within 30
days after the date of enactment of this section. In
promulgating these regulations, the Administrator 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
[[Page H1320]]
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
[[Page H1321]]
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.
ENVIROMENTAL 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
[[Page H1322]]
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
[[Page H1323]]
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 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
[[Page H1324]]
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,
[[Page H1325]]
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
[[Page H1326]]
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 (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
[[Page H1327]]
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.
[[Page H1328]]
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
[[Page H1329]]
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
[[Page H1330]]
(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
[[Page H1331]]
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
highwaty 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),
[[Page H1332]]
$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 comming
led 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
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 provision 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 hbefore 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
[[Page H1333]]
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
[[Page H1334]]
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)
[[Page H1335]]
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 Funds''.
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
two 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
[[Page H1336]]
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
[[Page H1337]]
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
[[Page H1338]]
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
[[Page H1339]]
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 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 member 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
[[Page H1340]]
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 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
[[Page H1341]]
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
[[Page H1342]]
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.
[[Page H1343]]
``(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
[[Page H1344]]
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;
and
``(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;
``(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--
[[Page H1345]]
``(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
[[Page H1346]]
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
than 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
[[Page H1347]]
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 Regulation. 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 an 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 that 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
[[Page H1348]]
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 paragraph (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
[[Page H1349]]
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 thus 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.
[[Page H1350]]
``(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.
[[Page H1351]]
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
[[Page H1352]]
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), (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.
[[Page H1353]]
(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
[[Page H1354]]
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,
[[Page H1355]]
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.--
[[Page H1356]]
(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.
[[Page H1357]]
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.
[[Page H1358]]
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.
[[Page H1359]]
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--
[[Page H1360]]
``(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:
[[Page H1361]]
``(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.--
[[Page H1362]]
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
[[Page H1363]]
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)''.
[[Page H1364]]
(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
[[Page H1365]]
``(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'.
[[Page H1366]]
``(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
[[Page H1367]]
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
[[Page H1368]]
``(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--
[[Page H1369]]
``(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.
[[Page H1370]]
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
[[Page H1371]]
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
[[Page H1372]]
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.
[[Page H1373]]
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
[[Page H1374]]
``(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 one 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 one-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 one-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
[[Page H1375]]
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,'';
[[Page H1376]]
(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
[[Page H1377]]
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''.
[[Page H1378]]
(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
[[Page H1379]]
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.
[[Page H1380]]
``(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'';
[[Page H1381]]
(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
date 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
[[Page H1382]]
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.
[[Page H1383]]
``(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--
[[Page H1384]]
``(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
[[Page H1385]]
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
[[Page H1386]]
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
[[Page H1387]]
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--
[[Page H1388]]
(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
[[Page H1389]]
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 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).
[[Page H1390]]
``(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
[[Page H1391]]
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
[[Page H1392]]
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
[[Page H1393]]
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.''.
[[Page H1394]]
(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.''.
[[Page H1395]]
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
[[Page H1396]]
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
[[Page H1397]]
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 the 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
[[Page H1398]]
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.''.
[[Page H1399]]
(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'
[[Page H1400]]
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,
[[Page H1401]]
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
[[Page H1402]]
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:
[[Page H1403]]
``(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
[[Page H1404]]
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)--
[[Page H1405]]
(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
[[Page H1406]]
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
[[Page H1407]]
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.
[[Page H1408]]
(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
[[Page H1409]]
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.
[[Page H1410]]
``(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.
[[Page H1411]]
(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;
[[Page H1412]]
(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
[[Page H1413]]
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
[[Page H1414]]
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 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
[[Page H1415]]
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. 6dd-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.
[[Page H1416]]
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.
[[Page H1417]]
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
[[Page H1418]]
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.
[[Page H1419]]
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
[[Page H1420]]
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
[[Page H1421]]
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 to 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
[[Page H1422]]
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
[[Page H1423]]
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.
[[Page H1424]]
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.
[[Page H1425]]
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 611and
$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 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,
[[Page H1426]]
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.
[[Page H1427]]
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
[[Page H1428]]
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
[[Page H1429]]
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..........................................
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. 132011
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 Technology1
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.''
[[Page H1430]]
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.
[[Page H1431]]
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 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
[[Page H1432]]
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 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 USC
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 (NISI) 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
[[Page H1433]]
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.
[[Page H1434]]
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(0(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.
[[Page H1435]]
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
[[Page H1436]]
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, of
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
[[Page H1437]]
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
Tile 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 H--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 if 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
[[Page H1438]]
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 add a study to requires 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 record 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
[[Page H1439]]
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 website 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
[[Page H1440]]
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.
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\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.
---------------------------------------------------------------------------
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.
[[Page H1441]]
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\
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\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
[[Page H1442]]
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.
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\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.
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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.
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\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.
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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.
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\7\ A foster child must reside with the taxpayer for the
entire taxable year.
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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\
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\8\ All income thresholds are indexed for inflation annually.
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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).
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\9\ The $5,000 is indexed for inflation in the case of
taxable years beginning in 2010.
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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
[[Page H1443]]
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,
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 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.
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\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.
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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
[[Page H1444]]
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 for 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 minor 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\ VA 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.
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\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.
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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\
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\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.
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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
[[Page H1445]]
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.
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\13\ Sec. 42.
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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.
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\14\ Rev. Proc. 2008-66.
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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
[[Page H1446]]
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.
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\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 thirdparty to perform
these asset management duties.
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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.
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\16\ Sec. 42.
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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.
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\17\ Rev. Proc. 2008-66.
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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
[[Page H1447]]
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\
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\18\ The rule applicable to the adoption credit and child
credit is subject to the EGTRRA sunset.
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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 alteative 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.
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\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.
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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.
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\21\ Assume that the cost of the property is not eligible for
expensing under section 179.
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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
[[Page H1448]]
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\
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\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.
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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.
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\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.
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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.
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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.
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\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.
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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 \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 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).
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\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 pot ply 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.
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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\
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\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).
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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\
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\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.
[[Page H1449]]
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 beginnin 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.
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\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)).
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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\
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\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.
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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\
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\37\ Sec. 179(c)(2).
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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\
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\38\Sec. 172(b)(1)(A).
\39\ Sec. 172(b)(2).
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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).
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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.
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\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.
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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.
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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
[[Page H1450]]
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 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.\47\ 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.
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Effective date.--The conference agreement provision is
effective for net operating losses arising in taxable yea
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.
Entitled to compensation for a service-connection
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
[[Page H1451]]
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.
---------------------------------------------------------------------------
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 prescreening 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:
[[Page H1452]]
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.\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 yAny 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
increase.\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.
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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 excess of the adjusted basis of the asset
over its fair market value on the ownership change day.\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\
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\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).
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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\
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\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).
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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
[[Page H1453]]
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\
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\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.
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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.
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\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.
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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\
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\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).
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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\
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\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).
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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 ne
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.
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\71\ 2008-42 I.R.B. 2008-42 (Oct. 20, 2008).
\72\ Notice 2008-83, section 2.
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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 200883 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 orating 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\
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\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).
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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),\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\
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\75\ Sec. 382(k)(1).
\76\ Sec. 382(h)(3).
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[[Page H1454]]
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\
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\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. I .382-2T(e)(1) (defining an
``owner shift'' as ``any change in the ownership of the stock
of a loss corporation that affects 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(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 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. 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 c its, 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)(1 0)(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 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
[[Page H1455]]
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
[[Page H1456]]
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\
---------------------------------------------------------------------------
\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 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.
---------------------------------------------------------------------------
\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.
---------------------------------------------------------------------------
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, 2006.\107\
---------------------------------------------------------------------------
\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\
---------------------------------------------------------------------------
\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
[[Page H1457]]
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.
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\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 a 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).
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\
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\116\ Sec. 265(a).
\117\ See Rev. Proc. 72-18, 1972-1 C.B. 740.
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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
[[Page H1458]]
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.
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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.
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\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).
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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 *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 acquired on
August 7, 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.
[[Page H1459]]
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\
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\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.
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\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, State nd
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
[[Page H1460]]
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 lame 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: (I) 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.
[[Page H1461]]
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
[[Page H1462]]
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.
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\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, State nd
local governments were given the authority to issue
``qualified zone academy bonds.'' \138\ 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.
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\138\ See secs. 54E and 1397E.
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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.
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\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.
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``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\
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\140\ Sec. 141.
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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\
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\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.
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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
[[Page H1463]]
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.
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\142\ Sec. 103(a) and (b)(2).
\143\ Sec. 148.
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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\
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\144\ See secs. 54B, 54C, 54D, and 54E.
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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.
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\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)).
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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.
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\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.
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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 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.)
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\148\ Original issue discount (OID) is not treated as a
payment of interest for purposes of calculating the
refundable credit under the provision.
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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.
[[Page H1464]]
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.
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\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.
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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\
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\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.
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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\
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\151\Sec. 141.
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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\Sec. 103(a) and (b)(20.
---------------------------------------------------------------------------
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\
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\155\See secs. 54B, 54C, 54DE, and 54E.
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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
[[Page H1465]]
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 t e 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 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
[[Page H1466]]
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.
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\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)
<http://www.bls.govnews.release/laus.nr0.htm>.
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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. 1.151-1(b).
\160\ Secs. 103(b)(1) and 141.
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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\
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\161\ Sec. 7871.
\162\ Sec. 7871(c).
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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.
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\163\ See secs. 54B, 54C, 54D, and 54E.
\164\ See sec. 54A(h), which also covers real estate
investment trusts.
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House Bill
No provision.
Senate Amendment
No provision.
Conference Agreement
The conference agreement provides procedures for passing
though 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.
[[Page H1467]]
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.
[[Page H1468]]
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 elecnicity 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).
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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.
[[Page H1469]]
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\ 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.
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\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\
[[Page H1470]]
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.
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\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.
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\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)
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\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.
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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.
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\175\ Sec. 48.
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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.
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\176\ Sec. 38(b)(1).
\177\ Sec. 39.
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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
[[Page H1471]]
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.
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\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.
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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 mew 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.
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\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\
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\180\Section 1604 of the House bill.
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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 Enemy 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.
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\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
[[Page H1472]]
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\
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\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).
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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 conservations 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 maybe 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.
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\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).
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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.
[[Page H1473]]
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.
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 bums 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
[[Page H1474]]
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.
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\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.
[[Page H1475]]
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.
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\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.
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\193\ Sec. 41.
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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\
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\194\ Sec. 41(e).
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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\
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\195\ Sec. 41(h).
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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).
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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\
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\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.
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\199\ Sec. 41(c)(4).
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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 rat listed above are increased to three percent,
four percent, and five percent, respectively.\200\
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\200\ A special transition rule applies for fiscal year 2006-
2007 taxpayers.
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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.
[[Page H1476]]
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.
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\201\ A special transition rule applies for fiscal year 2006-
2007 taxpayers.
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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.
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\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).
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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 researcNimarket 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.
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\203\ Sec. 41(d)(3).
\204\ Sec. 41(d)(4).
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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 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).
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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.
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\208\ Sec. 45Q.
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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\
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\209\ Sec. 638(1).
\210\ Sec. 638(2).
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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
[[Page H1477]]
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.
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\211\ Sec. 30B.
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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 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
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).
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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 all wed 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.
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\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.
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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\
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\214\ Sec. 48.
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In addition to these, numerous other credits are available
to taxpayers to encourage renewable energy production and
energy conservation, including, among others, credits
[[Page H1478]]
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.
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\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, 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.
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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),
[[Page H1479]]
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.
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\222\ As defined by section 30D(c).
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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 a
limitations are increased for the research credit \223\ and
the alternative minimum tax credit \224\ by the amount of the
loan.
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\223\ Sec. 38(c).
\224\ Sec. 53(c).
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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 are 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 directoA, officer, or other
employee of a financial institution or its controlled group
of corporations.\225\
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\225\ Members of a controlled group of corporations are
determined as provided under section 52(a).
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[[Page H1480]]
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\
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\226\ Descriptions 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 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
[[Page H1481]]
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 153 2502 1,29, 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.
[[Page H1482]]
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 Chance
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
[[Page H1483]]
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
[[Page H1484]]
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, i 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.
[[Page H1485]]
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 receives 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
[[Page H1486]]
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
[[Page H1487]]
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
[[Page H1488]]
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 take 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 Section 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.
[[Page H1489]]
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
[[Page H1490]]
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
[[Page H1491]]
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 \237\
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\237\ 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.
I. 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
[[Page H1492]]
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. 21010
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.
[[Page H1493]]
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 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 accrue 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:
[[Page H1494]]
(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 the of 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 Fiscal
Year 2011 will be based on caseload change from Fiscal Year
2005 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
[[Page H1495]]
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,
[[Page H1496]]
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
[[Page H1497]]
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
continua ion 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,
[[Page H1498]]
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.
---------------------------------------------------------------------------
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 no aid 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
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.
---------------------------------------------------------------------------
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
[[Page H1499]]
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 the 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 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 chances
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
[[Page H1500]]
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 \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.
(3) 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.
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 6 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
[[Page H1501]]
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.
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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.
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\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.
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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.
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\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.
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\258\ Sec. 4980B.
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House Bill
No provision.
[[Page H1502]]
Senate Amendment
No provision.\259\
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\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.
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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 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.
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\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 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 Treasury
[[Page H1503]]
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 nationality, 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, excepted 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 (EHR's) 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
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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
[[Page H1505]]
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
[[Page H1506]]
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
[[Page H1507]]
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 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
[[Page H1508]]
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 Center 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.
[[Page H1509]]
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.
[[Page H1510]]
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(0(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 can not 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
[[Page H1511]]
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
[[Page H1512]]
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 Aapplicable 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 UI0 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
[[Page H1513]]
representative of the UI0s and IHS. The UI0 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 UI0s provide health services to establish a
process for obtaining advice on a regular, on-going basis
from designees of IHPs and UI0s 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 UI0s. This
process may include appointment of an advisory panel and of a
designee of IHPs and UI0s 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 UI0s. 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.
DIVISION B
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
[[Page H1514]]
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)(Bb) 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
[[Page H1515]]
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 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
[[Page H1516]]
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.
____________________