American Recovery and Reinvestment Conference Report Division B

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1 DIVISION UNEMPLOY-
FIS-
OTHER
B-TAX,
MENT, HEALTH, STATE
CAL RELIEF, AND
PROVISIONS
TITLE I-TAX PROVISIONS
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6 SEC. 1000. SHORT TITLE, ETC.
7 (a) SHORT TITLE.-This title may be cited as the
8 "AJ.nerican Recovery and Reinvestment Tax Act of 2009".
9 (b) REFERENCE.-Except as otherwise expressly pro-
10 vided, whenever in this title an amendment or repeal is
11 expressed in terms of an amendment to, or repeal of, a
12 section or other provision, the reference shall be consid-
13 ered to be made to a section or other provision of the 1n-
14 ternal Revenue Code of 1986.
15 (c) TABLE OF CONTENTS.-The table of contents for
16 tIns title is as follows:
TITLE I-TAX PROVISIONS
See. 1000. Short title, ete.
Subtitle A-Tax Relief for Individuals and Families
PART I-GENERAL TA.."{ RELIEF
See. 1001. Making work pay credit.
See. 1002. Temporary increase in earned income tax credit.
See. 1003. Temporary inerease of refundable portion of child credit.
See. 1004. Ameriean opportunity ta.x credit.
See. 1005. Computer teehnology and equipment allowed as a qualified higher
edueation eAl)ense for seetion 529 aeeounts in 2009 and 2010.
See. 1006. Extension of and inc~rease in first-time homebuyer eredit; waiver of
requirement to repay.
See. 1007. Suspension of tax on portion of unemployment compensation.

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See. 1008. Adclitional deduetion for State sales tax and excise tax on the pur-
ehase of eeItain motor vehieles.
PART II-ALTERNATIVE MINIMUM TA."'C RELIEF
Sec. 1011. Extension of alternative minimum tax relief for nonrefundable per-
sonal ereclits.
See. 1012. Extension of inereased alternative minimum tax exemption amount.
Subtitle B-Energ,y Ineentives
PART I-RENEWABLE ENERGY INCENTIVES
Sec. 1101. Extension of creclit for electrieity produeed from certain renewable
resourees.
See. 1102. Eleetion of investment eredit in lieu of produetion ereclit.
See. 1103. Repeal of certain limitations on creclit for renewable energy prop-
erty.
See. 1104. Coorclination with renewable energ,y gTants.
PART II-INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY
BONDS AND QUALIFIED ENERGY CONSERVATION BONDS
See. 1111. Increased limitation on issuance of new elean renewable energy
bonds.
Sec. 1112. Inereased limitation on issuance of qualified energy eonservation
bonds.
PART III-ENERGY CONSERVATION INCENTIVES
See. 1121. E}.'tension and moclifieation of eredit for nonbusiness energy prop-
erty.
See. 1122. Moclification of ereclit for residential energ,y effieient propelty.
Sec. 1123. Temporary inerease in creclit for alternative fuel vehiele refueling
property.
PART IV-MODIFICATION OF CREDIT FOR CARBON DIOXIDE
SEQUESTRATION
See. 1131. Applieation of monitoring requirements to em'bon clioxide used as a
teltiary injeetant.
PART V-PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES
See. 1141. Creclit for new qualified plug-in eleetric drive motor vehieles.
See. 1142. Creclit for eertain plug-in eleetrie vehieles.
See. 1143. Conversion kits.
See. 1144. Treatment of alternative motor vehiele ereclit as a personal eredit al-
lowed against A1VIT.
PART VI-PARITY FOR TRANSPORTATION FRINGE BE~'EFITS
See. 1151. Inereased exclusion mllount for commuter transit benefits and tran-
sit passes.
Subtitle C-Tax Ineentives for Business
PART I-TEMPORARY 11TVESTMENT INCENTIVES

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See. 1201. Speeial allowanee for eertain propelt.y aequired during 2009.
See. 1202. Temporary inerease in limitations on expensing of eertain depre-
eiable business assets.
PART II-SMALL BUSINESS PROVISIONS
See. 1211. 5-year eal1'ybaek of operating losses of small businesses.
See. 1212. Deereased required estimated ta.x payments in 2009 for eertain
small businesses.
PART III-INCENTIVES FOR NEW JOBS
See. 1221. Ineentives to hire unemployed veterans and diseonneeted youth.
PART IV-RuLES RELATING TO DEBT INSTRUMENTS
See. 1231. Deferral and ratable inelusion of ineome arising from business in-
debtedness diseharged by the reaequisition of a debt instl1l-
ment.
See. 1232. Modifieations of l1.lles for original issue discount on eertain high
yield obligations.
PART V-QUALIFIED SMALL BUSINESS STOCK
See. 1241. Speeial rules applieable to qualified small business stoek for 2009
and 2010.
PART VI-S CORPORATIONS
See. 1251. Temporary reduetion in reeogl1ition period for built-in gains tax.
PART VII-RULES RELATING TO OWNERSHIP CHANGES
See. 1261. Clarifieation of regl1lations related to limitations on certain built-in
losses following an ownership ehang'e.
See. 1262. Treatment of eertain ownership ehang'es for pUlvoses of limitations
on net operating' loss earryforwards and eertain built-in losses.
Subtitle D-Manufaeturing Reeovery Provisions
See. 1301. Temporary eJqlansion of availability of industrial development bonds
to faeilities manufaeturing intangible property.
See. 1302. Credit for investment in advaneed energy faeilities.
Subtitle E-EeonOlnie Reeovery Tools
See. 1401. ReeoveIy zone bonds.
See. 1402. Tribal eeonomie development bonds.
See. 1403. Inerease in new markets tax eredit.
See. 1404. Coordination of low-ineome housing eredit and low-ineome housing'
gnlllts.
Subtitle F-Infrastl1.leture Finaneing Tools
PART I-IMPROVED IVURKETABILITY FOR TA.:-EXEMPT BOlTDS
See. 1501. De minimis safe harbor exeeption for tax-exempt interest expense of
finaneial institutions.
See. 1502. Modifieation of small issuer exeeption to tax-exempt interest e2>.11enSe
alloeation l1.lles for finallC~ial institutions.

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See. 1503. Temporary modifieation of alternative minimum ta.x limitations on
ta.x-exempt bonds.
See. 1504. lVIodifieation to high speed intereity rail faeility bonds.
PART II-DELAY IN APPLICATION OF WITHHOLDING TA."'C ON GOVERNlillNT
CONTRACTORS
See. 1511. Delay in applieation of withholding tax on govel'l1ment eontraetors.
PART III-TAX CREDIT BONDS FOR SCHOOLS
See. 1521. Qualified sehool eonstrnetion bonds.
See. 1522. E:lI..i.ension and eA1)ansion of qualified zone aeademy bonds.
PART IV-BuILD MillRICA BONDS
See. 1531. Build Ameriea bonds.
PART V-REGULATED I~TVESTlillNT COMPANIES ALLmVED TO PASs-THRU
T A."'C CREDIT BOND CREDITS
See. 1541. Regulated investment companies allowed to pass-timl tax credit
bond eredits.
Subtitle G-Other Provisions
See. 1601.
Sec. 1602.
See. 1603.
See. 1604.
Applieation of certain labor standards to projects financed with cer-
tain tax-favored bonds.
Grants to States for low-ineome housing projects in lieu of low-in-
come housing credit alloeations for 2009.
Grants for specified energ,y property in lieu of tax credits.
Increase in public debt limit.
Subtitle H-Prohibition on Colleetion of Certain Payments Made Dnder the
Continued Dumping and Subsidy Offset Act of 2000
Sec. 1701. Prohibition on collection of certain payments made under the Con-
tinued Dumping and Subsidy Offset Aet of 2000.
Subtitle I-Trade Adjustment Assistanee
Sec. 1800. Short title.
PART I-TRADE ADJUSTlillNT AsSISTANCE FOR WORKERS
SUBPART A-TRADE ADJUSTlillNT ASSISTANCE FOR SERVICE SECTOR
WORKERS
See. 1801.
See. 1802.
See. 1803.
See. 1804.
Extension of trade acljustment assistanee to service seetor and pub-
lie ageney workers; shifts in production.
Separate basis for eertifieation.
Determinations by Secretary of Labor.
Monitoring and reporting' relating to serviee seetor.
SUBPART B--INDUSTRY NOTIFICATIONS FOLLOWING CERTAIN AFFIRMATIVE
DETERMINATIONS
See. 1811. Notifieations following certain affirmative determinations.
See. 1812. Notifieation to Seeretary of Commeree.

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Sec. 1821.
Sec. 1822.
Sec. 1823.
Sec. 1824.
Sec. 1825.
Sec. 1826.
Sec. 1827.
Sec. 1828.
Sec. 1829.
See. 1830.
See. 1831.
See. 1832.
Sec. 1833.
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SUBPAR,T C-PROGRAl'I BENEFITS
Qualifying Requirements for Workers.
Veekly amounts.
Limitations on trade readjustment allowances; allowances for ex-
tended training and breaks in training.
Special I1lles for ealculation of eligibility period.
Application of State laws and regulations on good cause for waiver
of time limits 01' late filing of elaims.
Employment and case management serviees.
Administrative expenses and employment and case management
serviees.
Training funding.
Prerequisite education; approved training programs.
Pre-layoff and part-time training.
On-the-job training.
Eligibility for unemployment insuranee and program benefits while
in training.
Job seareh and reloeation allowances.
SUBPART D--REEMPLOYMENT TRADE ADJUSTlVIENT ASSISTANCE PROGRAM:
Sec. 1841. Reemployment trade adjustment assistanee program.
SUBPART E--OTHER MATTERS
See. 1851.
See. 1852.
Sec. 1853.
Sec. 1854.
Sec. 1855.
Sec. 1856.
See. 1857.
See. 1858.
Office of Trade Adjustment Assistance.
Accountability of State agencies; collection and publication of pro-
gram data; agreements with States.
Verification of elig-ibility for program benefits.
Colleetion of data and reports; information to workers.
Fraud and reeovery of overpayments.
Sense of Congress on application of trade adjustment assistance.
Consultations in promulgation' of regl1lations.
Teelmical correetions.
PART II-TRADE ADJUSTMENT AsSISTANCE FOR FIRMS
Sec. 1861. E},.lJansion to serviee sector firms.
See. 1862. Modifieation of requirements for eertification.
Sec. 1863. Basis for detenninations.
Sec. 1864. Oversight and administration; authorization of appropriations.
Sec. 1865. Increased penalties for false statements.
Sec. 1866. .A1mual repOIt on trade adjustment assistanee for firms.
Sec. 1867. Teelmieal eorrections.
PART III-TRADE ADJUSTMENT ASSISTANCE FOR COMMUNITIES
Sec. 1871. PUI1JOse.
Sec. 1872. Trade adjustment assistance for comnnmities.
See. 1873. Conforming amendments.
PART IV-TRADE ADJUSTMENT ASSISTANCE FOR FARMERS
Sec. 1881. Definitions.
Sec. 1882. Eligibilit,Y.
Sec. 1883. Benefits.
Sec. 1884. RepOlt.

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See. 1885. Fraud and reeovery of overpayments.
See. 1886. Determination of increases of imports for eertain fishel1nen.
See. 1887. Extension of trade adjustment assistanee for farmers.
PART V-GENERAL PROVISIONS
See. 1891. Effeetive date.
See. 1892. E:>..i.ension of trade adjustment assistanee progTams.
See. 1893. 'l'ermination; related provisions.
See. 1894. Govel'l1ment Accountability Offiee report.
Sec. 1895. Emergency desigl1ation.
PART VI-HEALTH COVERAGE IMPROVEMENT
S.L.C.
See.
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See.
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1899. Short title.
1899A. Improvement of the affordability of the credit.
1899B. Payment for monthly premiums paid prior to commencement of
advance payments of credit.
1899C. TAA reeipients not enrolled in training progTams eligible for cred-
it.
1899D. TAA pre-certifieation period rule for pUl1Joses of determining
whether there is a 63-day lapse in creditable coverage.
1899E. Continued qualifieation of family members aft.er certain events.
1899F. Extension of COBRA benefits for certain TAA-eligible individuals
and PBGC recipients.
1899G. Addition of coverage through volUlltary employees' beneficiary as-
sociations.
1899H. Notice requirements.
18991. Survey illld report. on enhaneed health coverag'e tax credit progTilll1.
1899J. Authorization of appropriations.
1899K. Extension of national emergel1C~y grants.
1899L. GAO study and report..
Subtitle A-Tax Relief for
Individuals and Families
PART I-GENERAL TAX RELIEF
4 SEC. 1001. MAKING WORK PAY CREDIT.
5 (a) IN GENERAL.-Subpart C of part IV of sub-
6 chapter A of chapter 1 is amended by inserting after sec-
7 tion 36 the following new section:
8 "SEC. 36A. MAKING WORK PAY CREDIT.
9 "(a) ALLOWANCE OF CREDIT.-In the case of an eli-
10 gible individual, there shall be allowed as a credit against

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1 the tax imposed by this subtitle for the taxable year an
2 amount equal to the lesser of-
3 "(1) 6.2 percent of earned income of the tax-
4 payer, or
5 "(2) $400 ($800 in the case of a joint return).
6 "(b) LIMITATION BASED ON MODIFIED ADJUSTED
7 GROSS INCOME.-
8 "(1) IN GENERAL.-The amount allowable as a
9 credit under subsection (a) (determined without re-
10 gard to this paragraph and subsection (c)) for the
11 taxable year shall be reduced (but not below zero) by
12 2 percent of so much of the taxpayer's modified ad-
13 justed gross income as exceeds $75,000 ($150,000
14 in the case of a joint return).
15 "(2) MODIFIED ADJUSTED GROSS INCOME.-
16 For purposes of subparagraph (A), the term 'modi-
17 fied adjusted gross income' means the adjusted
18 gross income of the taxpayer for the taxable year in-
19 creased by any amount excluded from gross income
20 under section 911, 931, or 933.
21 "(c) REDUCTION FOR CERTAIN OTHER PAY-
22 MENTS.-The credit allowed under subsection (a) for any
23 taxable year shall be reduced by the amount of any pay-
24 ments received by the taxpayer during such taxable year
25 under section 2201, and any credit allowed to the taxpayer

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"(iii) an estate or trust.
"(B) IDENTIFICATION NUMBER REQUIRE-
MENT.-Such term shall not include any indi-
vidual 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.
1 under section 2202, of the American Recovery and Rein-
2 vestment Tax Act of 2009.
3 "(d) DEFINITIONS AND SPECIAL RULES.-For pur-
4 poses of this section-
S "(1) ELIGIBLE INDIVIDUAL.-
6 "(A) IN GENERAL.-The term 'eligible in-
7 dividual' means any individual other than-
8 "(i) any nonresident alien individual,
9 "(ii) any individual with respect to
10 whom a deduction under section 151 is al-
II lowable to another taxpayer for a taxable
12 year beginning in the calendar year in
13 which the individual's taxable year begins,
14 and
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1 For purposes of the preceding sentence, the so-
2 cial security account number shall not include a
3 TIN issued by the Internal Revenue Service.
4 "(2) EARNED INCOME.-The term 'earned lll-
5 come' has the meaning given such term by section
6 32(c)(2), except that such term shall not include net
7 earnings from self-employment which are not taken
8 into account in computing taxable income. For pur-
9 poses of the preceding sentence, any amount ex-
10 cluded from gross income by reason of section 112
11 shall be treated as earned income which is taken
12 into account in computing taxable income for the
13 taxable year.
14 "(e) TERMINATION.-This section shall not apply to
15 taxable years beginning after December 31, 2010.".
16 (b) TREATMENT OF POSSESSIONS.-
17 (1) PAYMENTS TO POSSESSIONS.-
18 (A) MIRROR CODE POSSESSION.-The Sec-
19 retary of the Treasury shall pay to each posses-
20 sion of the United States with a mirror code
21 tax system amounts equal to the loss to that
22 possession by reason of the amendments made
23 by this section ,vith respect to taxable years be-
24 ginning in 2009 and 2010. Such amounts shall
25 be determined by the Secretary of the Treasury

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1 based on information provided by the govern-
2 ment of the respective possession.
3 (B) OTHER POSSESSIONS.-The Secretary
4 of the Treasury shall pay to each possession of
5 the United States which does not have a mirror
6 code tax system amounts estimated by the Sec-
7 retary of the Treasury as being equal to the ag-
8 gregate benefits that would have been provided
9 to residents of such possession by reason of the
10 amendments made by this section for taxable
11 years beginning in 2009 and 2010 if a mirror
12 code tax system had been in effect in such pos-
13 session. The preceding sentence shall not apply
14 with respect to any possession of the United
15 States unless such possession has a plan, which
16 has been approved by the Secretary of the
17 Treasury, under which such possession will
18 promptly distribute such payments to the resi-
19 dents of such possession.
20 (2) COORDINATION WITH CREDIT ALLOWED
21 AGAINST UNITED STATES INCOME TAXES.-No cred-
22 it shall be allowed against United States income
23 taxes for any taxable year under section 36A of the
24 Internal Revenue Code of 1986 (as added by this
25 section) to any person-

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(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 (I)(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 Is-
lands.
(B) MIRROR CODE TAX SYSTEM.-For pur-
poses of this subsection, the term "mirror code
tax system" means, ·with respect to any posses-
sion of the United States, the income tax sys-
tem of such possession if the income tax liabil-
ity 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 pur-
poses of section 1324(b)(2) of title 31, United

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1 States Code, the payments under this sub-
2 section shall be treated in the same manner as
3 a refund due from the credit allowed under sec- .
4 tion 36A of the Internal Revenue Code of 1986
5 (as added by this section).
6 (c) REFUNDS DISREGARDED IN THE ADMINISTRA-
7 TION OF FEDERAL PROGRAl1S AND FEDERALLY As-
8 SISTED PROGRAMS.-Any credit or refund allowed or
9 made to any individual by reason of section 36A of the
10 Internal Revenue Code of 1986 (as added by this section)
11 or by reason of subsection (b) of this section shall not be
12 taken into account as income and shall not be taken into
13 account as resources for the month of receipt and the fol-
14 lowing 2 months, for purposes of determining the eligi-
15 bility of such individual or any other individual for benefits
16 or assistance, or the amount or extent of benefits or assist-
17 ance, under any Federal program or under any State or
18 local program financed in whole or in part with Federal
19 funds.
20 (d) AUTHORITY RELATING TO CLERICAL ERRORS.-
21 Section 6213(g)(2) is amended by striking "and" at the
22 end of subparagraph (L)(ii), by striking the period at the
23 end of subparagraph (M) and inserting ", and", and by
24 adding at the end the following new subparagraph:

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1 "(N) an omission of the reduction required
2 under section 36A(c) with respect to the credit
3 allowed under section 36A or an omission of the
4 correct social security account number required
5 under section 36A(d)(1)(B).".
6 (e) CONFORMING AMENDMENTS.-
7 (1) Section 6211(b)(4)(A) is amended by insert-
8 ing "36A," after "36,".
9 (2) Section 1324(b)(2) of title 31, United
10 States Code, is amended by inserting "36A," after
11 "36,".
12 (3) The table of sections for subpart C of part
13 IV of subchapter A of chapter 1 is amended by in-
14 serting after the item relating to section 36 the foI-
lS lowing new item:
"See. 36A. Making' work pay credit.".
16 (f) EFFECTIVE DATE.-This section, and the amend-
17 ments made by this section, shall apply to taxable years
18 beginning after December 31, 2008.
19 SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX
20 CREDIT.
21 (a) IN GENERAL.-Subsection (b) of section 32 is
22 amended by adding at the end the following new para-
23 graph:

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1 "(3) SPECIAL RULES FOR 2009 AND 2010.-In
2 the case of any taxable year beginning in 2009 or
3 2010-
4 "(A) INCREASED CREDIT PERCENTAGE
5 FOR 3 OR MORE QUALIFYING CHILDREN.-In
6 the case of a taxpayer with 3 or more qualifying
7 children, the credit percentage is 45 percent.
8 "(B) REDUCTION OF MARRIAGE PEN-
9 ALTY.-
10 "(i) IN GENERAL.-The dollar amount
11 in effect under paragraph (2)(B) shall be
12 $5,000.
13 "(ii) INFLATION ADJUSTMENT.-In
14 the case of any taxable year beginning in
15 . 2010, the $5,000 amount in clause (i)
16 shall be increased by an amount equal to-
17 "(I) such dollar amount, multi-
18 plied by
19 " (II) the cost of living adjust-
20 ment determined under section 1(f)(3)
21 for the calendar year in which the tax-
22 able year begins determined by sub-
23 stituting 'calendar year 2008' for 'cal-
24 endar year 1992' in subparagraph (B)
25 thereof.

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1 "(iii) ROUNDING.-Subparagraph (A)
2 of subsection (j)(2) shall apply after taking
3 into account any increase under clause
4 (..) "11. .
5 (b) EFFECTIVE DATE.-The amendments made by
6 this section shall apply to taxable years beginning after
7 December 31, 2008.
8 SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE POR-
9 TION OF CHILD CREDIT.
10 (a) IN GENERAL.-Paragraph (4) of section 24(d) is
11 amended to read as follows:
12 "(4) SPECIAL RULE FOR 2009 AND 2010.-Not-
13 withstanding paragraph (3), in the case of any tax-
14 able year beginning in 2009 or 2010, the dollar
15 amount in effect for such taxable year under para-
16 graph (l)(B)(i) shall be $3,000.".
19 December 31, 2008.
20 SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT.
21 (a) IN GENERAL.-Section 25A (relating to Hope
22 scholarship credit) is amended by redesignating subsection
23 (i) as subsection (j) and by inserting after subsection (h)
24 the following new subsection:

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1 "(i) A1VIERICAN OPPORTUNITY TA."'{ CREDIT.-In the
2 case of any taxable year beginning in 2009 or 2010-
3 "(1) INCREASE IN CREDIT.-The Hope Scholar-
4 ship Credit shall be an amount equal to the sum
5 of-
6 "(A) 100 percent of so much of the quali-
7 fied tuition and related expenses paid by the
8 taxpayer during the taxable year (for education
9 furnished to the eligible student during any
10 academic period beginning in such taxable year)
11 as does not exceed $2,000, plus
12 "(B) 25 percent of such expenses so paid
13 as exceeds $2,000 but does not exceed $4,000.
14 "(2) CREDIT ALLOWED FOR FIRST 4 YEARS OF
15 POST-SECONDARY EDUCATION.-Subparagraphs (A)
16 and (C) of subsection (b)(2) shall be applied by sub-
17 stituting '4' for '2'.
18 "(3) QUALIFIED TUITION AND RELATED EX-
19 PENSES TO INCLUDE REQUIRED COURSE MATE-
20 RIALs.-Subsection (f)(I)(A) shall be applied by
21 substituting 'tuition, fees, and course materials' for
22 'tuition and fees'.
23 "(4) INCREASE IN AGI LIMITS FOR HOPE
24 SCHOLARSHIP CREDIT.-In lieu of applying sub-
25 section (d) with respect to the Hope Scholarship

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1 Credit, such credit (determined without regard to
2 this paragraph) shall be reduced (but not below
3 zero) by the amount which bears the same ratio to
4 such credit (as so determined) as-
5 "(A) the excess of-
6 "(i) the taxpayer's modified adjusted
7 gross income (as defined in subsection
8 (d)(3)) for such taxable year, over
9 "(ii) $80,000 ($160,000 in the case of
10 a joint return), bears to
11 "(B) $10,000 ($20,000 III the case of a
12 joint return).
13 "(5) CREDIT ALLOVED AGAINST ALTERNATIVE
14 MINIMUM TAX.-In the case of a taxable year to
15 which section 26(a)(2) does not apply, so much of
16 the credit allowed under subsection (a) as is attrib-
17 utable to the Hope Scholarship Credit shall not ex-
18 ceed the excess of- .
19 "(A) the sum of the regular tax liability
20 (as defined in section 26(b)) plus the tax im-
21 posed by section 55, over
22 "(B) the sum of the credits allowable
23 under this subpart (other than this subsection
24 and sections 23, 25D, and 30D) and section 27
25 for the taxable year.

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1 Any reference in this section or section 24, 25, 26,
2 25B, 904, or 1400C to a credit allowable under this
3 subsection shall be treated as a reference to so much
4 of the credit allowable under subsection (a) as is at-
5 tributable to the Hope Scholarship Credit.
6 "(6) PORTION OF CREDIT MADE REFUND-
7 ABLE.-40 percent of so much of the credit allowed
8 under subsection (a) as is attributable to the Hope
9 Scholarship Credit (determined after application of
10 paragraph (4) and without regard to this paragraph
11 and section 26(a)(2) or paragraph (5), as the case
12 may be) shall be treated as a credit allowable under
13 subpart C (and not allowed under subsection (a)).
14 The preceding sentence shall not apply to any tax-
IS payer for any taxable year if such taxpayer is a child
16 to whom subsection (g) of section 1 applies for such
17 taxable year.
18 "(7) COORDINATION ·WITH MIDWESTERN DIS-
19 ASTER AREA BENEFITS.-In the case of a taxpayer
20 with respect to whom section 702(a)(1)(B) of the
21 Heartland Disaster Tax Relief Act of 2008 applies
22 for any taxable year, such taxpayer may elect to
23 waive the application of tIns subsection to such tax-
24 payer for such taxable year.".
25 (b) CONFORMING AIVIENDMENTS.-

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1 (1) Section 24(b)(3)(B) is amended by inserting
2 "25A(i)," after "23,".
3 (2) Section 25(e)(1)(C)(ii) IS amended by m-
4 serting "25A(i)," after "24,".
5 (3) Section 26(a)(1) is amended by inserting
6 "25A(i)," after "24,".
7 (4) Section 25B(g)(2) is amended by inserting
8 "25A(i)," after "23,".
9 (5) Section 904(i) IS amended by inserting
10 "25A(i)," after "24,".
11 (6) Section 1400C(d)(2) is amended by insert-
12 ing "25A(i)," after "24,".
13 (7) Section 6211(b)(4)(A) is amended by insert-
14 mg "25A by reason of subsection (i)(6) thereof,"
15 after "24(d),".
17 States Code, is amended by inserting "25A," before
18 "35".
19 (c) TREATMENT OF POSSESSIONS.-
20 (1) PAYMENTS TO POSSESSIONS.-
21 (A) MIRROR CODE POSSESSION.-The Sec-
22 retmy of the Treasuly shall pay to each posses-
23 sion of the United States with a mirror code
24 tax system amounts equal to the loss to that
25 possession by reason of the application of sec-

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tion 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 Sec-
retary 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 Sec-
retary of the Treasury as being equal to the ag-
gregate 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 pos-
session has a plan, which has been approved by
the SecretaIy of the Treasury, under which
such possession will promptly distribute such
payments to the residents of such possession.

21
1 (2) COORDINATION WITH CREDIT ALLOWED
2 AGAINST UNITED S'l'ATES INCOME TAXES.-Section
3 25A(i)(6) of such Code (as added by this section)
4 shall not apply to a bona fide resident of any posses-
S sion of the United States.
6 (3) DEFINITIONS AND SPECIAL RULES.-
7 (A) POSSESSION OF THE UNITED
8 STATES.-For purposes of this subsection, the
9 term "possession of the United States" includes
10 the Commonwealth of Puerto Rico and the
11 Commonwealth of the Northern Mariana 1s-
12 lands.
13 (B) MIRROR CODE TAX SYSTEM.-For pur-
14 poses of this subsection, the term "mirror code
15 tax system" means, with respect to any posses-
16 sion of the United States, the income tax sys-
17 tern of such possession if the income tax liabil-
18 ity of the residents of such possession under
19 such system is determined by reference to the
20 income tax laws of the United States as if such
21 possession were the Uluted States.
22 (C) TREATMENT OF PAYMENTS.-For pur-
23 poses of section 1324(b)(2) of title 31, United
24 States Code, the payments under this sub-
25 section shall be treated in the same manner as

22
1 a refund due from the credit allowed under sec-
2 tion 25A of the Internal Revenue Code of 1986
3 by reason of subsection (i)(6) of such section
4 (as added by this section).
5 (d) EFFEc'rIVE DATE.-The amendments made by
6 this section shall apply to ta."{able years beginning after
8 (e) APPLICATION OF EGTRRA SUNSET.-The
9 amendment made by subsection (b)(l) shall be subject to
10 title IX of the Economic Growth and Tax Relief Reconcili-
11 ation Act of 2001 in the same manner as the provision
12 of such Act to which such amendment relates.
13 (f) TREASURY STUDIES REGARDING EDUCATION IN-
14 CENTIVES.-·
15 (1) STUDY REGARDING COORDINATION WITH
16 NON-TAX STUDENT FINANCIAL ASSISTANCE.-The
17 Secretary of the Treasury and the Secretary of Edu-
18 cation, or their delegates, shall-
19 (A) study how to coordinate the credit al-
20 lowed under section 25A of the Internal Rev-
21 enue Code of 1986 with the Federal Pell Grant
22 program under section 401 of the Higher Edu-
23 cation Act of 1965 to maximize their effective-
24 ness at promoting college affordability, and

"(iii) expenses paid or incurred in
2009 or 2010 for the purchase of any com-
23
1 (B) examine ways to expedite the delivery
2 of the tax credit.
3 (2) STUDY REGARDING INCLUSION OF COMMU-
4 NI'l'Y SERVICE REQUIREMENTS.-The Secretary of
5 the Treasury and the Secretary of Education, or
6 their delegates, shall study the feasibility of requir-
7 ing including community service as a condition of
8 taking their tuition and related expenses into ac-
9 count under section 25A of the Internal Revenue
10 Code of 1986.
11 (3) REPORT.-Not later than 1 year after the
12 date of the enactment of this Act, the Secretary of
13 the Treasury, or the Secretary's delegate, shall re-
14 port to Congress on the results of the studies con-
15 ducted under this paragraph.
16 SEC. 1005. COMPUTER TECHNOLOGY AND EQUIPMENT AL-
17 LOWED AS A QUALIFIED mGIlER EDUCATION
18 EXPENSE FOR SECTION 529 ACCOUNTS IN
19 2009 AND 2010.
20 (a) IN GENERAL.-Section 529(e)(3)(A) is amended
21 by striking "and" at the end of clause (i), by striking the
22 period at the end of clause (ii), and by adding at the end
23 the following:
24
25

24
1 puter technology or equipment (as defined
2 in section 170(e)(6)(F)(i)) or Internet ac-
3 cess and related services, if such tech-
4 nology, equipment, or services are to be
5 used by the beneficiary and the bene-
6 ficiary's family during any of the years the
7 beneficiary is enrolled at an eligible edu-
8 cational institution.
9 Clause (iii) shall not include expenses for com-
10 puter software designed for sports, games, or
11 hobbies unless the software is predominantly
12 educational in nature.".
14 this section shall apply to expenses paid or incurred after
15 December 31,2008.
16 SEC. 1006. EXTENSION OF AND INCREASE IN FffiST·TIME
17 HOMEBUYER CREDIT; WAIVER OF REQUIRE-
18 MENT TO REPAY.
19 (a) EXTENSION.-
20 (1) IN GENERAL.-Section 36(h) is amended by
21 striking"July 1, 2009" and inserting "December 1,
22 2009".
23 (2) CONFORMING AMENDMENT.-Section 36(g)
24 is amended by striking "July 1, 2009" and inserting
25 "December 1, 2009".

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1 (b) INCREASE.-
2 (1) IN GENERAL.-Section 36(b) is amended by
3 striking "$7,500" each place it appears and insert-
4 ing "$8,000".
5 (2) CONFORMING A1VIENDMENT.-Section
6 36(b) (1) (B) is amended by striking "$3,750" and
7 inserting "$4,000".
8 (c) WAIVER OF RECAPTURE.-
9 (1) IN GENERAL.-Paragraph (4) of section
10 36(f) is amended by adding at the end the following
11 new subparagraph:
12 "(D) WAIVER OF RECAPTURE FOR PUR-
13 CHASES IN 2009.-In the case of any credit al-
14 lowed with respect to the purchase of a prin-
15 cipal residence after December 31, 2008, and
16 before December 1, 2009-
17 "(i) paragraph (1) shall not apply,
18 and
19 "(ii) paragraph (2) shall apply only if
20 the disposition or cessation described in
21 paragraph (2) with respect to such resi-
22 dence occurs during the 36-month period
23 beginning on the date of the purchase of
24 such residence by the taxpayer.".

26
1 (2) CONFORMING AIVIENDMENT.-Subsection (g)
2 of section 36 is amended by striking "subsection
3 (c)" and inserting "subsections (c) and (f) (4)(D)".
4 (d) COORDINATION WITH FIRST-TIME HOMEBUYER
5 CREDIT FOR DISTRICT OF COLUMBIA.-
6 (1) IN GENERAL.-Subsection (e) of section
7 1400C is amended by adding at the end the fol-
8 lowing new paragraph:
9 "(4) COORDINATION WITH NATIONAL FIRST-
10 TIME HOMEBUYERS CREDIT.-No credit shall be al-
II lowed under this section to any taxpayer with re-
12 spect to the purchase of a residence after December
13 31, 2008, and before December 1, 2009, if a credit
14 under section 36 is allowable to such taxpayer (or
15 the taxpayer's spouse) with respect to such pur-
16 chase.".
17 (2) CONFORMING AlVIENDMENT.-Section 36(d)
18 is amended by striking paragraph (1).
19 (e) REMOVAL OF PROHIBITION ON FINANCING BY
20 MORTGAGE REVENUE BONDS.-Section 36(d), as amend-
21 ed by subsection (c)(2), is amended by striking paragraph
22 (2) and by redesignating paragraphs (3) and (4) as para-
23 graphs (1) and (2), respectively.

27
1 (f) EFFEC'l'IVE DATE.-The amendments made by
2 this section shall apply to residences purchased after De-
3 cember 31, 2008.
4 SEC. 1007. SUSPENSION OF TAX ON PORTION OF UNEM-
5 PLOYMENT COMPENSATION.
6 (a) IN GENERAL.-Section 85 of the Internal Rev-
7 enue Code of 1986 (relating to unemployment compensa-
8 tion) is amended by adding at the end the following new
9 subsection:
10 "(c) SPECIAL RULE FOR 2009.-In the case of any
11 taxable year beginning in 2009, gross income shall not in-
12 clude so much of the unemployment compensation received
13 by an individual as does not exceed $2,400.".
14 (b) EFFECTIVE DATE.-The amendluent made by
16 December 31, 2008.
17 SEC. 1008. ADDITIONAL DEDUCTION FOR STATE SALES TAX
18 AND EXCISE TAX ON THE PURCHASE OF CER-
19 TAIN MOTOR VEIDCLES.
20 (a) IN GENERAL.-Subsection (a) of section 164 is
21 amended by inserting after paragTaph (5) the following
22 new paragraph:
23 " (6) Qualified motor vehicle taxes.".

28
1 (b) QUALIFIED MOTOR VEHICLE TAXEs.-Sub-
2 section (b) of section 164 is amended by adding at the
3 end the following new paragraph:
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"(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 im-
posed on the purchase of a qualified motor vehi-
cle.
"(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.
"(0) INCOME LIl1ITATION.-The amount
otherwise taken into account under subpara-
graph (A) (after the application of subpara-
graph (B)) for any taxable year shall be re-
duced (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-

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"(1) the taxpayer's modified ad-
justed 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 'quali-
fied motor vehicle' means-
"(I) a t bOIpassenger au omo 1 e 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 tax-
payer,
"(II) a motorcycle the gross vehi-
cle weight rating of which is not more

O:ERNERN09560.LC S.L.C.
30
1 than 8,500 pounds and the original
2 use of which commences ,vith the tax-
3 payer, and
4 "(III) a motor home the original
5 use of which commences vith the tax-
6 payer.
7 "(ii) OTHER TERMS.-The terms 'mo-
8 torcycle' and 'motor home' have the mean-
9 ings given such terms under section 571.3
10 of title' 49, Code of Federal Regulations
11 (as in effect on the date of the enactment
12 of this paragraph).
13 "(E) QUALIFIED MOTOR VEHICLE TAXES
14 NOT INCLUDED IN COST OF ACQUIRED PROP-
15 ERTY.-The last sentence of subsection (a)
16 shall not apply to any qualified motor vehicle
17 taxes.
18 "(F) COORDINATION WITH GENERAL
19 SALES TAX.-This paragraph shall not apply in
20 the case of a taxpayer who makes an election
21 under paragraph (5) for the taxable year.
22 "(G) TERMINATION.-This paragraph
23 shall not apply to purchases after December 31,
24 2009.".
25 (c) DEDUCTION ALLOWED TO NONITEMIZERS.-

31
2 63(c) is amended by striking "and" at the end of
3 subparagraph (C), by striking the period at the end
4 of subparagraph (D) and inserting ", and", and by
5 adding at the end the following new subparagraph:
6 "(E) the motor vehicle sales tax deduc-
7 tion.".
8 (2) DEFINITIoN.-Section 63(c) is amended by
9 adding at the end the following new paragraph:
10 "(9) MOTOR VEHICLE SALES TAX DEDUC-
11 TION.-For purposes of paragraph (1), the term
12 'motor vehicle sales tax deduction' means the
13 amount allowable as a deduction under section
14 164(a)(6). Such term shall not include any amount
15 taken into account under section 62(a).".
16 (d) TREATMENT OF DEDUCTION UNDER ALTER-
17 NATIVE MINIMUM TAX.-The last sentence of section
18 56(b)(1)(E) is amended by striking "section 63(c)(1)(D)"
19 and inserting "subparagraphs (D) and (E) of section
20 63(c)(1)".
21 (e) EFFECTIVE DATE.-The amendments made by
22 this section shall apply to purchases on or after the date
23 of the enactment of tIlls Act in taxable years ending after
24 such date.

32
1 PART II-ALTERNATIVE MINIMUM TAX RELIEF
2 SEC. 1011. EXTENSION OF ALTERNATIVE MINIMUM TAX RE-
3 LIEF FOR NONREFUNDABLE PERSONAL
4 CREDITS.
5 (a) IN GENERAL.-Paragraph (2) of section 26(a)
6 (relating to special rule for taxable years 2000 through
7 2008) is amended-
8. (1) by striking "or 2008" and inserting "2008,
9 or 2009", and
10 (2) by striking "2008" III the heading thereof
11 and inserting "2009".
12 (b) EFFECTNE DATE.-The amendments made by
14 December 31, 2008.
15 SEC. 1012. EXTENSION OF INCREASED ALTERNATIVE MIN-
16 IMUM TAX EXEMPTION AMOUNT.
17 (a) IN GENERAL.-Paragraph (1) of section 55(d)
18 (relating to exemption amount) is amended-
19 (1) by striking "($69,950 in the case of taxable
20 years beginning in 2008)" in subparagraph (A) and
21 inserting "($70,950 in the case of taxable years be-
22 ginning in 2009)", and
23 (2) by striking "($46,200 in the case of taxable
24 years beginning in 2008)" in subparagraph (B) and
25 inserting "($46,700 in the case of taxable years be-
26 ginning in 2009)".

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S.L.C.
4 Subtitle B-Energy Incentives
5 PART I-RENEWABLE ENERGY INCENTIVES
6 SEC. 1101. EXTENSION OF CREDIT FOR ELECTRICITY PRO·
7 DUCED FROM CERTAIN RENEWABLE RE·
8 SOURCES.
9 (a) IN GENERAL.-Subsection (d) of section 45 IS
10 amended-
11 (1) by striking "2010" in paragraph (1) and in-
12 serting "2013",
13 (2) by striking "2011" each place it appears in
14 paragraphs (2), (3), (4), (6), (7) and (9) and insert-
15 ing "2014", and
16 (3) by striking "2012" in paragraph (ll)(B)
17 and inserting "2014".
18 (b) TECHNICAL AMENDMENT.-Paragraph (5) of
19 section 45(d) is amended by striking "and before" and
20 all that follows and inserting " and before October 3,
21 2008.".
22 (c) EFFECTIVE DATE.-
23 (1) IN GENERAL.-The amendments made by
24 subsection (a) shall apply to property placed in serv-
25 ice after the date of the enactment of this Act.

TIES AS ENERGY PROPERTY.-
"(5) ELECTION TO TREAT QUALIFIED FACILI-
"(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 sec-
tion, and
"(ii) the energy percentage with re-
spect 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.
"(0) QUALIFIED INVESTMENT CREDIT FA-
CILITY.-For purposes of this paragraph, the
34
1 (2) TECHNICAL AIVIENDMENT.-The amendment
2 made by subsection (b) shall take effect as if in-
3 cluded in section 102 of the Energy Improvement
4 and Extension Act of 2008.
5 SEC. 1102. ELECTION OF INVESTMENT CREDIT IN LIEU OF
6 PRODUCTION CREDIT.
7 (a) IN GENERAL.-Subsection (a) of section 48 is
9 graph:
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

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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 ta..xpayer makes an irrev-
ocable election to have this paragraph apply to
such facility:
"(i) WIND FACILITIES.-AllY 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 quali-
fied 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 pur-
poses 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

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S.L.C.
"(D) TERMINATION.-This paragraph
shall not apply to periods after December 31,
2008, under rules similar to the rules of section
1 components), but only if such prop-
2 erty is used as an integral part of the
3 qualified investment credit facility,
4 and
5 "(ii) with respect to which deprecia-
6 tion (or amortization in lieu of deprecia-
7 tion) is allowable.".
9 tIns section shall apply to facilities placed in service after
10 December 31,2008.
11 SEC. 1103. REPEAL OF CERTAIN LIMITATIONS ON CREDIT
12 FOR RENEWABLE ENERGY PROPERTY.
13 (a) REPEAL OF LIMITATION ON CREDIT FOR QUALI-
14 FlED SMALL WIND ENERGY PROPERTY.-Paragraph (4)
15 of section 48(c) is amended by striking subparagraph (B)
16 and by redesignating subparagraphs (C) and (D) as sub-
17 paragraphs (B) and (C).
18 (b) REPEAL OF LIMITATION ON PROPERTY FI-
19 NANCED BY SUBSIDIZED ENERGY FINANCING.-
20 (1) IN GENERAL.-Section 48(a)(4) is amended
21 by adding at the end the follmving new subpara-
22 graph:
23
24
25

37
1 48(m) (as in effect on the day before the date
2 of the enactment of the Revenue Reconciliation
3 Act of 1990).".
4 (2) CONFORMING AMENDMENTS.-
5 (A) Section 25C(e)(1) is amended by strik-
6 ing "(8), and (9)" and inserting "and (8)".
7 (B) Section 25D(e) is amended by striking
8 paragraph (9).
9 (C) Section 48A(b)(2) is amended by in-
10 serting "(without regard to subparagraph (D)
11 thereof)" after "section 48(a)(4)".
12 (D) Section 48B(b)(2) is amended by in-
13 serting "(without regard to subparagraph (D)
14 thereof)" after "section 48(a)(4)".
16 (1) IN GENERAL.-Except as provided in para-
17 graph (2), the amendment made by this section shall
18 apply to periods after December 31, 2008, under
19 rules similar to the rules of section 48(m) of the In-
20 ternal Revenue Code of 1986 (as in effect on the day
21 before the date of the enactment of the Revenue
22 Reconciliation Act of 1990).
23 (2) CONFORMING AIVIENDMENTS.-The amend-
24 ments made by subparagraphs (A) and (B) of sub-

"(1) DENIAL OF PRODUCTION AND INVEST-
MENT CREDITS.-N0 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,
38
1 section (b)(2) shall apply to taxable years beginning
2 after December 31, 2008.
3 SEC. 1104. COORDINATION WITH RENEWABLE ENERGY
4 GRANTS.
5 Section 48 is amended by adding at the end the fol-
6 lowing new subsection:
7 "(d) COORDINATION WITH DEPARTMENT OF TREAS-
8 URY GRANTS.-In the case of any property with respect
9 to which the Secretary makes a grant under section 1603
10 of the AJ.nerican Recovery and Reinvestment Tax Act of
11 2009-
12
13
14
15
16
17
18
19
20
21
22
23
24
25

39
1 " (B) the general business carryforwards
2 under section 39 shall be adjusted so as to re-
3 capture the portion of such credit which was
4 not so allowed, and
5 " (0) the amount of such grant shall be de-
6 termined without regard to any reduction in the
7 basis of such property by reason of such credit.
8 "(3) TREATMENT OF GRANTs.-Any such grant
9 shall-
10 "(A) not be includible in the gross income
11 of the taxpayer, but
12 "(B) shall be taken into account in deter-
13 mining the basis of the property to which such
14 grant relates, except that the basis of such
15 property shall be reduced under section 50(c) in
16 the same manner as a credit allowed under sub-
17 section (a).".
18 PART II-INCREASED ALLOCATIONS OF NEW
19 CLEAN RENEWABLE ENERGY BONDS AND
20 QUALIFIED ENERGY CONSERVATION BONDS
21 SEC. 1111. INCREASED LIMITATION ON ISSUANCE OF NEW
22 CLEAN RENEWABLE ENERGY BONDS.
23 Subsection (c) of section 540 is amended by adding
24 at the end the follmving new paragraph:

40
1 "(4) ADDITIONAL LIMITATION.-The national
2 new clean renewable energy bond limitation shall be
3 increased by $1,600,000,000. Such increase shall be
4 allocated by the Secretary consistent with the rules
5 of paragraphs (2) and (3).".
6 SEC. 1112. INCREASED LIMITATION ON ISSUANCE OF
7 QUALIFIED ENERGY CONSERVATION BONDS.
8 (a) IN GENERAL.-Section 54D(d) is amended by
9 striking "$800,000,000" and inserting "$3,200,000,000".
10 (b) CLARIFICATION WITH RESPECT TO GREEN COM-
11 MUNITY PROGRAMS.-
12 (1) IN GENERAL.-Clause (ii) of section
13 54D(f)(1)(A) is amended by inserting "(including
14 the use of loans, grants, or other repayment mecha-
15 nisms to implement such programs)" after "green
16 community programs".
17 (2) SPECIAL RULES FOR BONDS FOR IMPLE-
18 MENTING GREEN COMMUNITY PROGRAMS.-Sub-
19 section (e) of section 54D is amended by adding at
20 the end the following new paragraph:
21 "(4) SPECIAL RULES FOR BONDS TO IMPLE-
22 MENT GREEN COMMUNITY PROGRAMS.-In the case
23 of any bond issued for the purpose of providing
24 loans, grants, or other repayment mechanisms for
25 capital expenditures to implement green community

41
1 progTams, such bond shall not be treated as a pri-
2 vate activity bond for purposes of paragraph (3).".
3 PART III-ENERGY CONSERVATION INCENTIVES
4 SEC. 1121. EXTENSION AND MODIFICATION OF CREDIT FOR
5 NONBUSINESS ENERGY PROPERTY.
6 (a) IN GENERAL.-Section 250 is amended by strik-
7 ing subsections (a) and (b) and inserting the following new
8 subsections:
9 "(a) ALLOWANCE OF OREDIT.-In the case of an in-
10 dividual, there shall be allowed as a credit against the tax
11 imposed by this chapter for the taxable year an amount
12 equal to 30 percent of the sum of-
13 "(1) the amount paid or incurred by the tax-
14 payer during such taxable year for qualified energy
15 efficiency improvements, and
16 "(2) the amount of the residential energy prop-
17 erty expenditures paid or incurred by the taxpayer
18 during such taxable year.
19 "(b) LIMITATION.-The aggregate amount of the
20 credits allowed under this section for taxable years begin-
21 lung in 2009 and 2010 with respect to any taxpayer shall
22 not exceed $1,500.".
23 (b) MODIFICATIONS OF STANDARDS FOR ENERGY-
24 EFFICIENT BUILDING PROPERTY.-

42
1 (1) ELECTRIC HEAT PUMPs.-Subparagraph
2 (B) of section 25C(d)(3) is amended to read as fol-
3 lows:
4 "(B) an electric heat pump which achieves
5 the highest efficiency tier established by the
6 Consortium for Energy Efficiency, as in effect
7 on January 1, 2009.".
8 (2) CENTRAL AIR CONDITIONERS.-Subpara-
9 graph (C) of section 25C(d)(3) is amended by strik-
10 ing "2006" and inserting "2009".
11 (3) WATER HEATERS.-Subparagraph (D) of
12 section 25C(d)(3) is amended to read as follows:
13 "(D) a natural gas, propane, or oil water
14 heater which has either an energy factor of at
15 least 0.82 or a thermal efficiency of at least 90
16 percent.".
17 (4) WOOD STOVES.-Subparagraph (E) of sec-
18 tion 25C(d)(3) is amended by inserting ", as meas-
19 ured using a lower heating value" after "75 per-
20 cent".
21 (c) MODIFICATIONS OF STANDARDS FOR OIL FUR-
22 NACES AND HOT WATER BOILERS.-
24 25C(d) is amended to read as follows:

43
1 "(4) QUALIFIED NATURAL GAS, PROPANE, AND
2 OIL FURNACES AND HOT WATER BOILERS.-
3 "(A) QUALIFIED NATURAL GAS FUR-
4 NACE.-The term 'qualified natural gas fur-
5 nace' means any natural gas furnace which
6 achieves an annual fuel utilization efficiency
7 rate of not less than 95.
8 "(B) QUALIFIED NATURAL GAS HOT
9 WATER BOILER.-The term 'qualified natural
10 gas hot water boiler' means any natural gas hot
11 water boiler which achieves an annual fuel utili-
12 zation efficiency rate of not less than 90.
13 "(0) QUALIFIED PROPANE FURNACE.-
14 The term 'qualified propane furnace' means any
15 propane furnace which achieves an annual fuel
16 utilization efficiency rate of not less than 95.
17 "(D) QUALIFIED PROPANE HOT WATER
18 BOILER.-The term 'qualified propane hot
19 water boiler' means any propane hot water boil-
20 er which achieves an annual fuel utilization effi-
21 ciency rate of not less than 90.
22 "(E) QUALIFIED OIL FURNACES.-The
23 term 'qualified oil furnace' means any oil fur-
24 nace which achieves an annual fuel utilization
25 efficiency rate of not less than 90.

44
1 "(F) QUALIFIED OIL HOT WATER BOIL-
2 ER.-The term 'qualified oil hot water boiler'
3 means any oil hot water boiler which achieves
4 an annual fuel utilization efficiency rate of not
5 less than 90.".
6 (2) CONFORMING AIVIENDMENT.-Clause (ii) of
7 section 25C(d)(2)(A) is amended to read as follows:
8 "(ii) any qualified natural gas fur-
9 nace, qualified propane furnace, qualified
10 oil furnace, qualified natural gas hot water
11 boiler, qualified propane hot water boiler,
12 or qualified oil hot water boiler, or".
13 (d) MODIFICATIONS OF STANDARDS FOR QUALIFIED
14 ENERGY EFFICIENCY IMPROVEMENTS.-
15 (1) QUALIFICATIONS FOR EXTERIOR WINDOWS,
16 DOORS, AND SKYLIGHTS.-Subsection (c) of section
17 25C is amended by adding at the end the following
18 new paragraph:
19 "(4) QUALIFICATIONS FOR EXTERIOR WIN-
20 DOWS, DOORS, AND SKYLIGHTS.-Such term shall
21 not include any component described in subpara-
22 graph (B) or (C) of paragraph (2) unless such com-
23 ponent is equal to or below a U factor of 0.30 and
24 SHGC of 0.30.".

45
1 (2) ADDITIONAL QUALIFICATION FOR INSULA-
2 TION.-Subparagraph (A) of section 25C(c)(2) is
3 amended by inserting "and meets the prescriptive
4 criteria for such material or system established by
5 the 2009 International Energy Conservation Code,
6 as such Code (including supplements) is in effect on
7 the date of the enactment of the American Recovery
8 and Reinvestment Tax Act of 2009" after "such
9 dwelling unit".
10 (e) EXTENSIoN.-Section 25C(g)(2) is amended by
11 striking "December 31, 2009" and inserting "December
12 31, 2010".
13 (f) EFFECTIVE DATES.-
15 graph (2), the amendments made by this section
16 shall apply to taxable years beginning after Decem-
17 bel' 31, 2008.
18 (2) EFFICIENCY STANDARDS.-The amend-
19 ments made by paragraphs (1), (2), and (3) of sub-
20 section (b) and subsections (c) and (d) shall apply
21 to property placed in service after the date of the en-
22 actment of this Act.

46
1 SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL
2 ENERGY EFFICIENT PROPERTY.
3 (a) REMOVAL OF CREDIT LIMITATION FOR PROP-
4 ERTY PLACED IN SERVICE.-
6 25D(b) is amended to read as follows:
7 "(1) MAxrMUM CREDIT FOR FUEL CELLS.-In
8 the case of any qualified fuel cell property expendi-
9 ture, the credit allowed under subsection (a) (deter-
10 mined without regard to subsection (c)) for any tax-
11 able year shall not exceed $500 with respect to each
12 half kilowatt of capacity of the qualified fuel cell
13 property (as defined in section 48(c)(1)) to which
14 such expenditure relates.".
15 (2) CONFORMING AMENDMENT.-Paragraph (4)
16 of section 25D(e) is amended-
17 (A) by striking all that precedes subpara-
18 graph (B) and inserting the following:
19 "(4) FUEL CELL EXPENDITURE LIMITATIONS
20 IN CASE OF JOINT OCCUPANCY.-In the case of any
21 dwelling unit with respect to which qualified fuel cell
22 property expenditures are made and which is jointly
23 occupied and used during any calendar year as a
24 residence by two or more individuals, the following
25 rules shall apply:

47
1 "(A) MAxIMUM EXPENDI'l'URES FOR FUEL
2 CELLS.-The maximum amount of such ex-
3 penditures which may be taken into account
4 under subsection (a) by all such individuals
5 ,vith respect to such dwelling unit during such
6 calendar year shall be $1,667 in the case of
7 each half kilowatt of capacity of qualified fuel
8 cell property (as defined in section 48(c)(1))
9 vith respect to which such expenditures re-
10 late.", and
11 (B) by striking subparagraph (C).
14 December 31, 2008.
15 SEC. 1123. TEMPORARY INCREASE IN CREDIT FOR ALTER·
16 NATIVE FUEL VEHICLE REFUELING PROP·
17 ERTY.
18 (a) IN GENERAL.-Section 30C(e) is amended by
19 adding at the end the folloving new paragraph:
20 "(6) SPECIAL RULE FOR PROPERTY PLACED IN
21 SERVICE DURING 2009 AND 2010.-In the case of
22 property placed in service in taxable years beginning
23 after December 31, 2008, and before January 1,
24 2011-

48
1 " (A) in the case of any such property
2 which does not relate to hydrogen-
3 "(i) subsection (a) shall be applied by
4 substituting '50 percent' for '30 percent',
5 "(ii) subsection (b)(l) shall be applied
6 by substituting '$50,000' for '$30,000',
7 and
8 "(iii) subsection (b)(2) shall be ap-
9 plied by substituting '$2,000' for '$1,000',
10 and
11 "(B) III the case of any such property
12 which relates to hydrogen, subsection (b)(l)
13 shall be applied by substituting '$200,000' for
14 '$30,000'.".
15 (b) EFFECTIVE DATE.-The amendment made by
17 December 31, 2008.
18 PART IV-MODIFICATION OF CREDIT FOR
19 CARBON DIOXIDE SEQUESTRATION
20 SEC. 1131. APPLICATION OF MONITORING REQUIREMENTS
21 TO CARBON DIOXIDE USED AS A TERTIARY
22 INJECTANT.
23 (a) IN GENERAL.-Section 45Q(a)(2) is amended by
24 striking"and" at the end of subparagraph (A), by striking
25 the period at the end of subparagraph (B) and inserting

49
1 ", and", and by adding at the end the following new sub-
2 paragTaph:
3 "(C) disposed of by the taxpayer in secure
4 geological storage.".
5 (b) CONFORMING AMENDMENTS.-
6 (1) Section 45Q(d)(2) is amended-
7 (A) by striking "subsection (a)(l)(B)" and
8 inserting "paragraph (l)(B) or (2)(C) of sub-
9 section (a)",
10 (B) by striking "and unminable coal
11 seems" and inserting", oil and gas reservoirs,
12 and unminable coal seams", and
13 (C) by inserting "the Secretal'Y of Energy,
14 and the Secretary of the Interior," after "Envi-
15 ronmental Protection Agency".
16 (2) Section 45Q(a)(1)(B) is amended by insert-
17 ing "and not used by the taxpayer as described in
18 paragraph (2)(B)" after "storage".
19 (3) Section 45Q(e) is amended by striking
20 "captured and disposed of or used as a tertiary
21 injectant" and inserting "taken into account in ac-
22 cordance with subsection (a)".
23 (c) EFFECTIVE DATE.-The amendments made by
24 this section shall apply to carbon dioxide captured after
25 the date of the enactment of this Act.

15 year.
16
17
18
19
20
21
22
23
24
50
1 PART V-PLUG·IN ELECTRIC DRIVE MOTOR
2 VEHICLES
3 SEC. 1141. CREDIT FOR NEW QUALIFIED PLUG·IN ELECTRIC
4 DRIVE MOTOR VEIDCLES.
5 (a) IN GENERAL.-Section 30D is amended to read
6 as follows:
7 "SEC. 30D. NEW QUALIFIED PLUG·IN ELECTRIC DRIVE
8 MOTOR VEHICLES.
9 "(a) ALLOWANCE OF CREDIT.-There shall be al-
10 lowed as a credit against the tax imposed by this chapter
11 for the taxable year an amount equal to the sum of the
12 credit amounts determined under subsection (b) with re-
13 spect to each new qualified plug-in electric drive motor ve-
14 hicle placed in service by the taxpayer during the taxable
"(b) PER VEHICLE DOLLAR LIMITATION.-
"(1) IN GENERAL.-The amount determined
under this subsection with respect to any new quali-
fied 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 ve-
25 hicle which draws propulsion energy from a battery
26 'with not less than 5 kilowatt hours of capacity, the

51
1 amount determined under this paragraph is $417,
2 plus $417 for each kilowatt hour of capacity in ex-
3 cess of 5 kilowatt hours. The 3lTIount determined
4 under this paragraph shall not exceed $5,000.
5 "(c) APPLICATION WITH OTHER CREDITS.-
6 "(1) BUSINESS CREDIT TREATED AS PART OF
7 GENERAL BUSINESS CREDIT.-SO much of the credit
8 which would be allowed under subsection (a) for any
9 taxable year (determined without regard to this sub-
10 section) that is attributable to property of a char-
11 acter subject to an allowance for depreciation shall
12 be treated as a credit listed in section 38(b) for such
13 taxable year (and not allowed under subsection (a)).
14 "(2) PERSONAL CREDIT.-
15 "(A) IN GENERAL.-For purposes of this
16 title, the credit allowed under subsection (a) for
17 any taxable year (determined after application
18 of paragraph (1)) shall be treated as a credit
19 allowable under subpart A for such taxable
20 year.
21 "(B) LIMITATION BASED ON AMOUNT OF
22 TAX.-In the case of a taxable year to which
23 section 26(a)(2) does not apply, the credit al-
24 lowed under subsection (a) for any taxable year

52
1 (determined after application of paragTaph (1))
2 shall not exceed the excess of-
3 "(i) the sum of the regular tax liabil-
4 ity (as defined in section 26(b)) plus the
5 tax imposed by section 55, over
6 "(ii) the sum of the credits allowable
7 under subpart A (other than this section
8 and sections 23 and 25D) and section 27
9 for the taxable year.
10 "(d) NEW QUALIFIED PLUG-IN ELECTRIC DRIVE
11 MOTOR VEHICLE.-For purposes of this section-
12 "(1) IN GENERAL.-The term 'new qualified
13 plug-in electric drive motor vehicle' means a motor
14 vehicle-
15 "(A) the original use of which commences
16 with the taxpayer,
17 "(B) which is acquired for use or lease by
18 the taxpayer and not for resale,
19 "(C) which is made by a manufacturer,
20 "(D) which is treated as a motor vehicle
21 for purposes of title II of the Clean Air Act,
22 "(E) which has a gross vehicle weight rat-
23 ing of less than 14,000 pounds, and

53
1 "(F) which is propelled to a significant ex-
2 tent by an electric motor which draws electricity
3 from a battery which-
4 "(i) has a capacity of not less than 4
5 kilowatt hours, and
6 "(ii) is capable of being recharged
7 from an external source of electricity.
8 "(2) MOTOR VEHICLE.-The term 'motor vehi-
9 cle' means any vehicle which is manufactured pri-
10 marily for use on public streets, roads, and highways
11 (not including a vehicle operated exclusively on a rail
12 or rails) and which has at least 4 wheels.
13 "(3) MANUFACTURER.-The term 'manufac-
14 turer' has the meaning given such term in regula-
15 tions prescribed by the Administrator of the Envi-
16 ronmental Protection Agency for purposes of the ad-
17 ministration of title II of the Clean Air Act (42
18 U.S.C. 7521 et seq.).
19 "(4) BATTERY CAPACITY.-The term 'capacity'
20 means, with respect to any battery, the quantity of
21 electricity which the battery is capable of storing, ex-
22 pressed in kilowatt hours, as measured from a 100
23 percent state of charge to a 0 percent state of
24 charge.

54
1 "(e) LIMITATION ON NUMBER OF NEW QUALIFIED
2 PLUG-IN ELEC'rRIC DRIVE MOTOR VEHICLES ELIGIBLE
3 FOR CREDIT.-
4 "(1) IN GENERAL.-In the case of a new quali-
5 fied plug-in electric drive motor vehicle sold during
6 the phaseout period, only the applicable percentage
7 of the credit otherwise allowable under subsection
8 (a) shall be allowed.
9 "(2) PHASEOUT PERIOD.-For purposes of this
10 subsection, the phaseout period is the period begin-
11 ning with the second calendar quarter following the
12 calendar quarter which includes the first date on
13 which the number of new qualified plug-in electric
14 drive motor vehicles manufactured by the manufac-
15 turer of the vehicle referred to in paragraph (1) sold
16 for use in the United States after December 31,
17 2009, is at least 200,000.
18 "(3) APPLICABLE PERCENTAGE.-For purposes
19 of paragraph (1), the applicable percentage is-
20 "(A) 50 percent for the first 2 calendar
21 quarters of the phaseout period,
22 "(B) 25 percent for the 3d and 4th cal-
23 endar quarters of the phaseout period, and
24 "(C) 0 percent for each calendar quarter
25 thereafter.

55
1 "(4) CONTROLLED GROuPs.-Rules similar to
2 the rules of section 30B(f)(4) shall apply for pur-
3 poses of this subsection.
4 "(f) SPECIAL RULES.-
5 "(1) BASIS REDUCTION.-For purposes of this
6 subtitle, the basis of any property for which a credit
7 is allowable under subsection (a) shall be reduced by
8 the amount of such credit so allowed.
9 "(2) No DOUBLE BENEFIT.-The amount of
10 any deduction or other credit allowable under this
11 chapter for a new qualified plug-in electric drive
12 motor vehicle shall be reduced by the amount of
13 credit allowed under subsection (a) for such vehicle.
14 "(3) PROPERTY USED BY TAX-EXEMPT ENTI-
15 TY.-In the case of a vehicle the use of which is de-
16 scribed in paragraph (3) or (4) of section 50(b) and
17 which is not subject to a lease, the person who sold
18 such vehicle to the person or entity using such vehi-
19 cle shall be treated as the taxpayer that placed such
20 vehicle in service, but only if such person clearly dis-
21 closes to such person or entity in a document the
22 amount of any credit allowable under subsection (a)
23 with respect to such vehicle (determined without re-
24 gard to subsection (c)).

56
1 "(4) PROPERTY USED OUTSIDE UNITED STATES
2 NO'!' QUALIFIED.-No credit shall be allowable under
3 subsection (a) with respect to any property referred
4 to in section 50(b)(1).
5 "(5) RECAPTURE.-The Secretary shall, by reg-
6 ulations, provide for recapturing the benefit of any
7 credit allowable under subsection (a) with respect to
8 any property which ceases to be property eligible for
9 such credit.
10 "(6) ELECTION NOT TO TAKE CREDIT.-No
11 credit shall be allowed under subsection (a) for any
12 vehicle if the taxpayer elects to not have this section
13 apply to such vehicle.
14 "(7) INTERACTION WITH AIR QUAljITY AND
15 MOTOR VEHICLE SAFETY STANDARDS.-A. motor ve-
16 hicle shall not be considered eligible for a credit
17 under this section unless such vehicle is in compli-
18 ance with-
19 "(A) the applicable provisions of the Clean
20 Air Act for the applicable make and model year
21 of the vehicle (or applicable air quality provi-
22 sions of State law in the case of a State which
23 has adopted such provision under a waiver
24 under section 209(b) of the Clean Air Act), and

57
1 " (B) the motor vehicle safety provisions of
2 sections 30101 through 30169 of title 49,
3 United States Code.".
4 (b) CONFORMING AIVIENDMENTS.-
5 (1) Section 30B(d)(3)(D) is amended by strik-
6 lng "subsection (d) thereof" and inserting "sub-
7 section (c) thereof".
8 (2) Section 38(b)(35) is amended by striking
9 "30D(d)(1)" and inserting "30D(c)(1)".
10 (3) Section 1016(a)(25) is amended by striking
11 "section 30D(e)(4)" and inserting "section
12 30D(f)(1)".
13 (4) Section 6501(m) is amended by striking
14 "section 30D(e)(9)" and inserting "section
15 30D(e)(4)".
17 this section shall apply to vehicles acquired after Decem-
18 bel' 31, 2009.
19 SEC. 1142. CREDIT FOR CERTAIN PLUG-IN ELECTRIC VEHI-
20 CLES.
21 (a) IN GENERAL.-Section 30 is amended to read as
22 follows:
23 "SEC. 30. CERTAIN PLUG-IN ELECTRIC VEIDCLES.
24 "(a) ALLOWANCE OF CREDIT.-There shall be al-
25 lowed as a credit against the tax imposed by this chapter

58
1 for the ta.."'Cable year an amount equal to 10 percent of the
2 cost of any qualified plug-in electric vehicle placed in serv-
3 ice by the taxpayer during the taxable year.
4 "(b) PER VEHICLE DOLLAR LIMITATION.-The
5 amount of the credit allowed under subsection (a) with
6 respect to any vehicle shall not exceed $2,500.
7 "(c) APPLICATION WITH OTHER CREDITS.-
8 "(1) BUSINESS CREDIT TREATED AS PART OF
9 GENERAL BUSINESS CREDIT.-SO much of the credit
10 which would be allowed under subsection (a) for any
11 taxable year (determined without regard to this sub-
12 section) that is attributable to property of a char-
13 acter subject to an allowance for depreciation shall
14 be treated as a credit listed in section 38(b) for such
15 taxable year (and not allowed under subsection (a)).
22 year.
23 "(B) LIMITATION BASED ON AMOUNT OF

59
2 (determined after application of paragraph (1))
9 and sections 23, 25D, and 30D) and sec-
10 tion 27 for the taxable year.
11 "(d) QUALIFIED PLUG-IN ELECTRIC VEHICLE.-For
12 purposes of this section-
13 "(1) IN GENERAL.-The term 'qualified plug-in
14 electric vehicle' means a specified vehicle-
15 "(A) the original use of which commences
16 with the taxpayer,
17 "(B) which is acquired for use or lease by
18 the taxpayer and not for resale,
19 "(C) which is made by a manufacturer,
20 " (D) which is manufactured primarily for
21 use on public streets, roads, and highways,
22 "(E) which has a gross vehicle weight rat-
23 ing of less than 14,000 pounds, and

60
1 "(F) which is propelled to a significant ex-
2 tent by an electric motor which draws electricity
3 from a battery which-
4 "(i) has a capacity of not less than 4
5 kilowatt hours (2.5 kilowatt hours in the
6 case of a vehicle with 2 or 3 wheels), and
7 "(ii) is capable of being recharged
8 from an external source of electricity.
9 "(2) SPECIFIED VEHICLE.-The term 'specified
10 vehicle' means any vehicle which-
11 "(A) is a low speed vehicle within the
12 meaning of section 571.3 of title 49, Code of
13 Federal Regulations (as in effect on the date of
14 the enactment of the American Recovery and
15 Reinvestment Tax Act of 2009), or
16 "(B) has 2 or 3 wheels.
17 "(3) MANUFACTURER.-The term 'manufac-
18 turer' has the meaning given such term in regula-
19 tions prescribed by the Administrator of the Envi-
20 ronmental Protection Agency for purposes of the ad-
21 ministration of title II of the Clean Air Act (42
22 U.S.C. 7521 et seq.).
23 "(4) BATTERY CAPACITY.-The term 'capacity'
24 means, ,vith respect to any battery, the quantity of
25 electricity which the battery is capable of storing, ex-

61
1 pressed in kilowatt hours, as measured from a 100
2 percent state of charge to a 0 percent state of
3 charge.
4 "(e) SPECIAL RULES.-
5 "(1) BASIS REDUCTION.-For purposes of this
6 subtitle, the basis of any property for which a credit
7 is allowable under subsection (a) shall be reduced by
8 the amount of such credit so allowed.
9 "(2) No DOUBLE BENEFIT.-The amount of
10 any deduction or other credit allowable under this
11 chapter for a new qualified plug-in electric drive
12 motor vehicle shall be reduced by the amount of
13 credit allowable under subsection (a) for such vehi-
14 cleo
15 "(3) PROPERTY USED BY TAX-EXEMPT ENTI-
16 TY.-In the case of a vehicle the use of which is de-
17 scribed in paragraph (3) or (4) of section 50(b) and
18 which is not subject to a lease, the person who sold
19 such vehicle to the person or entity using such vehi-
20 cle shall be treated as the taxpayer that placed such
21 vehicle in service, but only if such person clearly dis-
22 closes to such person or entity in a document the
23 amount of any credit allowable under subsection (a)
24 with respect to such vehicle (determined without re-
25 gard to subsection (c)).

62
1 "(4) PROPERTY USED OUTSIDE UNITED STATES
2 NO'!' QUALIFIED.-No credit shall be allowable under
3 subsection (a) with respect to any property referred
4 to in section 50(b)(I).
5 "(5) RECAPTURE.-The Secretary shall, by reg-
6 ulations, provide for recapturing the benefit of any
7 credit allowable under subsection (a) with respect to
8 any property which ceases to be property eligible for
9 such credit.
10 "(6) ELECTION NOT TO TAKE CREDIT.-No
11 credit shall be allowed under subsection (a) for any
12 vehicle if the taxpayer elects to not have this section
13 apply to such vehicle.
14 "(f) TERMINATION.-This section shall not apply to
15 any vehicle acquired after December 31, 2°11." .
17 (I)(A) Section 24(b)(3)(B) IS amended by in-
18 serting "30," after "25D,".
19 (B) Section 25(e)(I)(C)(ii) IS amended by in-
20 serting "30," after "25D,".
21 (C) Section 25B(g)(2) is amended by inserting
22 "30," after "25D,".
23 (D) Section 26(a)(l) IS amended by inserting
24 "30," after "25D,".

63
1 (E) Section 904(i) is amended by striking "and
2 25B" and inserting "25B, 30, and 30D".
3 (F) Section 1400C(d)(2) is amended by striking
4 "and 25D" and inserting "25D, and 30".
5- (2) Paragraph (1) of section 30B(h) is amend-
6 ed to read as follows:
7 "(1) MOTOR VEHICLE.-The term 'motor vehi-
8 cle' means any vehicle which is manufactured pri-
9 marily for use on public streets, roads, and highways
10 (not including a vehicle operated exclusively on a rail
11 or rails) and which has at least 4 wheels.".
12 (3) Section 30C(d)(2)(A) is amended by strik-
13 ing ", 30,".
14 (4)(A) Section 53(d)(1)(B) is amended by strik-
15 mg clause (iii) and redesignating clause (iv) as
16 clause (iii).
17 (B) Subclause (II) of section 53(d)(l)(B)(iii),
18 as so redesignated, is amended by striking "in-
19 creased in the manner provided in clause (iii)".
20 (5) Section 55(c) (3) is amended by striking
21 "30(b)(3),".
22 (6) Section 1016(a)(25) is amended by striking
23 "section 30(d)(1)" and inserting "section 30(e)(1)".
24 (7) Section 6501(m) is amended by striking
25 "section 30(d)(4)" and inserting "section 30(e)(6)".

64
1 (8) The item in the table of sections for subpart
2 B of part IV of subchapter A of chapter 1 is amend-
3 ed to read as follows:
"See. 30. Certain pIng-in eleetrie yehieles.".
5 this section shall apply to vehicles acquired after the date
6 of the enactment of this Act.
7 (d) TRANSITIONAL RULE.-Ill the case of a vehicle
8 acquired after the date of the enactment of this Act and
9 before January 1, 2010, no credit shall be allowed under
10 section 30 of the Internal Revenue Code of 1986, as added
11 by this section, if credit is allowable under section 30D
12 of such Code with respect to such vehicle.
13 (e) APPLICATION OF EGTRRA SUNSET.-The
14 amendment made by subsection (b)(l)(A) shall be subject
15 to title IX of the Economic Growth and Tax Relief Rec-
16 onciliation Act of 2001 in the same manner as the provi-
17 sion of such Act to which such amendment relates.
18 SEC. 1143. CONVERSION KITS.
19 (a) IN GENERAL.-Section 30B (relating to alter-
20 .native motor vehicle credit) is amended by redesignating
21 subsections (i) and (j) as subsections (j) and (k), respec-
22 tively, and by inserting after subsection (h) the following
23 new subsection:
24 "(i) PLUG-IN CONVERSION CREDIT.-

65
1 "(1) IN GENERAL.-For purposes of subsection
2 (a), the plug-in conversion credit determined under
3 this subsection with respect to any motor vehicle
4 which is converted to a qualified plug-in electric
5 drive motor vehicle is 10 percent of so much of the
6 cost of the converting such vehicle as does not ex-
7 ceed $40,000.
8 "(2) QUALIFIED PLUG-IN ELECTRIC DRIVE
9 MOTOR VEHICLE.-For purposes of this subsection,
1° the term 'qualified plug-in electric drive motor vehi-
11 cle' means any new qualified plug-in electric drive
12 motor vehicle (as defined in section 30D, determined
13 without regard to whether such vehicle is made by
14 a manufacturer or whether the original use of such
15 vehicle commences with the taxpayer).
16 "(3) CREDIT ALLOWED IN ADDITION TO OTHER
17 CREDITS.-The credit allowed under this subsection
18 shall be allowed with respect to a motor vehicle not-
19 withstanding whether a credit has been allowed with
20 respect to such motor vehicle under this section
21 (other than this subsection) in any preceding taxable
22 year.
23 "(4) TERMINATION.-This subsection shall not
24 apply to conversions made after December 31,
25 2011.".

66
1 (b) CREDIT TREATED AS PART OF ALTERNATIVE
2 MO'l'OR VEHICLE CREDIT.-Section 30B(a) is amended
3 by striking "and" at the end of paragraph (3), by striking
4 the period at the end of paragraph (4) and inserting ",
5 and", and by adding at the end the following new para-
6 graph:
7 "(5) the plug-in converSIOn credit determined
8 under subsection (i).".
9 (c) No RECAPTURE FOR VEHICLES CONVERTED TO
10 QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR VEHI-
11 CLEs.-Paragraph (8) of section 30B(h) is amended by
12 adding at the end the following: ", except that no benefit
13 shall be recaptured if such property ceases to be eligible
14 for such credit by reason of conversion to a qualified plug-
15 in electric drive motor vehicle.".
16 (d) EFFECTIVE DATE.-The amendments made by
17 this section shall apply to property placed in service after
19 SEC. 1144. TREATMENT OF ALTERNATIVE MOTOR VEHICLE
20 CREDIT AS A PERSONAL CREDIT ALLOWED
21 AGAINST AMT.
22 (a) IN GENERAL.-Paragraph (2) of section 30B(g)
23 is amended to read as follows:

67
6 year.
7 "(B) LIMITA'l'ION BASED ON Al10UNT OF
11 (determined after application of paragraph (1))
18 and sections 23, 25D, 30, and 30D) and
19 section 27 for the taxable year.".
21 (l)(A) Section 24(b)(3)(B), as amended by this
22 Act, is amended by inserting "30B," after "30,".
23 (B) Section 25(e)(1)(C)(ii), as amended by this
24 Act, is amended by inserting "30B," after "30,".

68
1 (C) Section 25B(g)(2), as amended by this Act,
2 is amended by inserting "30B," after "30,".
3 (D) Section 26(a)(1), as amended by this Act,
4 is amended by inserting "30B," after "30,".
5 (E) Section 904(i), as amended by this Act, is
6 amended by inserting "30B," after "30".
7 (F) Section 1400C(d)(2), as amended by this
8 Act, is amended by striking "and 30" and inserting
9 "30, and 30B".
10 (2) Section 30C(d)(2)(A), as amended by this
11 Act, is amended by striking "sections 27 and 30B"
12 and inserting "section 27".
13 (3) Section 55(c)(3) is amended by striking
14 "30B(g)(2),".
17 December 31, 2008.
18 (d) APPLICATION OF EGTRRA SUNSET.-The
19 amendment made by subsection (b)(l)(A) shall be subject
20 to title IX of the Economic Growth and Tax Relief Rec-
21 onciliation Act of 2001 in the same manner as the provi-
22 sion of such Act to which such amendment relates.

69
1 PART VI-PARITY FOR TRANSPORTATION
2 FRINGE BENEFITS
3 SEC. 1151. INCREASED EXCLUSION AMOUNT FOR COM-
4 MUTER TRANSIT BENEFITS AND TRANSIT
5 PASSES.
6 (a) IN GENERAL.-Paragraph (2) of section 132(f)
7 is amended by adding at the end the following flush sen-
8 tence:
9 "In the case of any month beginning on or after the
10 date of the enactment of this sentence and before
11 January 1, 2011, subparagraph (A) shall be applied
12 as if the dollar amount therein were the same as the
13 dollar amount in effect for such month under sub-
14 paragraph (B).".
16 tIns section shall apply to months beginning on or after
17 the date of the enactment of this section.
18 Subtitle C-Tax Incentives for
19 Business
20 PART I-TEMPORARY INVESTMENT INCENTIVES
21 SEC. 1201. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY
22 ACQUIRED DURING 2009.
23 (a) EXTENSION OF SPECIAL ALLOWANCE.-
25 168(k) is amended-

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(A) by striking "January 1, 2010" and in-
serting "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 sec-
tion 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-JAN-
UARY 1, 2009" and inserting "PRE-JANUARY 1,
2010".
(C) Subparagraph (B) of section 168(1)(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-

section
inserting
71
1 (i) by striking "and" at the end of
2 clause (i),
3 (ii) by redesignating clause (ii) as
4 clause (iii), and
5 (iii) by inserting after clause (i) the
6 following new clause:
7 "(ii) 'April 1, 2008' shall be sub-
8 stituted for 'January 1, 2008' in subpara-
9 graph (A)(iii)(I) thereof, and".
10 (B) Subparagraph (A) of
11 6211(b)(4) IS amended by
12 "168(k)(4)," after"53(e),".
13 (b) EXTENSION OF ELECTION TO ACCELERATE THE
14 AMT AND RESEARCH CREDITS IN LIEU OF BONUS DE-
15 PRECIATION.-
16 (1) IN GENERAL.-Section 168(k)(4) (relating
17 to election to accelerate the AMT and research cred-
18 its in lieu of bonus depreciation) is amended-
19 (A) by striking "2009" and inserting
20 "2010"in subparagraph (D)(iii) (as redesig-
21 nated by subsection (a)(3)), and
22 (B) by adding at the end the following new
23 subparagraph:
24 "(H) SPECIAL RULES FOR EXTENSION
25 PROPERTY.-

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"(i) TAXPAYERS PREVIOUSLY ELEC'l'-
ING ACCELERATION.-1n the case of a tax-
payer who made the election under sub-
paragraph (A) for its first taxable year
ending after March 31, 2008-
"(I) the taxpayer may elect not
to have this paragraph apply to exten-
sion property, but
"(II) if the taxpayer does not
make the election under subclause (I),
in applying this paragraph to the tax-
payer a separate bonus depreciation
amount, maximum amount, and max-
imum increase amount shall be com-
puted 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.-1n the case of
a taxpayer who did not make the election
under subparagraph (A) for its first tax-
able year ending after March 31, 2008-
"(I) the taxpayer may elect to
have this paragraph apply to its first

73
1 taxable year ending after December
2 31, 2008, and each subsequent tax-
3 able year, and
4 "(II) if the taxpayer makes the
5 election under subclause (I), this
6 paragraph shall only apply to eligible
7 qualified property which is extension
8 property.
9 "(iii) EXTENSION PROPERTY.-For
10 purposes of this subparagraph, the term
11 'extension property' means property which
12 is eligible qualified property solely by rea-
13 son of the extension of the application of
14 the special allowance under paragraph (1)
15 pursuant to the amendments made by sec-
16 tion 1201(a) of the American Recovery and
17 Reinvestment Tax Act of 2009 (and the
18 application of such extension to this para-
19 graph pursuant to the amendment made
20 by section 1201(b)(1) of such Act).".
21 (2) TECHNICAL AMENDMENT.-Section
22 6211(b)(4)(A) is amended by inserting "168(k)(4),"
23 after "53(e),".
24 (c) EFFECTIVE DATES.-

74
2 graph (2), the amendments made by this section
3 shall apply to property placed in service after De-
4 cember 31, 2008, in taxable years ending after such
5 date.
6 (2) TECHNICAL AMENDMENTS.-The amend-
7 ments made by subsections (a)(3) and (b)(2) shall
8 apply to taxable years ending after March 31, 2008.
9 SEC. 1202. TEMPORARY INCREASE IN LIMITATIONS ON EX-
10 PENSING OF CERTAIN DEPRECIABLE BUSI-
11 NESS ASSETS.
12 (a) IN GENERAL.-Paragraph (7) of section 179(b)
13 is amended-
14 (1) by striking "2008" and inserting "2008, or
15 2009", and
16 (2) by striking "2008" in the heading thereof
17 and inserting "2008, AND 2009".
20 December 31, 2008.
21 PART II-SMALL BUSINESS PROVISIONS
22 SEC. 1211. 5-YEAR CARRYBACK OF OPERATING LOSSES OF
23 SMALL BUSINESSES.
24 (a) IN GENERAL.-Subparagraph (H) of section
25 172(b)(1) is amended to read as follows:

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"(H) CARRYBACK FOR 2008 NET OPER-
ATING LOSSES OF SMALL BUSINESSES.-
"(i) IN GENERAL.-If an eligible small
business elects the application of this sub-
paragraph 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 sub-
clause (I) for '2', and
"(III) subparagraph (F) shall not
apply.
"(ii) APPLICABLE 2008 NET OPER-
ATING LOSS.-For purposes of this sub-
paragraph, the term 'applicable 2008 net
operating loss' means-
"(I) the taxpayer's net operating
loss for any taxable year ending in
2008, or

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"(II) if the taxpayer elects to
have this subclause apply in lieu of
subclause (I), the taxpayer's net oper-
ating loss for any taxable year begin-
ning in 2008.
"(iii) ELECTION.-Any election under
this subparagraph shall be made in such
manner as may be prescribed by the Sec- .
retary, 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 elec-
tion 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 sub-
paragraph, section 448(c) shall be applied
by substituting '$15,000,000' for
'$5,000,000' each place it appears.".

77
1 (b) CONFORMING AM:ENDMENT.-Section 172 is
2 amended by striking subsection (k) and by redesignating
3 subsection (1) as subsection (k).
4 (c) ANTI-ABUSE RULEs.-The Secretary of Treasury
5 or the Secretary's designee shall prescribe such rules as
6 are necessary to prevent the abuse of the purposes of the
7 amendments made by this section, including anti-stuffing
8 rules, anti-churning rules (including rules relating to sale-
9 leasebacks), and rules similar to the rules under section
10 1091 of the Internal Revenue Code of 1986 relating to
11 losses from wash sales.
12 (d) EFFECTIVE DATE.-
13 (1) IN GENERAL.-Except as otherwise pro-
14 vided in this subsection, the amendments made by
15 this section shall apply to net operating losses aris-
16 mg In taxable years ending after December 31,
17 2007.
18 (2) TRANSITIONAL RULE.-In the case of a net
19 operating loss for a taxable year ending before the
20 date of the enactment of this Act-
21 (A) any election made under section
22 172(b)(3) of the Internal Revenue Code of
23 1986 with respect to such loss may (notwith-
24 standing such section) be revoked before the ap-
25 plicable date,

1
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12
13 SEC.
14
78
(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 appli-
cable 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 appli-
cable date.
For purposes of this paragTaph, the term "applica-
ble date" means the date which is 60 days after the
date of the enactment of this Act.
1212. DECREASED REQUIRED ESTIMATED TAX PAY-
MENTS IN 2009 FOR CERTAIN SMALL BUSI-
15 NESSES.
16 Paragraph (1) of section 6654(d) is amended by add-
17 ing at the end the following new subparagraph:
18
19
20
21
22
23
24
"(D) SPECIAL RULE FOR 2009.-
"(i) IN GENERAL.-Notwithstanding
subparagraph (C), in the case of any tax-
able year beginning in 2009, clause (ii) of
subparagraph (B) shall be applied to any
qualified individual by substituting '90 per-
cent' for '100 percent'.

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"(ii) QUALIFIED INDIVIDUAL.-For
purposes of this subparagraph, the term
'qualified individual' means any individual
if-
" (I) the adjusted gross lllcome
shown on the return of such indi-
vidual 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 tax-
able 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 regula-
tions prescribe.
"(iii) INCOME FROM A SMALL BUSI-
NESS.-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

"(14) CREDIT ALLOWED FOR UNEMPLOYED
VETERANS AND DISCONNECTED YOUTH HIRED IN
2009 OR 2010.-
"(A) IN GENERAL.-AllY unemployed vet-
eran or disconnected youth who begins work for
the employer during 2009 or 2010 shall be
80
1 the calendar year ending with or within the
2 preceding taxable year of the individual.
3 "(iv) SEPARATE RETURNS.-In the
4 case of a married individual (within the
5 meaning of section 7703) who files a sepa-
6 rate return for the taxable year for which
7 the amount of the installment is being de-
8 termined, clause (ii) (I) shall be applied by
9 substituting '$250,000' for '$500,000'.
10 "(v) ESTATES AND TRUSTS.-In the
11 case of an estate or trust, adjusted gross
12 income shall be determined as provided in
13 section 67(e).".
14 PART III-INCENTIVES FOR NEW JOBS
15 SEC. 1221. INCENTIVES TO HffiE UNEMPLOYED VETERANS
16 AND DISCONNECTED YOUTH.
17 (a) IN GENERAL.-Subsection (d) of section 51 is
19 graph:
20
21
22
23
24
25

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S.L.C.
81
treated as a member of a targeted group for
purposes of this subpart.
"(B) DEFINITIONS.-For purposes of this
paragTaph-
"(i) UNEMPLOYED VETERAN.-The
term 'unemployed veteran' means any vet-
eran (as defined in paragTaph (3) (B), de-
termined 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 unem-
ployment compensation under State or
Federal law for not less than 4 weeks
during the I-year period ending on
the hiring date.
"(ii) DISCONNECTED YOUTH.-The
term 'disconnected youth' means any indi-
vidual who is certified by the designated
local agency-

82
1 "(I) as having attained age 16
2 but not age 25 on the hiring date,
3 "(II) as not regularly attending
4 any secondmy, technical, or post-see-
S ondary school during the 6-month pe-
6 riod preceding the hiring date,
7 "(III) as not regularly employed
8 during such 6-month period, and
9 "(IV) as not readily employable
10 by reason of lacking a sufficient num-
11 bel' of basic skills.".
13 this section shall apply to individuals who begin work for
14 the employer after December 31,2008.
15 PART IV-RULES RELATING TO DEBT
16 INSTRUMENTS
17 SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF IN-
18 COME ARISING FROM BUSINESS INDEBTED-
19 NESS DISCHARGED BY THE REACQUISITION
20 OF A DEBT INSTRUMENT.
21 (a) IN GENERAL.-Section 108 (relating to income
22 from discharge of indebtedness) is amended by adding at
23 the end the following new subsection:
24 "(i) DEFERRAL AND RATABLE INCLUSION OF IN-
25 COME ARISING FROM BUSINESS INDEBTEDNESS DIS-

curs.
"(2) DEFERRAL OF DEDUCTION FOR ORIGINAL
ISSUE DISCOUNT IN DEBT FOR DEBT EXCHANGES.-
"(A) IN GENERAL.-If, as part of a reac-
quisition 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 origi-
"(A) in the case of a reacquisition occur-
ring in 2009, the fifth taxable year following
the taxable year in which the reacquisition oc-
curs, and
"(B) in the case of a reacquisition occur-
ring in 2010, the fourth taxable year following
the taxable year in which the reacquisition oc-
83
1 CHARGED BY THE REACQUISITION OF A DEBT INSTRU-
2 lVIENT.-
3 "(1) IN GENERAL.-At the election of the tax-
4 payer, income from the discharge of indebtedness in
5 connection with the reacquisition after December 31,
6 2008, and before January 1, 2011, of an applicable
7 debt instrument shall be includible in gross income
8 ratably over the 5-taxable-year period beginning
9 with-
10
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12
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17
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22
23
24
25

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nal 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 tax-
able year in the 5-taxable-year period
in which income from the discharge of
indebtedness attributable to the reac-
quisition of the debt instrument is in-
cludible 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 deduc-
tions disallowed under clause (i) shall be
allowed as a deduction ratably over the 5-
taxable-year period described in clause
(i)(1) .

85
1 If the amount of the original issue discount ac-
2 cluing before such 1st taxable year exceeds the
3 income from the discharge of indebtedness with
4 respect to the applicable debt instrument being
5 reacquired, the deductions shall be disallowed in
6 the order in which the original issue discount is
7 accrued.
8 "(B) DEEMED DEBT FOR DEBT EX-
9 CHANGES.-For purposes of subparagraph (A),
10 if any debt instrument is issued by an issuer
11 and the proceeds of such debt instrument are
12 used directly or indirectly by the issuer to reac-
13 quire an applicable debt instrument of the
14 issuer, the debt instrument so issued shall be
15 treated as issued for the debt instrument being
16 reacquired. If only a portion of the proceeds
17 from a debt instrument are so used, the rules
18 of subparagraph (A) shall apply to the portion
19 of any original issue discount on the newly
20 issued debt instrument which is equal to the
21 portion of the proceeds from such instrument
22 used to reacquire the outstanding instrument.
23 "(3) APPLICABLE DEBT INSTRUMENT.-For
24 purposes of this subsection-

86
1 "(A) APPLICABLE DEBT INSTRUMENT.-
2 The term 'applicable debt instrument' means
3 any debt instrument which was issued by-
4 "(i) a C corporation, or
5 "(ii) any other person III connection
6 'with the conduct of a trade or business by
7 such person.
8 "(B) DEBT INSTRUMENT.-The term 'debt
9 instrument' means a bond, debenture, note, cer-
10 tificate, or any other instrument or contractual
11 arrangement constituting indebtedness (within
12 the meaning of section 1275(a)(1)).
13 "(4) REACQUISITION.-For purposes of this
14 subsection-
15 "(A) IN GENERAL.-The term 'reacquisi-
16 tion' means, with respect to any applicable debt
17 instrument, any acquisition of the debt instru-
18 ment by-
19 "(i) the debtor which issued (or is
20 otherwise the obligor under) the debt in-
21 strument, or
22 "(ii) a related person to such debtor.
23 "(B) ACQUISITIoN.-The term 'acquisi-
24 tion' shall, with respect to any applicable debt
25 instrument, include an acquisition of the debt

87
1 instrument for cash, the exchange of the debt
2 instrument for another debt instrument (includ-
3 ing an exchange resulting from a modification
4 of the debt instrument), the exchange of the
5 debt instrument for corporate stock or a part-
6 nership interest, and the contribution of the
7 debt instrument to capital. Such term shall also
8 include the complete forgiveness of the indebt-
9 edness by the holder of the debt instrument.
10 "(5) OTHER DEFINITIONS AND RULES.-F0r
11 purposes of this subsection-
12 "(A) RELATED PERSON.-The determina-
13 tion of whether a person is related to another
14 person shall be made in the same manner as
15 under subsection (e)(4) .
16 "(B) ELECTION.-
17 "(i) IN GENERAL.-An election under
18 this subsection with respect to anyapplica-
19 ble debt instrument shall be made by in-
20 eluding ,vith the return of tax imposed by
21 chapter 1 for the taxable year in which the
22 reacquisition of the debt instrument occurs
23 a statement which-
24 "(I) clearly identifies such instru-
25 ment, and

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"(II) includes the amount of in-
come 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 part-
nership, the S corporation, or other entity
involved.
"(C) COORDINATION WITH OTHER EXCLU-
SIONS.-If a taxpayer elects to have this sub-
section apply to an applicable debt instrument,
subparagraphs (A), (B), (C), and (D) of sub-
section (a)(l) 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

89
1 taxpayer (including in a title 11 or similar
2 case), the cessation of business by the tax-
3 payer, or similar circumstances, any item
4 of income or deduction which is deferred
5 under this subsection (and has not pre-
6 viously been taken into account) shall be
7 taken into account in the taxable year in
8 which such event occurs (or in the case of
9 a title 11 or similar case, the day before
10 the petition is filed).
11 "(ii) SPECIAL RULE FOR PASS-THRU
12 ENTITIES.-The rule of clause (i) shall
13 also apply in the case of the sale or ex-
14 change or redemption of an interest in a
15 partnership, S corporation, or other pass-
16 thru entity by a partner, shareholder, or
17 other person holding an ownership interest
18 in such entity.
19 "(6) SPECIAL RULE FOR PARTNERSHIPS.-In
20 the case of a partnership, any income deferred under
21 this subsection shall be allocated to the partners in
22 the partnership immediately before the discharge in
23 the manner such amounts would have been included
24 in the distributive shares of such partners under sec-
25 tion 704 if such income were recognized at such

90
1 time. AllY decrease in a partner's share of partner-
2 ship liabilities as a result of such discharge shall not
3 be taken into account for purposes of section 752 at
4 the time of the discharge to the extent it would
5 cause the partner to recognize gain under section
6 731. AllY decrease in partnership liabilities deferred
7 under the preceding sentence shall be taken into ac-
8 count by such partner at the same time, and to the
9 extent remaining in the same amount, as income de-
10 ferred under this subsection is recognized.
11 "(7) SECRETARIAL AUTHORITY.-The Secretary
12 may prescribe such regulations, rules, or other guid-
13 ance as may be necessary or appropriate for pur-
14 poses of applying this subsection, including-
15 "(A) extending the application of the rules
16 of paragraph (5)(D) to other circumstances
17 where appropriate,
18 " (B) requiring reporting of the election
19 (and such other information as the Secretary
20 may require) on returns of tax for subsequent
21 taxable years, and
22 "(C) rules for the application of this sub-
23 section to partnerships, S corporations, and
24 other pass-thru entities, including for the allo-
25 cation of deferred deductions.".

91
2 this section shall apply to discharges in taxable years end-
3 ing after December 31, 2008.
4 SEC. 1232. MODIFICATIONS OF RULES FOR ORIGINAL ISSUE
5 DISCOUNT ON CERTAIN IDGH YIELD OBLIGA·
6 TIONS.
7 (a) SUSPENSION OF SPECIAL RULES.-Section
8 163(e)(5) (relating to special rules for original issue dis-
9 count on certain high yield obligations) is amended by re-
10 designating subparagraph (F) as subparagraph (G) and
11 by inserting after subparagraph (E) the following new
12 subparagraph:
13 "(F) SUSPENSION OF APPLICATION OF
14 PARAGRAPH.-
15 "(i) TEMPORARY SUSPENSION.-This
16 paragraph shall not apply to any applicable
17 high yield discount obligation issued during
18 the period beginning on September 1,
19 2008, and ending on December 31, 2009,
20 in exchange (including an exchange result-
21 ing from a modification of the debt instru-
22 ment) for an obligation which is not an ap-
23 plicable high yield discount obligation and
24 the issuer (or obligor) of which is the same
25 as the issuer (or obligor) of such applicable

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(1) by inserting "(i)" after "regulation", and

93
1 (2) by inserting ", or (ii) permit, on a tem-
2 porary basis, a rate to be used with respect to any
3 debt instrument which is higher than the applicable
4 Federal rate if the Secretary determines that such
5 rate is appropriate in light of distressed conditions
6 in the debt capital markets" before the period at the
7 end.
9 (1) SUSPENSION.-The amendments made by
10 subsection (a) shall apply to obligations issued after
11 August 31, 2008, in taxable years ending after such
12 date.
13 (2) INTEREST RATE AUTHORITY.-The amend-
14 ments made by subsection (b) shall apply to obliga-
15 tions issued after December 31, 2009, in taxable
16 years ending after such date.
17 PART V-QUALIFIED SMALL BUSINESS STOCK
18 SEC. 1241. SPECIAL RULES APPLICABLE TO QUALIFIED
19 SMALL BUSINESS STOCK FOR 2009 AND 2010.
20 (a) IN GENERAL.-Section 1202(a) is amended by
21 adding at the end the following new paragraph:
22 "(3) SPECIAL RULES FOR 2009 AND 2010.-In
23 the case of qualified small business stock acquired
24 after the date of the enactment of this paragraph
25 and before January 1, 2011-

94
1 "(A) paragraph (1) shall be applied by
2 substituting '75 percent' for '50 percent', and
3 "(B) paragraph (2) shall not apply.".
5 this section shall apply to stock acquired after the date
7 PART VI-S CORPORATIONS
8 SEC. 1251. TEMPORARY REDUCTION IN RECOGNITION PE-
9 RIOD FOR BUILT-IN GAINS TAX.
10 (a) IN GENERAL.-Paragraph (7) of section 1374(d)
11 (relating to definitions and special rules) is amended to
12 read as follows:
13 "(7) RECOGNITION PERIOD.-
14 "(A) IN GENERAL.-The term 'recognition
15 period' means the 10-year period beginning
16 with the 1st day of the 1st taxable year for
17 which the corporation was an S corporation.
18 "(B) SPECIAL RULE FOR 2009 AND 2010.-
19 In the case of any taxable year beginning in
20 2009 or 2010, no tax shall be imposed on the
21 net recognized built-in gain of an S corporation
22 if the 7th taxable year in the recognition period
23 preceded such ta.xable year. The preceding sen-
24 tence shall be applied separately with respect to
25 any asset to which paragraph (8) applies.

95
1 "(C) SPECIAL RULE FOR DISTRIBUTIONS
2 TO SHAREHOLDERS.-For purposes of applying
3 tIns section to any amount includible in income
4 by reason of distributions to shareholders pur-
5 suant to section 593(e)-
6 "(i) subparagraph (A) shall be applied
7 without regard to the phrase '10-year', and
8 "(ii) subparagraph (B) shall not
9 apply.".
12 December 31, 2008.
13 PART VII-RULES RELATING TO OWNERSIDP
14 C~GES
15 SEC. 1261. CLARIFICATION OF REGULATIONS RELATED TO
16 LIMITATIONS ON CERTAIN BUILT·IN LOSSES
17 FOLLOWING AN OWNERSHIP CHANGE.
18 (a) FINDINGs.-Congress finds as follows:
19 (1) The delegation of authority to the Secretary
20 of the Treasury under section 382(m) of the Inter-
21 nal Revenue Code of 1986 does not authorize the
22 Secretary to provide exemptions or special rules that
23 are restricted to particular industries or classes of
24 taxpayers.

96
1 (2) Internal Revenue Service Notice 2008-83 is
2 inconsistent with the congressional intent in enact-
3 ing such section 382(m).
4 (3) The legal authority to prescribe Internal
5 Revenue Service Notice 2008-83 is doubtful.
6 (4) However, as taxpayers should generally be
7 able to rely on guidance issued by the Secretary of
8 the Treasury legislation is necessary to clarify the
9 force and effect of Internal Revenue Service Notice
10 2008-83 and restore the proper application under
11 the Internal Revenue Code of 1986 of the limitation
12 on built-in losses following an ownership change of
13 a bank.
14 (b) DETERMINATION OF FORCE AND EFFECT OF IN-
15 TERNAL REVENUE SERVICE NOTICE 2008-83 EXEMPT-
16 ING BANKS FROM LIMITATION ON CERTAIN BUILT-IN
17 LOSSES FOLLOWING OWNERSHIP CHANGE.-
18 (1) IN GENERAL.-Internal Revenue Service
19 Notice 2008-83-
20 (A) shall be deemed to have the force and
21 effect of law with respect to any ownership
22 change (as defined in section 382(g) of the In-
23 ternal Revenue Code of 1986) occurrmg on or
24 before January 16, 2009, and

97
1 (B) shall have no force or effect with re-
2 spect to any ownership change after such date.
3 (2) BINDING CONTRACTS.-Notwithstanding
4 paragraph (1), Internal Revenue Service Notice
5 2008-83 shall have the force and effect of law with
6 respect to any ownership change (as so defined)
7 which occurs after January 16, 2009, if such
8 change-
9 (A) is pursuant to a written binding con-
10 tract entered into on or before such date, or
11 (B) is pursuant to a written agreement en-
12 tered into on or before such date and such
13 agreement was described on or before such date
14 in a public announcement or in a filing with the
15 Securities and Exchange Commission required
16 by reason of such ownership change.
17 SEC. 1262. TREATMENT OF CERTAIN OWNERSHIP CHANGES
18 FOR PURPOSES OF LIMITATIONS ON NET OP-
19 ERATING LOSS CARRYFORWARDS AND CER-
20 TAIN BUILT-IN LOSSES.
21 (a) IN GENERAL.-Section 382 is amended by adding
22 at the end the following new subsection:
23 "(n) SPECIAL RULE FOR CERTAIN OWNERSHIP
24 CHANGES.-

98
1 "(1) IN GENERAL.-The limitation contained in
2 subsection (a) shall not apply in the case of an own-
3 ership change which is pursuant to a restructuring
4 plan of a taxpayer which-
5 "(A) is required under a loan agreement or
6 a cOlnmitment for a line of credit entered into
7 with the Department of the Treasury under the
8 Emergency Economic Stabilization Act of 2008,
9 and
10 "(B) is intended to result in a rationaliza-
11 tion of the costs, capitalization, and capacity
12 with respect to the manufacturing workforce of,
13 and suppliers to, the taxpayer and its subsidi-
14 arIes.
15 "(2) SUBSEQUENT ACQUISITIONS.-Paragraph
16 (1) shall not apply in the case of any subsequent
17 ownership change unless such ownership change is
18 described in such paragraph.
19 "(3) LIMITATION BASED ON CONTROL IN COR-
20 PORATION.-
21 "(A) IN GENERAL.-Paragraph (1) shall
22 not apply in the case of any ownership change
23 if, immediately after such ownership change,
24 any person (other than a voluntary employees'
25 beneficiary association under section 501(c)(9))

99
1 owns stock of the new loss corporation pos-
2 sessing 50 percent or more of the total com-
3 bined voting power of all classes of stock ellti-
4 tIed to vote, or of the total value of the stock
5 of such corporation.
6 "(B) TREATMENT OF RELA'l'ED PER-
7 SONS.-
8 "(i) IN GENERAL.-Related persons
9 shall be treated as a single person for pur-
10 poses of this paragraph.
11 "(ii) RELATED PERSONS.-For pur-
12 poses of clause (i), a person shall be treat-
13 ed as related to another person if-
14 "(I) such person bears a relation-
15 ship to such other person described in
16 section 267(b) or 707(b), or
17 "(II) such persons are members
18 of a group of persons acting in con-
19 cert.".
21 this section shall apply to ownership changes after the
22 date of the enactment of this Act.

100
1 Subtitle D-Manufacturing
2 Recovery Provisions
3 SEC. 1301. TEMPORARY EXPANSION OF AVAILABILITY OF
4 INDUSTRIAL DEVELOPMENT BONDS TO FA-
5 CILITIES MANUFACTURING INTANGffiLE
6 PROPERTY.
7 (a) IN GENERAL.-Subparagraph (C) of section
8 144(a)(12) is amended-
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(1) by striking "For purposes of this para-
graph, 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 IN-
CLUDED.-Such term includes facilities
which are directly related and ancillary to
a manufacturing facility (determined with-
out regard to this clause) if-
"(1) such facilities are located on
the same site as the manufacturing
facility, and
"(II) not more than 25 percent
of the net proceeds of the issue are
used to provide such facilities.

101
1 "(iii) SPECIAL RULES FOR BONDS
2 ISSUED IN 2009 AND 2010.-In the case of
3 any issue made after the date of enactment
4 of this clause and before January 1, 2011,
5 clause (ii) shall not apply and the net pro-
6 ceeds from a bond shall be considered to
7 be used to provide a manufacturing facility
8 if such proceeds are used to provide-
9 "(I) a facility which is used III
10 the creation or production of intan-
11 gible property which is described III
12 section 197(d)(1)(C)(iii), or
13 "(II) a facility which is function-
14 ally related and subordinate to a man-
15 ufacturing facility (determined with-
16 out regard to this subclause) if such
17 facility is located on the same site as
18 the manufacturing facility.".
20 this section shall apply to obligations issued after the date
22 SEC. 1302. CREDIT FOR INVESTMENT IN ADVANCED EN-
23 ERGY FACILITIES.
24 (a) IN GENERAL.-Section 46 (relating to amount of
25 credit) is amended by striking "and" at the end of para-

102
1 gTaph (3), by striking the period at the end of paragTaph
2 (4), and by adding at the end the following new para-
3 graph:
4 "(5) the qualifying advanced energy project
5 credit.".
6 (b) A1VIOUNT OF CREDIT.-Subpart E of part IV of
7 subchapter A of chapter 1 (relating to rules for computing
8 investment credit) is amended by inserting after section
9 48B the following new section:
10 "SEC. 48C. QUALIFYING ADVANCED ENERGY PROJECT
11 CREDIT.
12 "(a) IN GENERAL.-For purposes of section 46, the
13 qualifying advanced energy project credit for any taxable
14 year is an amount equal to 30 percent of the qualified
15 investment for such taxable year with respect to any quali-
16 fying advanced energy project of the taxpayer.
17 "(b) QUALIFIED I:tTVESTMENT.-
18 "(1) IN GENERAL.-For purposes of subsection
19 (a), the qualified investment for any taxable year is
20 the basis of eligible property placed in service by the
21 taxpayer during such taxable year which is part of
22 a qualifying advanced energy project.
23 "(2) CERTAIN QUALIFIED PROGRESS EXPENDI-
24 TURES RULES lVIADE APPLICABLE.-Rules similar to
25 the rules of subsections (c)(4) and (d) of section 46

103
1 (as in effect on the day before the enactment of the
2 Revenue Reconciliation Act of 1990) shall apply for
3 purposes of this section.
4 "(3) LIlVIITATION.-The amount which is treat-
5 ed for all taxable years with respect to any quali-
6 fying advanced energy project shall not exceed the
7 amount designated by the Secretary as eligible for
8 the credit under this section.
9 "(c) DEFINITIONS.-
10 "(1) QUALIFYING ADVANCED ENERGY
11 PROJECT.-
12 "(A) IN GENERAL.-The term 'qualifying
13 advanced energy project' means a project-
14 "(i) which re-equips, expands, or es-
15 tablishes a manufacturing facility for the
16 production of-
17 "(I) property designed to be used
18 to produce energy from the sun, wind,
19 geothermal deposits (within the mean-
20 ing of section 613(e) (2)), or other re-
21 newable resources,
22 "(II) fuel cells, microturbines, or
23 an energy storage system for use with
24 electric or hybrid-electric motor vehi-
25 cles,

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"(III) electric grids to support
the transmission of intermittent
sources of renewable energy, including
storage of such energy,
"(IV) property designed to cap-
ture and sequester carbon dioxide
emISSIOns,
"(V) property designed to refine
or blend renewable fuels or to produce
energy conservation technologies (in-
cluding energy-conservmg lighting
technologies and smart grid tech-
nologies) ,
" (VI) new qualified plug-in elec-
tric drive motor vehicles (as defined
by section 30D), qualified plug-in
electric vehicles (as defined by section
30(d)), or components which are de-
signed specifically for use with such
vehicles, including electric motors,
generators, and power control units,
or
"(VII) other advanced energy
property designed to reduce green-

105
1 house gas emissions as may be deter-
2 mined by the Secretary, and
3 "(ii) any portion of the qualified 1n-
4 vestment of which is certified by the See-
S retary under subsection (d) as eligible for
6 a credit under this section.
7 "(B) EXCEPTION.-Such term shall not in-
8 elude any portion of a project for the produc-
9 tion of any property which is used in the refin-
10 ing or blending of any transportation fuel
11 (other than renewable fuels).
12 "(2) ELIGIBLE PROPERTY.-The term 'eligible
13 property' means any property-
14 "(A) which is necessary for the production
15 of property described in paragraph (l)(A)(i),
16 "(B) which is-
17 "(i) tangible personal property, or
18 "(ii) other tangible property (not lll-
19 eluding a building or its structural compo-
20 nents), but only if such property is used as
21 an integral part of the qualified investment
22 credit facility, and
23 "(C) with respect to which depreciation (or
24 amortization in lieu of depreciation) is allow-
25 able.

106
1 "(d) QUALIFYING ADVANCED ENERGY PROJECT
2 PROGRAlVI:.-
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"(1) ESTABLISHMENT.-
"(A) IN GENERAL.-Not later than 180
days after the date of enactment of tIns section,
the Secretary, in consultation with the Sec-
retary of Energy, shall establish a qualifying
advanced energy project program to consider
and award certifications for qualified invest-
ments 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 pro-
gram shall not exceed $2,300,000,000.
"(2) CERTIFICATION.-
"(A) APPLICATION PERIOD.-Each appli-
cant for certification under this paragraph shall
submit an application containing such informa-
tion 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 CER-
TIFICATION.-Each applicant for certification
shall have 1 year from the date of acceptance
by the Secretary of the application during

107
1 which to provide to the Secretary evidence that
2 the requirements of the certification have been
3 met.
4 "(C) PERIOD OF ISSUANCE.-An applicant
5 which receives a certification shall have 3 years
6 from the date of issuance of the certification in
7 order to place the project in service and if such
8 project is not placed in service by that time pe-
9 riod, then the certification shall no longer be
10 valid.
11 "(3) SELECTION CRITERIA.-In determining
12 which qualifying advanced energy projects to certify
13 under this section, the Secretary-
14 "(A) shall take into consideration only
15 those projects where there is a reasonable ex-
16 pectation of commercial viability, and
17 "(B) shall take into consideration which
18 projects-
19 "(i) will provide the greatest domestic
20 job creation (both direct and indirect) dur-
21 ing the credit period,
22 "(ii) will provide the greatest net im-
23 pact in avoiding or reducing air pollutants
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"(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 green-
house 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 sec-
tion 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 pursu-
ant to paragraph (2)(B) because the
project subject to the certification has been

109
1 delayed as a result of third party opposi-
2 tion or litigation to the proposed project.
3 "(C) REALLOCATION.-If the Secretmy de-
4 termines that credits under this section are
5 available for reallocation pursuant to the re-
6 quirements set forth in paragraph (2), the Sec-
7 retmy is authorized to conduct an additional
8 program for applications for certification.
9 "(5) DISCLOSURE OF ALLOCATIONS.-The Sec-
10 retary shall, upon making a certification under this
11 subsection, publicly disclose the identity of the appli-
12 cant and the amount of the credit with respect to
13 such applicant.
14 "(e) DENIAL OF DOUBLE BENEFIT.-A credit shall
15 not be allowed under this section for any qualified invest-
16 ment for which a credit is allowed under section 48, 48A,
17 or 48B.".
18 (c) CONFORMING AMENDMENTS.-
19 (1) Section 49(a)(1)(C) is amended by striking
20 "and" at the end of clause (iii), by striking the pe-
21 riod at the end of clause (iv) and inserting ", and",
22 and by adding after clause (iv) the following new
23 clause:

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1 "(v) the basis of any property which
2 IS part of a qualifying advanced energy
3 project under section 48C.".
4 (2) The table of sections for subpart E of part
5 IV of subchapter A of chapter 1 is amended by in-
6 seTting after the item relating to section 48B the fol-
7 lowing new item:
"48C. Qualifying advaneed energ..y projeet credit.".
9 this section shall apply to periods after the date of the
10 enactment of this Act, under rules similar to the rules of
11 section 48(m) of the Internal Revenue Code of 1986 (as
12 in effect on the day before the date of the enactment of
13 the Revenue Reconciliation Act of 1990).
14 Subtitle E-Economic Recovery
15 Tools
16 SEC. 1401. RECOVERY ZONE BONDS.
17 (a) IN GENERAL.-Subchapter Y of chapter 1 IS
18 amended by adding at the end the following new part:
19 "PART III-RECOVERY ZONE BONDS
"See. 1400D-I. Alloeation of reeovery zone bonds.
"See. 1400D-2. Reeovery zone economic development bonds.
"See. 1400D-3. Reeovery zone facility bonds.
20 "SEC. 1400U-1. ALLOCATION OF RECOVERY ZONE BONDS.
21 "(a) ALLOCATIONS.-
22 "(1) IN GENERAL.-

111
1 "(A) GENERAL ALLOCATION.-The Sec-
2 retary shall allocate the national recovery zone
3 economic development bond limitation and the
4 national recovery zone facility bond limitation
5 among the States in the proportion that each
6 such State's 2008 State employment decline
7 bears to the aggregate of the 2008 State em-
8 ployment declines for all of the States.
9 "(B) MINIMUM ALLOCATION.-The Sec-
10 retary shall adjust the allocations under sub-
11 paragraph (A) for any calendar year for each
12 State to the extent necessary to ensure that no
13 State receives less than 0.9 percent of the na-
14 tional recovery zone economic development bond
15 limitation and 0.9 percent of the national recov-
16 ery zone facility bond limitation.
17 "(2) 2008 STATE EMPLOYMENT DECLINE.-For
18 purposes of this subsection, the term '2008 State
19 employment decline' means, with respect to any
20 State, the excess (if any) of-
21 "(A) the number of individuals employed
22 III such State determined for December 2007,
23 over
24 "(B) the number of individuals employed
25 in such State determined for December 2008.

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"(3) ALLOCATIONS BY STATES.-
"(A) IN GENERAL.-Each State with re-
spect 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 coun-
ty'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 pur-
poses of subparagraph (A), the term 'large mu-
nicipality' means a municipality with a popu-
lation of more than 100,000.
"(C) DETERMINATION OF LOCAL EMPLOY-
MENT DECLINES.-For purposes of this para-
graph, the employment decline of any munici-
pality or county shall be determined in the
same manner as determining the State employ-
ment decline under paragraph (2), except that
in the case of a municipality any portion of
which is in a county, such portion shall be

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"(3) any area for which a designation as an em-
powerment zone or renewal community is in effect.
1 treated as part of such municipality and not
2 part of such county.
3 "(4) NATIONAL LIMITATIONS.-
4 "(A) RECOVERY ZONE ECONOMIC DEVEL-
5 OPMENT BONDs.-There is a national recovery
6 zone economic development bond limitation of
7 $10,000,000,000.
8 "(B) RECOVERY ZONE FACILITY BONDS.-
9 There is a national recovery zone facility bond
10 limitation of $15,000,000,000.
11 "(b) RECOVERY ZONE.-For purposes of this part,
12 the term 'recovery zone' means-
13 "(1) any area designated by the issuer as hav-
14 ing significant poverty, unemployment, rate of home
15 foreclosures, or general distress,
16 "(2) any area designated by the issuer as eco-
17 nomically distressed by reason of the closure or re-
18 alignment of a military installation pursuant to the
19 Defense Base Closure and Realignment Act of 1990,
20 and
21
22

114
1 "SEC. 1400U-2. RECOVERY ZONE ECONOMIC DEVELOPMENT
2 BONDS.
3 "(a) IN GENERAL.-In the case of a recovery zone
4 economic development bond-
S "(1) such bond shall be treated as a qualified
6 bond for purposes of section 6431, and
7 "(2) subsection (b) of such section shall be ap-
8 plied by substituting '45 percent' for '35 percent'.
9 "(b) RECOVERY ZONE ECONOMIC DEVELOPMENT
10 BOND.-
11 "(1) IN GENERAL.-For purposes of this sec-
12 tion, the term 'recovery zone economic development
13 bond' means any build America bond (as defined in
14 section 54AA(d)) issued before January 1, 2011, as
15 part of issue if-
16 "(A) 100 percent of the excess of-
17 "(i) the available project proceeds (as
18 defined in section 54A) of such issue, over
19 "(ii) the amounts in a reasonably re-
20 quired reserve (within the meaning of sec-
21 tion 150(a)(3)) with respect to such issue,
22 are to be used for one or more qualified eco-
23 nomic development purposes, and
24 "(B) the issuer designates such bond for

115
1 "(2) LnVIITA'l'ION ON AMOUNT OF BONDS DES-
2 IGNATED.-The maximum aggregate face amount of
3 bonds which may be designated by any issuer under
4 paragraph (1) shall not exceed the amount of the re-
5 covel",Y zone economic development bond limitation
6 allocated to such issuer under section 1400U-1.
7 "(c) QUALIFIED ECONOMIC DEVELOPMENT PUR-
8 pOSE.-For purposes of this section, the term 'qualified
9 economic development purpose' means expenditures for
10 purposes of promoting development or other economic ac-
11 tivity in a recovel",Y zone, including-
12 "(1) capital expenditures paid or incurred with
13 respect to property located in such zone,
14 "(2) expenditures for public infrastructure and
15 construction of public facilities, and
16 "(3) expenditures for job training and edu-
17 cational programs.
18 "SEC. 1400U-3. RECOVERY ZONE FACILITY BONDS.
19 "(a) IN GENERAL.-For purposes of part IV of sub-
20 chapter B (relating to tax exemption requirements for
21 State and local bonds), the term 'exempt facility bond' in-
22 cludes any recovel",Y zone facility bond.
23 "(b) RECOVERY ZONE FACILITY BOND.-

116
2 tion, the term 'recovery zone facility bond' means
3 any bond issued as part of an issue if-
4 "(A) 95 percent or more of the net pro-
S ceeds (as defined in section 150(a)(3)) of such
6 issue are to be used for recovery zone property,
7 "(B) such bond is issued before January 1,
8 2011, and
9 "(C) the Issuer designates such bond for
11 "(2) LIMITATION ON AMOUNT OF BONDS DES-
13 bonds which may be designated by any issuer under
14 paragraph (1) shall not exceed the amount of recov-
15 ery zone facility bond limitation allocated to such
16 issuer under section 1400U-1.
17 "(c) RECOVERY ZONE PROPERTY.-For purposes of
18 this section-
19 "(1) IN GENERAL.-The term 'recovery zone
20 property' means any property to which section 168
21 applies (or would apply but for section 179) if-
22 "(A) such property was constructed, recon-
23 structed, renovated, or acquired by purchase (as
24 defined in section 179(d)(2)) by the taxpayer

117
1 after the date on which the designation of the
2 recovery zone took effect,
3 "(B) the original use of which in the recov-
4 ery zone commences with the taxpayer, and
5 "(C) substantially all of the use of which
6 is in the recovery zone and is in the active con-
7 duct of a qualified business by the taxpayer in
8 such zone.
9 "(2) QUALIFIED BUSINESS.-The term 'quali-
10 fied business' means any trade or business except
11 that-
12 "(A) the rental to others of real property
13 located in a recovery zone shall be treated as a
14 qualified business only if the property is not
15 residential rental property (as defined in section
16 168(e)(2)), and
17 "(B) such term shall not include any trade
18 or business consisting of the operation of any
19 facility described in section 144(c)(6)(B).
20 "(3) SPECIAL RULES FOR SUBSTANTIAL REN-
21 OVATIONS AND SALE-LEASEBACK.-Rules similar to
22 the rules of subsections (a)(2) and (b) of section
23 1397D shall apply for purposes of this subsection.
24 "(d) NONAPPLICATION OF CERTAIN RULES.-Sec-
25 tions 146 (relating to volume cap) and 147(d) (relating

118
1 to acquisition of existing property not permitted) shall not
2 apply to any recovery zone facility bond.".
3 (b) CLERICAL AMENDMENT.-The table of parts for
4 subchapter Y of chapter 1 of such Code is amended by
5 adding at the end the following new item:
"PART III. RECOVERY ZONE BONDS.".
9 SEC. 1402. TRffiAL ECONOMIC DEVELOPMENT BONDS.
10 (a) IN GENERAL.-Section 7871 is amended by add-
11 ing at the end the following new subsection:
12 "(f) TRIBAL ECONOMIC DEVELOPMENT BONDS.-
13 "(1) ALLOCATION OF LIMITATION.-
14 "(A) IN GENERAL.-The Secretary shall
15 allocate the national tribal economic develop-
16 ment bond limitation among the Indian tribal
17 governments in such manner as the SecretaIy,
18 in consultation with the Secretary of the Inte-
19 rior, determines appropriate.
20 "(B) NATIONAL LIMITATION.-There IS a
21 national tribal economic development bond limi-
22 tation of $2,000,000,000.
23 "(2) BONDS TREATED AS EXEMPT FROM
24 TAX.-In the case of a tribal economic development
25 bond-

119
1 "(A) notwithstanding subsection (c), such
2 bond shall be treated for purposes of this title
3 in the same manner as if such bond were issued
4 by a State,
5 " (B) the Indian tribal government issuing
6 such bond and any instrumentality of such In-
7 dian tribal government shall be treated as a
8 State for purposes of section 141, and
9 "(C) section 146 shall not apply.
10 "(3) TRIBAL ECONOMIC DEVELOPMENT
11 BOND.-
13 section, the term 'tribal economic development
14 bond' means any bond issued by an Indian trib-
15 al government-
16 "(i) the interest on which would be ex-
17 empt from tax under section 103 if issued
18 by a State or local government, and
19 "(ii) which is designated by the In-
20 dian tribal government as a tribal eco-
21 nomic development bond for purposes of
22 tIllS subsection.
23 "(B) EXCEPTIONS.-Such term shall not
24 include any bond issued as part of an issue if

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1 any portion of the proceeds of such Issue are
2 used to finance--
3 "(i) any portion of a building in which
4 class II or class III gaming (as defined in
5 section 4 of the Indian Gaming Regulatory
6 Act) is conducted or housed or any other
7 property actually used in the conduct of
8 such ganung, or
9 "(ii) any facility located outside the
10 Indian reservation (as defined in section
11 168(j)(6)).
12 "(C) LIMITATION ON AMOUNT OF BONDS
13 DESIGNATED.-The maximum aggregate face
14 amount of bonds which may be designated by
15 any Indian tribal government under subpara-
16 graph (A) shall not exceed the amount of na-
17 tional tribal economic development bond limita-
18 tion allocated to such government under para-
19 graph (1).".
20 (b) STUDY.-The Secretary of the Treasury, or the
21 Secretary's delegate, shall conduct a study of the effects
22 of the amendment made by subsection (a). Not later than
23 1 year after the date of the enactment of this Act, the
24 Secretary of the Treasury, or the Secretary's delegate,
25 shall report to Congress on the results of the study con-

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1 ducted under this paragTaph, including the Secretary's
2 recommendations regarding such amendment.
3 (c) EFFECTIVE DATE.-The amendment made by
4 subsection (a) shall apply to obligations issued after the
6 SEC. 1403. INCREASE IN NEW MARKETS TAX CREDIT.
7 (a) IN GENERAL.-Section 45D(f)(1) is amended-
8 (1) by striking "and" at the end of subpara-
9 graph (C),
10 (2) by striking ", 2007, 2008, and 2009." in
11 subparagraph (D), and inserting "and 2007,", and
12 (3) by adding at the end the following new sub-
13 paragraphs:
14 "(E) $5,000,000,000 for 2008, and
15 "(F) $5,000,000,000 for 2009.".
16 (b) SPECIAL RULE FOR ALLOCATION OF INCREASED
17 2008 LIMITATION.-The amount of the increase in the
18 new markets tax credit limitation for calendar year 2008
19 by reason of the amendments made by subsection (a) shall
20 be allocated in accordance with section 45D(f)(2) of the
21 Internal Revenue Code of 1986 to qualified community de-
22 velopment entities (as defined in section 45D(c) of such
23 Code) which-
24 (1) submitted an allocation application with re-
25 spect to calendar year 2008, and

122
1 (2) (A) did not receive an allocation for such cal-
2 endar year, or
3 (B) received an allocation for such calendar
4 year in an amount less than the amount requested
5 in the allocation application.
6 SEC. 1404. COORDINATION OF LOW-INCOME HOUSING
7 CREDIT AND LOW-INCOME HOUSING GRANTS.
8 Subsection (i) of section 42 is amended by adding at
9 the end the following new paragraph:
10 "(9) COORDINATION WITH LOW-INCOME HOUS-
11 ING GRANTS.-
12 "(A) REDUCTION IN STATE HOUSING
13 CREDIT CEILING FOR LOW-INCOME HOUSING
14 GRANTS RECEIVED IN 2009.-For purposes of
15 this section, the amounts described in clauses
16 (i) through (iv) of subsection (h)(3)(C) with re-
17 spect to any State for 2009 shall each be re-
18 duced by so much of such amount as is taken
19 into account in determining the amount of any
20 grant to such State under section 1602 of the
21 American Recovery and Reinvestment Ta...x Act
22 of 2009.
23 "(B) SPECIAL RULE FOR BASIS.-Basis of
24 a qualified low-income building shall not be re-

123
1 duced by the amount of any grant described in
2 subparagraph (A).".
3 Subtitle F-Infrastructure
4 Financing Tools
5 PART I-IMPROVED MARKETABll..ITY FOR TAX-
6 EXEMPT BONDS
7 SEC. 1501. DE MINIMIS SAFE HARBOR EXCEPTION FOR TAX-
2010.
graph (2)(B).
ISSUED DURING 2009 OR 2010.-
"(7) DE MINIMIS EXCEPTION FOR BONDS
"(A) IN GENERAL.-In applying paragraph
(2)(A) , there shall not be taken into account
tax-exempt obligations issued during 2009 or
"(B) LIMITATION.-The amount of tax-ex-
empt obligations not taken into account by rea-
son of subparagraph (A) shall not exceed 2 per-
cent of the amount determined under para-
"(C) REFUNDINGS.-For purposes of this
paragraph, a refunding bond (whether a current
8 EXEMPT INTEREST EXPENSE OF FINANCIAL
9 INSTITUTIONS.
10 (a) IN GENERAL.-Subsection (b) of section 265 is
12 graph:
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"(G) SPECIAL· RULES FOR OBLIGATIONS
ISSUED DURING 2009 AND 2010.-
"(i) INCREASE IN LIMITATION.-In
the case of obligations issued during 2009
1 or advance refunding) shall be treated as issued
2 on the date of the issuance of the refunded
3 bond (or in the case of a series of refundings,
4 the original bond).".
5 (b) TREATMENT AS FINA1~CIAL INSTITUTION PREF-
6 ERENCE ITEM.-Clause (iv) of section 291(e)(1)(B) is
7 amended by adding at the end the following: "That por-
8 tion of any obligation not taken into account under para-
9 graph (2)(A) of section 265(b) by reason of paragraph (7)
10 of such section shall be treated for purposes of this section
11 as having been acquired on August 7, 1986.".
13 this section shall apply to obligations issued after Decem-
14 bel' 31, 2008.
15 SEC. 1502. MODIFICATION OF SMALL ISSUER EXCEPTION
16 TO TAX-EXEMPT INTEREST EXPENSE ALLOCA-
17 TION RULES FOR FINANCIAL INSTITUTIONS.
18 (a) IN GENERAL.-Paragraph (3) of section 265(b)
19 (relating to exception for certain tax-exempt obligations)
20 is amended by adding at the end the following new sub-
21 paragraph:
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or 2010, subparagTaphs (C)(i), (D)(i), and
(D)(iii)(II) shall each be applied by sub-
stituting '$30,000,000' for '$10,000,000'.
"(ii) QUALIFIED 501(C)(3) BONDS
TREATED AS ISSUED BY EXEMPT ORGANI-
ZATION.-1n the case of a qualified
501(c)(3) bond (as defined in section 145)
issued during 2009 or 2010, this para-
graph 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.-1n the case of a qualified fi-
nancIng 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
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126
1 qualified borrower with respect to
2 which such portion relates).
3 "(iv) QUALIFIED FINANCING ISSUE.-
4 For purposes of this subparagraph, the
5 term 'qualified financing issue' means any
6 composite, pooled, or other conduit financ-
7 ing issue the proceeds of which are used
8 directly or indirectly to make or finance
9 loans to 1 or more ultimate borrowers each
10 of whom is a qualified borrower.
11 "(v) QUALIFIED PORTION.-For pur-
12 poses of this subparagraph, the term
13 'qualified portion' means that portion of
14 the proceeds which are used with respect
15 to each qualified borrower under the issue.
16 "(vi) QUALIFIED BORROWER.-For
17 purposes of this subparagraph, the term
18 'qualified borrower' means a borrower
19 which is a State or political subdivision
20 thereof or an organization described in sec-
21 tion 501(c)(3) and exempt from taxation
22 under section 501(a).".
25 bel' 31, 2008.

127
1 SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE
2 MINIMUM TAX LIMITATIONS ON TAX-EXEMPT
3 BONDS.
4 (a) INTEREST ON PRIVATE ACTIVITY BONDS ISSUED
5 DURING 2009 AND 2010 No'}' TREATED AS TAX PREF-
6 ERENCE ITElVI.-Subparagraph (C) of section 57(a)(5) is
7 amended by adding at the end a new clause:
8 "(vi) EXCEPTION FOR BONDS ISSUED
9 IN 2009 AND 2010.-
10 "(I) IN GENERAL.-For purposes
11 of clause (i), the term 'private activity
12 bond' shall not include any bond
13 issued after December 31, 2008, and
14 before January 1, 2011.
15 "(II) TREATMENT OF REFUND-
16 ING BONDS.-For purposes of sub-
17 clause (I), a refunding bond (whether
18 a current or advance refunding) shall
19 be treated as issued on the date of the
20 issuance of the refunded bond (or in
21 the case of a series of refundings, the
22 original bond).
23 "(III) EXCEPTION FOR CERTAIN
24 REFUNDING BONDS.-Subclause (II)
25 shall not apply to any refunding bond
26 which is issued to refund any bond

128
1 which was issued after December 31,
2 2003, and before January 1, 2009.".
3 (b) No ADJUSTMENT TO ADJUSTED CURRENT
4 EARNINGS FOR INTEREST ON TAX-EXEMPT BONDS
5 ISSUED DURING 2009 AND 2010.-Subparagyaph (B) of
6 section 56(g)(4) is amended by adding at the end the fol-
7 Imving new clause:
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
"(iv) TAX EXEMPT INTEREST ON
BONDS ISSUED IN 2009 AND 2010.-
"(I) IN GENERAL.-Clause (i)
shall not apply in the case of any in-
terest on a bond issued after Decem-
ber 31, 2008, and before January 1,
2011.
"(II) TREATMENT OF REFUND-
ING BONDS.-For purposes of sub-
clause (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

129
1 which is issued to refund any bond
2 which was issued after December 31,
3 2003, and before January 1, 2009.".
6 bel' 31, 2008.
7 SEC. 1504. MODIFICATION TO HIGH SPEED INTERCITY RAIL
8 FACILITY BONDS.
9 (a) IN GENERAL.-Paragraph (1) of section 142(i)
lOis amended by striking "operate at speeds in excess of"
11 and inserting "be capable of attaining a maximum speed
12 in excess of".
16 PART II-DELAY IN APPLICATION OF WITH-
17 HOLDING TAX ON GOVERNMENT CONTRAC-
18 TORS
19 SEC. 1511. DELAY IN APPLICATION OF WITHHOLDING TAX
20 ON GOVERNMENT CONTRACTORS.
21 Subsection (b) of section 511 of the Tax Increase
22 Prevention and Reconciliation Act of 2005 is amended by
23 striking "December 31, 2010" and inserting "December
24 31, 2011".

130
1 PART III-TAX CREDIT BONDS FOR SCHOOLS
2 SEC. 1521. QUALIFIED SCHOOL CONSTRUCTION BONDS.
3 (a) IN GENERAL.-Subpart I of part IV of sub-
4 chapter A of chapter 1 is amended by adding at the end
5 the folIo-wing new section:
6 "SEC. 54F. QUALIFIED SCHOOL CONSTRUCTION BONDS.
7 "(a) QUALIFIED SCHOOL CONSTRUCTION BOND.-
8 For purposes of this subchapter, the term 'qualified school
9 construction bond' means any bond issued as part of an
10 issue if-
11 "(1) 100 percent of the available project pro-
12 ceeds of such issue are to be used for the construc-
13 tion, rehabilitation, or repair of a public school facil-
14 ity or for the acquisition of land on which such a fa-
15 cility is to be constructed with part of the proceeds
16 of such issue,
17 "(2) the bond is issued by a State or local gov-
18 ernment within the jurisdiction of which such school
19 is located, and
20 "(3) the issuer designates such bond for pur-
21 poses of this section.
22 "(b) LIMITATION ON AMOUNT OF BONDS DES-
24 bonds issued during any calendar year which may be des-
25 ignated under subsection (a) by any issuer shall not exceed

131
1 the limitation amount allocated under subsection (d) for
2 such calendar year to such issuer.
3 "(c) NATIONAL LIMITATION ON .AMOUNT OF BONDS
4 DESIGNATED.-There is a national qualified school con-
S struction bond limitation for each calendar year. Such lim-
6 itation is-
7 "(1) $11,000,000,000 for 2009,
8 "(2) $11,000,000,000 for 2010, and
9 "(3) except as provided in subsection (e), zero
10 after 2010.
11 "(d) ALLOCATION OF LIMITATION.-
12 "(1) ALLOCATION AMONG STATEs.-Except as
13 provided in paragraph (2)(0), the limitation applica-
14 ble under subsection (c) for any calendar year shall
15 be allocated by the Secretary among the States in
16 proportion to the respective amounts each such
17 State is eligible to receive under section 1124 of the
18 Elementary and Secondary Education Act of 1965
19 (20 U.S.O. 6333) for the most recent fiscal year
20 ending before such calendar year. The limitation
21 amount allocated to a State under the preceding
22 sentence shall be allocated by the State to issuers
23 within such State.
24 "(2) 40 PERCENT OF LIMITATION ALLOCATED
25 Al10NG LARGEST SCHOOL DISTRICTS.-

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"(A) IN GENERAL.-40 percent of the limi-
tation applicable under subsection (c) for any
calendar year shall be allocated under subpara-
graph (B) by the Secretary among local edu-
cational agencies which are large local edu-
cational 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 re-
ceived 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 ALLOCA-
TION.-The allocation to any State under para-
gTaph (1) shall be reduced by the aggTegate
amount of the allocations under this paragTaph
to large local educational agencies within such
State.
"(D) ALLOCATION OF UNUSED LIMITATION
TO STATE.-The amount allocated under this
paragTaph to a large local educational agency
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such agency to the State in which such agency
is located for such calendar year. Any amount
reallocated to a State under the preceding sen-
tence may be allocated as provided in para-
graph (1).
"(E) LARGE LOCAL EDUCATIONAL AGEN-
CY.-For purposes of this paragraph, the term
'large local educational agency' means, with re-
spect to a calendar year, any local educational
agency if such agency is-
"(i) among the 100 local educational
agencies with the largest numbers of c1ril-
dren aged 5 through 17 from families liv-
ing 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 Sec-
retary, or
"(ii) 1 of not more than 25 local edu-
cational agencies (other than those de-
scribed in clause (i)) that the Secretary of
Education determines (based on the most
recent data available satisfactory to the
Secretmy) are in particular need of assist-
ance, based on a low level of resources for

134
1 school construction, a high level of enroll-
2 ment growth, or such other factors as the
3 Secretary deems appropriate.
4 "(3) ALLOCATIONS TO CERTAIN POSSES-
S SIONS.-The amount to be allocated under para-
6 gTaph (1) to any possession of the United States
7 other than Puerto Rico shall be the amount which
8 would have been allocated if all allocations under
9 paragTaph (1) were made on the basis of respective
10 populations of individuals below the poverty line (as
11 defined by the Office of Management and Budget).
12 In making other allocations, the amount to be allo-
13 cated under paragraph (1) shall be reduced by the
14 aggregate amount allocated under this paragraph to
15 possessions of the United States.
16 "(4) ALLOCATIONS FOR INDIAN SCHOOLS.-In
17 addition to the amounts otherwise allocated under
18 this subsection, $200,000,000 for calendar year
19 2009, and $200,000,000 for calendar year 2010,
20 shall be allocated by the Secretary of the Interior for
21 purposes of the construction, rehabilitation, and re-
22 pair of schools funded by the Bureau of Indian Af-
23 fairs. In the case of amounts allocated under the
24 preceding sentence, Indian tribal governments (as

135
1 defined in section 7701(a)(40)) shall be treated as
2 qualified issuers for purposes of this subchapter.
3 "(e) CARRYOVER OF UNUSED LIMITATION.-If for
4 any calendar year-
S "(1) the amount allocated under subsection (d)
6 to any State, exceeds
7 "(2) the amount of bonds issued during such
8 year which are designated under subsection (a) pur-
9 suant to such allocation,
10 the limitation amount under such subsection for such
11 State for the following calendar year shall be increased
12 by the amount of such excess. A similar rule shall apply
13 to the amounts allocated under subsection (d)(4).".
15 (1) Paragraph (1) of section 54.A(d) is amended
16 by striking "or" at the end of subparagraph (C), by
17 inserting "or" at the end of subparagraph (D), and
18 by inserting after subparagraph (D) the following
19 new subparagraph:
20 "(E) a qualified school construction
21 bond,".
22 (2) Subparagraph (C) of section 54.A(d)(2) is
23 amended by striking "and" at the end of clause (iii),
24 by striking the period at the end of clause (iv) and

136
1 inserting ", and", and by adding at the end the fol-
2 lowing new clause:
3 "(v) in the case of a qualified school
4 construction bond, a purpose specified in
5 section 54F(a)(1).".
6 (3) The table of sections for subpart I of part
7 IV of subchapter A of chapter 1 is amended by add-
8 ing at the end the following new item:
"See. 54F. Qualified sehool eonstruetion bonds.".
12 SEC. 1522. EXTENSION AND EXPANSION OF QUALIFIED
13 ZONE ACADEMY BONDS.
14 (a) IN GENERAL.-Section 54E(c)(1) is amended by
15 striking "and 2009" and inserting "and $1,400,000,000
16 for 2009 and 2010".
19 bel' 31, 2008.
20 PART IV-BUILD AMERICA BONDS
21 SEC. 1531. BUILD AMERICA BONDS.
22 (a) IN GENERAL.-Part IV of subchapter A of chap-
23 tel' 1 is amended by adding at the end the following new
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"Subpart J-Build America Bonds
S.L.C.
"Sec. 54AA. Build America bonds.
2 "SEC. 54AA. BUILD AMERICA BONDS.
3 "(a) IN GENERAL.-If a taxpayer holds a build
4 America bond on one or more interest payment dates of
5 the bond during any taxable year, there shall be allowed
6 as a credit against the tax imposed by this chapter for
7 the taxable year an amount equal to the sum of the credits
8 determined under subsection (b) with respect to such
9 dates.
10 "(b) AMOUNT OF CREDIT.-The amount of the credit
11 determined under this subsection with respect to any in-
12 terest payment date for a build America bond is 35 per-
13 cent of the amount of interest payable by the issuer with
14 respect to such date.
15 "(c) LIMITATION BASED ON AMOUNT OF TAX.-
16 "(1) IN GENERAL.-The credit allowed under
17 subsection (a) for any taxable year shall not exceed
18 the excess of-
19 "(A) the sum of the regular tax liability
20 (as defined in section 26(b)) plus the tax im-
21 posed by section 55, over
22 "(B) the sum of the credits allowable
23 under this part (other than subpart C and this
24 subpart).

138
1 "(2) CARRYOVER OF UNUSED CREDIT.-If the
2 credit allowable under subsection (a) exceeds the
3 limitation imposed by paragraph (1) for such taxable
4 year, such excess shall be carried to the succeeding
5 taxable year and added to the credit allowable under
6 subsection (a) for such taxable year (determined be-
7 fore the application of paragraph (1) for such suc-
8 ceeding taxable year).
9 "(d) BUILD AMERICA BOND.-
11 tion, the term 'build A1nerica bond' means any obli-
12 gation (other than a private activity bond) if-
13 "(A) the interest on such obligation would
14 (but for this section) be excludable from gross
15 income under section 103,
16 "(B) such obligation is issued before J anu-
17 ary 1, 2011, and
18 "(C) the issuer makes an irrevocable elec-
19 tion to have this section apply.
20 "(2) APPLICABLE RULES.-For purposes of ap-
21 plying paragraph (1)-
22 "(A) for purposes of section 149(b), a
23 build A1nerica bond shall not be treated as fed-
24 erally guaranteed by reason of the credit al-
25 lowed under subsection (a) or section 6431,

139
1 "(B) for purposes of section 148, the yield
2 on a build America bond shall be determined
3 without regard to the credit allowed under sub-
4 section (a), and
5 "(0) a bond shall not be treated as a build
6 America bond if the issue price has more than
7 a de minimis amount (determined under rules
8 similar to the rules of section 1273(a)(3)) of
9 prelllium over the stated principal amount of
10 the bond.
11 "(e) INTEREST PAYMENT DATE.-For purposes of
12 this section, the term 'interest payment date' means any
13 date on which the holder of record of the build America
14 bond is entitled to a payment of interest under such bond.
15 "(f) SPECIAL RULES.-
16 "(1) INTEREST ON BUILD AMERICA BONDS IN-
17 CLUDIBLE IN GROSS INCOME FOR FEDERAL INCOME
18 TAX PURPOSES.-For purposes of this title, interest
19 on any build America bond shall be includible in
20 gross lllcome.
21 "(2) APPLICATION OF CERTAIN RULEs.-Rules
22 similar to the rules of subsections (f), (g), (h), and
23 (i) of section 54A shall apply for purposes of the
24 credit allowed under subsection (a).

140
1 "(g) SPECIAL RULE FOR QUALIFIED BONDS ISSUED
2 BEFORE 2011.-In the case of a qualified bond issued be-
3 fore January 1, 2011-
4 "(1) ISSUER ALLOWED REFUNDABLE CRED-
5 IT.-In lieu of any credit allowed under this section
6 'with respect to such bond, the issuer of such bond
7 shall be allowed a credit as provided in section 6431.
8 "(2) QUALIFIED BOND.-For purposes of this
9 subsection, the term 'qualified bond' means any
10 build America bond issued as part of an issue if-
11 "(A) 100 percent of the excess of-
12 "(i) the available project proceeds (as
13 defined in section 54A) of such issue, over
14 "(ii) the amounts in a reasonably re-
15 quired reserve (within the meaning of sec-
16 tion 150(a)(3)) with respect to such issue,
17 are to be used for capital expenditures, and
18 " (B) the issuer makes an irrevocable elec-
19 tion to have this subsection apply.
20 "(h) REGULATIONs.-The Secretary may prescribe
21 such regulations and other guidance as may be necessary
22 or appropriate to carry out this section and section
23 6431.".

141
1 (b) CREDIT FOR QUALIFIED BONDS ISSUED BEFORE
2 2011.-Subchapter B of chapter 65 is amended by adding
3 at the end the following new section:
4 "SEC. 6431. CREDIT FOR QUALIFIED BONDS ALLOWED TO
5 ISSUER.
6 "(a) IN GENERAL.-In the case of a qualified bond
7 issued before January 1, 2011, the issuer of such bond
8 shall be allowed a credit with respect to each interest pay-
9 ment under such bond which shall be payable by the Sec-
10 retary as provided in subsection (b).
11 "(b) PAYMENT OF CREDIT.-The Secretary shall pay
12 (contemporaneously with each interest payment date
13 under such bond) to the issuer of such bond (or to any
14 person who makes such interest payments on behalf of the
15 issuer) 35 percent of the interest payable under such bond
16 on such date.
17 "(c) APPLICATION OF ARBITRAGE RULES.-For pur-
18 poses of section 148, the yield on a qualified bond shall
19 be reduced by the credit allowed under this section.
20 "(d) INTEREST PAYMENT DATE.-For purposes of
21 this subsection, the term 'interest payment date' means
22 each date on which interest is payable by the issuer under
23 the terms of the bond.

142
1 "(e) QUALIFIED BOND.-For purposes of this sub-
2 section, the term 'qualified bond' has the meaning given
3 such term in section 54AA(g).".
4 (c) CONFORMING A1VIENDMENTS.-
6 States Code, is amended by striking "or 6428" and
7 inserting "6428, or 6431,".
8 (2) Section 54A(c)(1)(B) is amended by strik-
9 ing "subpart C" and inserting "subparts C and J".
10 (3) Sections 54(c)(2), 1397E(c)(2), and
11 1400N(l)(3)(B) are each amended by striking "and
12 I" and inserting", I, and J".
13 (4) Section 6211(b)(4)(A) is amended by strik-
14 ing "and 6428" and inserting "6428, and 6431".
15 (5) Section 6401(b)(1) is amended by striking
16 "and I" and inserting "I, and J".
17 (6) The table of subparts for part IV of sub-
18 chapter A of chapter 1 is amended by adding at the
19 end the following new item:
"SUBPART J. BUILD AMERICA BONDS.".
20 (7) The table of section for subchapter B of
21 chapter 65 is amended by adding at the end the fol-
22 lowing new item:
"See. 6431. Creclit for qualified bonds allowed to issuer.".
23 (d) TRANSITIONAL COORDINATION WITH STATE
24 LAw.-Except as otherwise provided by a State after the

143
1 date of the enactment of this Act, the interest on any build
2 America bond (as defined in section 54AA of the Internal
3 Revenue Code of 1986, as added by this section) and the
4 amount of any credit determined under such section with
5 respect to such bond shall be treated for purposes of the
6 income tax laws of such State as being exempt from Fed-
7 eral income tax.
11 PART V-REGULATED INVESTMENT COMPANIES
12 ALLOWED TO PASS-THRU TAX CREDIT BOND
13 CREDITS
14 SEC. 1541. REGULATED INVESTMENT COMPANIES AL-
15 LOWED TO PASS-THRU TAX CREDIT BOND
16 CREDITS.
17 (a) IN GENERAL.-Part I of subchapter M of chapter
18 1 is amended by inserting after section 853 the following
19 new section:
20 "SEC. 853A. CREDITS FROM TAX CREDIT BONDS ALLOWED
21 TO SHAREHOLDERS.
22 "(a) GENERAL RULE.-A regulated investment
23 company-

144
1 "(1) which holds (directly or indirectly) one or
2 more tax credit bonds on one or more applicable
3 dates during the taxable year, and
4 "(2) which meets the requirements of section
5 852(a) for the taxable year,
6 may elect the application of this section with respect to
7 credits allowable to the investment company during such
8 taxable year with respect to such bonds.
9 "(b) EFFECT OF ELECTION.-If the election provided
10 in subsection (a) is in effect for any taxable year-
11 "(1) the regulated investment company shall
12 not be allowed any credits to which subsection (a)
13 applies for such taxable year,
14 "(2) the regulated investment company shall-
15 "(A) include in gross income (as interest)
16 for such taxable year an amount equal to the
17 amount that such investment company would
18 have included in gross income with respect to
19 such credits if this section did not apply, and
20 "(B) increase the amount of the dividends
21 paid deduction for such taxable year by the
22 amount of such income, and
23 "(3) each shareholder of such investment com-
24 pany shall-

145
1 "(A) include in gross lllcome an amount
2 equal to such shareholder's proportionate share
3 of the interest income attributable to such cred-
4 its, and
5 "(B) be allowed the shareholder's propor-
6 tionate share of such credits against the tax im-
7 posed by this chapter.
8 "(c) NOTICE TO SHAREHOLDERS.-For purposes of
9 subsection (b)(3), the shareholder's proportionate share
10 of-
11 "(1) credits described in subsection (a), and
12 "(2) gross income in respect of such credits,
13 shall not exceed the amounts so designated by the regu-
14 lated investment company in a written notice mailed to
15 its shareholders not later than 60 days after the close of
16 its taxable year.
17 "(d) MANNER OF MAKING ELECTION AND NOTI-
18 FYING SHAREHOLDERs.-The election provided in sub-
19 section (a) and the notice to shareholders required by sub-
20 section (c) shall be made in such manner as the Secretary
21 may prescribe.
22 "(e) DEFINITIONS AND SPECIAL RULES.-
23 "(1) DEFINITIONS.-For purposes of this
24 subsection-

146
1 "(A) TAX CREDIT BOND.-The term 'tax
2 credit bond' means-
3 "(i) a qualified tax credit bond (as de-
4 fined in section 54A(d)),
5 "(ii) a build America bond (as defined
6 in section 54AA(d)), and
7 "(iii) any bond for which a credit is
8 allowable under subpart H of part IV of
9 subchapter A of this chapter.
10 "(B) APPLICABLE DATE.-The term 'ap-
11 plicable date' means-
12 "(i) in the case of a qualified tax
13 credit bond or a bond described in sub-
14 paragraph (A) (iii), any credit allowance
15 date (as defined in section 54A(e)(1)), and
16 "(ii) in the case of a build America
17 bond (as defined in section 54AA(d)), any
18 interest paYment date (as defined in sec-
19 tion 54AA(e)).
20 "(2) STRIPPED TAX CREDIT BONDS.-If the
21 ownership of a tax credit bond is separated from the
22 credit with respect to such bond, subsection (a) shall
23 be applied by reference to the instruments evidenc-
24 ing the entitlement to the credit rather than the tax
25 credit bond.

·147
1 "(f) REGULATIONS, ETC.-The Secretary shall pre-
2 scribe such regulations or other guidance as may be nec-
3 essary or appropriate to carTy out the purposes of this
4 section, including methods for determining a shareholder's
5 proportionate share of credits.".
6 (b) CONFORMING A1VIENDMENTS.-
7 (1) Section 54(1) is amended by striking para-
8 graph (4) and by redesignating paragraphs (5) and
9 (6) as paragraphs (4) and (5), respectively.
10 (2) Section 54A(h) is amended to read as fol-
11 lows:
12 "(h) BONDS HELD BY REAL ESTATE INVESTMENT
13 TRUSTS.-If any qualified tax credit bond is held by a
14 real estate investment trust, the credit determined under
15 subsection (a) shall be allowed to beneficiaries of such
16 trust (and any gross income included under subsection (f)
17 with respect to such credit shall be distributed to such
18 beneficiaries) under procedures prescribed by the Sec-
19 retary.".
20 (3) The table of sections for part I of sub-
21 chapter M of chapter 1 is amended by inserting
22 after the item relating to section 853 the following
23 new item:
"See. 853A. Credits from ta.x eredit bonds allowed to shareholders.".

148
2 this section shall apply to taxable years ending after the
4 Subtitle G-Other Provisions
5 SEC. 1601. APPLICATION OF CERTAIN LABOR STANDARDS
6 TO PROJECTS FINANCED WITH CERTAIN TAX.
7 FAVORED BONDS.
8 Subchapter IV of chapter 31 of the title 40, United
9 States Code, shall apply to projects financed with the pro-
10 ceeds of-
11 (1) any new clean renewable energy bond (as
12 defined in section 54C of the Internal Revenue Code
13 of 1986) issued after the date of the enactment of
14 this Act,
15 (2) any qualified energy conservation bond (as
16 defined in section 54D of the Internal Revenue Code
18 this Act,
19 (3) any qualified zone academy bond (as de-
20 fined in section 54E of the Internal Revenue Code
22 this Act,
23 (4) any qualified school construction bond (as
24 defined in section 54F of the Internal Revenue Code
25 of 1986), and

149
1 (5) any recovery zone economIC development
2 bond (as defined in section 1400U-2 of the Internal
3 Revenue Code of 1986).
4 SEC. 1602. GRANTS TO STATES FOR LOW-INCOME HOUSING
5 PROJECTS IN LIEU OF LOW·INCOME HOUS-
6 ING CREDIT ALLOCATIONS FOR 2009.
7 (a) IN GENERAL.-The Secretary of the Treasury
8 shall make a grant to the housing credit agency of each
9 State in an amount equal to such State's low-income hous-
10 ing grant election amount.
11 (b) Low-INCOME HOUSING GRANT ELECTION
12 AMOUNT.-For purposes of this section, the term "low-
13 income housing grant election amount" means, with re-
14 spect to any State, such amount as the State may elect
15 which does not exceed 85 percent of the product of-
16 (1) the sum of-
17 (A) 100 percent of the State housing credit
18 ceiling for 2009 which is attributable to
19 amounts described in clauses (i) and (iii) of sec-
20 tion 42(h)(3)(C) of the Internal Revenue Code
21 of 1986, and
22 (B) 40 percent of the State housing credit
23 ceiling for 2009 which is attributable to
24 amounts described in clauses (ii) and (iv) of
25 such section, multiplied by

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1 (2) 10.
2 (c) SUBAWARDS FOR Low-INCOME BUILDINGS.-
3 (1) IN GENERAL.-A State housing credit agen-
4 cy receiving a gTant under tIns section shall use such
5 gTant to make subawards to finance the construction
6 or acquisition and rehabilitation of qualified low-in-
7 come buildings. A subaward under tIns section may
8 be made to finance a qualified low-income building
9 ,:vith or mthout an allocation under section 42 of the
10 Internal Revenue Code of 1986, except that a State
11 housing credit agency may make subawards to fi-
12 nance qualified low-income buildings mthout an allo-
13 cation only if it makes a determination that such use
14 mIl increase the total funds available to the State to
15 build and rehabilitate affordable housing. In com-
16 plying ,:vith such determination requirement, a State
17 housing credit agency shall establish a process in
18 which applicants that are allocated credits are re-
19 quired to demonstrate good faith efforts to obtain
20 investment commitments for such credits before the
21 agency makes such subawards.
22 (2) SUBAWARDS SUBJECT TO SAME REQUIRE-
23 MENTS AS LOW-INCOME HOUSING CREDIT ALLOCA-
24 TIONS.-Any such subaward mth respect to any
25 qualified low-income building shall be made in the

151
1 same manner and shall be subject to the same limi-
2 tations (including rent, income, and use restrictions
3 on such building) as an allocation of housing credit
4 dollar amount allocated by such State housing credit
5 agency under section 42 of the Internal Revenue
6 Code of 1986, except that such subawards shall not
7 be limited by, or otherwise affect (except as provided
8 in subsection (h)(3)(J) of such section), the State
9 housing credit ceiling applicable to such agency.
10 (3) COMPLIANCE AND ASSET MANAGEMENT.-
11 The State housing credit agency shall perform asset
12 management functions to ensure compliance with
13 section 42 of the Internal Revenue Code of 1986
14 and the long-term viability of buildings funded by
15 any subaward under this section. The State housing
16 credit agency may collect reasonable fees from a
17 subaward recipient to cover expenses associated with
18 the performance of its duties under this paragraph.
19 The State housing credit agency may retain an
20 agent or other private contractor to satisfy the re-
21 quirements of this paragraph.
22 (4) RECAPTURE.-The State housing credit
23 agency shall impose conditions or restrictions, 1n-
24 eluding a requirement providing for recapture, on
25 any subaward under this section so as to assure that

152
1 the building with respect to which such subaward is
2 made remains a qualified low-income building during
3 the compliance period. AllY such recapture shall be
4 payable to the Secretary of the Treasury for deposit
5 in the general fund of the Treasury and may be en-
6 forced by means of liens or such other methods as
7 the Secretary of the Treasury determines appro-
8 priate.
9 (d) RETURN OF UNUSED GRANT FUNDs.-Any grant
10 funds not used to make subawards under this section be-
II fore January 1, 2011, shall be returned to the Secretary
12 of the TreasUl'Y on such date. AllY subawards returned
13 to the State housing credit agency on or after such date
14 shall be promptly returned to the Secretary of the Treas-
15 ury. AllY amounts returned to the Secretary of the Treas-
16 ury under this subsection shall be deposited in the general
17 fund of the Treasury.
18 (e) DEFINITIONs.-Any term used in this section
19 which is also used in section 42 of the Internal Revenue
20 Code of 1986 shall have the same meaning for purposes
21 of this section as when used in such section 42. AllY ref-
22 erence in this section to the Secretary of the Treasury
23 shall be treated as including the Secretary's delegate.

153
1 (f) APPROPRIATIONS.-There is hereby appropriated
2 to the SecretaIy of the Treasury such sums as may be
3 necessary to carry out this section.
4 SEC. 1603. GRANTS FOR SPECIFIED ENERGY PROPERTY IN
5 LIEU OF TAX CREDITS.
6 (a) IN GENERAL.-Upon application, the Secretary
7 of the Treasury shall, subject to the requirements of this
8 section, provide a grant to each person who places in serv-
9 ice specified energy property to reimburse such person for
lOa portion of the expense of such property as provided in
11 subsection (b). No grant shall be made under this section
12 with respect to any property unless such property-
13 (1) is placed in service during 2009 or 2010, or
14 (2) is placed in service after 2010 and before
15 the credit termination date with respect to such
16 property, but only if the construction of such prop-
17 erty began during 2009 or 2010.
18 (b) GRANT AMOUNT.-
19 (1) IN GENERAL.-The amount of the grant
20 under subsection (a) with respect to any specified
21 energy property shall be the applicable percentage of
22 the basis of such property.
23 (2) APPLICABLE PERCENTAGE.-For purposes
24 of paragraph (1), the term "applicable percentage"
25 means-

154
1 (A) 30 percent in the case of any property
2 described in paragraphs (1) through (4) of sub-
3 section (d), and
4 (B) 10 percent III the case of any other
5 property.
6 (3) DOLLAR LIMITATIONS.-In the case of
7 property described in paragraph (2), (6), or (7) of
8 subsection (d), the amount of any grant under this
9 section with respect to such property shall not ex-
10 ceed the limitation described in section 48(c)(1)(B),
11 48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue
12 Code of 1986, respectively, with respect to such
13 property.
14 (c) TIME FOR PAYMENT OF GRANT.-The Secretary
15 of the Treasury shall make payment of any grant under
16 subsection (a) during the 60-day period beginning on the
17 later of-
18 (1) the date of the application for such grant,
19 or
20 (2) the date the specified energy property for
21 which the grant is being made is placed in service.
22 (d) SPECIFIED ENERGY PROPERTY.-For purposes
23 of this section, the term "specified energy property"
24 means any of the following:

155
1 (1) QUALIFIED FACILITIES.-Any qualified
2 property (as defined in section 48(a)(5)(D) of the
3 Internal Revenue Code of 1986) which is part of a
4 qualified facility (within the meaning of section 45
5 of such Code) described in paragraph (1), (2), (3),
6 (4), (6), (7), (9), or (11) of section 45(d) of such
7 Code.
8 (2) QUALIFIED FUEL CELL PROPERTY.-Any
9 qualified fuel cell property (as defined in section
10 48(c)(l) of such Code).
11 (3) SOLAR PROPERTY.-Any property described
12 in clause (i) or (ii) of section 48(a)(3)(A) of such
13 Code.
14 (4) QUALIFIED SMALL WIND ENERGY PROP-
15 ERTY.-Any qualified small wind energy property
16 (as defined in section 48(c)(4) of such Code).
17 (5) GEOTHERMAL PROPERTY.-Any property
18 described in clause (iii) of section 48(a)(3)(A) of
19 such Code.
20 (6) QUALIFIED MICROTURBINE PROPERTY.-
21 Any qualified microturbine property (as defined in
22 section 48(c)(2) of such Code).
23 (7) COMBINED HEAT AND POWER SYSTEM
24 PROPERTY.-Any combined heat and power system

156
1 property (as defined in section 48(c)(3) of such
2 Code).
3 (8) GEOTHERlUL HEAT PUMP PROPERTY.-
4 Any property described in clause (vii) of section
5 48(a)(3)(A) of such Code.
6 Such term shall not include any property unless deprecia-
7 tion (or amortization in lieu of depreciation) is allowable
8 ,vith respect to such property.
9 (e) CREDIT TERMINATION DATE.-For purposes of
10 this section, the term "credit termination date" means-
11 (1) in the case of any specified energy property
12 which is part of a facility described in paragraph (1)
13 of section 45(d) of the Internal Revenue Code of
14 1986, January 1, 2013,
16 which is part of a facility described in paragraph
17 (2), (3), (4), (6), (7), (9), or (11) of section 45(d)
18 of such Code, January 1, 2014, and
20 described in section 48 of such Code, January 1,
21 2017.
22 In the case of any property which is described in para-
23 graph (3) and also in another paragraph of this sub-
24 section, paragraph (3) shall apply vith respect to such
25 property.

157
1 (f) APPLICATION OF CERTAIN RULES.-In making
2 gTants under this section, the Secretary of the Treasury
3 shall apply rules similar to the rules of section 50 of the
4 Internal Revenue Code of 1986. In applying such rules,
5 if the property is disposed of, or otherwise ceases to be
6 specified energy property, the SecretaIy of the Treasury
7 shall provide for the recapture of the appropriate percent-
8 age of the gTant amount in such manner as the SecretaIy
9 of the Treasury determines appropriate.
10 (g) EXCEPTION FOR CERTAIN NON-TAXPAYERS.-
11 The Secretary of the Treasuly shall not make any gTant
12 under this section to-
13 (1) any Federal, State, or local government (or
14 any political subdivision, agency, or instrumentality
15 thereof),
16 (2) any organization described in section 501(c)
17 of the Internal Revenue Code of 1986 and exempt
18 from tax under section 501(a) of such Code,
19 (3) any entity referred to in paragTaph (4) of
20 section 54(j) of such Code, or
21 (4) any partnership or other pass-thru entity
22 any partner (or other holder of an equity or profits
23 interest) of which is described in paragraph (1), (2)
24 or (3).

158
1 (h) DEFINITIONS.-Terms used in this section which
2 are also used in section 45 or 48 of the Internal Revenue
3 Code of 1986 shall have the same meaning for purposes
4 of tIns section as when used in such section 45 or 48.
5 Any reference in this section to the Secretary of the Treas-
6 ury shall be treated as including the Secretary's delegate.
7 (i) APPROPRIATIONS.-There is hereby appropriated
8 to the Secretary of the Treasury such sums as may be
9 necessary to carry out this section.
10 (j) TERMINATION.-The Secretary of the Treasury
11 shall not make any grant to any person under this section
12 unless the application of such person for such grant is re-
13 ceived before October 1, 2011.
14 SEC. 1604. INCREASE IN PUBLIC DEBT LIMIT.
15 Subsection (b) of section 3101 of title 31, Ulnted
16 States Code, is amended by striking out the dollar limita-
17 tion contained III such subsection and inserting
18 "$12,104,000,000,000".

159
1 Subtitle H-Prohibition on Collec-
2 tion of Certain Payments Made
3 Under the Continued Dumping
4 and Subsidy Offset Act of 2000
5 SEC. 1701. PROHIBITION ON COLLECTION OF CERTAIN PAY-
6 MENTS MADE UNDER THE CONTINUED DUMP-
7 ING AND SUBSIDY OFFSET ACT OF 2000.
8 (a) IN GENERAL.-Notwithstanding any other provi-
9 sion of law, neither the Secretary of Homeland Security
10 nor any other person may-
11 (1) require repayment of, or attempt in any
12 other way to recoup, any payments described in sub-
13 section (b); or
14 (2) offset any past, current, or future distribu-
15 tions of antidumping or countervailing duties as-
16 sessed with respect to imports from countries that
17 are not parties to the North AJ.nerican Free Trade
18 Agreement in an attempt to recoup any payments
19 described in subsection (b).
20 (b) PAYMENTS DESCRIBED.-Payments described in
21 this subsection are payments of antidumping or counter-
22 vailing duties made pursuant to the Continued Dumping
23 and Subsidy Offset Act of 2000 (section 754 of the Tariff
24 Act of 1930 (19 U.S.C. 1675c; repealed by subtitle F of

160
1 title VII of the Deficit Reduction Act of 2005 (Public Law
2 109-171; 120 Stat. 154))) that were-
3 (1) assessed and paid on imports of goods from
4 countries that are parties to the North American
5 Free Trade Agreement; and
6 (2) distributed on or after January 1, 2001,
7 and before January 1, 2006.
8 (c) PAYMENT OF FUNDS COLLECTED OR WITH-
9 HELD.-Not later than the date that is 60 days after the
10 date of the enactment of this Act; the Secretary of Home-
11 land Security shall-
12 (1) refund any repayments, or any other
13 recoupment, of payments described in subsection (b);
14 and
15 (2) fully distribute any antidumping or counter-
16 vailing duties that the U.S. Customs and Border
17 Protection is withholding as an offset as described in
18 subsection (a)(2).
19 (d) LIMITATION.-Nothing in this section shall be
20 construed to prevent the Secretary of Homeland Security,
21 or any other person, from requiring repayment of, or at-
22 tempting to otherwise recoup, any payments described in
23 subsection (b) as a result of-
24 (1) a finding of false statements or other mis-
25 conduct by a recipient of such a payment; or

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1 (2) the reliquidation of an entry with respect to
2 which such a payment was made.
3 Subtitle I-Trade Adjustment
4 Assistance
5 SEC. 1800. SHORT TITLE.
6 This subtitle may be cited as the "Trade and
7 Globalization Adjustment Assistance Act of 2009".
8 PART I-TRADE ADJUSTMENT ASSISTANCE FOR
9 WORKERS
10 Subpart A-Trade Adjustment Assistance for Service
11 Sector Workers
12 SEC. 1801. EXTENSION OF TRADE ADJUSTMENT ASSIST-
13 ANCE TO SERVICE SECTOR AND PUBLIC
14 AGENCY WORKERS; SHIFTS IN PRODUCTION.
15 (a) DEFINITloNs.-Section 247 of the Trade Act of
16 1974 (19 U.S.C. 2319) is amended-
17 (1) in paragraph (1)-
18 (A) by striking "or appropriate subdivision
19 of a firm"; and
20 (B) by striking "or subdivision";
21 (2) in paragraph (2), by striking "employ-
22 ment-" and all that follows and inserting "employ-
23 ment, has been totally or partially separated from
24 such emploYment.";

162
1 (3) by inserting after paragraph (2) the fol-
2 luwing:
3 "(3) Subject to section 222(d)(5), the term
4 'firm'means-
5 "(A) a firm, including an agricultural firm,
6 service sector firm, or public agency; or
7 "(B) an appropriate subdivision thereof.";
8 (4) by inserting after paragraph (6) the fol-
9 lowing:
10 "(7) The term 'public agency' means a depart-
11 ment or agency of a State or local government or of
12 the Federal Government, or a subdivision thereof.";
13 (5) in paragraph (11), by striking ", or in a
14 subdivision of which,"; and
15 (6) by adding at the end the following:
16 "(18) The term 'service sector firm' means a
17 firm engaged in the business of supplying services.".
18 (b) GROUP ELIGIBILITY REQUIREMENTS.-Section
19 222 of the Trade Act of 1974 (19 U.S.C. 2272) is
20 amended-
21 (1) in subsection (a)(2)-
22 (A) by amending subparagraph (A) (ii) to
23 read as follows:

163
1 "(ii)(I) imports of articles or services like or di-
2 rectly competitive with articles produced or services
3 supplied by such firm have increased;
4 "(II) imports of articles like or directly competi-
5 tive with articles-
6 "(aa) into which one or more component
7 parts produced by such firm are directly incor-
8 porated, or
9 "(bb) which are produced directly usmg
10 services supplied by such firm,
11 have increased; or
12 "(III) imports of articles directly incorporating
13 one or more component parts produced outside the
14 United States that are like or directly competitive
15 with imports of articles incorporating one or more
16 component parts produced by such firm have in-
17 creased; and"; and
18 (B) by amending subparagraph (B) to read
19 as follows:
20 "(B)(i)(I) there has been a shift by such work-
21 ers' firm to a foreign country in the production of
22 articles or the supply of services like or directly com-
23 petitive with articles which are produced or services
24 which are supplied by such firm; or

164
1 "(II) such workers' firm has acquired from a
2 foreign countly articles or services that are like or
3 directly competitive with articles which are produced
4 or services which are supplied by such firm; and
5 "(ii) the shift described in clause (i)(I) or the
6 acquisition of articles or services described in clause
7 (i)(II) contributed importantly to such workers' sep-
8 aration or threat of separation.";
9 (2) by redesignating subsections (b) and (c) as
10 subsections (c) and (d), respectively; and
11 (3) by inserting after subsection (a) the fol-
12 luwing:
13 "(b) ADVERSELY AFFECTED WORKERS IN PUBLIC
14 AGENCIES.-A group of workers in a public agency shall
15 be certified by the Secretary as eligible to apply for adjust-
16 ment assistance under this chapter pursuant to a petition
17 filed under section 221 if the Secretary determines that-
18 "(1) a significant number or proportion of the
19 workers in the public agency have become totally or
20 partially separated, or are threatened to become to-
21 tally or partially separated;
22 "(2) the public agency has acquired from a for-
23 eign countly services like or directly competitive with
24 services which are supplied by such agency; and

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1 "(3) the acquisition of serVIces described in
2 paragraph (2) contributed importantly to such work-
3 ers' separation or threat of separation.".
4 (c) BASIS FOR SECRETARY'S DETERM:INATIONS.-
5 Section 222 of the Trade Act of 1974 (19 U.S.C. 2272),
6 as amended, is further amended by adding at the end the
7 following:
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"(e) BASIS FOR SECRETARY'S DETERM:INATIONS.-
"(1) IN GENERAL.-The Secretary shall, in de-
termining 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 appro-
priate.
"(2) ADDITIONAL INFORMA'l'ION.-The Sec-
retary may seek additional information to determine
whether to certify a group of workers under sub-
section (a), (b), or (c)-
"(A) by contacting-
"(i) officials or employees of the work-
ers' firm;
"(ii) officials of customers of the
workers' firm',

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"(iii) officials of certified or recog-
nized unions or other duly authorized rep-
resentatives 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 in-
formation.
"(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 question-
llaires; and
"(ii) all other information obtained
under paragraph (1) from the firm or cus-
tomer (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.

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"(B) USE OF SUBPOENAS.-The Secretary
shall require the workers' firm or a customer of
the workers' firm to provide information re-
quested by the Secretary under paragraph (1)
by subpoena pursuant to section 249 if the firm
or customer (as the case may be) fails to pro-
vide 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 pro-
vide the information within a reasonable period
of time.
"(0) PROTECTION OF CONFIDENTIAL IN-
FORMATION.-The Secretary may not release
information obtained under paragraph (1) that
the Secretary considers to be confidential busi-
ness 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 re-
leased 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

168
1 Secretary from providing such confidential busi-
2 ness information to a court in camera or to an-
3 other party under a protective order issued by
4 a court.".
5 (d) PENALTIES.-Section 244 of the Trade Act of
6 1974 (19 U.S.C. 2316) is amended to read as follows:
7 "SEC. 244. PENALTIES.
8 "Any person who-
9 "(1) makes a false statement of a material fact
10 knowing it to be false, or knowingly fails to disclose
11 a material fact, for the purpose of obtaining or in-
12 creasing for that person or for any other person any
13 payment authorized to be furnished under this chap-
14 tel' or pursuant to an agreement under section 239,
15 or
18 a material fact, when providing information to the
19 Secretary during an investigation of a petition under
20 section 221,
21 shall be imprisoned for not more than one year, or fined
22 under title 18, United States Code, or both.".
23 (e) CONFORMING AlVIENDMENTS.-
24 (1) Section 221(a) of the Trade Act of 1974
25 (19 U.S.C. 2271(a)) is amended-

169
1 (A) in paragraph (1)-
2 (i) in the matter preceding subpara-
3 graph (A)-
4 (I) by striking "Secretary" and
5 inserting"Secretary of Labor"; and
6 (II) by striking "or subdivision"
7 and inserting "(as defined in section
8 247)"; and
9 (ii) in subparagraph (A), by striking
10 "(including workers in an agricultural firm
11 or subdivision of any agricultural firm)";
12 (B) in paragraph (2)(A), by striking
13 "rapid response assistance" and inserting
14 "rapid response activities"; and
15 (C) in paragraph (3), by inserting "and on
16 the website of the Department of Labor" after
17 "Federal Register".
18 (2) Section 222 of the Trade Act of 1974 (19
19 U.S.C. 2272), as amended, is further amended-
20 (A) by striking "(including workers in any
21 agricultural firm or subdivision of an agricul-
22 tural firm)" each place it appears;
23 (B) in subsection (a)-

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(i) in paragTaph (1), by striking", or
an appropriate subdivision of the firm,";
and
(ii) in paragTaph (2), by striking "or
subdivision" each place it appears;
(C) in subsection (c) (as redesignated)-
(i) in paragTaph (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 in-
serting "(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 in-
serting "DEFINITIONS.-For purposes";
(ii) in paragTaph (2), by striking", or
appropriate subdivision of a firm," each
place it appears;
(iii) by amending paragTaph (3) to
read as follows:
"(3) DOWNSTREAM PRODUCER.-

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"(A) IN GENERAL.-The term 'down-
stream 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 work-
ers in such other firm has been certified under
subsection (a).
"(B) VALUE-ADDED PRODUCTION PROC-
ESSES OR SERVICES.-For purposes of subpara-
graph (A), value-added production processes or
services include final assembly, finishing, test-
ing, packaging, or maintenance or transpor-
tation 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.".

172
1 (3) Section 231(a)(2) of the Trade Act of 1974
2 (19 U.S.C. 2291(a)(2)) is amended-
3 (A) in the matter preceding subparagraph
4 (A), by striking "or subdivision of a firm"; and
5 (B) in subparagraph (C), by striking "or
6 subdivision".
7 SEC. 1802. SEPARATE BASIS FOR CERTIFICATION.
8 Section 222 of the Trade Act of 1974 (19 U.S.C.
9 2272), as amended, is further amended by adding at the
10 end the following:
11 "(f) FIRMS IDENTIFIED BY THE INTERNATIONAL
12 TRADE COMMISSION.-Notwithstanding any other provi-
13 sion of this chapter, a group of workers covered by a peti-
14 tion filed under section 221 shall be certified under sub-
15 section (a) as eligible to apply for adjustment assistance
16 under this chapter if-
17 "(1) the workers' firm is publicly identified by
18 name by the International Trade Commission as a
19 member of a domestic industry in an investigation
20 resulting in-
21 "(A) an affirmative determination of seri-
22 ous InJury or threat thereof under section
23 202(b)(1);

173
1 "(B) an affirmative determination of mar-
2 ket disruption or threat thereof under section
3 421(b)(1); or
4 "(C) an affirmative final determination of
5 material injury or threat thereof under section
6 705(b)(1)(A) or 735(b)(1)(A) of the Tariff Act
7 of 1930 (19 U.S.C. 1671d(b)(1)(A) and
8 1673d(b)(1)(A));
9 "(2) the petition is filed during the one-year pe-
10 riod beginning on the date on which-
11 "(A) a summary of the report submitted to
12 the President by the International Trade Com-
13 mission under section 202(f)(1) with respect to
14 the affirmative determination described in para-
15 graph (l)(A) is published in the Federal Reg-
16 ister under section 202(f)(3); or
17 "(B) notice of an affirmative determination
18 described in subparagraph (B) or (C) of para-
19 graph (1) is published in the Federal Register;
20 and
21 "(3) the workers have become totally or par-
22 tially separated from the workers' firm within-
23 "(A) the one-year period described in para-
24 graph (2); or

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1 "(B) notwithstanding section 223(b), the
2 one-year period preceding the one-year period
3 described in paragraph (2).".
4 SEC. 1803. DETERMINATIONS BY SECRETARY OF LABOR.
6 2273) is amended-
7 (1) in subsection (b), by striking "or appro-
8 priate subdivision of the firm before his application"
9 and all that follows and inserting "before the work-
10 er's application under section 231 occurred more
11 than one year before the date of the petition on
12 which such certification was gl·anted.";
13 (2) in subsection (c), by striking "together with
14 his reasons" and inserting "and on the website of
15 the Department of Labor, together with the Sec-
16 retary's reasons";
17 (3) in subsection (d)-
18 (A) by striking "or subdivision of the
19 firm" and all that follows through "he shall"
20 and inserting", that total or partial separations
21 from such firm are no longer attributable to the
22 conditions specified in section 222, the Sec-
23 retary shall"; and
24 (B) by striking "together with his reasons"
25 and inserting "and on the website of the De-

175
1 partment of Labor, together ,vith the Sec-
2 retmy's reasons"; and
3 (4) by adding at the end the follmving:
4 "(e) STANDARDS FOR INVESTIGATIONS Al"TD DETER-
S MINATIONS.-
6 "(1) IN GENERAL.-The Secretary shall estab-
7 lish standards, including data requirements, for in-
8 vestigations of petitions filed under section 221 and
9 criteria for making determinations under subsection
10 (a).
11 "(2) CONSULTATIONS.-Not less than 90 days
12 before issuing a final rule vith respect to the stand-
13 ards required under paragraph (1), the Secretary
14 shall consult vith the Committee on Finance of the
15 Senate and the Committee on Ways and Means of
16 the House of Representatives vith respect to such
17 rule.".
18 SEC. 1804. MONITORING AND REPORTING RELATING TO
19 SERVICE SECTOR.
20 (a) IN GENERAL.-Section 282 of the Trade Act of
21 1974 (19 U.S.C. 2393) is amended-
22 (1) in the heading, by striking "SYSTEM" and
23 inserting "AND DATA COLLECTION";
24 (2) in the first sentence-

176
1 (A) by striking "The Secretary" and in-
2 serting "(a) MONITORING PROGRAMS.-The
3 Secretary" ;
4 (B) by inserting "and services" after "im-
5 ports of articles";
6 (C) by inserting "and domestic supply of
7 services" after "domestic production";
8 (D) by inserting "or supplying services"
9 after "producing articles"; and
10 (E) by inserting ", or supply of services,"
11 after "changes in production"; and
13 "(b) COLLECTION OF DATA AND REPORTS ON SERV-
14 ICE SECTOR.-
15 "(1) SECRETARY OF LABOR.-Not later than
16 90 days after the date of the enactment of this sub-
17 section, the Secretary of Labor shall implement a
18 system to collect data on adversely affected workers
19 employed in the service sector that includes the
20 number of workers by State and industry, and by
21 the cause of the dislocation of each worker, as iden-
22 tified in the certification.
23 "(2) SECRETARY OF COMMERCE.-Not later
24 than 1 year after such date of enactment, the Sec-
25 retary of Commerce shall, in consultation with the

177
1 Secretary of Labor, conduct a study and submit to
2 the Committee on Finance of the Senate and the
3 Committee on Ways and Means of the House of
4 Representatives a report on ways to improve the
5 timeliness and coverage of data on trade in services,
6 including methods to identify increased imports due
7 to the relocation of United States firms to foreign
8 countries, and increased imports due to United
9 States firms acquiring services from firms in foreign
10 countries.".
11 (b) CLERICAL AMENDMENT.-The table of contents
12 of the Trade Act of 1974 is amended by striking the item
13 relating to section 282 and inserting the following:
"See. 282. Trade monitoring and data eolleetion.".
15 this section shall take effect on the date of the enactment
16 of this Act.
17 Subpart B-Industry Notifications Following Certain
18 Affirmative Determinations
19 SEC. 1811. NOTIFICATIONS FOLLOWING CERTAIN AFFIRMA·
20 TIVE DETERMINATIONS.
22 1974 (19 U.S.C. 2274) is amended-
23 (1) by amending the heading to read as follows:

178
1 "SEC. 224. STUDY AND NOTIFICATIONS REGARDING CER-
2 TAIN AFFIRMATIVE DETERMINATIONS; IN-
3 DUSTRY NOTIFICATION OF ASSISTANCE.";
4 (2) in subsection (a), by striking "Whenever"
5 and inserting "STUDY OF DOMESTIC INDUSTRY.-
6 Whenever";
7 (3) in subsection (b)-
8 (A) by striking "The report" and inserting
9 "REPORT BY THE SECRETARY.-The report";
10 and
11 (B) by inserting "and on the website of the
12 Department of Labor" after "Federal Reg-
13 ister"; and
15 "(c) NOTIFICATIONS FOLLOWING AFFIRMATIVE
16 GLOBAL SAFEGUARD DETERMINATIONS.-Upon making
17 an affirmative determination under section 202(b)(1), the
18 Commission shall promptly notify the Secretary of Labor
19 and the Secretary of Commerce and, in the case of a deter-
20 mination with respect to an agricultural commodity, the
21 Secretary of Agriculture, of the determination.
22 "(d) NOTIFICATIONS FOLLOWING AFFIRMATIVE BI-
23 LATERAL OR PLURILATERAL SAFEGUARD DETERMINA-
24 TIONS.-
25 "(1) NOTIFICATIONS OF DETERMINATIONS OF
26 MARKET DISRUPTION.-Upon making an affirmative

179
1 determination under section 421(b)(1), the Commis-
2 sion shall promptly notify the Secretary of Labor
3 and the Secretary of Commerce and, in the case of
4 a determination with respect to an agricultural com-
5 modity, the Secretary of Agriculture, of the deter-
6 mination.
7 "(2) NOTIFICATIONS REGARDING· TRADE
8 AGREEMENT SAFEGUARDS.-Upon making an af-
9 firmative determination in a proceeding initiated
10 under an applicable safeguard provision (other than
11 a provision described in paragraph (3)) that is en-
12 acted to implement a trade agreement to which the
13 Uluted States is a party, the Commission shall
14 promptly notify the Secretary of Labor and the Sec-
15 retary of Commerce and, in the case of a determina-
16 tion with respect to an a,gricultural commodity, the
17 Secretary of Agriculture, of the determination.
18 "(3) NOTIFICATIONS REGARDING TEXTILE AND
19 APPAREL SAFEGUARDS.-Upon making an affirma-
20 tive determination in a proceeding initiated under
21 any safeguard provision relating to textile and ap-
22 parel articles that is enacted to implement a trade
23 agreement to which the United States is a party, the
24 President shall promptly notify the Secretary of

180
1 Labor and the Secretary of Commerce of the deter-
2 mination.
3 "(e) NOTIFICATIONS FOLLOWING CERTAIN AFFIRM-
4 ATIVE DETERMINATIONS UNDER TITLE VII OF THE TAR-
S IFF ACT OF 1930.-Upon making an affirmative deter-
6 mination under section 705(b)(I)(A) or 735(b)(I)(A) of
7 the Tariff Act of 1930 (19 U.S.C. 1671d(b)(I)(A) and
8 1673d(b)(I)(A)), the Commission shall promptly notify
9 the Secretary of Labor and the Secretary of Commerce
10 and, in the case of a determination with respect to an agri-
11 cultural commodity, the Secretary of Agriculture, of the
12 determination.
13 "(f) INDUSTRY NOTIFICATION OF ASSISTANCE.-
14 Upon receiving a notification of a determination under
15 subsection (c), (d), or (e) with respect to a domestic
16 industry-
17 "(1) the Secretary of Labor shall-
18 "(A) notify the representatives of the do-
19 mestic industry affected by the determination,
20 firms publicly identified by name during the
21 course of the proceeding relating to the deter-
22 mination, and any certified or recognized union
23 or, to the extent practicable, other duly author-
24 ized representative of workers employed by such
25 representatives of the domestic industry, of-

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"(i) the allowances, training, employ-
ment services, and other benefits available
under this chapter;
"(ii) the manner in which to file a pe-
tition and apply for such benefits; and
"(iii) the availability of assistance III
filing such petitions;
"(B) notify the Governor of each State in
which one or more firms in the industry de-
scribed 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 do-
mestic industry affected by the determination
and any firms publicly identified by name dur-
ing the course of the proceeding relating to the
determination of-
"(i) the benefits available under chap-
ter 3;
"(ii) the manner in which to file a pe-
tition and apply for such benefits; and

182
1 "(iii) the availability of assistance III
2 filing such petitions; and
3 "(B) upon request, provide any assistance
4 that is necessary to file a petition under section
5 251; and
6 "(3) in the case of an affirmative determination
7 based upon imports of an agricultural commodity,
8 the Secretary of Agriculture shall-
9 "(A) notify representatives of the domestic
10 industry affected by the determination and any
11 agricultural commodity producers publicly iden-
12 tified by name during the course of the pro-
13 ceeding relating to the determination of-
14 "(i) the benefits available under chap-
15 ter 6;
16 "(ii) the manner in which to file a pe-
17 tition and apply for such benefits; and
18 "(iii) the availability of assistance III
19 filing such petitions; and
20 "(B) upon request, provide any assistance
21 that is necessary to file a petition under section
22 292.
23 "(g) REPRESENTATIVES OF THE DOMESTIC INDUS-
24 TRY.-For purposes of subsection (f), the term 'represent-

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183
S.L.C.
1 atives of the domestic industry' means the persons that
2 petitioned for relief in connection with-
3 "(1) a proceeding under section 202 or 421 of
4 this Act;
5 "(2) a proceeding under section 702(b) or
6 732(b) of the Tariff Act of 1930 (19 U.S.C.
7 1671d(b) and 1673d(b)); or
8 "(3) any safeguard investigation described In
9 subsection (d)(2) or (d)(3).".
10 (b) CLERICAL A1VIENDlVIENT.-The table of contents
"See. 224. Study and notifieations regarding certain affirmative determina-
tions; industry notifieation of assistanee.".
13 SEC. 1812. NOTIFICATION TO SECRETARY OF COMMERCE.
15 2275) is amended by adding at the end the following:
16 "(c) Upon issuing a certification under section 223,
17 the Secretary shall notify the Secretary of Commerce of
18 the identity of each firm covered by the certification.".
19 Subpart C-Program Benefits
20 SEC. 1821. QUALIFYING REQUIREMENTS FOR WORKERS.
21 (a) IN GENERAL.-Section 231(a)(5)(A)(ii) of the
22 Trade Act of 1974 (19 U.S.C. 2291 (a)(5)(A)(ii)) is
23 amended-

184
1 (1) by striking subclauses (I) and (II) and in-
2 serting the following:
3 "(I) in the case of a worker whose
4 most recent total separation from adversely
5 affected employment that meets the re-
6 quirements of paragTaphs (1) and (2) oc-
7 curs after the date on which the Secretary
8 issues a certification covering the worker,
9 the last day of the 26th week after such
10 total separation,
11 "(II) in the case of a worker whose
12 most recent total separation from adversely
13 affected employment that meets the re-
14 quirements of paragraphs (1) and (2) oc-
15 curs before the date on which the Sec-
16 retary issues a certification covering the
17 worker, the last day of the 26th week after
18 the date of such certification,";
19 (2) in subclause (II1)-
20 (A) by striking "later of the dates specified
21 In subclause (I) or (II)" and inserting "date
22 specified in subclause (I) or (II) , as the case
23 may be"; and
24 (B) by striking "or" at the end;

185
1 (3) by redesignating subclause (IV) as sub-
2 clause (V); and
3 (4) by inserting after subclause (III) the fol-
4 lowing:
5 "(IV) in the case of a worker who
6 fails to enroll by the date required by sub-
7 clause (I), (II), or (III), as the case may
8 be, due to the failure to provide the worker
9 with timely information regarding the date
10 specified in such subclause, the last day of
11 a period determined by the Secretary, or".
12 (b) WAIVERS OF TRAINING REQUIREMENTS.-Sec-
13 tion 231(c) of the Trade Act of 1974 (19 U.S.C. 2291(c))
14 is amended-
15
16
17
18
19
20
21
22
23
24
25
(1) in paragraph (I)(B)-
(A) by striking "The worker possesses"
and inserting the following:
"(i) IN GENERAL.-The worker pos-
sesses"; and
(B) by adding at the end the following:
"(ii) MARKETABLE SKILLS DE-
FINED.-For purposes of clause (i), the
term 'marketable skills' may include the
possession of a postgraduate degree from
an institution of higher education (as de-

186
1 fined in section 102 of the Higher Edu-
2 cation Act of 1965 (20 U.S.C. 1002)) or
3 an equivalent institution, or the possession
4 of an equivalent postgraduate certification
5 in a specialized field.";
6 (2) in paragraph (2)(A), by striking "A waiver"
7 and inserting "Except as provided in paragTaph
8 (3)(B), a waiver"; and
10 (A) in subparagraph (A), by striking "Pur-
11 suant to an agreement under section 239, the
12 Secretary may authorize a" and inserting "An
13 agreement under section 239 shall authorize a";
14 (B) by redesignating subparagraph (B) as
15 . subparagraph (C); and
16 (C) by inserting after subparagraph (A)
17 the following:
18 "(B) REVIEW OF WAIVERS.-An agree-
19 ment under section 239 shall require a cooper-
20 ating State to review each waiver issued by the
21 State under subparagraph (A), (B), (D), (E),
22 or (F) of paragraph (1)-
23 "(i) 3 months after the date on which
24 the State issues the waiver; and
25 "(ii) on a monthly basis thereafter.".

187
1 (c) CONFORMING AMENDliENTS.-
3 U.S.C. 2291), as amended, is further amended-
4 (A) in subsection (a), in the matter pre-
S ceding paragraph (1), by striking "more than
6 60 days" and all that follows through "section
7 221" and inserting "on or after the date of
8 such certification"; and
9 (B) in subsection (b)-
10 (i) by striking paragraph (2); and
11 (ii) in paragraph (1)-
12 (I) by striking "(1)";
13 (II) by redesignating subpara-
14 graphs (A) and (B) as paragraphs (1)
15 and (2), respectively;
16 (III) by redesignating clauses (i)
17 and (ii) as subparagraphs (A) and
18 . (B), respectively; and
19 (IV) by redesignating subclauses
20 (I) and (II) as clauses (i) and (ii), re-
21 spectively.
23 U.S.C. 2293) is amended-
24 (A) by striking subsection (b); and

188
1 (B) by redesignating subsections (C)
2 through (g) as subsections (b) through (f), re-
3 spectively.
4 SEC. 1822. WEEKLY AMOUNTS.
6 2292) is amended-
7 (1) in subsection (a)-
8 (A) by striking "subsections (b) and (c)"
9 and inserting "subsections (b), (c), and (d)";
10 (B) by striking "total unemployment" the
11 first place it appears and inserting "unemploy-
12 ment"; and
13 (C) in paragraph (2), by inserting before
14 the period the following: ", except that in the
15 case of an adversely affected worker who is par-
16 ticipating in training under this chapter, such
17 income shall not include earnings from work for
18 such week that are equal to or less than the
19 most recent weekly benefit amount of the unem-
20 ployment insurance payable to the worker for a
21 week of total unemployment preceding the
22 worker's first exhaustion of unemployment in-
23 surance (as determined for purposes of section
24 231(a)(3)(B))"; and

189
1 "(d) ELECTION OF TRADE READJUSTMENT ALLOW-
2 ANCE OR UNEMPLOYMENT INSURANCE.-Notwith-
3 standing section 231(a)(3)(B), an adversely affected work-
4 er may elect to receive a trade readjustment allowance in-
S stead of unemployment insurance during any week with
6 respect to which the worker-
7 "(1) is entitled to receive unemployment insur-
8 ance as a result of the establishment by the worker
9 of a new benefit year under State law, based in
10 whole or in part upon part-time or short-term em-
Il ployment in which the worker engaged after the
12 worker's most recent total separation from adversely
13 affected employment; and
14 "(2) is otherwise entitled to a trade readjust-
15 ment allowance.".
16 SEC. 1823. LIMITATIONS ON TRADE READJUSTMENT AL-
17 LOWANCES; ALLOWANCES FOR EXTENDED
18 TRAINING AND BREAKS IN TRAINING.
19 Section 233(a) of the Trade Act of 1974 (19 U.S.C.
20 2293(a)) is amended-
21 (1) in paragraph (2), by inserting "under para-
22 graph (I)" after "trade readjustment allowance";
23 and

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(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 insert-
ing "91-week"; and
(B) in the matter following subparagraph
(B), by striking "52-week" and inserting "91-
week".
13 SEC. 1824. SPECIAL RULES FOR CALCULATION OF ELIGI-
14 BILITY PERIOD.
18 "(g) SPECIAL RULE FOR CALCULATING SEPARA-
19 TION.-Notwithstanding any other provision of this chap-
20 tel', any period during which a judicial or administrative
21 appeal is pending with respect to the denial by the Sec-
22 retary of a petition under section 223 shall not be counted
23 for purposes of calculating the period of separation under
24 subsection (a)(2).

191
1 "(h) SPECIAL RULE FOR JUSTIFIABLE CAUSE.-If
2 the Secretary determines that there is justifiable cause,
3 the Secretary may extend the period during which trade
4 readjustment allowances are payable to an adversely af-
5 fected worker under paragTaphs (2) and (3) of subsection
6 (a) (but not the maximum amounts of such allowances
7 that are payable under this section).
8 "(i) SPECIAL RULE WITH RESPECT TO MILITARY
9 SERVICE.-
10 "(1) IN GENERAL.-No"hvithstanding any other
11 prOVISIOn of this chapter, the Secretary may waive
12 any requirement of this chapter that the Secretary
13 determines is necessary to ensure that an adversely
14 affected worker who is a member of a reserve com-
15 ponent of the Armed Forces and serves a period of
16 duty described in paragraph (2) is eligible to receive
17 a trade readjustment allowance, training, and other
18 benefits under this chapter in the same manner and
19 to the same extent as if the worker had not served
20 the period of duty.
21 "(2) PERIOD OF DUTY DESCRIBED.-An ad-
22 versely affected worker serves a period of duty de-
23 scribed in this paragraph if, before completing train-
24 ing under section 236, the worker-

192
1 "(A) serves on active duty for a period of
2 more than 30 days under a call or order to ac-
3 tive duty of more than 30 days; or
4 " (B) in the case of a member of the Army
5 National Guard of the United States or Air Na-
6 tional Guard of the United States, performs
7 full-time National Guard duty under section
8 502(f) of title 32, United States Code, for 30
9 consecutive days or more when authorized by
10 the President or the Secretary of Defense for
11 the purpose of responding to a national emer-
12 gency declared by the President and supported
13 by Federal funds.".
14 SEC. 1825. APPLICATION OF STATE LAWS AND REGULA-
15 TIONS ON GOOD CAUSE FOR WAIVER OF TIME
16 LIMITS OR LATE FILING OF CLAIMS.
18 2294) is amended-
19 (1) by striking "Except where inconsistent" and
20 inserting "(a) IN GENERAL.-Except where incon-
21 sistent"; and
23 "(b) SPECIAL RULE WITH RESPECT TO STATE LAWS
24 AND REGULATIONS ON GOOD CAUSE FOR WAIVER OF
25 TIME LIMITS OR LATE FILING OF CLAIMs.-Any law,

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1 regulation, policy, or practice of a cooperating State that
2 allows for a waiver for good cause of any time limitation
3 relating to the administration of the State unemployment
4 insurance law shall, in the administration of the program
5 under this chapter by the State, apply to any time limita-
6 tion with respect to an application for a trade readjust-
7 ment allowance or enrollment in training under this chap-
8 ter.".
9 SEC. 1826. EMPLOYMENT AND CASE MANAGEMENT SERVo
10 ICES.
12 1974 (19 U.S.C. 2295) is amended to read as follows:
13 "SEC. 235. EMPLOYMENT AND CASE MANAGEMENT SERVo
14 ICES.
15 "The Secretary shall make available, directly or
16 through agreements with States under section 239, to ad-
17 versely affected workers and adversely affected incumbent
18 workers covered by a certification under subchapter A of
19 this chapter the following employment and case manage-
20 ment services:
21 "(1) Comprehensive and specialized assessment
22 of skill levels and service needs, including through-
23 "(A) diagnostic testing and use of other
24 assessment tools; and

194
1 "(B) in-depth interviewing and evaluation
2 to identify employment barriers and appropriate
3 employment goals.
4 "(2) Development of an individual employment
5 plan to identify employment goals and objectives,
6 and appropriate training to achieve those goals and
7 objectives.
8 "(3) Information on training available in local
9 and regional areas, information on individual coun-
10 seling to determine which training is suitable train-
11 ing,' and information on how to apply for such train-
12 mg.
13 "(4) Information on how to apply for financial
14 aid, including referring workers to educational op-
15 portunity centers described in section 402F of the
16 Higher Education Act of 1965 (20 U.S.c. 1070a-
17 16), where applicable, and notifying workers that the
18 workers may request financial aid administrators at
19 institutions of higher education (as defined in sec-
20 tion 102 of such Act (20 U.S.c. 1002)) to use the
21 administrators' discretion under section 479A of
22 such Act (20 U.S.C. 1087tt) to use current year in-
23 come data, rather than preceding year income data,
24 for determining the amount of need of the workers

195
1 for Federal financial assistance under title N of
2 such Act (20 U.S.C. 1070 et seq.).
3 "(5) Short-term prevocational servIces, includ-
4 mg development of learning skills, communications
5 skills, interviewing skills, punctuality, personal main-
6 tenance skills, and professional conduct to prepare
7 individuals for employment or training.
8 "(6) Individual career counseling, including job
9 search and placement counseling, during the period
10 in which the individual is receiving a trade adjust-
11 ment allowance or training under this chapter, and
12 after receiving such training for purposes of job
13 placement.
14 "(7) Provision of employment statistics infor-
15 mation, including the provision of accurate informa-
16 tion relating to local, regional, and national labor
17 market areas, including-
18 "(A) job vacancy listings In such labor
19 market areas;
20 "(B) information on jobs skills necessary
21 to obtain jobs identified in job vacancy listings
22 described in subparagraph (A);
23 "(C) information relating to local occupa-
24 tions that are in demand and earnings potential
25 of such occupations; and

196
1 "(D) skills requirements for local occupa-
2 tions described in subparagraph (C).
3 "(8) Information relating to the availability of
4 supportive services, including services relating to
5 child care, transportation, dependent care, housing
6 assistance, and need-related payments that are nec-
7 essary to enable an individual to participate in train-
8 ing.".
"235. Employment and case management services.".
12 SEC. 1827. ADMINISTRATIVE EXPENSES AND EMPLOYMENT
13 AND CASE MANAGEMENT SERVICES.
14 (a) IN GENERAL.-Part II of subchapter B of chap-
15 ter 2 of title II of the Trade Act of 1974 (19 U.S.C. 2295
16 et seq.) is amended by inserting after section 235 the fol-
17 lowing:
18 "SEC. 235A. FUNDING FOR ADMINISTRATIVE EXPENSES
19 AND EMPLOYMENT AND CASE MANAGEMENT
20 SERVICES.
21 "(a) FUNDING FOR ADMINISTRATIVE EXPENSES AND
22 EMPLOYMENT AND CASE MANAGEMENT SERVICES.-
23 "(1) IN GENERAL.-In addition to any funds
24 made available to a State to carry out section 236
25 for a fiscal year, the State shall receive for the fiscal

197
1 year a payment in an amount that IS equal to 15
2 percent of the amount of such funds.
3 "(2) USE OF FUNDS.-A State that receives a
4 payment under paragraph (1) shall-
5 "(A) use not more than 2/3 of such pay-
6 ment for the administration of the trade adjust-
7 ment assistance for workers program under this
8 chapter, including for-
9 "(i) processing waivers of training re-
10 quirements under section 231;
11 "(ii) collecting, validating, and report-
12 ing data required under this chapter; and
13 "(iii) providing reemployment trade
14 adjustment assistance under section 246;
15 and
16 "(B) use not less than 1/3 of such payment
17 for employment and case management services
18 under section 235.
19 "(b) ADDITIONAL FUNDING FOR EMPLOYMENT AND
20 CASE MANAGEMENT SERVICES.-
21 "(1) IN GENERAL.-In addition to any funds
22 made available to a State to carry out section 236
23 and the payment under subsection (a)(l) for a fiscal
24 year, the Secretary shall provide to the State for the
25 fiscal year a payment in the amount of $350,000.

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1 "(2) USE OF FUNDS.-A State that receives a
2 payment under paragraph (1) shall use such pay-
3 ment for the purpose of providing employment and
4 case management services under section 235.
5 "(3) VOLUNTARY RETURN OF FUNDS.-A State
6 that receives a payment under paragraph (1) may
7 decline or otherwise return such payment to the Sec-
8 retary.".
10 of the Trade Act of 1974 is amended by inserting after
11 the item relating to section 235 the following:
"Sec. 235A. Funding for administrative e},.1Jenses and employment and case
management services.".
14 of this Act.
15 SEC. 1828. TRAINING FUNDING.
16 (a) IN GENERAL.-Section 236(a)(2) of the Trade
17 Act of 1974 (19 U.S.C. 2296(a)(2)) is amended to read
18 as follows:
19 "(2)(A) The total amount of payments that may be
20 made under paragraph (1) shall not exceed-
21 "(i) for each of the fiscal years 2009 and 2010,
22 $575,000,000; and
23 "(ii) for the period beginning October 1, 2010,
24 and ending December 31,2010, $143,750,000.

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1 "(B)(i) The Secretary shall, as soon as practicable
2 after the beginning of each fiscal year, make an initial dis-
3 tribution of the funds made available to carry out this sec-
4 tion, in accordance with the requirements of subparagraph
5 (C).
6 "(ii) The Secretary shall ensure that not less than
7 90 percent of the funds made available to carry out this
8 section for a fiscal year are distributed to the States by
9 not later than July 15 of that fiscal year.
10 "(C)(i) In making the initial distribution of funds
11 pursuant to subparagraph (B)(i) for a fiscal year, the Sec-
12 retary shall hold in reserve 35 percent of the funds made
13 available to carry out this section for that fiscal year for
14 additional distributions during the remainder of the fiscal
15 year.
16 "(ii) Subject to clause (iii), in determining how to ap-
17 portion the initial distribution of funds pursuant to sub-
18 paragraph (B)(i) in a fiscal year, the Secretary shall take
19 into account, with respect to each State---
20 "(I) the trend in the number of workers covered
21 by certifications of eligibility under this chapter dur-
22 ing the most recent 4 consecutive calendar quarters
23 for which data are available;
24 "(II) the trend in the number of workers par-
25 ticipating in training under this section during the

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1 most recent 4 consecutive calendar quarters for
2 which data are available;
3 "(III) the number of workers estimated to be
4 participating in training under this section during
5 the fiscal year;
6 "(IV) the amount of funding estimated to be
7 necessary to provide training approved under tIns
8 section to such workers during the fiscal year; and
9 " (V) such other factors as the Secretary con-
10 siders appropriate relating to the provision of train-
11 ing under this section.
12 "(iii) In no case may the amount of the initial dis-
13 tribution to a State pursuant to subparagraph (B)(i) in
14 a fiscal year be less than 25 percent of the initial distribu-
15 tion to the State in the preceding fiscal year.
16 " (D) The Secretary shall establish procedures for the
17 distribution of the funds that remain available for the fis-
18 cal year after the initial distribution required under sub-
19 paragraph (B)(i). Such procedures may include the dis-
20 tribution of funds pursuant to requests submitted by
21 States in need of such funds.
22 "(E) If, during a fiscal year, the Secretary estimates
23 that the amount of funds necessary to pay the costs of
24 training approved under this section will exceed the dollar
25 amount limitation specified in subparagraph (A), the Sec-

201
1 retary shall decide how the amount of funds made avail-
2 able to carry out this section that have not been distrib-
3 uted at the time of the estimate will be apportioned among
4 the States for the remainder of the fiscal year.".
5 (b) DETERMINATIONS REGARDING TRAINING.-Sec-
6 tion 236(a)(9) of the Trade Act of 1974 (19 U.S.C.
7 2296(a)(9)) is amended-
8 (1) by striking "The Secretary" and inserting
9 "(A) Subject to subparagraph (B), the Secretary";
10 and
12 "(B)(i) In determining under paragraph (l)(E)
13 whether a worker is qualified to undertake and complete
14 training, the Secretary may approve training for a period
15 longer than the worker's period of eligibility for trade re-
16 adjustment allowances under part I if the worker dem-
17 onstrates a financial ability to complete the training after
18 the expiration of the worker's period of eligibility for such
19 trade readjustment allowances.
20 "(ii) In determining the reasonable cost of training
21 under paragraph (l)(F) with respect to a worker, the Sec-
22 retary may consider whether other public or private funds
23 are reasonably available to the worker, except that the
24 Secretary may not require a worker to obtain such funds

202
1 as a condition of approval of training under paragraph
2 (1).".
3 (c) REGULATIONs.-Section 236 of the Trade Act of
4 1974 (19 U.S.C. 2296) is amended by adding at the end
5 the following:
6 "(g) REGULATIONS WITH RESPECT TO APPORTION-
7 MENT OF TRAINING FUNDS TO STATES.-
8 "(1) IN GENERAL.-Not later than 1 year after
.9 the date of the enactment of this subsection, the
10 Secretary shall issue such regulations as may be nec-
11 essary to carry out the provisions of subsection
12 (a)(2).
13 "(2) CONSULTATIONs.-The Secretary shall
14 consult with the Committee on Finance of the Sen-
15 ate and the Committee on Ways and Means of the
16 House of Representatives not less than 90 days be-
17 fore issuing any regulation pursuant to paragraph
18 (1).".
19 (d) EFFECTIVE DATE.-This section and the amend-
20 ments made by this section shall take effect upon the expi-
21 ration of the 90-day period beginning on the date of the
22 enactment of this Act, except that-
23 (1) subparagraph (A) of section 236(a)(2) of
24 the Trade Act of 1974, as amended by subsection

203
1 (a) of tIns section, shall take effect on the date of
2 the enactment of this Act; and
3 (2) subparagraphs (B), (C), and (D) of such
4 section 236(a) (2) shall take effect on October 1,
5 2009.
6 SEC. 1829. PREREQUISITE EDUCATION; APPROVED TRAIN-
7 ING PROGRAMS.
8 (a) IN GENERAL.-Section 236(a)(5) of the Trade
9 Act of 1974 (19 U.S.C. 2296(a)(5)) is amended-
10 (1) in subparagraph (A)-
11 (A) by striking "and" at the end of clause
12 (i);
13 (B) by adding "and" at the end of clause
14 (ii); and
15 (C) by inserting after clause (ii) the fol-
16 lowing:
17 "(iii) apprenticeship programs registered
18 under the Act of August 16, 1937 (commonly
19 known as the 'National Apprenticeship Act'; 50
20 Stat. 664, chapter 663; 29 U.S.C. 50 et seq.),";
21 (2) by redesignating subparagraphs (E) and
22 (F) as subparagraphs (F) and (G), respectively;
23 (3) by inserting after subparagraph (D) the fol-
24 lowing:

204
(4) in subparagraph (F)(ii), as redesignated by
"(E) any program of prerequisite education or
(6) by adding at the end the following:
coursework required to enroll iiI training that may
be approved under this section,";
(5) in subparagraph (G), as redesignated by
paragraph (2), by striking the period at the end and
paragraph (2), by striking "and" at the end;
inserting" and"· and, ,
1
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11
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13
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15
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17
18
19 The
"(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 ac-
credited institution of higher education.
Secretary may not limit approval of a training pro-
20 gram under paragraph (1) to a program provided pursu-
21 ant to title I of the Workforce Investment Act of 1998
22 (29 U.S.C. 2801 et seq.).".
23 (b) CONFORMING AMENDMENTS.-Section 233 of the
24 Trade Act of 1974 (19 U.S.C. 2293) is amended-

205
1 (1) in subsection (a)(2), by inserting "pre-
2 requisite education or" after "requires a program
3 of"; and
4 (2) in subsection (f) (as redesignated by section
5 1821(c) of this subtitle), by inserting "prerequisite
6 education or" after "includes a program of".
7 (c) TECHNICAL CORRECTIONS.-Section 236 of the
10 (A) in paragraph (1), in the flush text, by
11 striking "his behalf" and inserting "the work-
12 er's behalf"; and
13 (B) in paragraph (3), by striking "this
14 paragraph (1)" and inserting "paragraph (1)";
15 and
16 (2) in subsection (b)(2), by striking ", and"
17 and inserting a period.
18 SEC. 1830. PRE·LAYOFF AND PART·TIME TRAINING.
19 (a) PRE-LAYOFF TRAINING.-
20 (1) IN GENERAL.-Section 236(a) of the Trade
21 Act of 1974 (19 U.S.C. 2296(a)) is amended-
22 (A) in paragraph (1), by inserting after
23 "determines" the following: ", with respect to
24 an adversely affected worker or an adversely af-
25 fected incumbent worker,";

206
1 (B) in paragraph (4)-
2 (i) in subparagraphs (A) and (B), by
3 inserting "or an adversely affected incum-
4 bent worker" after "an adversely affected
5 worker" each place it appears; and
6 (ii) in subparagraph (C), by inserting
7 "or adversely affected incumbent worker"
8 after "adversely affected worker" each
9 place it appears;
10 (C) in paragraph (5), m the matter pre-
II ceding subparagraph (A), by striking "The
12 training programs" and inserting "Except as
13 provided in paragraph (10), the training pro-
14 grams";
15 (D) in paragraph (6HB), by inserting "or
16 adversely affected incumbent worker" after
17 "adversely affected worker";
18 (E) in paragraph (7HB), by inserting "or
19 adversely affected incumbent worker" after
20 "adversely affected worker"; and
21 (F) by inserting after paragraph (9) the
22 following:
23 "(10) In the case of an adversely affected incumbent
24 worker, the Secretary may not approve-

207
1 "(A) on-the-job training under paragraph
2 (5)(A)(i); or
3 "(B) customized training under paragraph
4 (5)(A)(ii), unless such training is for a position
5 other than the worker's adversely affected employ-
6 ment.
7 "(11) If the Secretary determines that an adversely
8 affected incumbent worker for whom the Secretary ap-
9 proved training under this section is no longer threatened
10 with a total or partial separation, the Secretary shall ter-
11 minate the approval of such training.".
12 (2) DEFINITloNs.-Section 247 of the Trade
13 Act of 1974 (19 U.S.C. 2319), as amended, is fur-
14 ther amended by adding at the end the following:
15 " (19) The term 'adversely affected incumbent
16 worker' means a worker who-
17 "(A) is a member of a group of workers
18 who have been certified as eligible to apply for
19 adjustment assistance under subchapter A;
20 "(B) has not been totally or partially sepa-
21 rated from adversely affected employment; and
22 "(C) the Secretary determines, on an indi-
23 vidual basis, is threatened with total or partial
24 separation.".

208
1 (b) PART-TIME TRAINING.-Section 236 of the
2 Trade Act of 1974 (19 U.S.C. 2296), as amended, is fur-
3 ther amended by adding at the end the following:
4 "(h) PART-TIME TRAINING.-
5 "(1) IN GENERAL.-The Secretary may approve
6 full-time or part-time training for a worker under
7 subsection (a).
8 "(2) LIMITATION.-Notwithstanding paragraph
9 (1), a worker participating in part-time training ap-
10 proved under subsection (a) may not receive a trade
11 readjustment allowance under section 231.".
12 SEC. 1831. ON-THE-JOB TRAINING.
13 (a) IN GENERAL.-Section 236(c) of the Trade Act
14 of 1974 (19 U.S.C. 2296(c)) is amended-
15 (1) by redesignating paragraphs (1) through
16 (10) as subparagraphs (A) through (J) and moving
17 such subparagraphs 2 ems to the right;
18 (2) by striking "(c) The Secretary shall" and
19 all that follows through "such costs," and inserting
20 the following:
21 "(c) ON-THE-JOB TRAINING REQUIREMENTS.-
22 "(1) IN GENERAL.-The Secretary may approve
23 on-the-job training for any adversely affected worker
24 if-

209
1 "(A) the worker meets the requirements
2 for training to be approved under subsection
3 (a)(l);
4 "(B) the Secretary determines that on-the-
5 job training-
6 "(i) can reasonably be expected to
7 lead to suitable employment with the em-
8 ployer offering the on-the-job training;
9 "(ii) is compatible with the skills of
10 the worker;
11 "(iii) includes a curriculum through
12 which the worker will gain the knowledge
13 or skills to become proficient in the job for
14 which the worker is being trained; and
15 "(iv) can be measured by benchmarks
16 that indicate that the worker IS gaullng
17 such knowledge or skills; and
18 "(C) the State determines that the on-the-
19 job training program meets the requirements of
20 clauses (iii) and (iv) of subparagraph (B).
21 "(2) MONTHLY PAYMENTS.-The Secretary
22 shall pay the costs of on-the-job training approved
23 under paragraph (1) in monthly installments.
24 "(3) CONTRACTS FOR ON-THE-JOB TRAlNING.-

210
2 ensure, in entering into a contract with an em-
3 ployer to provide on-the-job training to a work-
4 er under this subsection, that the skill require-
S ments of the job for which the worker is being
6 trained, the academic and occupational skill
7 level of the worker, and the work experience of
8 the worker are taken into consideration.
9 "(B) TERM OF CONTRACT.-Training
10 under any such contract shall be limited to the
11 period of time required for the worker receiving
12 on-the-job training to become proficient in the
13 job for which the worker is being trained, but
14 may not exceed 104 weeks in any case.
15 "(4) EXCLUSION OF CERTAIN EMPLOYERS.-
16 The Secretary shall not enter into a contract for on-
17 the-job training with an employer that exhibits a
18 pattern of failing to provide workers receiving on-
19 the-job training from the employer with-
20 "(A) continued, long-term employment as
21 regular employees; and
22 "(B) wages, benefits, and working condi-
23 tions that are equivalent to the wages, benefits,
24 and working conditions provided to regular em-
25 ployees who have worked a similar period of

211
1 time and are doing the same type of work as
2 workers receiving on-the-job training from the
3 employer.
4 "(5) LABOR STANDARDS.-The Secretary may
5 pay the costs of on-the-job training,"; and
6 (3) in paragraph (5), as redesignated-
7 (A) in subparagraph (I), as redesignated
8 by paragraph (1) of this section, by striking
9 "paragraphs (1), (2), (3), (4), (5), and (6)"
10 and inserting "subparagraphs (A), (B), (C),
11 (D), (E), and (F)"; and
12 (B) in subparagraph (J), as redesignated
13 by paragraph (1) of this section, by striking
14 "paragTaph (8)" and inserting "subparagraph
15 (H)".
16 (b) REPEAL OF PREFERENCE FOR TRAlNING ON THE
17 JOB.-Section 236(a)(1) of the Trade Act of 1974 (19
18 U.S.C. 2296(a)(1)) is amended by striking the last sen-
19 tence.
20 SEC. 1832. ELIGffiILITY FOR UNEMPLOYMENT INSURANCE
21 AND PROGRAM BENEFITS WHILE IN TRAIN-
22 ING.
23 Section 236(d) of the Trade Act of 1974 (19 U.S.C.
24 2296(d)) is amended to read as follows:

212
1 "(d) ELIGIBILITy.-All adversely affected worker
2 may not be determined to be ineligible or disqualified for
3 unemployment insurance or program benefits under this
4 subchapter-
5 "(1) because the worker-
6 "(A) is enrolled in training approved under
7 subsection (a);
8 "(B) left work-
9 "(i) that was not suitable employment
l O i n order to enroll in such training; or
11 "(ii) that the worker engaged in on a
12 temporary basis during a break in such
13 training or a delay in the commencement
14 of such training; or
15 "(0) left on-the-job training not later than
16 30 days after commencing such training be-
17 cause the training did not meet the require-
18 ments of subsection (c)(1)(B); or
19 "(2) because of the application to any such
20 week in training of the provisions of State law or
21 Federal unemployment insurance law relating to
22 availability for work, active search for work, or re-
23 fusal to accept work.".

213
1 SEC. 1833. JOB SEARCH AND RELOCATION ALLOWANCES.
2 (a) JOB SEARCH ALLOWANCES.-Section 237 of the
4 (1) in subsection (a)(2)(C)(ii), by striking ",
5 unless the worker received a waiver under section
6 231(c)"; and
8 (A) in paragraph (1), by striking "90 per-
9 cent of the cost of" and inserting "all"; and
10 (B) in paragraph (2), by striking "$1,250"
11 and inserting "$1,500".
12 (b) RELOCATION ALLOWANCES.-Section 238 of the
14 (1) in subsection (a)(2)(E)(ii), by striking ",
15 unless the worker received a waiver under section
16 231(c)"; and
18 (A) in paragraph (1), by striking "90 per-
19 cent of the" and inserting"all"; and
20 (B) in paragraph (2), by striking "$1,250"
21 and inserting "$1,500".

214
1 Subpart D-Reemployment Trade Adjustment
2 Assistance Program
3 SEC. 1841. REEMPLOYMENT TRADE ADJUSTMENT ASSIST·
4 ANCE PROGRAM.
6 1974 (19 U.S.C. 2318) is amended-
7 (1) by amending the heading to read as follows:
8 "SEC. 246. REEMPLOYMENT TRADE ADJUSTMENT ASSIST·
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
ANCE PROGRAM.";
(2) in subsection (a)-
(A) in paragraph (1)-
(i) by striking "Not later than" and
all that follows through "2002, the Sec-
retary" 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

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(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 subpara-
graph (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 fol-
lowing:
"(C) TRAINING AND OTHER SERVICES.-A
worker described in paragraph (3)(B) partici-
pating in the program established under para-
graph (1) is eligible to receive training approved
under section 236 and employment and case
management services under section 235."; and

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(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 ad-
justment assistance under subchapter A is eligi-
ble for benefits described in paragraph (2)
under the program established under paragraph
(1).
"(B) INDIVIDUAL ELIGIBILITY.-A worker
III a group of workers described in subpara-
gTaph (A) may elect to receive benefits de-
scribed in paragraph (2) under the program es-
tablished 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 pro-
gram approved under section 236; and

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"(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 al-
lowance under part I of subchapter B pursuant
to the certification described in paragraph
(3)(A), the worker may receive benefits de-
scribed in paragraph (2) for a period not to ex-
ceed 2 years beginning on the earlier of-
"(i) the date on which the worker ex-
hausts all rights to unemployment insur-
ance based on the separation of the worker
from the adversely affected employment
that is the basis of the certification; or
"(ii) the date 011 which the worker ob-
tains 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 certifi-

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cation described in paragraph (3)(A), the work-
er 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 re-
ceived such trade readjustment allowance.
"(5) TOTAL AMOUNT OF PAYlVIENTS.-
"(A) IN GENERAL.-The payments de-
scribed 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 subpara-
graph (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

219
1 "(II) 104 weeks.
2 "(6) CALCULATION OF AMOUNT OF PAYMENTS
3 FOR CER1'AIN WORKERS.-
4 "(A) IN GENERAL.-In the case of a work-
S er described in paragraph (3)(B)(iii)(II), para-
6 graph (2)(A) shall be applied by substituting
• 7 the percentage described in subparagraph (B)
8 for '50 percent'.
9 "(B) PERCENTAGE DESCRIBED.-The per-
10 centage described in this subparagraph is the
11 percentage-
12 "(i) equal to l/2 of the ratio of-
13 "(I) the number of weekly hours
14 of employment of the worker referred
15 to in paragraph (3)(B)(iii)(II), to
16 "(II) the number of weekly hours
17 of employment of the worker at the
18 time of separation, but
19 "(ii) in no case more than 50 percent.
20 "(7) LIMITATION ON OTHER BENEFITS.-A
21 worker described in paragraph (3)(B) may not re-
22 ceive a trade readjustment allowance under part I of
23 subchapter B pursuant to the certification described
24 in paragraph (3) (A) during any week for which the

220
1 worker reCelves a paYluent described III paragraph
2 (2)(A)."; and
3 (3) in subsection (b)(2), by striking "subsection
4 (a)(3)(B)" and inserting "subsection (a)(3)".
'5 (b) EXTENSION OF PROGRAM.-Section 246(b)(1) of
6 the Trade Act of 1974 (19 U.S.C. 2318(b)(1)) is amended
7 by striking "the date that is 5 years" and all that follows
8 through the end period and inserting "December 31,
9 2010.".
10 (c) CLERICAL AMENDMENT.-The table of contents
"See. 246. Reemplo,yment trade adjustment assistanee progl"ffil1.".
13 Subpart E-Other Matters
14 SEC. 1851. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.
15 (a) IN GENERAL.-Subchapter C of chapter 2 of title
16 II of the Trade Act of 1974 (19 U.S.C. 2311 et seq.) is
17 amended by adding at the end the following:
18 "SEC. 249A. OFFICE OF TRADE ADJUSTMENT ASSISTANCE.
19 "(a) ESTABLISHMENT.-There is established in the
20 Department of Labor an office to be known as the Office
21 of Trade Adjustment Assistance (in this section referred
22 to as the 'Office').
23 "(b) HEAD OF OFFICE.-The head of the Office shall
24 be an administrator, who shall report directly to the Dep-
25 uty Assistant Secretary for Employment and Training.

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S.L.C.
1 "(c) PRINCIPAL FUNCTIONS.-The principal func-
2 tions of the administrator of the Office shall be-
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"(1) to oversee and implement the administra-
tion of trade adjustment assistance progTam 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 work-
ers and assisting such workers to prepare peti-
tions or applications for progTam benefits;
"(C) providing assistance to employers of
groups of workers that have filed petitions
under section 221 in submitting information re-
quired by the Secretary relating to the peti-
tions;
"(D) ensuring workers covered by a certifi-
cation 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·,

222
1 "(F) advocating for workers applying for
2 benefits available under this chapter;
3 "(G) establishing and overseeing a hotline
4 that workers, employers, and other entities may
5 call to obtain information regarding eligibility
6 criteria, procedural requirements, and benefits
7 available under this chapter; and
8 "(H) carrying out such other duties with
9 respect to this chapter as the Secretary speci-
10 fies for purposes of this section.
11 "(d) ADMINISTRATION.-
12 "(1) DESIGNATION.-The administrator shall
13 desigllate an employee of the Department of Labor
14 with appropriate experience and expertise to carry
15 out the duties described in paragraph (2).
16 "(2) DUTIEs.-The employee designated under
17 paragraph (1) shall-
18 "(A) receive complaints and requests for
19 assistance related to the trade adjustment as-
20 sistance program under this chapter;
21 "(B) resolve such complaints and requests
22 for assistance, in coordination with other em-
23 ployees of the Office;

223
1 "(C) compile basic information concerning
2 such complaints and requests for assistance;
3 and
4 "(D) cany out such other duties with re-
5 spect to this chapter as the Secretary specifies
6 for purposes of this section.".
7 (b) CLERICAL AIVIENDMENT.-The table of contents
"See. 249A. Offiee of Trade Adjustment Assistanee.".
10 SEC. 1852. ACCOUNTABILITY OF STATE AGENCIES; COLLEC-
11 TION AND PUBLICATION OF PROGRAM DATA;
12 AGREEMENTS WITH STATES.
13 (a) IN GENERAL.-Section 239(a) of the Trade Act
14 of 1974 (19 U.S.C. 2311(a)) is amended-
15 (1) by amending clause (2) to read as follows:
16 " (2) in accordance with subsection (f) , shall make
17 available to adversely affected workers and adversely
18 affected incumbent workers covered by a certifi-
19 cation under subchapter A the employment and case
20 management services described in section 235,"; and
21 (2) by striking "will" each place it appears and
22 inserting "shall".
23 (b) FORM AND MANNER OF DATA.-Section 239 of
24 the Trade Act of 1974 (19 U.S.C. 2311) is amended-

(2) by amending paragraph (4) to read as fol-
lows:
"(4) perform outreach to, intake of, and ori-
entation for adversely affected workers and adversely
affected incumbent workers covered by a certifi-
cation under subchapter A with respect to assistance
and benefits available under this chapter, and"; and
224
1 (1) by redesignating subsections (c) through (g)
2 as subsections (d) through (h), respectively; and
3 (2) by inserting after subsection (b) the fol-
4 lowing:
5 "(c) FORM AND MANNER OF DATA.-Each agree-
6 ment under this subchapter shall-
7 "(1) provide the Secretary with the authority to
8 collect any data the Secretary determines necessary
9 to meet the requirements of this chapter; and
10 "(2) specify the form and manner in which any
11 such data requested by the Secretary shall be re-
12 ported.".
13 (c) STATE ACTIVITIES.-Section 239(g) of the Trade
14 Act of 1974 (as redesignated) is amended-
15 (1) in paragraph (3), by striking "and" at the
16 end;
17
18
19
20
21
22
23
24

225
1 "(5) make employment and case management
2 services described in section 235 available to ad-
3 versely affected workers and adversely affected in-
4 cumbent workers covered by a certification under
5 subchapter A and, if funds provided to carry out this
6 chapter are insufficient to make such services avail-
7 able, make arrangements to make such seI'Vlces
8 available through other Federal programs.".
9 (d) REPORTING REQUIREMENT.-Section 239(h) of
10 the Trade Act of 1974 (as redesignated) is amended by
11 striking "1998." and inserting "1998 (29 U.S.C. 2822(b))
12 and a description of the State's rapid response activities
13 under section 221(a)(2)(A).".
14 (e) CONTROL MEASURES.-Section 239 of the Trade
15 Act of 1974 (19 U.S.C. 2311), as amended, is further
17 "(i) CONTROL MEASURES.-
18 "(1) IN GENERAL.-The Secretary shall require
19 each cooperating State and cooperating State agency
20 to implement effective control measures and to effec-
21 tively oversee the operation and administration of
22 the trade adjustment assistance program under this
23 chapter, including by means of monitoring the oper-
24 ation of control measures to improve the accuracy

226
1 and timeliness of the data being collected and re-
2 ported.
3 "(2) DEFINITION.-For purposes of paragraph
4 (1), the term 'control measures' means measures
5 that-
6 "(A) are internal to a system used by a
7 State to collect data; and
8 "(B) are designed to ensure the accuracy
9 and verifiability of such data.
10 "(j) DATA REPORTING.-
11 "(1) IN GENERAL.-Any agreement entered
12 into under this section shall require the cooperating
13 State or cooperating State agency to report to the
14 Secretary on a quarterly basis comprehensive per-
15 formance accountability data, to consist of-
16 "(A) the core indicators of performance de-
17 scribed in paragraph (2)(A);
18 "(B) the additional indicators of perform-
19 ance described in paragraph (2)(B), if any; and
20 "(C) a description of efforts made to im-
21 prove outcomes for workers under the trade ad-
22 justment assistance program.
23 "(2) CORE INDICATORS DESCRIBED.-
24 "(A) IN GENERAL.-The core indicators of
25 performance described in tIns paragraph are-

227
1 "(i) the percentage of workers receiv-
2 lng benefits under this chapter who are
3 employed during the second calendar quar-
4 tel' following the calendar quarter in which
5 the workers cease receiving such benefits;
6 "(ii) the percentage ;of such workers
7 who are employed in each of the third and
8 fourth calendar quarters following the cal-
9 endar quarter in which the workers cease
10 receiving such benefits; and
11 "(iii) the earnings of such workers in
12 each of the third and fourth calendar quar-
13 tel'S following the calendar quarter in
14 which the workers cease receiving such
15 benefits.
16 "(B) ADDITIONAL INDICATORS.-The Sec-
17 retary and a cooperating State or cooperating
18 State agency may agree upon additional indica-
19 tors of performance for the trade adjustment
20 assistance program under this chapter, as ap-
21 propriate.
22 "(3) STANDARDS WITH RESPECT TO RELI-
23 ABILITY OF DATA.-In preparmg the quarterly re-
24 port required by paragraph (1), each cooperating
25 State or cooperating State agency shall establish

228
1 procedures that are consistent with guidelines to be
2 issued by the Secretary to ensure that the data re-
3 ported are valid and reliable.".
4 SEC. 1853. VERIFICATION OF ELIGmILITY FOR PROGRAM
5 BENEFITS.
9 "(k) VERIFICATION OF ELIGIBILITY FOR PROGRAM
10 BENEFITS.-
11 "(1) IN GENERAL.-An agTeement under this
12 subchapter shall provide that the State shall periodi-
13 cally redetermine that a worker receiving benefits
14 under this subchapter who is not a citizen or na-
15 tional of the United States remains in a satisfactory
16 immigration status. Once satisfactory immigration
17 status has been initially verified through the immi-
18 gration status verification system described in sec-
19 tion 1137(d) of the Social Security Act (42 U.S.C.
20 1320b-7(d)) for purposes of establishing a worker's
21 eligibility for unemployment compensation, the State
22 shall reverify the worker's immigration status if the
23 documentation provided during initial verification
24 will expire during the period in which that worker is
25 potentially eligible to receive benefits under this sub-

229
1 chapter. The State shall conduct such redetermina-
2 tion in a timely manner, utilizing the immigration
3 status verification system described III section
4 1137(d) of the Social Security Act (42 U.S.C.
5 1320b-7(d)).
6 "(2) PROCEDuRES.-The Secretary shall estab-
7 lish procedures to ensure the uniform application by
8 the States of the requirements of this subsection.".
9 SEC. 1854. COLLECTION OF DATA AND REPORTS; INFORMA-
l O T I O N TO WORKERS.
11 (a) IN GENERAL.-Subchapter C of chapter 2 of title
12 II of the Trade Act of 1974 (19 U.S.C. 2311 et seq.),
13 as amended, is further amended by adding at the end the
14 following:
15 "SEC. 249B. COLLECTION AND PUBLICATION OF DATA AND
16 REPORTS; INFORMATION TO WORKERS.
17 "(a) IN GENERAL.-Not later than 180 days after
18 the date of the enactment of this section, the Secretary
19 shall implement a system to collect and report the data
20 described in subsection (b), as well as any other informa-
21 tion that the Secretary considers appropriate to effectively
22 carry out this chapter.
23 "(b) DATA TO BE INCLUDED.-The system required
24 under subsection (a) shall include collection of and report-
25 ing on the following data for each fiscal year:

230
1 "(1) DATA ON PETITIONS FILED, CERTIFIED,
2 AND DENIED.-
3 "(A) The number of petitions filed, cer-
4 tified, and denied under this chapter.
5 "(B) The number of workers covered by
6 petitions filed, certified, and denied.
7 "(0) The number of petitions, classified
8 by-
9 "(i) the basis for certification, includ-
10 ing increased imports, shifts in production,
11 and other bases of eligibility; and
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15
16
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18
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20
21
22
23
24
25
"(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 ben-
efits under this chapter.
"(B) The number of workers recenllng
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.

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"(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, 011-
the-job training, and customized training.
" (B) The number of workers enrolled III
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 em-
ployed after receiving benefits under this chap-
ter.

232
1 "(5) DATA ON RAPID RESPONSE ACTIVITIES.-
2 Whether rapid response activities were provided with
3 respect to each petition filed under section 221.
4 "(c) CLASSIFICATION OF DATA.-To the extent pos-
5 sible, in collecting and reporting the data described in sub-
6 section (b), the Secretary shall classify the data by indus-
7 try, State, and national totals.
8 "(d) REPORT.-Not later than December 15 of each
9 year, the Secretary shall submit to the Committee on Fi-
10 nance of the Senate and the Committee on Ways and
11 Means of the House of Representatives a report that
12 includes-
13 "(1) a summary of the information collected
14 under this section for the preceding fiscal year;
15 "(2) information on the distribution of funds to
16 each State pursuant to section 236(a)(2); and
17 "(3) any recommendations of the Secretary
18 with respect to changes in eligibility requirements,
19 benefits, or training funding under this chapter
20 based on the data collected under this section.
21 "(e) AVAILABILITY OF DATA.-
22 "(1) IN GENERAL.-The Secretary shall make
23 available to the public, by publishing on the website
24 of the Department of Labor and by other means, as
25 appropriate-

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S.L.C.
1 "(A) the report required under subsection
2 (d);
3 "(B) the data collected under this section,
4 in a searchable format; and
5 "(C) a list of cooperating States and co-
6 operating State agencies that failed to submit
7 the data required by this section to the Sec-
8 retary in a timely manner.
9 "(2) UPDATES.-The Secretary shall update
10 the data under paragraph (1) on a quarterly basis.".
13 the item relating to section 249A the following:
"See. 249B. Colleetion and publieation of data and repOltSj information to
. workers.".
16 of this Act.
17 SEC. 1855. FRAUD AND RECOVERY OF OVERPAYMENTS.
18 Section 243(a)(1) of the Trade Act of 1974 (19
19 U.S.C. 2315(a)(1)) is amended-
20
21
22
23
24
(1) in the matter preceding subparagraph (A)-
(A) by striking "may waive" and inserting
"shall waive"; and
(B) by striking ", III accordance with
guidelines prescribed by the Secretary,"; and

234
1 (2) in subparagraph (B), by striking "would be
2 contrary to equity and good conscience" and insert-
3 ing "would cause a financial hardship for the indi-
4 vidual (or the individual's household, if applicable)
5 when taking into consideration the income and re-
6 sources reasonably available to the individual (or
7 household) and other ordinary living expenses of the
8 individual (or household)".
9 SEC. 1856. SENSE OF CONGRESS ON APPLICATION OF
10 TRADE ADJUSTMENT ASSISTANCE.
11 (a) IN GENERAL.-Chapter 5 of title II of the Trade
12 Act of 1974 (19 U.S.C. 2391 et seq.) is amended by add-
13 ing at the end the following:
14 "SEC. 288. SENSE OF CONGRESS.
15 "It is the sense of Congress that the Secretaries of
16 Labor, Commerce, and Agriculture should apply the provi-
17 sions of chapter 2 (relating to adjustment assistance for
18 workers), chapter 3 (relating to adjustment assistance for
19 firms), chapter 4 (relating to adjustment assistance for
20 communities), and chapter 6 (relating to adjustment as-
21 sistance for farmers), respectively, with the utmost regard
22 for the interests of workers, firms, communities, and farm-
23 ers petitioning for benefits under such chapters.".

235
"See. 288. Sense of Congl'ess.".
4 SEC. 1857. CONSULTATIONS IN PROMULGATION OF REGU-
5 LATIONS.
7 2320) is amended-
8 (1) by striking "The Secretary shall" and in-
9 serting the following:
10 "(a) IN GENERAL.-The Secretary shall"; and
12 "(b) CONSULTATIONS.-Not later than 90 days be-
13 fore issuing a regulation under subsection (a), the Sec-
14 retary shall consult with the Committee on Finance of the
15 Senate and the Committee on Ways and Means of the
16 House of Representatives with respect to the regulation.".
17 SEC. 1858. TECHNICAL CORRECTIONS.
18 (a) DETERMINATIONS BY SECRETARY OF LABOR.-
19 Section 223(c) of the Trade Act of 1974 (19 U.S.C.
20 2273(c)) is amended by striking "his determination" and
21 inserting"a determination".
22 (b) QUALIFYING REQUIREMENTS FOR WORKERS.-
24 2291(a)) is amended-

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(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 cov-
ered"·,
(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
12 8521(a)(1) of title 5, United States Code"; and
14 (A) by striking "he" each place it appears
15 and inserting "the worker"; and
16 (B) in subparagraph (C), by striking
17 "him" and inserting "the worker".
18 (c) SUBPOENA POWER.-Section 249 of the Trade
19 Act of 1974 (19 U.S.C. 2321) is amended-
20 (1) in the section heading, by striking "SUB-
21 PENA" and inserting "SUBPOENA";
22 (2) by striking "subpena" and inserting "sub-
23 poena" each place it appears; and
24 (3) in subsection (a), by striking "him" and in-
25 serting "the Secretary".

237
1 (d) CLERICAL Al1ENDlVIENT.-The table of contents
"See. 249. Subpoena power.".
4 PART II-TRADE ADJUSTMENT ASSISTANCE FOR
5 FIRMS
6 SEC. 1861. EXPANSION TO SERVICE SECTOR FIRMS.
8 1974 (19 U.S.C. 2341) is amended by inserting "or.. serv-
9 ice sector firm" after "agricultural firm" each place it ap-
10 pears.
11 (b) DEFINITION OF SERVICE SECTOR FIRlVI.-Sec-
12 tion 261 of the Trade Act of 1974 (19 U.S.C. 2351) is
13 amended-
14 (1) by striking "chapter," and inserting "chap-
15 ter:";
16 (2) by striking "the term 'firm'" and inserting
17 the following:
18 "(1) FIRlVI.-The term 'firm' "; and
20 "(2) SERVICE SECTOR FIRlVI.-The term 'service
21 sector firm' means a firm engaged in the business
22 of supplying services.".
23 (c) CONFORlVIING Al1ENDlVIENTS.-
24 (1) Section 251(c)(1)(C) of the Trade Act of
25 1974 (19 U.S.C. 2341(c)(1)(C)) is amended-

1
2
3
4
5
6
7
8
9
10
11
12 SEC.
13
14
238
(A) by inserting "or services" after "arti-
cles" 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 III exploration or
drilling for oil or natural gas, or otherwise produces
oil or natural gas, shall be considered to be pro-
ducing articles directly competitive with imports of
oil and with imports of natural gas.".
1862. MODIFICATION OF REQUIREMENTS FOR CER-
TIFICATION.
Section 251(c)(1)(B) of the Trade Act of 1974 (19
15 U.S.C. 2341(c)(1)(B)) is amended to read as follows:
16
17
18
19
20
21
22
23
24
"(B) that-
"(i) sales or production, or both, of the
firm have decreased absolutely,
"(ii) sales or production, or both, of an ar-
ticle 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,

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"(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 pro-
duction for the firm during the 24-month
period preceding that 12-month period, or
"(II) the average annual sales or pro-
duction for the firm during the 36-month
period preceding that 12-month period,
and
"(iv) sales or production, or both, of an ar-
ticle 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 pe-
riod for which data are available have decreased
compared to-
"(I) the average annual sales or pro-
duction for the article or service during the
24-month period preceding that 12-month
period, or
"(II) the average annual sales or pro-
duction for the article or service during the
36-month period preceding that 12-month
period, and".

240
1 SEC. 1863. BASIS FOR DETERMINATIONS.
5 "(e) BASIS FOR SECRETARY'S DETERMINATIONS.-
6 For purposes of subsection (c)(l)(C), the Secretary may
7 determine that there are increased imports of like or di-
8 rectly competitive articles or services, if customers ac-
9 counting for a significant percentage of the decrease in
10 the sales or production of the firm certify to the Secretary
11 that such customers have increased their imports of such
12 articles or services from a foreign country, either abso-
13 lutely or relative to their acquisition of such articles or
14 services from suppliers located in the United States.
15 "(f) NOTIFICATION TO FIRMS OF AVAILABILITY OF
16 BENEFITS.-Upon receiving notice from the Secretary of
17 Labor under section 225 of the identity of a firm that
18 is covered by a certification issued under section 223, the
19 Secretary of Commerce shall notify the firm of the avail-
20 ability of adjustment assistance under tIns chapter.".
21 SEC. 1864. OVERSIGHT AND ADMINISTRATION; AUTHORIZA·
22 TION OF APPROPRIATIONS.
24 Act of 1974 (19 U.S.C. 2341 et seq.) is amended-
25 (1) by striking sections 254, 255, 256, and 257;

241
1 (2) by redesigllating sections 258, 259, 260,
2 261, 262, 264, and 265, as sections 256, 257, 258,
3 259, 260, 261, and 262, respectively; and
4 (3) by inserting after section 253 the following:
5 "SEC. 254. OVERSIGHT AND ADMINISTRATION.
6 "(a) IN GENERAL.-The Secretary shall, to such ex-
7 tent and in such amounts as are provided in appropria-
8 tions Acts, provide grants to intermediary organizations
9 (referred to in section 253(b)(1)) throughout the United
1°States pursuant to agreements with such intermediary or-
11 ganizations. Each such agreement shall require the inter-
12 mediary organization to provide benefits to firms certified
13 under section 251. The Secretary shall, to the maximum
14 extent practicable, provide by October 1, 2010, that con-
15 tracts entered into with intermediary organizations be for
16 a 12-month period and that all such contracts have the
17 same beginning date and the same ending date.
18 "(b) DISTRIBUTION OF FUNDS.-
19 "(1) IN GENERAL.-Not later than 90 days
20 after the date of the enactment of this subsection,
21 the Secretary shall develop a methodology for the
22 distribution of funds among the intermediary organi-
23 zations described in subsection (a).
24 "(2) PROMPT INITIAL DISTRIBUTION.-·The
25 methodology described in paragraph (1) shall ensure

242
1 the prompt initial distribution of funds and establish
2 additional criteria governing the apportionment and
3 distribution of the remainder of such funds among
4 the intermediary organizations.
5 "(3) CRITERIA.-The methodology described in
6 paragraph (1) shall include criteria based on the
7 data in the annual report on the trade adjustment
8 assistance for firms program described in section
9 1866 of the Trade and Globalization Adjustment As-
10 sistance Act of 2009.
11 "(c) REQUIREMENTS FOR CONTRACTS.-An agree-
12 ment with an intermediary organization described in sub-
13 section (a) shall require the intermediary organization to
14 contract for the supply of services to carry out grants
15 under this chapter in accordance with terms and condi-
16 tions that are consistent with guidelines established by the
17 Secretary.
18 "(d) CONSULTATIONS.-
19 "(1) CONSULTATIONS REGARDING METHOD-
20 OLOGY.-The Secretary shall consult with the Com-
21 mittee on Finance of the Senate and the Committee
22 on Ways and Means of the House of
23 Representatives-

243
1 "(A) not less than 30 days before final-
2 izing the methodology described in subsection
3 (b); and
4 "(B) not less than 60 days before adopting
5 any changes to such methodology.
6 "(2) CONSULTATIONS REGARDING GUIDE-
7 LINEs.-The Secretary shall consult with the Com-
8 mittee on Finance of the Senate and the Committee
9 on Ways and Means of the House of Representatives
10 not less than 60 days before finalizing the guidelines
11 described in subsection (c) or adopting any subse-
12 quent changes to such guidelines.
13 "SEC. 255. AUTHORIZATION OF APPROPRIATIONS.
14 "(a) IN GENERAL.-There are authorized to be ap-
15 propriated to the Secretary $50,000,000 for each of the
16 fiscal years 2009 through 2010, and $12,501,000 for the
17 period beginning October 1, 2010, and ending December
18 31, 2010, to carry out the provisions of this chapter.
19 Amounts appropriated pursuant to this subsection shall-
20 "(1) be available to provide adjustment assist-
21 ance to firms that file a petition for such assistance
22 pursuant to this chapter on or before December 31,
23 2010; and
24 "(2) otherwise remain available until expended.

244
1 "(b) PERSONNEL.-Of the amounts appropriated
2 pursuant to this section for each fiscal year, $350,000
3 shall be available for full-time positions in the Department
4 of Commerce to administer the provisions of this chapter.
5 Of such funds the Secretary shall make available to the
6 Economic Development Administration such sums as may
7 be necessary to establish the position of Director of Ad-
8 justment Assistance for Firms and such other full-time po-
9 sitions as may be appropriate to administer the provisions
10 of this chapter.".
11 (b) RESIDUAL AUTHORITY.-The Secretary of Com-
12 merce shall have the authority to modify, terminate, re-
13 solve, liquidate, or take any other action with respect to
14 a loan, guarantee, contract, or any other financial assist-
15 ance that was extended under section 254, 255, 256, or
16 257 of the Trade Act of 1974 (19 U.S.C. 2344, 2345,
17 2346, and 2347), as in effect on the day before the effec-
18 tive date set forth in section 1891.
19 (c) CONFORMING AMENDMENTS.-
20 (1) Section 256 of the Trade Act of 1974, as
21 redesignated by subsection (a) of this section, IS
22 amended by striking subsection (d).
23 (2) Section 258 of the Trade Act of 1974, as
24 redesignated by subsection (a) of this section, IS
25 amended-

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(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,
8 United States Code".
9 (d) CLERICAL AMENDMENTS.-The table of contents
10 of the Trade Act of 1974 is amended by striking the items
11 relating to sections 254, 255, 256, 257, 258, 259, 260,
12 261, 262, 264, and 265, and inserting the following:
"See. 254. Oversight and administration.
"See. 255. Authorization of appropriations.
"See. 256. Proteetive provisions.
"See. 257. Penalties.
"See. 258. Civil aetions.
"See. 259. Definitions.
"See. 260. Regulations.
"See. 261. Study by Seeretary of Commeree when International Trade Conuuis-
sion begins investigation; a(~tion where there is affirmative find-
ing'.
"See. 262. Assistanee to industries.".
13 (e) EFFECTIVE DATE.-This section and the amend-
14 ments made by this section shall take effect upon the expi-
15 ration of the 90-day period beginning on the date of the
16 enactment of this Act, except that subsections (b) and (d)
17 of section 254 of the Trade Act of 1974 (as added by sub-
18 section (a) of this section) shall take effect on such date
19 of enactment.

246
1 SEC. 1865. INCREASED PENALTIES FOR FALSE STATE·
2 MENTS.
3 Section 257 of the Trade Act of 1974, as redesig-
4 nated by section 1864(a), is amended to read as follows:
5 "SEC. 257. PENALTIES.
6 "Any person who-
9 a material fact, or willfully overvalues any security,
10 for the purpose of influencing in any way a deter-
11 mination under this chapter, or for the purpose of
12 obtaining money, property, or anything of value
13 under this chapter, or
16 a material fact, when providing information to the
17 Secretary during an investigation of a petition under
18 this chapter,
19 shall be imprisoned for not more than 2 years, or fined
20 under title 18, United States Code, or both.".
21 SEC. 1866. ANNUAL REPORT ON TRADE ADJUSTMENT AS-
22 SISTANCE FOR FIRMS.
23 (a) IN GENERAL.-Not later than December 15,
24 2009, and each year thereafter, the Secretary of Com-
•
25 merce shall prepare a report containing data regarding the
26 trade adjustment assistance for firms program provided

247
1 for in chapter 3 of title II of the Trade Act of 1974 (19
2 U.S.C. 2341 et seq.) for the preceding fiscal year. The
3 data shall include the following:
4 (1) The number of firms that inquired about
5 the program.
6 (2) The number of petitions filed under section
7 251.
8 (3) The number of petitions certified and de-
9 nied.
10 (4) The average time for processing petitions.
11 (5) The number of petitions filed and firms cer-
12 tified for each congressional district of the Uluted
13 States.
14 (6) The number of firms that received assist-
15 ance in preparing their petitions.
16 (7) The number of firms that received assist-
17 ance developing business recovery plans.
18 (8) The number of business recovery plans ap-
19 proved and denied by the Secretary of Commerce.
20 (9) Sales, employment, and productivity at each
21 firm participating in the program at the time of cer-
22 tification.
23 (10) Sales, employment, and productivity at
24 each firm upon completion of the program and each
25 year for the 2-year period following completion.

248
1 (11) The financial assistance received by each
2 firm participating in the program.
3 (12) The financial contribution made by each
4 firm participating in the program.
5 (13) The types of technical assistance included
6 in the business recovery plans of firms participating
7 in the program.
8 (14) The number of firms leaving the program
9 before completing the project or projects in their
10 business recovery plans and the reason the project
11 was not completed.
12 (b) CLASSIFICATION OF DATA.-To the extent pos-
13 sible, in collecting and reporting the data described in sub-
14 section (a), the Secretary shall classify the data by inter-
15 mediary organization, State, and national totals.
16 (c) REPORT TO CONGRESS; PUBLICATION.-The Sec-
17 retary of Commerce shall-
18 (1) submit the report described in subsection
19 (a) to the Committee on Finance of the Senate and
20 the Committee on Ways and Means of the House of
21 Representatives; and
22 (2) publish the report in the Federal Register
23 and on the website of the Department of Commerce.
24 (d) PROTECTION OF CONFIDENTIAL INFORIVIA-
25 TION.-The Secretary of Commerce may not release infor-

249
1 mation described in subsection (a) that the Secretary con-
2 siders to be confidential business information unless the
3 person submitting the confidential business information
4 had notice, at the time of submission, that such informa-
5 tion would be released by the Secretary, or such person
6 subsequently consents to the release of the information.
7 Nothing in this subsection shall be construed to prohibit
8 the Secretary from providing such confidential business in-
9 formation to a court in camera or to another party under
lOa protective order issued by a court.
11 SEC. 1867. TECHNICAL CORRECTIONS.
13 1974 (19 U.S.C. 2341), as amended, is further
14 amended-
15 (1) in subsection (a), by striking "he has" and
16 inserting "the Secretary has"; and
17 (2) in subsection (d), by striking "60 days" and
18 inserting "40 days".
19 (b) TECHNICAL ASSISTANCE.-Section 253(a)(3) of
20 the Trade Act of 1974 (19 U.S.C. 2343(a)(3)) is amended
21 by striking "of a certified firm" and inserting "to a cer-
22 tified firm".

250
1 PART III-TRADE ADJUSTMENT ASSISTANCE FOR
2 COMMUmTlliS
3 SEC. 1871. PURPOSE.
4 The purpose of the amendments made by this part
5 is to assist communities impacted by trade with economic
6 adjustment through the coordination of Federal, State,
7 and local resources, the creation of community-based de-
8 velopment strategies, and the development and provision
9 of programs that meet the training needs of workers cov-
10 ered by certifications under section 223.
11 SEC. 1872. TRADE ADJUSTMENT ASSISTANCE FOR COMMU·
12 NITIES.
14 Act of 1974 (19 U.S.C. 2371 et seq.) is amended to read
15 as follows:
16 "CHAPTER 4-TRADE ADJUSTMENT
17 ASSISTANCE FOR COMMUNITIES
18 "Subchapter A-Trade Adjustment Assistance
19 for Communities
20 "SEC. 271. DEFINITIONS.
21 "In this subchapter:
22 "(1) AGRICULTURAL COMMODITY PRODUCER.-
23 The term 'agricultural commodity producer' has the
24 meaning given that term in section 291.
25 "(2) COMMUNITY.-The term 'community'
26 means a city, county, or other political subdivision of

251
1 a State or a consortium of political subdivisions of
2 a State.
3 "(3) COMMUNITY IMPACTED BY TRADE.-The
4 term 'community impacted by trade' means a com-
5 munity described in section 273(b)(2).
6 "(4) ELIGIBLE COMMUNITY.-The term 'eligible
7 community' means a community that the Secretary
8 has determined under section 273(b)(1) is eligible to
9 apply for assistance under this subchapter.
10 "(5) SECRETARY.-The term 'Secretary' means
11 the Secretary of Commerce.
12 "SEC. 272. ESTABLISHMENT OF TRADE ADJUSTMENT AS-
13 SISTANCE FOR COMMUNITIES PROGRAM.
14 "Not later than August 1, 2009, the Secretary shall
15 establish a trade adjustment assistance for communities
16 program at the Department of Commerce under which the
17 Secretary shall-
18 " (1) provide technical assistance under section
19 274 to communities impacted by trade to facilitate
20 the economic adjustment of those communities; and
21 "(2) award grants to communities impacted by
22 trade to carry out strategic plans developed under
23 section 276.
24 "SEC. 273. ELIGffiILITY; NOTIFICATION.
25 "(a) PETITION.-

252
1 "(1) IN GENERAL.-A community may submit
2 a petition to the Secretary for an affirmative deter-
3 mination under subsection (b)(l) that the commu-
4 nity is eligible to apply for assistance under this sub-
S chapter if-
6 "(A) on or after August 1, 2009, one or
7 more certifications described in subsection
8 (b)(3) are made with respect to the community;
9 and
10 "(B) the community submits the petition
11 not later than 180 days after the date of the
12 most recent certification.
13 "(2) SPECIAL RULE WITH RESPECT TO CER-
14 TArN COMMUNITIES.-In the case of a community
15 with respect to which one or more certifications de-
16 scribed in subsection (b) (3) were made on or after
17 January 1, 2007, and before August 1, 2009, the
18 community may submit not later than February 1,
19 2010, a petition to the Secretary for an affirmative
20 determination under subsection (b)(I).
21 "(b) AFFIRMATIVE DETERMINATION.-
22 "(1) IN GENERAL.-The Secretary shall make
23 an affirmative determination that a community is el-
24 igible to apply for assistance under this subchapter

253
1 if the Secretary determines that the community is a
2 community impacted by trade.
3 "(2) COMMUNITY IMPACTED BY TRADE.-A
4 community is a community impacted by trade if-
5 "(A) one or more certifications described
6 in paragraph (3) are made with respect to the
7 community; and
8 "(B) the Secretary determines that the
9 community is significantly affected by the
10 threat to, or the loss of, jobs associated with
11 any such certification.
12 "(3) CERTIFICATION DESCRIBED.-A certifi-
13 cation described III this paragraph IS a
14 certification-
15 "(A) by the Secretary of Labor that a
16 group of workers in the community is eligible to
17 apply for assistance under section 223;
18 "(B) by the Secretary of Commerce that a
19 firm located in the community is eligible to
20 apply for adjustment assistance under section
21 251; or
22 "(C) by the Secretary of Agriculture that
23 a group of agricultural commodity producers in
24 the community is eligible to apply for adjust-
25 ment assistance under section 293.

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"(c) NOTIFICATIONS.-
"(1) NOTIFICATION TO THE GOVERNOR.-The
Governor of a State shall be notified promptly-
"(A) by the Secretary of Labor, upon mak-
ing 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 agricul-
tural commodity producers in the State is eligi-
ble for assistance under section 293.
"(2) NOTIFICATION TO COMMUNITy.-Upon
making an affirmative determination under sub-
section (b)(l) that a community is eligible to apply
for assistance under this subchapter, the Secretary
shall promptly notify the community and the Gov-
ernor of the State in which the community is
located-
"(A) of the affirmative determination;
" (B) of the applicable provisions of this
subchapter; and

255
1 "(C) of the means for obtaining assistance
2 under this subchapter and other appropriate
3 economic assistance that may be available to
4 the community.
5 "SEC. 274. TECHNICAL ASSISTANCE.
6 "(a) IN GENERAL.-The Secretary shall provide com-
7 prehensive technical assistance to an eligible community
8 to assist the community to-
9 "(1) diversify and strengthen the economy III
10 the community;
11 "(2) identify significant impediments to eco-
12 nomic development that result from the impact of
13 trade on the community; and
14 "(3) develop a strategic plan under section 276
15 to address economic adjustment and workforce dis-
16 location in the community, including unemployment
17 among agricultural commodity producers.
18 "(b) COORDINATION OF FEDERAL RESPONSE.-The
19 Secretary shall coordinate the Federal response to an eligi-
20 ble community by-
21 "(1) identifying Federal, State, and local re-
22 sources that are available to assist the community in
23 responding to economic distress; and
24 "(2) assisting the community in accessing avail-
25 able Federal assistance and ensuring that such as-

256
1 sistance IS provided in a targeted, integrated man-
2 nero
3 "(c) INTERAGENCY COMMUNITY AsSISTANCE WORK-
4 ING GROUP.-
5 "(1) IN GENERAL.-The Secretary shall estab-
6 lish an interagency Community Assistance Working
7 Group, to be chaired by the Secretary or the Sec-
8 retary's designee, which shall assist the Secretary
9 with the coordination of the Federal response pursu-
10 ant to subsection (b).
11 "(2) MEMBERSHIP.-The Working Group shall
12 consist of representatives of any Federal department
13 or agency with responsibility for providing economic
14 adjustment assistance, including the Department of
15 Agriculture, the Department of Defense, the Depart-
16 ment of Education, the Department of Labor, the
17 Department of Housing and Urban Development,
18 the Department of Health and Human Services, the
19 Small Business Administration, the Department of
20 the Treasury, and any other Federal, State, or re-
21 gional public department or agency the Secretary de-
22 termines to be appropriate.
23 "SEC. 275. GRANTS FOR ELIGffiLE COMMUNITIES.
24 "(a) IN GENERAL.-The Secretary may award a
25 grant under tIlls section to an eligible community to assist

257
1 the community in carrying out any project or program
2 that is included in a strategic plan developed by the com-
3 munity under section 276.
4 "(b) APPLICATION.-
5 "(1) IN GENERAL.-An eligible community
6 seeking to receive a grant under this section shall
7 submit a grant application to the Secretary that
8 contains-
9 "(A) the strategic plan developed by the
10 community under section 276(a)(1)(A) and ap-
11 proved by the SecretaIy under section
12 276(a)(1)(B); and
13 "(B) a description of the project or pro-
14 gram included in the strategic plan with respect
15 to which the community seeks the grant.
16 "(2) COORDINATION Al10NG GRANT PRO-
17 GRAl1s.-If an entity in an eligible community is
18 seeking or plans to seek a Community College and
19 Career Training Grant under section 278 or a Sec-
20 tor Partnership Grant under section 279A while the
21 eligible community is seeking a grant under this sec-
22 tion, the eligible community shall include in the
23 grant application a description of how the eligible
24 community will integrate any projects or programs
25 carried out using a grant under this section with any

258
1 projects or programs that may be carried out using
2 such other grants.
3 "(c) LIMITATION.-An eligible community may not
4 be awarded more than $5,000,000 under this section.
5 "(d) COST-SHARING.-
6 "(1) FEDERAL SHARE.-The Federal share of a
7 project or program for which a grant is awarded
8 under this section may not exceed 95 percent of the
9 cost of such project or program.
10 "(2) COMMUNITY SHARE.-The Secretary shall
11 require, as a condition of awarding a grant to an eli-
12 gible community under this section, that the eligible
13 community contribute not less than an amount equal
14 to 5 percent of the amount of the grant toward the
15 cost of the project or program for which the grant
16 is awarded.
17 "(e) GRANTS TO SMALL- AND MEDIUM-SIZED COM-
18 MUNITIES.-The Secretary shall give priority to grant ap-
19 plications submitted under this section by eligible commu-
20 nities that are small- and medium-sized communities.
21 "(f) ANNUAL REPORT.-Not later than December 15
22 in each of the calendar' years 2009 through 2011, the Sec-
23 retary shall submit to the Committee on Finance of the
25 House of Representatives a report-

ENTITIES.-
"(A) develop a strategic plan for the com-
munity'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
"(A) IN GENERAL.-To the extent prac-
ticable, an eligible community shall consult with
entities described in subparagraph (B) in devel-
oping a strategic plan under paragraph (1).
"(B) ENTITIES DESCRIBED.-Entities de-
scribed in this subparagraph are public and pri-
vate entities within the eligible community,
including-
259
1 "(1) describing each grant awarded under this
2 section during the preceding fiscal year; and
3 "(2) assessing the impact on the eligible com-
4 munity of each such grant awarded in a fiscal year
5 before the fiscal year referred to in paragraph (1).
6 "SEC. 276. STRATEGIC PLANS.
7 "(a) IN GENERAL.-
8 "(1) DEVELOPMENT.-An eligible community
9 that intends to apply for a grant under section 275
10 shall-
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

260
1 "(i) local, county, or State govern-
2 ment agencies serving the community;
3 "(ii) firms, including small- and me-
4 dium-sized firms, within the community;
5 "(iii) local workforce investment
6 boards established under section 117 of the
7 Workforce Investment Act of 1998 (29
8 U.S.C. 2832);
9 "(iv) labor organizations, including
10 State labor federations and labor-manage-
11 ment initiatives, representing workers in
12 the community; and
13 "(v) educational institutions, local
14 educational agencies, or other training pro-
15 viders serving the community.
16 "(b) CONTENTs.-The strategic plan shall, at a min-
17 imum, contain the following:
18 "(1) A description and analysis of the capacity
19 of the eligible community to achieve economic ad-
20 justment to the impact of trade.
21 "(2) An analysis of the economic development
22 challenges and opportunities facing the community
23 as well as the strengths and weaknesses of the econ-
24 omy of the community.

261
1 "(3) An assessment of the commitment of the
2 eligible community to the strategic plan over the
3 long term and the participation and input of mem-
4 bel's of the community affected by economic disloca-
5 tion.
6 "(4) A description of the role and the participa-
7 tion of the entities described in subsection (a)(2)(B)
8 in developing the strategic plan.
9 "(5) A description of the projects to be under-
10 taken by the eligible community under the strategic
11 plan.
12 "(6) A description of how the strategic plan
13 and the projects to be undertaken by the eligible
14 community will facilitate the community's economic
15 adjustment.
16 "(7) A description of the educational and train-
17 mg programs available to workers in the eligible
18 community and the future employment needs of the
19 community.
20 "(8) An assessment of the cost of implementing
21 the strategic plan, the timing of funding required by
22 the eligible community to implement the strategic
23 plan, and the method of financing to be used to im-
24 plement the strategic plan.

262
1 "(9) A strategy for continuing the economic ad-
2 justment of the eligible community after the comple-
3 tion of the projects described in paragraph (5).
4 "(c) GRANTS TO DEVELOP STRATEGIC PLANS.-
5 "(1) IN GENERAL.-The Secretary, upon re-
6 ceipt of an application from an eligible community,
7 may award a grant to the community to assist the
8 community in developing a strategic plan under sub-
9 section (a)(l). A grant awarded under this para-
10 graph shall not exceed 75 percent of the cost of de-
II veloping the strategic plan.
12 "(2) FUNDS TO BE USED.-Of the funds appro-
13 priated pursuant to section 277(c), the Secretary
14 may make available not more than $25,000,000 for
15 each of the fiscal years 2009 and 2010, and
16 $6,250,000 for the period beginning October 1,
17 2010, and ending December 31, 2010, to provide
18 grants to eligible communities under paragraph (1).
19 "SEC. 277. GENERAL PROVISIONS.
20 "(a) REGULATIONS.-
21 "(1) IN GENERAL.-The Secretary shall pre-
22 scribe such regulations as are necessary to carry out
23 the provisions of this subchapter, including-

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1 "(A) establishing specific guidelines for the
2 submission and evaluation of strategic plans
3 under section 276;
4 "(B) establishing specific guidelines for the
5 submission and evaluation of grant applications
6 under section 275; and
7 "(C) administering the grant programs es-
8 tablished under sections 275 and 276.
9 "(2) CONSULTATIONs.-The Secretary shall
10 consult with the Committee on Finance of the Sen-
11 ate and the Committee on Ways and Means of the
12 House of Representatives not less than 90 days
13 prior to promulgating any final rule or regulation
14 pursuant to paragraph (1).
15 "(b) PERSONNEL.-The Secretary shall designate
16 such staff as may be necessary to carry out the respon-
17 sibilities described in this subchapter.
18 "(c) AUTHORIZATION OF APPROPRIATIONS.-
19 "(1) IN GENERAL.-There are authorized to be
20 appropriated to the Secretary $150,000,000 for each
21 of the fiscal years 2009 and 2010, and $37,500,000
22 for the period beginning October 1, 2010, and end-
23 ing December 31, 2010, to carry out this sub-
24 chapter.

264
1 "(2) AVAILABILITY.-Amounts appropriated
2 pursuant to this subchapter-
3 "(A) shall be available to provide adjust-
4 ment assistance to communities that have been
5 approved for assistance pursuant to this chap-
6 tel' on or before December 31, 2010; and
7 "(B) shall otherwise remain available until
8 expended.
9 "(3) SUPPLEMENT NOT SUPPLANT.-Funds ap-
10 propriated pursuant to this subchapter shall be used
11 to supplement and not supplant other Federal,
12 State, and local public funds expended to provide
13 economic development assistance for communities.
14 "Subchapter B-Community College and
15 Career Training Grant Program
16 "SEC. 278. COMMUNITY COLLEGE AND CAREER TRAINING
17 GRANT PROGRAM.
18 "(a) GRANTS AUTHORIZED.-
19 "(1) IN GENERAL.-Beginning August 1, 2009,
20 the Secretary may award Community College and
21 Career Training Grants to eligible institutions for
22 the purpose of developing, offering, or improving
23 educational or career training progTams for workers
24 eligible for training under section 236.

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"(2) LIMITATIONS.-An eligible institution may
not be awarded-
"(A) more than one gTant under this sec-
tion' or,
"(B) a gTant under this section in excess
of $1,000,000.
"(b) DEFINITIONS.-In this section:
"(1) ELIGIBLE INSTITUTION.-The term 'eligi-
ble institution' means an institution of higher edu-
cation (as defined in section 102 of the Higher Edu-
cation 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.-All eligible institution seek-
ing 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 submis-
sion of gTant proposals under this section; and

266
1 "(B) publish and maintain such guidelines
2 on the website of the Department of Labor.
3 "(3) ASSISTANCE.-The Secretary shall· offer
4 assistance in preparing a grant proposal to anyeligi-
5 ble institution that requests such assistance.
6 "(4) GENERAL REQUIREMENTS FOR GRANT
7 PROPOSALS.-
8 "(A) IN GENERAL.-A grant proposal sub-
9 nutted to the Secretary under tills section shall
10 include a detailed description of-
11 "(i) the specific project for willch the
12 grant proposal is submitted, including the
13 manner in which the grant will be used to
14 develop, offer, or improve an educational
15 or career training program that is suited
16 to workers eligible for training under sec-
17 tion 236;
18 "(ii) the extent to which the project
19 for willch the grant proposal is submitted
20 will meet the educational or career training
21 needs of workers in the community served
22 by the eligible institution who are eligible
23 for training under section 236;
24 "(iii) the extent to which the project
25 for willch the grant proposal is submitted

267
1 fits within any overall strategic plan devel-
2 oped by an eligible community under sec-
3 tion 276;
4 "(iv) the extent to which the project
5 for which the grant proposal is submitted
6 relates to any project funded by a Sector
7 Partnership Grant awarded under section
8 279A; and
9 "(v) any previous experience of the el-
10 igible institution in providing educational
11 or career training programs to workers eli-
12 gible for training under section 236.
13 "(B) ABSENCE OF EXPERIENCE.-The ab-
14 sence of any previous experience in providing
15 educational or career training programs de-
16 scribed in subparagraph (A)(v) shall not auto-
17 matically disqualify an eligible institution from
18 receiving a grant under this section.
19 "(5) COMMUNITY OUTREACH REQUIRED.-In
20 order to be considered by the Secretary, a grant pro-
21 posal submitted by an eligible institution under this
22 section shall-
23 "(A) demonstrate that the eligible
24 institution-

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"(i) reached out to employers, and
other entities described In section
276(a)(2)(B) to identify-
"(1) any shortcomings in existing
educational and career training oppor-
tunities available to workers in the
community; and
"(II) any future employment op-
portunities 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 sit-
uated institutions in an effort to benefit
from any best practices that may be shared
with respect to providing educational or ca-
reer training programs to workers eligible
for training under section 236; and
"(iii) reached out to any eligible part-
nership in the community that has sought
or received a Sector Partnership Grant
under section 279A to enhance the effec-
tiveness of each grant and avoid duplica-
tion of efforts; and
"(B) include a detailed description of-

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"(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 short-
commgs identified under subparagraph
(A)(i)(I) or any educational or career
9 training needs identified under subpara-
10 graph (A)(i)(II); and
11 "(iii) the extent to which employers,
12 including small- and medium-sized firms
13 within the community, have demonstrated
14 a commitment to employing workers who
15 would benefit from the project for which
16 the grant proposal is submitted.
17 "(d) CRITERIA FOR AWARD OF GRANTS.-
18 "(1) IN GENERAL.-Subject to the appropria-
19 tion of funds, the Secretary shall award a grant
20 under this section based on-
21 "(A) a determination of the merits of the
22· grant proposal submitted by the eligible institu-
23 tion to develop, offer, or improve educational or
.
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to workers eligible for training under section
236·,
"(B) an evaluation of the likely employ-
ment opportunities available to workers who
complete an educational or career training pro-
gram that the eligible institution proposes to
develop, offer, or improve; and
"(C) an evaluation of prior demand for
training programs by workers eligible for train-
ing under section 236 in the community served
by the eligible institution, as well as the avail-
ability and capacity of existing training pro-
grams to meet future demand for training pro-
grams.
"(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 pro-
posal is submitted to the Secretary under this sec-
tion.
"(3) MATCHING REQUIREMENTS.-A grant
25 awarded under this section may not be used to sat-

271
1 isfy any private matching requirement under any
2 other provision of law.
3 "(e) ANNUAL REPORT.-Not later than Decernber 15
4 in each of the calendar years 2009 through 2011, the See-
S retary shall submit to the Committee on Finance of the
7 House of Representatives a report-
8 " (1) describing each grant awarded under tIns
9 section during the preceding fiscal year; and
10 "(2) assessing the impact of each award of a
11 grant under this section in a fiscal year preceding
12 the fiscal year referred to in paragraph (1) on work-
13 ers receiving training under section 236.
14 "SEC. 279. AUTHORIZATION OF APPROPRIATIONS.
15 "(a) AUTHORIZATION OF APPROPRIATIONS.-There
16 are authorized to be appropriated to the Secretary of
17 Labor $40,000,000 for each of the fiscal years 2009 and
18 2010, and $10,000,000 for the period beginning October
19 1, 2010, and ending December 31, 2010, to fund the Com-
20 munity College and Career Training Grant Program.
21 Funds appropriated pursuant to this section shall remain
22 available until expended.
23 "(b) SUPPLEMENT NOT SUPPLANT.-Funds appro-
24 priated pursuant to this section shall be used to supple-
25 ment and not supplant other Federal, State, and local

272
1 public funds expended to support community college and
2 career training programs.
3 "Subchapter C-Industry or Sector Partner-
4 ship Grant Program for Communities Im-
5 pacted by Trade
6 "SEC. 279A. INDUSTRY OR SECTOR PARTNERSHIP GRANT
7 PROGRAM FOR COMMUNITIES IMPACTED BY
8 TRADE.
9 "(a) PURPOSE.-The purpose of this subchapter is
10 to facilitate efforts by industry or sector partnerships to
11 strengthen and revitalize industries and create employ-
12 ment opportunities for workers in communities impacted
13 by trade.
14 "(b) DEFINITIONS.-In this subchapter:
15 "(1) COMMUNITY IMPACTED BY TRADE.-The
16 term 'community impacted by trade' has the mean-
17 ing given that term in section 271.
18 "(2) DISLOCATED WORKER.-The term 'dis-
19 located worker' means a worker who has been totally
20 or partially separated, or is threatened with total or
21 partial separation, from employment in an industry
22 or sector in a community impacted by trade.
23 "(3) ELIGIBLE PARTNERSHIP.-The term 'eligi-
24 ble partnership' means a voluntary partnership com-
25 posed of public and private persons, firms, or other

273
1 entities within a community impacted by trade, that
2 shall include representatives of-
3 "(A) an industry or sector within the com-
4 munity, including an industry association;
5 "(B) local, county, or State government;
6 "(C) multiple firms in the industry or sec-
7 tor, including small- and medium-sized firms,
8 within the community;
9 "(D) local workforce investment boards es-
10 tablished under section 117 of the Workforce
11 Investment Act of 1998 (29 U.S.C. 2832);
12 "(E) labor organizations, including State
13 labor federations and labor-management initia-
14 tives, representing workers in the community;
15 and
16 "(F) educational institutions, local edu-
17 cational agencies, or other training providers
18 serving the community.
19 "(4) LEAD ENTITY.-The term 'lead entity'
20 means-
21 "(A) an entity designated by the eligible
22 partnership to be responsible for submitting a
23 grant proposal under subsection (e) and serving
24 as the eligible partnership's fiscal agent in ex-

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S.L.C.
1 pending any Sector Partnership Grant awarded
2 under this section; or
3 "(B) a State agency designated by the
4 Governor of the State to carry out the respon-
5 sibilities described in subparagraph (A).
6 "(5) SECRETARY.-The term 'Secretary' means
7 the Secretary of Labor.
8 "(6) TARGETED INDUSTRY OR SECTOR.-The
9 term 'targeted industry or sector' means the indus-
.10 try or sector represented by an eligible partnership.
11 "(c) SECTOR PARTNERSHIP GRANTS AUTHOR-
12 IZED.-Beginning on August 1, 2009, and subject to the
13 appropriation of funds, the Secretary shall award Sector
14 Partnership Grants to eligible partnerships to assist the
15 eligible partnerships in carrying out projects, over periods
16 of not more than 3 years, to strengthen and revitalize in-
17 dustries and sectors and create employment opportunities
18 for dislocated workers.
19 "(d) USE OF SECTOR PARTNERSHIP GRANTS.-An
20 eligible partnership may use a Sector Partnership Grant
21 to carry out any project that the Secretary determines will
22 further the purpose of this subchapter, which may
23 include-
24 "(1) identifying the skill needs of the targeted
25 industry or sector and any gaps in the available sup-

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ply 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 avail-
able 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 alig11ing the instruction provided by
local suppliers of education and training serv-
ices 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 me-
dium-sized firms, in the targeted industry or sector
increase their productivity and the productivity of
their workers;

276
1 " (4) helping such firms retain incumbent work-
2 e1's;
3 "(5) developing learning consortia of small- and
4 medium-sized firms in the targeted industry or sec-
5 tor with similar training needs to enable the firms
6 to combine their purchases of training services, and
7 thereby lower their training costs;
8 "(6) providing information and outreach activi-
9 ties to firms in the targeted industry or sector re-
10 garding the activities of the eligible partnership and
11 other local service suppliers that could assist the
12 firms in meeting needs for skilled workers;
13 "(7) seeking, applying, and disseminating best
14 practices learned from similarly situated commu-
15 nities impacted by trade in the development and im-
16 plementation of economic growth and revitalization
17 strategies; and
18 "(8) identifying additional public and private
19 resources to support the activities described in this
20 subsection, which may include the option to apply
21 for a community grant under section 275 or a Com-
22 munity College and Career Training Grant under
23 section 278 (subject to meeting any additional re-
24 quirements of those sections).
25 "(e) GRAL'JT PROPOSALS.-

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"(1) IN GENERAL.-The lead entity of an eligi-
ble partnership seeking to receive a Sector Partner-
ship Grant under this section shall submit a gl'ant
proposal to the Secretary at such time, in such man-
ner, and containing such information as the Sec-
retary may require.
"(2) GENERAL REQUIREMENTS OF GRANT PRO-
POSALs.-A grant proposal submitted under para-
graph (1) shall, at a minimum-
"(A) identify the members of the eligible
partnership;
"(B) identify the targeted industry or sec-
tor 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 partner-
ship has the organizational capacity to carry
out the projects described in subparagraph (D);
"(F) explain-

278
1 "(i) whether-
2 . "(I) the community impacted by
3 trade has sought or received a com-
4 munity grant under section 275;
5 "(II) an eligible institution in the
6 community has sought or received a
7 Community College and Career Train-
8 ing Grant under section 278; or
9 "(III) any other entity in the
10 community has received funds pursu-
11 ant to any other federally funded
12 training project; and
13 "(ii) how the eligible partnership will
14 coordinate its use of a Sector Partnership
15 Grant with the use of such other grants or
16 funds in order to enhance the effectiveness
17 of each grant and any such funds and
18 avoid duplication of efforts; and
19 "(G) include performance measures, devel-
20 oped based on the performance measures issued
21 by the Secretary under subsection (g)(2), and a
22 timeline for measuring progress toward achiev-
23 ing the goals described in subparagraph (C).
24 "(f) AWARD OF GRANTS.-

279
1 "(1) IN GENERAL.-Upon application by the
2 lead entity of an eligible partnership, the Secretary
3 may award a Sector Partnership Grant to the eligi-
4 ble partnership to assist the partnership in carrying
5 out any of the projects in the grant proposal that
6 the Secretary determines will further the purposes of
7 this subchapter.
8 "(2) LIMITATIONS.-All eligible partnership
9 may not be awarded-
10 " (A) more than one Sector Partnership
11 Grant; or
12 "(B) a total grant award under this sub-
13 chapter in excess of-
14 "(i) except as provided in clause (ii),
15 $2,500,000; or
16 "(ii) in the case of an eligible partner-
17 ship located within a community impacted
18 by trade that is not served by an institu-
19 tion receiving a Community College and
20 Career Training Grant under section 278,
21 $3,000,000.
22 "(g) ADMINISTRATION BY THE SECRETARY.-
23 "(1) TECHNICAL ASSISTANCE AND OVER-
24 SIGHT.-

280
2 provide technical assistance to, and oversight
3 of, the lead entity of an eligible partnership in
4 applying for and administering Sector Partner-
S ship Grants awarded under this section.
6 "(B) TECHNICAL ASSISTAt"TCE.-Technical
7 assistance provided under subparagraph (A)
8 shall include providing conferences and such
9 other methods of collecting and disseminating
10 information on best practices developed by eligi-
11 ble partnerships as the Secretary determines
12 appropriate.
13 "(C) GRANTS OR CONTRACTS FOR TECH-
14 NICAL ASSISTANCE.-The Secretary may award
15 a grant or contract to one or more national or
16 State organizations to provide technical assist-
17 ance to foster the planning, formation, and im-
18 plementation of eligible partnerships.
19 "(2) PERFORMANCE MEASURES.-The Sec-
20 retary shall issue a range of performance measures,
21 with quantifiable benchmarks, and methodologies
22 that eligible partnerships may use to measure
23 progress toward the goals described in subsection
24 (e). In developing such measures, the Secretary shall
25 consider the benefits of the eligible partnership and

281
1 its activities for workers, firms, industries, and com-
2 munities.
3 "(h) REPORTS.-
4 "(1) PROGRESS REPORT.-Not later than 1
5 year after receiving a Sector Partnership Grant, and
6 3 years thereafter, the lead entity shall submit to
7 the Secretary, on behalf of the eligible partnership,
8 a report containing-
9 "(A) a detailed description of the progress
10 made toward achieving the goals described in
11 subsection (e)(2)(C), using the performance
12 measures required under subsection (e)(2)(G);
13 "(B) a detailed evaluation of the impact of
14 the grant award on workers and employers in
15 the community impacted by trade; and
16 "(C) a detailed description of all expendi-
17 tures of funds awarded to the eligible partner-
18 ship under the Sector Partnership Grant ap-
19 proved by the Secretary under this subchapter.
20 "(2) ANNUAL REPORT.-Not later than Decem-
21 ber 15 in each of the calendar years 2009 through
22 2011, the Secretary shall submit to the Committee
23 on Finance of the Senate and the Committee on
24 Ways and Means of the House of Representatives a
25 report-

282
1 "(A) describing each Sector Partnership
2 Grant awarded to an eligible partnership during
3 the preceding fiscal year; and
4 "(B) assessing the impact of each Sector
5 Partnership Grant awarded in a fiscal year pre-
6 ceding the fiscal year referred to in subpara-
7 gTaph (A) on workers and employers in commu-
8 nities impacted by trade.
9 "SEC. 279B. AUTHORIZATION OF APPROPRIATIONS.
10 "(a) IN GENERAL.-There are authorized to be ap-
11 propriated to the Secretary of Labor $40,000,000 for each
12 of the fiscal years 2009 and 2010, and $10,000,000 for
13 the period beginning October 1, 2010, and ending Decem-
14 bel' 31, 2010, to carry out the Sector Partnership Grant
15 program under section 279A. Funds appropriated pursu-
16 ant to this section shall remain available until expended.
17 "(b) SUPPLEMENT NOT SUPPLANT.-Funds appro-
18 priated pursuant to this section shall be used to supple-
19 ment and not supplant other Federal, State, and local
20 public funds expended to support the economic develop-
21 ment of local communities.
22 "(c) ADMINISTRATIVE CosTs.-The Secretary may
23 retain not more than 5 percent of the funds appropriated
24 pursuant to this section for each fiscal year to administer

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1 the Sector Partnership Grant program under section
2 279A.
3 "Subchapter D-General Provisions
4 "SEC. 279C. RULE OF CONSTRUCTION.
5 "Nothing in this chapter prevents a worker from re-
6 ceiving trade adjustment assistance under chapter 2 of
7 this title at the same time the worker is receiving assist-
8 ance in any manner from-
9 "(1) a community receiving a community grant
10 under subchapter A;
11 "(2) an eligible institution receiving a Commu-
12 nity College and Career Training Grant under sub-
13 chapter B; or
14 "(3) an eligible partnership recelvmg a Sector
15 Partnership Grant under subchapter C.".
16 SEC. 1873. CONFORMING AMENDMENTS.
17 (a) TABLE OF CONTENTS.-The table of contents of
18 the Trade Act of 1974 is amended by striking the items
19 relating to chapter 4 of title II and inserting the following:
"CHAPTER 4--TRADE ADJUSTMENT ASSISTANCE FOR COMllffiNITIES
"Subehapter A-Trade Adjustment Assistanee for Communities
"See. 271. Definitions.
"See. 272. Establishment of trade adjustment assistanee for eommunities pro-
gTam.
"See. 273. Eligibility; notifieation.
"See. 274. Teehnieal assistanee.
"See. 275. Grants for eligible eOllununities.
"See. 276. Strategie plans.
"See. 277. General provisions.
"Subehapter B-Community College and Career Training Grant ProgTaIn

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"See. 278. Community eollege and eareer training gTant progTam.
"See. 279. Authorization of appropriations.
S.L.C.
"Subehapter C-Industry or Seetor Partnership Grant ProgTam for
Communities Impaeted by Trade
"See. 279A. Industry or seetor partnership gTant prog1'am for eOIllnmnities im-
paeted by trade.
"See. 279B. Authorization of appropriations.
"Subehapter D-General Provisions
"See. 279C. Rule of eonstruetion."
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(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 insert-
ing ". and"· and, ,

285
1 "(4) any final determination of the Secretary of
2 Agriculture under section 293 or 296 of the Trade
3 Act of 1974 (19 U.S.C. 2401b) with respect to the
4 eligibility of a group of agricultural commodity pro-
S ducers for adjustment assistance under such Act.".
6 PART IV-TRADE ADJUSTMENT ASSISTANCE FOR
7 FARMERS
8 SEC. 1881. DEFINITIONS.
10 2401) is amended-
11 (1) by amending paragraph (1) to read as fol-
12 lows:
13 "(1) AGRICULTURAL COMMODITY.-The term
14 'agricultural commodity' includes-
15 "(A) any agricultural commodity (includ-
16 ing livestock) in its raw or natural state;
17 "(B) any class of goods within an agricul-
18 tural commodity; and
19 "(C) in the case of an agricultural com-
20 modity producer described in paragraph (2)(B),
21 wild-caught aquatic species.";
22 (2) by amending paragraph (2) to read as fol-
23 lows:

286
1 "(2) AGRICULTURAL COMMODITY PRODUCER.-
2 The term 'agricultural commodity producer'
3 means-
4 "(A) a person that shares in the risk of
5 producing an agTicultural commodity and that
6 is entitled to a share of the commodity for mar-
7 keting, including an operator, a sharecropper,
8 or a person that owns or rents the land on
9 which the commodity is produced; or
10 "(B) a person that reports gain or loss
11 from the trade or business of fishing on the
12 person's annual Federal income tax return for
13 the taxable year that most closely corresponds
14 to the marketing year with respect to which a
15 petition is filed under section 292."; and
17 "(7) MARKETING YEAR.-The term 'marketing
18 year' means-
19 "(A) a marketing year designated by the
20 Secretary with respect to an agricultural com-
21 modity; or
22 "(B) in the case of an agricultural com-
23 modity with respect to which the Secretary does
24 not designate a marketing year, a calendar
25 year.".

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1 SEC. 1882. ELIGffiILITY.
3 1974 (19 U.S.C. 2401a) is amended by striking sub-
4 sections (c) through (e) and inserting the following:
5 "(c) GROUP ELIGIBILITY REQUIREMENTs.-The
6 Secretary shall certify a group of agricultural commodity
7 producers as eligible to apply for adjustment assistance
8 under this chapter if the Secretary determines that-
9 "(l)(A) the national average price of the agri-
10 cultural commodity produced by the group during
11 the most recent marketing year for which data are
12 available is less than 85 percent of the average of
13 the national average price for the commodity in the
14 3 marketing years preceding such marketing year;
15 "(B) the quantity of production of the agricul-
16 tural commodity produced by the group during such
17 marketing year is less than 85 percent of the aver-
18 age of the quantity of production of the commodity
19 produced by the group in the 3 marketing years pre-
20 ceding such marketing year;
21 "(C) the value of production of the agricultural
22 commodity produced by the group during such mar-
23 keting year is less than 85 percent of the average
24 value of production of the commodity produced by
25 the group in the 3 marketing years preceding such
26 marketing year; or

288
1 "(D) the cash receipts for the agricultural com-
2 modity produced by the group during such mar-
3 keting year are less than 85 percent of the average
4 of the cash receipts for the commodity produced by
5 the group in the 3 marketing years preceding such
6 marketing year;
7 "(2) the volume of imports of articles like or di-
8 rectly competitive with the agricultural commodity
9 produced by the group in the marketing year with
10 respect to which the group files the petition in-
11 creased compared to the average volume of such im-
12 ports during the 3 marketing years preceding such
13 marketing year; and
14 "(3) the increase III such imports contributed
15 importantly to the decrease in the national average
16 price, quantity of production, or value of production
17 of, or cash receipts for, the agricultural commodity,
18 as described in paragraph (1).
19 "(d) ELIGIBILI'fY OF CERTAIN OTHER PRO-
20 DUCERS.-An agricultural commodity producer or group
21 of producers that resides outside of the State or region
22 identified in the petition filed under subsection (a) may
23 file a request to become a party to that petition not later
24 than 15 days after the date the notice is published in the

289
1 Federal Register under subsection (a) with respect to that
2 petition.
3 "(e) TREATMEN'l' OF CLASSES OF GOODS WITHIN A
4 COMMODITY.-In any case in which there are separate
5 classes of goods within an agricultural commodity, the
6 Secretary shall treat each class as a separate commodity
7 in determining under subsection (c)-
8 "(1) group eligibility;
9 "(2) the national average price, quantity of pro-
10 duction, or value of production, or cash receipts; and
11 "(3) the volume of imports.".
12 (b) CONFORMING AM:ENDMENTS.-Section 293 of the
13 Trade Act of 1974 (19 U.S.C. 2401b) is amended-
14 (1) in subsection (a), by striking "section 292
15 (c) or (d), as the case may be," and inserting "sec-
16 tion 292(c)"; and
17 (2) in subsection (c), by striking "decline in
18 price for" and inserting "decrease in the national
19 average price, quantity of production, or value of
20 production of, or cash receipts for,".
21 SEC. 1883. BENEFITS.
23 1974 (19 U.S.C. 2401e) is amended to read as follows:

290
1 "SEC. 296. QUALIFYING REQUIREMENTS AND BENEFITS
2 FOR AGRICULTURAL COMMODITY PRO·
3 DUCERS.
4 "(a) IN GENERAL.-
5 "(1) REQUIREMENTS.-
6 "(A) IN GENERAL.-Benefits under this
7 chapter shall be available to an agricultural
8 commodity producer covered by a certification
9 under this chapter who files an application for
10 such benefits not later than 90 days after the
11 date on which the Secretary makes a deter-
12 mination and issues a certification of eligibility
13 under section 293, if the producer submits to
14 the Secretary sufficient information to establish
15 that-
16 "(i) the producer produced the agn-
17 cultural commodity covered by the applica-
18 tion filed under this subsection in the mar-
19 keting year with respect to which the peti-
20 tion is filed and in at least 1 of the 3 mar-
21 keting years preceding that marketing
22 year;
23 "(ii)(I) the quantity of the agricul-
24 tural commodity that was produced by the
25 producer in the marketing year with re-
26 spect to which the petition is filed has de-

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creased compared to the most recent mar-
keting year preceding that marketing year
for which data are available; or
"(II)(aa) the price received for the ag-
ricultural commodity by the producer dur-
ing the marketing year with respect to
which the petition is filed has decreased
compared to the average price for the com-
modity received by the producer in the 3
marketing years preceding that marketing
year; or
"(bb) the county level price malll-
tained by the Secretary for the agricultural
commodity on the date on which the peti-
tion is filed has decreased compared to the
average county level price for the com-
modity 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 pro-
duction of an agricultural commodity
covered by another petition filed
under this chapter.

292
1 "(B) SPECIAL RULE ,VITH RESPECT TO
2 CROPS NOT GROWN EVERY YEAR.-For pur-
3 poses of subparagraph (A)(ii)(II)(aa), if a peti-
4 tion is filed with respect to an agricultural corn-
S modity that is not produced by the producer
6 every year, an agricultural commodity producer
7 producing that commodity may establish the av-
8 erage price received for the commodity by the
9 producer in the 3 marketing years preceding
10 the year with respect to which the petition is
11 filed by using average price data for the 3 most
12 recent marketing years in which the producer
13 produced the commodity and for which data are
14 available.
15 "(2) LIMITATIONS BASED ON ADJUSTED GROSS
16 INCOME.-
17 "(A) IN GENERAL.-Notwithstanding any
18 other provision of this chapter, an agricultural
19 commodity producer shall not be eligible for as-
20 sistance under this chapter in any year in which
21 the average adjusted gross income (as defined
22 in section 1001D(a) of the Food Security Act
23 of 1985 (7 U.S.C. 1308-3a(a))) of the producer
24 exceeds the level set forth in subparagraph (A)
25 or (B) of section 1001D(b)(1) of the Food Se-

293
1 curity Act of 1985 (7 U.S.C. 1308-3a(b)(1)),
2 whichever is applicable.
3 "(B) DEMONSTRA'l'ION OF COMPLIANCE.-
4 An agricultural commodity producer shall pro-
S vide to the Secretary such information as the
6 Secretary determines necessary to demonstrate
7 that the producer is in compliance with the lim-
8 itation under subparagraph (A).
9 "(C) COUNTER-CYCLICAL AND ACRE PAY-
10 MENTS.-The total amount of paynlents made
11 to an agricultural commodity producer under
12 this chapter during any crop year may not ex-
13 ceed the limitations on payments set forth in
14 subsections (b)(2), (b)(3), (c)(2), and (c)(3) of
15 section 1001 of the Food Security Act of 1985
16 (7 U.S.C. 1308).
17 "(b) TECHNICAL ASSISTANCE.-
18 "(1) INITIAL TECHNICAL ASSISTANCE.-
19 "(A) IN GENERAL.-All agricultural com-
20 l1lodity producer that files an application and
21 meets the requirements under subsecti.on (a) (1)
22 shall be entitled to receive initial technical as-
23 sistance designed to improve the competitive-
24 ness of the production and marketing of the ag-
25 ricultural commodity with respect to which the

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producer was certified under this chapter. Such
assistance shall include information regarding-
"(i) improving the yield and mar-
keting of that agricultural commodity; and
"(ii) the feasibility and desirability of
substituting one or more alternative agri-
cultural commodities for that agricultural
commodity.
"(B) TRANSPORTATION AND SUBSISTENCE
EXPENSES.-
"(i) IN GENERAL.-The Secretary
may authorize supplemental assistance
necessary to defray reasonable transpor-
tation 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 agricul-
tural commodity producer under clause
(i)-

295
1 "(I) for subsistence expenses that
2 exceed the lesser of-
3 "(aa) the actual per diem
4 expenses for subsistence incurred
5 by the producer; or
6 "(bb) the prevailing per
7 diem allowance rate authorized
8 under Federal travel regulations;
9 or
10 "(II) for travel expenses that ex-
11 ceed the prevailing mileage rate au-
12 thorized under the Federal travel reg-
13 ulations.
14 "(2) INTENSIVE TECHNICAL ASSISTANCE.-A
15 producer that has completed initial technical assist-
16 ance under paragraph (1) shall be eligible to partici-
17 pate in intensive technical assistance. Such assist-
18 ance shall consist of-
19 "(A.) a series of courses to further assist
20 the producer in improving the competitiveness
21 of the producer in producing-
22 "(i) the agricultural commodity with
23 respect to which the producer was certified
24 under this chapter; or

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"(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 Sec-
retary shall approve an initial business plan de-
veloped 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 IMPLE-
MENTING INITIAL BUSINESS PLAN.-Upon ap-
proval of the producer's initial business plan by
the Secretary under subparagraph (A), a pro-
ducer shall be entitled to an amount not to ex-
ceed $4,000 to-
"(i) implement the initial business
plan; or
"(ii) develop a long-term business ad-
justment plan under paragraph (4).

297
1 "(4) LONG-TERM BUSINESS ADJUSTMENT
2 PLAN.-
3 "(A) IN GENERAL.-A producer that has
4 completed intensive technical assistance under
5 paragraph (2) and whose initial business plan
6 has been approved under paragraph (3)(A)
7 shall be eligible for, in addition to the amount
8 under subparagraph (0), assistance in devel-
9 oping a long-term business adjustment plan.
10 "(B) APPROVAL OF LONG-TERM BUSINESS
11 ADJUSTMENT PLANS.-The Secretary shall ap-
12 prove a long-term business adjustment plan de-
13 veloped under subparagraph (A) if the Sec-
14 retary determines that the plan-
15 "(i) includes steps reasonably cal-
16 culated to materially contribute to the eco-
17 nomic adjustment of the producer to
18 changing market conditions;
19 "(ii) takes into consideration the in-
20 terests of the workers employed by the pro-
21 ducer; and
22 "(iii) demonstrates that the producer
23 will have sufficient resources to implement
24 the business plan.

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S.L.C.
1 "(C) PLAN IMPLEMENTATION.-Upon ap-
2 proval of the producer's long-term business ad-
3 justment plan under subparagraph (B), a pro-
4 ducer shall be entitled to an amount not to ex-
5 ceed $8,000 to implement the long-term busi-
6 ness adjustment plan.
7 "(c) MAxrMUM AMOUNT OF ASSISTANCE.-An agri-
8 cultural commodity producer may receive not more than
9 $12,000 under paragraphs (3) and (4) of subsection (b)
10 in the 36-month period following certification under sec-
11 tion 293.
12 "(d) LIMITATIONS ON OTHER ASSISTANCE.-An ag-
13 ricultural commodity producer that receives benefits under
14 this chapter (other than initial technical assistance under
15 subsection (b)(1)) shall not be eligible for cash benefits
16 under chapter 2 or 3.".
17 (b) CLERICAL A-1ENDMENT.-The table of contents
"Sec. 296. Qualifyjng requireinents and benefits for agTjcultural commodity
producers.".
20 SEC. 1884. REPORT.
22 2401b) is amended by adding at the end the following:
23 "(d) REPORT BY THE SECRETAl~Y.-Not later than
24 January 30, 2010, and annually thereafter, the Secretary

299
1 of Agriculture shall submit to the Committee on Finance
2 of the Senate and the Committee on Ways and Means of
3 the House of Representatives a report containing the fol-
4 lowing information with respect to adjustment assistance
5 provided under this chapter during the preceding fiscal
6 year:
7 "(1) A list of the agricultural commodities cov-
8 ered by a certification under this chapter.
9 "(2) The States or regions in which such com-
10 modities are produced and the aggregate amount of
11 such commodities produced in each such State or re-
12 g1On.
13 "(3) The total number of agricultural com-
14 modity producers, by congressional district, receiving
15 benefits under this chapter.
16 "(4) The total number of agricultural com-
17 modity producers, by congressional district, receiving
18 technical assistance under this chapter.".
19 SEC. 1885. FRAUD AND RECOVERY OF OVERPAYMENTS.
20 Section 297(a)(1) of the Trade Act of 1974 (19
21 U.S.C. 2401f(a)(1)) is amended by inserting "or has ex-
22 pended funds received under this chapter for a 'purpose
23 that was not approved by the Secretary," after "entitled,".

300
1 SEC. 1886. DETERMINATION OF INCREASES OF IMPORTS
2 FOR CERTAIN FISHERMEN.
3 For purposes of chapters 2 and 6 of title II of the
4 Trade Act of 1974 (19 U.S.C. 2251 et seq.), in the case
5 of an agricultural commodity producer that-
6 (1) is a fisherman or aquaculture producer, and
7 (2) is otherwise eligible for adjustment assist-
8 ance under chapter 2 or 6, as the case may be,
9 the increase in imports of articles like or directly competi-
10 tive with the agricultural commodity produced by such
11 producer may be based on imports of wild-caught seafood,
12 farm-raised seafood, or both.
13 SEC. 1887. EXTENSION OF TRADE ADJUSTMENT ASSIST·
14 ANCE FOR FARMERS.
16 2401g(a)) is amended by striking "fiscal years 2003
17 through 2007" and all that follows through the end period
18 and inserting "fiscal years 2009 and 2010, and
19 $22,500,000 for the period beginning October 1, 2010,
20 and ending December 31, 2010, to carry out the purposes
21 of this chapter, including administrative costs, and sala-
22 ries and expenses of employees of the Department of Agri-
23 culture.".

301
1 PART V-GENERAL PROVISIONS
2 SEC. 1891. EFFECTIVE DATE.
3 (a) IN GENERAL.-Except as otherwise provided in
4 this subtitle, and subsection (b) of this section, this sub-
5 title and the amendments made by this subtitle-
6 (1) shall take effect upon the expiration of the
7 90-day period beginning on the date of the enact-
8 ment of this Act; and
9 (2) shall apply to-
10 (A) petitions for certification filed under
11 chapter 2, 3, or 6 of title II of the Trade Act
12 of 1974 on or after the effective date described
13 in paragraph (1); and
14 (B) petitions for assistance and proposals
15 for grants filed under chapter 4 of title II of
16 the Trade Act of 1974 on or after such effective
17 date.
18 (b) CERTIFICATIONS MADE BEFORE EFFECTIVE
19 DATE.-Notwithstanding subsection (a)-
20 (1) a worker shall continue to receive (or be eli-
21 gible to receive) trade adjustment assistance and
22 other benefits under subchapter B of chapter 2 of
23 title II of the Trade Act of 1974, as in effect on the
24 day before the effective date described in subsection
25 (a)(l), for any week for which the worker meets the
26 eligibility requirements of such chapter 2 as in effect

302
1 on the day before such effective date, if the
2 worker-
3 (A) is certified as eligible for trade adjust-
4 ment assistance benefits under such chapter 2
5 pursuant to a petition filed under section 221
6 of the Trade Act of 1974 on or before such ef-
7 fective date; and
8 (B) would otherwise be eligible to receIve
9 trade adjustment assistance benefits under such
10 chapter as in effect on the day before such ef-
11 fective date;
12 (2) a worker shall continue to receive (or be eli-
13 gible to receive) benefits under section 246(a)(2) of
14 the Trade Act of 1974, as in effect on the day be-
15 fore the effective date described in subsection (a)(l),
16 for such period for which the worker meets the eligi-
17 bility requirements of section 246 of that Act as in
18 effect 011 the day before such effective date, if the
19 worker-
20 (A) IS certified as eligible for benefits
21 under such section 246 pursuant to a petition
22 filed under section 221 of the Trade Act of
23 1974 on or before such effective date; and

303
1 (B) would otherwise be eligible to receIve
2 benefits under such section 246(a)(2) as in ef-
3 fect on the day before such effective date; and
4 (3) a firm shall continue to receive (or be eligi-
5 ble to receiveY adjustment assistance under chapter
6 3 of title II of the Trade Act of 1974, as in effect
7 on the day before the effective date described in sub-
8 section (a)(l), for such period for which the firm
9 meets the eligibility requirements of such chapter 3
10 as in effect on the day before such effective date, if
11 the firm-
12 (A) IS certified as eligible for benefits
13 under such chapter 3 pursuant to a petition
14 filed under section 251 of the Trade Act of
15 1974 on or before such effective date; and
16 (B) would otherwise be eligible to receive
17 benefits under such chapter 3 as in effect on
18 the day before such effective date.
19 SEC. 1892. EXTENSION OF TRADE ADJUSTMENT ASSIST·
20 ANCE PROGRAMS.
21 (a) FOR WORKERS.-Section 245(a) of the Trade Act
22 of 1974 (19 U.S.C. 2317(a)) is amended by striking "De-
23 cember 31, 2007" and inserting "December 31, 2010".
24 (b) TERMINATION.-Section 285 of the Trade Act of
25 1974 (19 U.S.C. 2271 note prec.) is amended-

•
304
1 (1) in subsection (a), by striking "December
2 31, 2007" each place it appears and inserting "De-
3 cember 31, 2010"; and
4 (2) by amending subsection (b) to read as fol-
5 lows:
6 "(b) OTHER AsSISTANCE.-
7 "(1) ASSISTANCE FOR FIRMS.-
8 "(A) IN GENERAL.-Except as provided in
9 subparagraph (B), technical assistance and
10 grants may not be provided under chapter 3
11 after December 31, 2010.
12 "(B) EXCEPTION.-Notwithstanding sub-
13 paragraph (A), any technical assistance or
14 grant approved under chapter 3 on or before
15 December 31, 2010, may be provided-
16 "(i) to the extent funds are available
17 pursuant to such chapter for such purpose;
18 and
19 "(ii) to the extent the recipient of the
20 technical assistance or grant is otherwise
21 eligible to receive such technical assistance
22 or grant, as the case may be.
23 "(2) FARMERS.-
25 subparagraph (B), technical assistance and fi-

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nancial assistance may not be provided under
chapter 6 after December 31, 2010.
"(B) EXCEPTION.-Notwithstanding sub-
paragraph (A), any technical or financial assist-
ance approved under chapter 6 on or before De-
cember 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 other-
wise eligible to receive such technical or fi-
nancial 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· sub-
paragraph (A), any technical assistance or
grant approved under chapter 4 on or before
December 31, 2010, may be provided-
and

306
1 "(ii) to the extent the recipient of the
2 technical assistance or grant is otherwise
3 eligible to receive such technical assistance
4 or grant, as the case may be.".
5 SEC. 1893. TERMINATION; RELATED PROVISIONS.
6 (a) SUNSET.-
7 (1) IN GENERAL.-Subject to paragraph (2),
8 the amendments made by this subtitle to chapters 2,
9 3, 4, 5, and 6 of title II of the Trade Act of 1974
10 (19 U.S.C. 2271 et seq.) shall not apply on or after
11 January 1, 2011.
12 (2) EXCEPTION.-The amendments made by
13 this subtitle to section 285 of the Trade Act of 1974
14 shall continue to apply on and after January 1,
15 2011, ,vith respect to-
16 (A) workers certified as eligible for trade
17 adjustment assistance benefits under chapter 2
18 of title II of that Act pursuant to petitions filed
19 under section 221 of that Act before J mmary 1,
20 2011;
21 (B) firms certified as eligible for technical
22 assistance or grants under chapter 3 of title II
23 of that Act pursuant to petitions filed under
24 section 251 of that Act before January 1, 2011;

307
r (C) recipients approved for technical as-
2 sistance or grants under chapter 4 of title II of
3 that Act pursuant to petitions for assistance or
4 proposals for grants (as the case may be) filed
5 pursuant to such chapter before January 1,
6 2011; and
7 (D) agricultural commodity producers cer-
8 tified as eligible for technical or financial assist-
9 ance under chapter 6 of title II of that Act pur-
10 suant to petitions filed under section 292 of
11 that Act before January 1, 2011.
12 (b) APPLICATION OF PRIOR LAw.-Chapters 2, 3, 4,
13 5, and 6 of title II of the Trade Act of 1974 (19 U.S.C.
14 2271 et seq.) shall be applied and administered beginning
15 January 1, 2011, as if the amendments made by this sub-
16 title (other than part VI) had never been enacted, except
17 that in applying and administering such chapters-
18 (1) section 245 of that Act shall be applied and
19 administered by substituting "2011" for "2007";
20 (2) section 246(b) of that Act shall be applied
21 and administered by substituting "December 31,
22 2011" for "the date that is 5 years" and all that fol-
23 lows through "State";
24 (3) section 256(b) of that Act shall be applied
25 and administered by substituting "the I-year period

308
1 beginning January 1, 2011" for "each of fiscal years
2 2003 through 2007, and $4,000,000 for the 3-
3 month period beginning October 1, 2007";
4 (4) section 298(a) of that Act shall be applied
5 and administered by substituting "the I-year period
6 beginning January 1, 2011" for "each of the fiscal
7 years" and all that follows through "October 1,
8 2007"; and
9 (5) subject to subsection (a)(2), section 285 of
10 that Act shall be applied and administered-
11 (A) in subsection (a), by substituting
12 "2011" for "2007" each place it appears; and
13 (B) by applying and administering sub.;
14 section (b) as if it read as follows:
15 "(b) OTHER AsSISTANCE.-
16 "(1) ASSISTANCE FOR FIRMS.-
18 subparagraph (B), assistance may not be pro-
19 vided under chapter 3 after December 31,
20 2011.
21 "(B) EXCEPTION.-Notwithstanding sub-
22 paragTaph (A), any assistance approved under
23 chapter 3 on or before December 31, 2011, may
24 be provided-

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and
assistance is otherwise eligible to receive
such assistance.
"(2) FARMERS.-
"(A) IN GENERAL.-Except as provided in
subparagraph (B), assistance may not be pro-
vided under chapter 6 after December 31,
2011.
"(B) EXCEPTION.-Notwithstanding sub-
paragraph (A), any assistance approved under
chapter 6 on or before December 31, 2011, may
be provided-
and
assistance is otherwise eligible to receive
such assistance.".
22 SEC. 1894. GOVERNMENT ACCOUNTABILITY OFFICE RE-
23 PORT.
24 Not later than September 30, 2012, the Comptroller
25 General of the United States shall prepare and submit to

310
1 the Committee on Finance of the Senate and the Com-
2 mittee on Ways and Means of the House of Representa-
3 tives a comprehensive report on the operation and effec-
4 tiveness of the amendments made by this subtitle to chap-
S tel'S 2, 3, 4, and 6 of the Trade Act of 1974.
6 SEC. 1895. EMERGENCY DESIGNATION.
7 Amounts appropriated pursuant to this subtitle are
8 designated as an emergency requirement and necessary to
9 meet emergency needs pursuant to section 204(a) of S.
10 Con. Res. 21 (110th Congress) and section 301(b)(2) of
11 S. Con. Res. 70 (110th Congress), the concurrent resolu-
12 tions on the budget for fiscal years 2008 and 2009.
13 "PART VI-HEALTH COVERAGE IMPROVE:MENT
14 SEC. 1899. SHORT TITLE.
15 This part may be cited as the "TAA Health Coverage
16 ImprovementAct of 2009".
17 SEC. 1899A. IMPROVEMENT OF THE AFFORDABILITY OF
18 THE CREDIT.
19 (a) IMPROVEMENT OF AFFORDABILITY.-
20 (1) IN GENERAL.-Section 35(a) of the Internal
21 Revenue Code of 1986 (relating to credit for health
22 insurance costs of eligible individuals) is amended by
23 inserting "(80 percent in the case of eligible cov-
24 erage months beginning before January 1, 2011)"
25 after "65 percent".

311
1 (2) CONFORMING AIVIENDMENT.-Section
2 , 7527(b) of such Code (relating to advance payment
3 of credit for health insurance costs- of eligible indi-
4 viduals) is amended by inserting "(80 percent in the
5 case of eligible coverage months beginning before
6 January 1, 2011)" after "65 percent".
7 (b) EFFECTIVE DATE.-'The amendments made by
8 this section shall apply to coverage months beginning on
9 or after the first day of the first month beginning 60 days
10 after the date of the enactment of this Act.
11 SEC. 1899B. PAYMENT FOR MONTHLY PREMIUMS PAID
12 PRIOR TO COMMENCEMENT OF ADVANCE
13 PAYMENTS OF CREDIT.
14 (a) PAYMENT FOR PREMIUMS DUE PRIOR TO COM-
15 MENCEMENT OF ADVANCE PAYMENTS OF CREDIT.-'Sec-
16 tion 7527 of the Internal Revenue Code of 1986 (relating
17 to advance payment of credit for health insurance costs
18 of eligible individuals) is amended by adding at the, end
19 the following new subsection:'
20 "(e) PAYIVIENT FOR PREMIUMS DUE PRIOR TO COM-
21 MENCEMENT OF ADVANCE PAYMENTS.-In the case of eli-
22 gible coverage months beginning before January 1,
"(1) IN GENERAL.-The program established
under subsection (a) shall provide that the Secretary
23 2011-
24
25

312
1 shall make 1 or more retroactive payments on behalf
2 of a certified individual in an aggregate amount
3 equal to 80 percent of the premiums for coverage of
4 the taxpayer and qualifying family members under
5 qualified health insurance for eligible coverage
6 months (as defined in section 35(b)) occurring prior
7 to the first month for which an advance payment is
8 made on behalf of such individual under subsection
9 (a).
10 "(2) REDUCTION OF PAYIVIENT FOR AMOUNTS
11 RECEIVED UNDER NATIONAL EMERGENCY
12 GRANTS.-The amount of any payment determined
13 under paragraph (1) shall be reduced by the amount
14 of any payment made to the taxpayer for the pur-
lS chase of qualified health insurance under a national
16 emergency grant pursuant to section 173(f) of the
17 Workforce Investment Act of 1998 for a taxable
18 year including the eligible coverage months described
19 in paragraph (1).".
21 this section shall apply to coverage months beginning after
22 December 31, 2008.
23 (c) TRANSITIONAL RULE.-The Secretary of the
24 Treasury shall not be required to make any payments
25 under section 7527(e) of the Internal Revenue Code of

313
1 1986, as added by this section, until after the date that
2 is 6 months after the date of the enactment of this Act.
.3 SEC. 1899C. TAA RECIPIENTS NOT ENROLLED IN TRAINING
4 PROGRAMS ELIGffiLE FOR CREDIT.
5 (a) IN GENERAL.-Paragraph (2) of section 35(c) of
6 the Internal Revenue Code of 1986 (defining eligible TAA
7 recipient) is amended to read as follows:
8 "(2) ELIGIBLE TAA RECIPIENT.-
10 subparagraph (B), the term 'eligible TAA re-
11 cipient' means, with respect to any month, any
12 individual who is receiving for any day of such
13 month a trade readjustment allowance under
14 chapter 2 of title II of the Trade Act of 1974
15 or who would be eligible to receive such allow-
16 ance if section 231 of such Act were applied
17 without regard to subsection (a)(3)(B) of such
18 section. An individual shall continue to be treat-
19 ed as an eligible TAA recipient during the first
20 month that such individual would otherwise
21 cease to be an eligible TAA recipient by reason
22 of the preceding sentence.
23 "(B) SPECIAL RULE.-In the case of any
24 eligible coverage month beginning after the date
25 of the enactment of tIns paragraph and before

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January 1, 2011, the term 'eligible TAA recipi-
ent' means, with respect to any month, any in-
dividual 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 train-
ing 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 com-
pensation (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 ap-
plied 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

315
1 that such individual would otherwise cease to be
2 an eligible TAA recipient by reason of the pre-
3 ceding sentence.".
6 the date of the enactment of tIns Act.
7 SEC. 1899D. TAA PRE-CERTIFICATION PERIOD RULE FOR
8 PURPOSES OF DETERMINING WHETHER
9 THERE IS A 63-DAY LAPSE IN CREDITABLE
10 COVERAGE.
11 (a) IRC AMENDMENT.-Section 9801(c)(2) of the In-
12 ternal Revenue Code of 1986 (relating to not counting pe-
13 riods before significant breaks in creditable coverage) is
14 amended by adding at the end the following new subpara-
15 graph:
16
17
18
19
20
21
22
23
24
25
"(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 indi-
vidual, 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

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 des-
ignated by the Secretary) of a qualified
316
1 designated by the Secretary) of a qualified
2 health insurance costs credit eligibility cer-
3 tificate for such individual for purposes of
4 section 7527 shall not be taken into ac-
5 count in determining the continuous period
6 under subparagraph (A).
7 "(ii) DEFINITIONS.-The terms 'TAA-
8 eligible individual' and 'TAA-related loss of
9 coverage' have the meanings given such
10 terms in section 4980B(f)(5)(C)(iv).".
11 (b) ERISA AMENDMENT.-Section 701(c)(2) of the
12 Employee Retirement Income Security Act of 1974 (29
13 U.S.C. 1181(c)(2)) is amended by adding at the end the
14 following new subparagraph:
15 "(C) TAA-ELIGIBLE INDIVIDUALS.-In the
16 case of plan years beginning before Jmmary 1,
17 2011-
18
19
20
21
22
23
24
25

317
3 section 7527 of the Internal Revenue Code
4 of 1986 shall ilOt be taken into account in
5 determining the continuous period under
6 subparagraph (A).
7 "(ii) DEFINITIONS.-The terms 'TAA-
10 . terms in section 605(b)(4).".
11 (c) PHSA AMENDMENT.-Section 2701(c)(2) of the
12 Public Health Service Act (42 U.S.C. 300gg(c)(2)) is
13 amended by adding at the end the following new subpara-
14 graph:
15
16
17
18
19
20
21
22
23
24
25
"(C) TAA-ELIGIBLE INDIVIDUALS.-In the
case of plan years beginning before JmlUary 1,
2011-
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 des-
ignated by the Secretary) of a qualified

318
3 section 7527 of the Internal Revenue Code
4 of 1986 shall not be taken into account in
5 determining the continuous period under
6 subparagTaph (A).
7 "(ii) DEFINITIONs.-The terms 'TAA-
10 terms in section 2205(b)(4).".
12 this section shall apply to plan years beginning after the
14 SEC. 1899E. CONTINUED QUALIFICATION OF FAMILY MEM·
15 BERS AFTER CERTAIN EVENTS.
16 (a) IN GENERAL.-Subsection (g) of section 35 of
17 such Code is amended by redesignating paragraph (9) as
18 paragraph (10) and inserting after paragraph (8) the fol-
19 lowing new paragraph:
20 "(9) CONTINUED QUALIFICATION OF FAMILY
21 MEMBERS AFTER CERTAIN EVENTS.-In the case of
22 eligible coverage months beginning before January
23 1,2011-
24 "(A) MEDICARE ELIGIBILITY.-In the case
25 .of any month which would be an eligible cov-

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erage month with respect to an eligible indi-
vidual 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) DrvORCE.-In the case of the final-
ization of a divorce between an eligible indi-
vidual and such individual's spouse, such spouse
shall be treated as an eligible individual for pur-
poses of this section and section 7527 for a pe-
riod 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 individ-
uals who were qualifying family members imme-
diately before such finalization.
"(C) DEATH.-In the case of the death of
an eligible individual-

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"(i) any spouse of such individual (de-
termined at the time of such death) shall
be treated as an eligible individual for pur-
poses 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 be-
fore such death, and
"(ii) any individual who was a quali-
fying family member of the decedent imme-
diately before such death (or, in the case
of an individual to whom paragraph (4)
applies, the taxpayer to whom the deduc-
tion under section 151 is allowable) shall
poses of this section and section 7527 for
a period of 24 months beginning with the
date of such death, except that in deter-
mining the amount of such credit only
such qualifying family member may be
taken into account.".

321
1 (b) CONFORMING A1VIENDMEN'l'.-Section 173(f) of
2 the Workforce Investment Act of 1998 (29 U.S.C.
3 2918(f)) is amended by adding at the end the following:
4 "(8) CONTINUED QUALIFICATION OF FAMILY
5 MEMBERS AFTER CERTAIN EVENTS.-In the case of
6 eligible coverage months beginning before JaIlUary
7 1, 2011-
8 "(A) MEDICARE ELIGIBILITY.-In the case
9 of any month which would be an eligible cov-
10 erage month ,vith respect to an eligible indi-
11 vidual but for paragraph (7)(B)(i), such month
12 shall be treated as an eligible coverage month
13 with respect to such eligible individual solely for
14 purposes of determining the eligibility of quali-
15 fying family members of such individual under
16 this subsection. This subparagraph shall only
17 apply with respect to the first 24 months after
18 such eligible individual is first entitled to the
19 benefits described in paragraph (7)(B)(i).
20 "(B) DIVORCE.-In the case of the final-
21 ization of a divorce between an eligible indi-
22 vidual and such individual's spouse, such spouse
23 shall be treated as an eligible individual for pur-
24 poses of this subsection for a period of 24
25 months beginning with the date of such final-

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ization, 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 be-
fore such finalization.
"(0) DEATH.-In the case of the death of
an eligible individual-
"(i) any spouse of such individual (de-
termined at the time of such death) shall
poses of this subsection for a period of 24
months beginning with the date of such
death, except that the only qualifying fam-
ily members who may be taken into ac-
count with respect to such spouse are those
individuals who were qualifying family
members immediately before such death,
and
"(ii) any individual who was a quali-
fying family member of the decedent imme-
diately before such death shall be treated
as an eligible individual for purposes this
subsection for a period of 24 months be-
ginning with the date of such death, except
that no qualifying family members may be

323
1 taken into account with respect to such in-
2 dividual.".
4 this section shall apply to months beginning after Decem-
5 ber 31, 2009.
6 SEC. 1899F. EXTENSION OF COBRA BENEFITS FOR CERTAIN
7 TAA-ELIGffiLE INDIVIDUALS AND PBGC RE-
8 CIPIENTS.
9 (a) ERISA AMENDMENTs.-Section 602(2)(A) of the
10 Employee Retirement Income Security Act of 1974 (29
11 U.S.C. 1162(2)(A)) is amended-
12 (1) by moving clause (v) to after clause (iv) and
13 before the flush left sentence beginning with "In the
14 case of a qualified beneficiary";
15 (2) by striking "In the case of a qualified bene-
16 ficiary" and inserting the following:
17 "(vi) SPECIAL RULE FOR DIS-
18 ABILITY.-In the case of a qualified bene-
19 ficiary"; and
20 (3) by redesignating clauses (v) and (vi); as
21 amended by paragraphs (1) and (2), as clauses (vii)
22 and (viii), respectively, and by inserting after clause
23 (iv) the following new clauses:
24 "(v) SPECIAL RULE FOR PBGC RECIPI-
25 ENTS.-In the case of a qualifying event

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described in section 603(2) with respect to
a covered employee who (as of such quali-
fying event) has a nonforfeitable right to a
benefit any portion of which is to be paid
by the Pension Benefit Guaranty Corpora-
tion under title IV, notwithstanding clause
(i) or (ii), the date of the death of the cov-
ered employee, or in the case of the sur-
viving spouse or dependent children of the
covered employee, 24 months after the
date of the death of the covered employee.
rrhe preceding sentence shall not reqmre
any period of coverage to extend beyond
December 31, 2010.
"(vi) SPECIAL RULE FOR TAA-ELIGI-
BLE INDIVIDUALS.-In the case of a quali-
fying 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),
otheI'vise terminate under clause (i) or
(ii)) a TAA-eligible individual (as defined
in section 605(b)(4)(B)), the period of cov-
erage shall not terminate by reason of
clause (i) or (ii), as the case may be, be-

325
1 fore the later of the date specified in such
2 clause or the date on which such individual
3 ceases to be such a TAA-eligible individual.
4 The preceding sentence shall not requIre
5 any period of coverage to extend beyond
6 December 31, 2010.".
7 (b) IRC Al1ENDlVIENTs.-Clause (i) of section
8 4980B(f)(2)(B) of the Internal Revenue Code of 1986 is
9 amended-
12 "(VI) SPECIAL RULE FOR DIS-
13 ABILITY.-In the case of a qualified
14 beneficiary", and
15 (2) by redesignating subclauses (V) and (VI),
16 as amended by paragraph (1), as subclauses (VII)
17 and (VIII), respectively, and by inserting after
18 clause (IV) the following new subclauses:
19 "(V) SPECIAL RULE FOR PBGC
20 RECIPIENTS.-In the case of a quali-
21 fying event described in paragraph
22 (3)(B) with respect to a covered em-
23 ployee who (as of such qualifying
24 event) has a nonforfeitable right to a
25 benefit any portion of which is to be

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paid by the Pension Benefit Guaranty
Corporation under title IV of the Em-
ployee Retirement Income Security
Act of 1974, notwithstanding. sub-
clause (1) or (II), the date of the
death of the covered employee, or in
the case of the surviving spouse or de-
pendent children of the covered em-
ployee, 24 months after the date of
the death of the covered employee.
The preceding sentence shall not re-
quire 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 sub-
clause (VII), otheI'vise terminate
under subclause (1) or (II)) a TAA-el-
igible individual (as defined in para-
graph (5)(C)(iv)(II)), the period of
coverage shall not terminate by reason

327
1 of subclause (I) or (II), as the case
2 may be, before the later of the date
3 specified in such subclause or the date
4 on which such individual ceases to be
5 such a TAA-eligible individual. The
6 preceding sentence shall not require
7 any period of coverage to extend be-
8 yond December 31, 2010.".
9 (c) PHSA AMENDMENTs.-Section 2202(2)(A) of
10 the Public Health Service Act (42 U.S.C. 300bb-2(2)(A))
11 is amended-
14 "(v) SPECIAL RULE FOR DIS-
15 ABILITY.-In the case of a qualified bene-
16 ficiary"; and
17 (2) by redesignating clauses (iv) and (v), as
18 amended by paragraph (1), as clauses (v) and (vi),
19 respectively, and by inserting after clause (iii) the
20 following new clause:
21 "(iv) SPECIAL RULE FOR TAA-ELIGI-
22 BLE INDIVIDUALS.-In the case of a quali-
23 fying event described in section 2203(2)
24 with respect to a covered employee who is
25 (as of the date that the period of coverage

328
1 would, but for this clause or clause (v),
2 otherwise terminate under clause (i) or
3 (ii)) a TAA-eligible individual (as defined
4 in section 2205(b)(4)(B)), the period of
5 coverage shall not terminate by reason of
6 clause (i) or (ii) , as the case may be, be-
7 fore the later of the date specified in such
8 clause or the date on which such individual
9 ceases to be such a TAA-eligible individual.
10 The preceding sentence shall not reqUIre
11 any period of coverage to extend beyond
12 December 31, 2010.".
14 this section shall apply to periods of coverage which would
15 (without regard to the amendments made by this section)
16 end on or after the date of the enactment of this Act.
17 SEC. 1899G. ADDITION OF COVERAGE THROUGH VOL-
18 UNTARY EMPLOYEES' BENEFICIARY ASSOCIA-
19 TIONS.
20 (a) IN GENERAL.-Paragraph (1) of section 35(e) of
21 the Internal Revenue Code of 1986 is amended by adding
22 at the end the following new subparagraph:
23 "(K) In the case of eligible coverage
24 months beginning before January 1, 2011, cov-
25 erage under an employee benefit plan funded by

329
1 a voluntary employees' beneficiary association
2 (as defined in section 501(c) (9)) established
3 pursuant to an order of a bankruptcy court, or
4 by agreement with an authorized representative,
5 as provided· in section 1114 of title 11, United
6 States Code.".
10 SEC. 1899H. NOTICE REQUIREMENTS.
11 (a) IN GENERAL.-Subsection (d) of section 7527 of
12 the Internal Revenue Code of 1986 (relating to qualified
13 health insurance costs credit eligibility certificate) is
14 amended to read as follows:
15 "(d) QUALIFIED HEALTH INSURANCE COSTS ELIGI-
16 BILITY CERTIFICATE.-
18 tion, the term 'qualified health insurance costs eligi-
19 bility certificate' means any ,vritten statement that
20 an individual is an eligible individual (as defined in
21 section 35(c)) if such statement provides such infor-
22 mation as the Secretary may require for purposes of
23 this section and-
24 "(A) in the case of an eligible TAA recipi-
25 ent (as defined in section 35(c)(2)) or an eligi-

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330
1 ble alternative TAA recipient (as defined in sec-
2 tion 35(c) (3)), is certified by the Secretary of
3 Labor (or by any other person or entity des-
4 ignated by the Secretary), or
5 "(B) in the case of an eligible PBGC pen-
6 sion recipient (as defined in section 35(c)(4)), is
7 certified by the Pension Benefit Guaranty Cor-
8 poration (or by any other person or entity des-
9 ignated by the Secretary).
10 "(2) INCLUSION OF CERTAIN INFORMATION.-
11 In the case of any statement described in paragraph
12 (1) which is issued before January 1, 2011, such
13 statement shall not be treated as a qualified health
14 insurance costs credit eligibility certificate unless
15 such statement includes-
16 " (A) the name, address, and telephone
17 number of the State office or offices responsible
18 for providing the individual with assistance with
19 enrollment in qualified health insurance (as de-
20 fined in section 35(e)),
21 "(B) a list of the coverage options that are
22 treated as qualified health insurance (as so de-
23 fined) by the State in which the individual re-
24 sides, and

331
1 "(C) III the case of a TAA-eligible indi-
2 vidual (as defined III section
3 4980B(f)(5)(C)(iv)(II)), a statement informing
4 the individual that the individual has 63 days
5 from the date that is 7 days after the date of
6 the issuance of such certificate to enroll in such
7 insurance without a lapse in creditable coverage
8 (as defined in section 9801(c)).".
10 this section shall apply to certificates issued after the date
11 that is 6 months after the date of the enactment of this
12 Act.
13 SEC. 18991. SURVEY AND REPORT ON ENHANCED HEALTH
14 COVERAGE TAX CREDIT PROGRAM.
15 (a) SURVEY.-
16 (1) IN GENERAL.-The Secretary of the Treas-
17 ury shall conduct a biennial survey of eligible indi-
18 viduals (as defined in section 35(c) of the Intenml
19 Revenue Code of 1986) relating to the health cov-
20 erage tax credit under section 35 of the Internal
21 Revenue Code of 1986 (hereinafter in this section
22 referred to as the "health coverage tax credit").
23 (2) INFORMATION OBTAINED.-The survey con-
24 ducted under subsection (a) shall obtain the fol-
25 lowing information:

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(A) HCTC PARTICIPANTS.-In the case of
eligible individuals receiving the health coverage
tax credit (including individuals participating in
the health coverage tax credit progTam under
section 7527 of such Code, hereinafter in this
section referred to as the "HCTC progTam")-
(i) demographic information of such
individuals, including income and edu-
cation 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 pre-
miums, 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-

333
1 (i) demogTaphic information of each
2 individual, including income and education
3 levels,
4 (ii) whether the individual was aware
5 of the health coverage tax credit or the
6 HCTC program,
7 (iii) the reasons the individual has not
8 enrolled in the HCTC program, including
9 whether such reasons include the burden of
10 the process of enrollment and the afford-
11 ability of coverage,
12 (iv) whether the individual has health
13 insurance coverage, and, if so, the source
14 of such coverage, and
15 (v) any other information that the
16 Secretary determines is appropriate.
17 (3) REPORT.-Not later than December 31 of
18 each year in which a survey is conducted under
19 paragraph (1) (beginning in 2010), the Secretary of
20 the Treasury shall report to the Committee on Fi-
21 nance and the Committee on Health, Education,
22 Labor, and Pensions of the Senate and the Com-
23 mittee on Ways and Means, the Committee on Edu-
24 cation and Labor, and the COlnmittee on Energy
25 and Commerce of the House of Representatives the

334
1 findings of the most recent survey conducted under
2 paragraph (1).
3 (b) REPORT.-Not later than October 1 of each year
4 (beginning in 2010), the Secretary of the Treasury (after
5 consultation with the Secretary of Health and Human
6 Services, and, in the case of the information required
7 under paragraph (7), the Secretary of Labor) shall report
8 to the Committee on Finance and the Committee on
9 Health, Education, Labor, and Pensions of the Senate and
10 the Committee on Ways and Means, the Committee on
11 Education and Labor, and the Committee on Energy and
12 Commerce of the House of Representatives the following
13 information with respect to the most recent taxable year
14 ending before such date:
15 (1) In each State and nationally-
16 (A) the total number of eligible individuals
17 (as defined in section 35(c) of the Internal Rev-
18 enue Code of 1986) and the number of eligible
19 individuals receiving the health coverage tax
20 credit,
21 (B) the total number of such eligible indi-
22 viduals who receive an advance payment of the
23 health coverage tax credit through the HCTC
24 progTam,

335
1 (C) the average length of the time period
2 of the participation of eligible individuals in the
3 RCTC program, and
4 (D) the total number of participating eligi-
5 ble individuals in the RCTC program who are
6 enrolled in each category of coverage as de-
7 scribed in section 35(e)(1) of such Code,
8 with respect to each category of eligible individuals
9 described in section 35(c)(l) of such Code.
10 (2) In each State and nationally, an analysis
11 of-
12 (A) the range of monthly health insurance
13 premiums, for self-only coverage and for family
14 coverage, for individuals receiving the health
15 coverage tax credit, and
16 (B) the average and median monthly
17 health insurance premiums, for self-only cov-
18 erage and for family coverage, for individuals
19 receiving the health coverage tax credit,
20 with respect to each category of coverage as de-
21 scribed in section 35(e)(1) of such Code.
22 (3) In each State and nationally, an analysis of
23 the following information with respect to the health
24 insurance coverage of individuals receiving the
25 health coverage tax credit who are enrolled in cov-

336
1 erage described in subparagraphs (B) through (H)
2 of section 35(e)(1) of such Code:
3 (A) Deductible amounts.
4 (B) Other out-of-pocket cost-sharing
5 amounts.
6 (C) A description of any annual or lifetime
7 limits on coverage or any other significant lim-
8 its on coverage services, or benefits.
9 The information required under this paragraph shall
10 be reported with respect to each category of coverage
11 described in such subparagraphs.
12 (4) In each State and nationally, the gender
13 and average age of eligible individuals (as defined in
14 section 35(c) of such Code) who receive the health
15 coverage tax credit, in each category of coverage de-
16 scribed in section 35(e)(1) of such Code, with re-
17 spect to each category of eligible individuals de-
18 scribed in such section.
19 (5) The steps taken by the Secretary of the
20 Treasury to increase the participation rates in the
21 HCTC program among eligible individuals, including
22 outreach and enrollment activities.
23 (6) The cost of administering the HCTC pro-
24 gram by function, including the cost of subcontrac-
25 tors, and recommendations on ways to reduce ad-

337
1 ministrative costs, including recommended statutory
2 changes.
3 (7) The number of States applying for and re-
4 ceiving national emergency grants under section
5 173(f) of the Workforce Investment Act of 1998 (29
6 . U.S.C. 2918(f)), the activities funded by such grants
7 on a State-by-State basis, and the time necessary for
8 application approval of such grants.
9 SEC. 1899J. AUTHORIZATION OF APPROPRIATIONS.
10 There is authorized to be appropriated $80,000,000
11 for the period of fiscal years 2009 through 2010 to imple-
12 ment the amendments made by, and the provisions of, sec-
13 tions 1899 through 18991 of this part.
14 SEC. 1899K. EXTENSION OF NATIONAL EMERGENCY
15 GRANTS.
16 (a) IN GENERAL.-Section 173(f) of the Workforce
17 Investment Act of 1998 (29 U.S.C. 2918(f)), as amended
18 by this Act, is amended-
19 (1) by striking paragraph (1) and inserting the
20 following new paragraph:
21 "(1) USE OF FUNDS.-
22 "(A) HEALTH INSURANCE COVERAGE FOR
23 ELIGIBLE INDIVIDUALS IN ORDER TO OBTAIN
24 QUALIFIED HEALTH INSURANCE THAT HAS
25 GUARANTEED ISSUE AND OTHER CONSUMER

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PROTECTIONS.-Funds made available to a
State or entity under paragraph (4)(A) of sub-
section (a) may be used to provide an eligible
individual described in paragraph (4)(C) and
such individual's qualifying family members
,vith health insurance coverage for the 3-month
period that immediately precedes the first eligi-
ble 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 quali-
fied health insurance that meets the require-
ments 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 indi-
vidual and such individual's qualifying family
members to be covered by qualified health in-
surance 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 follmving:
"(i) HEALTH INSURANCE COV-
ERAGE.-To assist an eligible individual

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339
and such individual's qualifying family
members with enrolling in health insurance
coverage and qualified health insurance or
paying premiums for such coverage or in-
surance.
"(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 mem-
bers in health insurance coverage and
qualified health insurance, including-
"(I) eligibility verification activi-
ties;
"(II) the notification of eligible
individuals of available health insur-
ance and qualified health insurance
options;
"(III) processing qualified health
insurance costs credit eligibility cer-
tificates provided for under section
7527 of the Internal Revenue Code of
1986;

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"(IV) providing assistance to eli-
gible individuals in enrolling in health
lllsurance coverage and qualified
health insurance;
"(V) the development or installa-
tion of necessary data management
systems; and
"(VI) any other expenses deter-
mined appropriate by the Secretary,
including start-up costs and on going
administrative expenses, in order for
the State to treat the coverage de-
scribed 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 out-
reach to eligible individuals to inform such
individuals of available health insurance
and qualified health insurance options, in-
cluding outreach consisting of notice to eli-
gible individuals of such options made
available after the date of enactment of
this clause and direct assistance to help
potentially eligible individuals and such in-

341
1 dividual's qualifying family members qual-
2 ify and remain eligible for the credit estab-
3 Iished under section 35 of the Internal
4 Revenue Code of 1986 and advance pay-
S ment of such credit under section 7527 of
6 such Code.
7 "(iv) BRIDGE FUNDING.-To assist
8 potentially eligible individuals to purchase
9 qualified health insurance coverage prior to
10 issuance of a qualified health insurance
11 costs credit eligibility certificate under sec-
12 tion 7527 of the Internal Revenue Code of
13 1986 and commencement of advance pay-
14 ment, and receipt of expedited payment,
15 under subsections (a) and (e), respectively,
16 of that section.
17 "(C) RULE OF CONSTRUCTION.-The in-
18 clusion of a permitted use under this paragraph
19 shall not be construed as prohibiting a similar
20 use of funds permitted under subsection (g).";
21 and
22 (2) by striking paragraph (2) and inserting the
23 following new paragraph:
24 "(2) QUALIFIED HEALTH INSURANCE.-For
25 purposes of tIns subsection and subsection (g), the

342
1 term 'qualified health insurance' has the meanlllg
2 given that term in section 35(e) of the Internal Rev-
3 enue Code of 1986.".
4 (b) FUNDING.-Section 174(c)(1) of the Workforce
5 Investment Act of 1998 (29 U.S.C. 2919(c)(1)) is
6 amended-
7 (1) in the paragraph heading, by striking "Au-
8 THORIZATION AND APPROPRIATION FOR FISCAL
9 YEAR 2002" and inserting "APPROPRIATIONS"; and
10 (2) by striking subparagraph (A) and inserting
11 the following new subparagraph:
12 "(A) to carry out subsection (a)(4)(A) of
13 section 173-
14 "(i) $10,000,000 for fiscal year 2002;
15 and
16 "(ii) $150,000,000 for the period of
17 fiscal years 2009 through 2010; and".
18 SEC. 1899L. GAO STUDY AND REPORT.
19 (a) STUDY.-The Comptroller General of the United
20 States shall conduct a study regarding the health insur-
21 ance tax credit allowed under section 35 of the Internal
22 Revenue Code of 1986.
23 (b) REPORT.-Not later than March 1, 2010, the
24 Comptroller General shall submit a report to Congress re-

343
1 garding the results of the study conducted under sub-
2 section (a). Such report shall include an analysis of-
3 (1) the administrative costs-
4 (A) of the Federal Government with re-
5 spect to such credit and the advance payment
6 of such credit under section 7527 of such Code,
7 and
8 . (B) of providers of qualified health insur-
9 ance with respect to providing such insurance
10 to eligible individuals and their qualifying fam-
11 ily members,
12 (2) the health status and relative risk status of
13 eligible individuals and qualifying family members
14 covered under such insurance,
15 (3) participation in such credit and the advance
16 paYInent of such credit by eligible individuals and
17 their qualifying family members, including the rea-
18 sons why such individuals did or did not participate
19 and the effect of the amendments made by this part
20 on such participation, and
21 (4) the extent to which eligible individuals and
22 their qualifying family members-
23 (A) obtained health insurance other than
24 qualifying health insurance, or

344
1 (B) went without health lllsurance cov-
2 erage.
3 (c) ACCESS TO RECORDS.-For purposes of con-
4 ducting the study required under this section, the Comp-
5 troller General and any of his duly authorized representa-
6 tives shall have access to, and the right to examine and
7 copy, all documents, records, and other recorded
8 information-
9 (1) within the possession or control of providers
10 of qualified health insurance, and
11 (2) determined by the Comptroller General (or
12 any such representative) to be relevant to the study.
13 The Comptroller General shall not disclose the identity of
14 any provider of qualified health insurance or any eligible
15 individual in making any information obtained under this
16 section available to the public.
17 (d) DEFINITIONS.-Any term which is defined in sec-
18 tion 35 of the Internal Revenue Code of 1986 shall have
19 the same meaning when used in this section.

0: ERNERN09560.LC
345
S.L.C.
1 TITLE II-ASSISTANCE FOR UN-
2 EMPLOYED WORKERS AND
3 STRUGGLING FAMILIES
4 SEC. 2000. SHORT TITLE; TABLE OF CONTENTS OF TITLE.
5 (a) SHORT TITLE.-This title may be cited as the
6 "Assistance for Unemployed Workers and Struggling
7 Families Act".
8 (b) TABLE OF CONTENTS OF TITLE.-The table of
9 contents of this title is as follows:
TITLE II-ASSISTANCE FOR UNEMPLOYED WORKERS AND
STRUGGLING FAMILIES
See. 2000. Short title; table of eontents of title.
Subtitle A-Unemployment Insuranee
See. 2001.
See. 2002.
See. 2003.
See. 2004.
See. 2005.
See. 2006.
E:A'tension of emergeney unemployment eompensation progl'am.
Inerease in unemployment eompensation benefits.
Speeial transfers for unemployment eompensation modernization.
Temporary assistanee for states with advanees.
Full Federal funding of e:A'tended unemployment eompensation for a
limited period.
Temporary inerease in e:A'tended unemployment benefits under the
Railroad Unemployment Insuranee Aet.
Subtitle B---'--Assistanee for Vulnerable Individuals
See. 2101.
See. 2102.
See. 2103.
See. 2104.
Emerg'eney fund for TANF program.
Extension of TANF supplemental gl'ants.
Clarifieation of authority of States to use TANF funds eal1'ied over
from prior years to provide TANF benefits and serviees.
Temporary resumption of prior ehild support law.
Subtitle G-Eeonomie Reeovery Payments to Certain Individuals
See. 2201. Eeonomie reeovery payment to reeipients of soeial secmrity, supple-
mental seeurity ineome, railroad retirement benefits, and vet-
erans disability eompensation or pension benefits.
See. 2202. Speeial eredit for eertain government retirees.

346
1 Subtitle A-Unemployment
2 Insurance
3 SEC. 2001. EXTENSION OF EMERGENCY UNEMPLOYMENT
4 COMPENSATION PROGRAM.
5 (a) IN GENERAL.-Section 4007 of the Supplemental
6 Appropriations Act, 2008 (Public Law 110-252; 26
7 U.S.C. 3304 note), as amended by section 4 of the Unem-
8 ployment Compensation Extension Act of 2008 (Public
9 Law 110-449; 122 Stat. 5015), is amended-
10 (1) by striking "March 31, 2009" each place it
11 appears and inserting "December 31, 2009";
12 (2) in the heading for subsection (b)(2), by
13 striking "MARCH 31, 2009" and inserting "DECEM-
14 BER 31, 2009"; and
15 (3) in subsection (b)(3), by striking "August
16 27, 2009" and inserting "May 31, 2010".
17 (b) FINANCING PROVISIONS.-Section 4004 of such
18 Act is amended by adding at the end the following:
19 "(e) TRANSFER OF FUNDS.-Notwithstanding any
20 other provision of law, the Secretary of the Treasury shall
21 transfer from the general fund of the Treasury (from
22 funds not otherwise appropriated)-
23 "(1) to the extended unemployment compensa-
24 tion account (as established by section 905 of the
25 Social Security Act) such sums as the Secretary of

347
1 Labor estimates to be necessary to make payments
2 to States under this title by reason of the amend-
3 ments made by section 2001(a) of the Assistance for
4 Unemployed Workers and Struggling Families Act;
5 and
6 "(2) to the employment security administration
7 account (as established by section 901 of the Social
8 Security Act) such sums as the Secretary of Labor
9 estimates to be necessary for purposes of assisting
10 States in meeting administrative costs by reason of
11 the amendments referred to in paragraph (1).
12 There are appropriated from the general fund of the
13 Treasury, without fiscal year limitation, the sums referred
14 to in the preceding sentence and such sums shall not be
15 required to be repaid.".
16 SEC. 2002. INCREASE IN UNEMPLOYMENT COMPENSATION
17 BENEFITS.
18 (a) FEDERAL-STATE AGREElVIENTs.-Any State
19 which desires to do so may enter into and participate in
20 an agreement under this section with the Secretary of
21 Labor (hereinafter in this section referred to as the "Sec-
22 retary"). Any State which is a party to an agreement
23 under this section may, upon providing 30 days' written
24 notice to the Secretary, terminate such agreement.
25 (b) PROVISIONS OF AGREElVIENT.-

348
1 (1) ADDITIONAL COMPENSATION.-AllY agree-
2 ment under this section shall provide that the State
3 agency of the State will make payments of regular
4 compensation to individuals in amounts and to the
5 extent that they would be determined if the State
6 law of the State were applied, with respect to any
7 week for which the individual is (disregarding this
8 section) otherwise entitled under the State law to re-
9 ceive regular compensation, as if such State law had
10 been modified in a manner such that the amount of
11 regular compensation (including dependents' allow-
12 ances) payable for any week shall be equal to the
13 amount determined under the State law (before the
14 application of this paragraph) plus an additional
15 $25.
16 (2) ALLOWABLE METHODS OF PAYMENT.-Any
17 additional compensation provided for in accordance
18 with paragTaph (1) shall be payable either-
19 (A) as an amount which is paid at the
20 same time and in the same manner as any reg-
21 ular compensation otherwise payable for the
22 week involved; or
23 (B) at the option of the State, by pay-
24 ments which are made separately from, but on

349
1 the same weekly basis as, any regular com-
2 pensation otherwise payable.
3 (c) NONREDUCTION RULE.-All agreement under
4 this section shall not apply (or shall cease to apply) with
5 respect to a State upon a determination by the Secretary
6 that the method governing the computation of regular
7 compensation under the State law of that State has been
8 modified in a manner such that-
9 (1) the average weekly benefit amount of reg-
10 ular compensation which will be payable during the
11 period of the agTeement (determined disregarding
12 any additional amounts attributable to the modifica-
13 tion described in subsection (b)(1)) will be less than
14 (2) the average weekly benefit amount of reg-
15 ular compensation which would otherwise have been
16 payable during such period under the State law, as
17 in effect on December 31, 2008.
18 (d) PAYMENTS TO STATES.-
19 (1) IN GENERAL.-
20 (A) FULL REIMBURSEMENT.-There shall
21 be paid to each State which has entered into an
22 agreement under this section an amount equal
23 to 100 percent of-
24 (i) the total amount of additional
25 compensation (as described In subsection

350
1 (b)(1)) paid to individuals by the State
2 pursuant to such agreement; and
3 (ii) any additional administrative ex-
4 penses incurred by the State by reason of
5 such agTeement (as determined by the Sec-
6 retary).
7 (B) TERMS OF PAYMENTS.-Sums payable
8 to any State by reason of such State's having
9 an agreement under this section shall be pay-
10 able, either in advance or by way of reimburse-
11 ment (as determined by the Secretary), in such
12 amounts as the Secretary estimates the State
13 will be entitled to receive under this section for
14 each calendar month, reduced or increased, as
15 the case may be, by any amount by which the
16 Secretary finds that his estimates for any prior
17 calendar month were greater or less than the
18 amounts which should have been paid to the
19 State. Such estimates may be made on the
20 basis of such statistical, sampling, or other
21 method as may be agreed upon by the Secretary
22 and the State agency of the State involved.
23 (2) CERTIFICATIONs.-The Secretary shall
24 from time to time certify to the Secretary of the

351
1 TreasUlY for payment to each State the sums pay-
2 able to such State under this section.
3 (3) APPROPRIATION.-There are appropriated
4 from the general fund of the TreasUlY, without fiscal
5 year limitation, such sums as may be necessary for
6 purposes of this subsection.
7 (e) APPLICABILITY.-
8 (1) IN GENERAL.-An agreement entered into
9 under this section shall apply to weeks of
10 unemployment-
11 (A) beginning after the date on which such
12 agreement is entered into; and
13 (B) ending before January 1, 2010.
14 (2) TRANSITION RULE FOR INDIVIDUALS RE-
15 MAINING ENTITLED TO REGULAR COMPENSATION AS
16 OF JANUARY 1, 2010.-In the case of any individual
17 who, as of the date specified in paragraph (l)(B),
18 has not yet exhausted all rights to regular com-
19 pensation under the State law of a State with re-
20 spect to a benefit year that began before such date,
21 additional compensation (as described in subsection
22 (b)(l)) shall continue to be payable to such indi-
23 vidual for any week beginning on or after such date
24 for which the individual is otherwise eligible for reg-
25 ular compensation with respect to such benefit year.

0: ERNERN09560.LC S.J..J.C.
(b)(l))-
(A) shall not be payable, pursuant to this
subsection, with respect to any unemployment
(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 bene-
fits 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
352
1 (3) TERMINATION.-Notwithstanding any other
2 provision of this subsection, no additional compensa-
3 tion (as described in subsection (b)(1)) shall be pay-
4 able for any week beginning after June 30, 2010.
5 (f) FRAUD AND OVERPAYMENTS.-The provisions of
6 section 4005 of the Supplemental Appropriations Act,
7 2008 (Public Law 110-252; 122 Stat. 2356) shall apply
8 with respect to additional compensation (as described in
9 subsection (b) (1)) to the same extent and in the same
10 manner as in the case of emergency unemployment com-
11 pensation.
12 (g) APPLICATION TO OTHER UNEMPLOYMENT BENE-
13 FITS.-
14
15
16
17
18
19
20
21
22
23
24
25

353
1 benefits described in subsection (i)(3) for any
2 week beginning on or after the date specified in
3 subsection (e)(1) (B), except in the case of an
4 individual who was eligible to receive additional
5 compensation (as so described) in connection
6 with any regular compensation or any unem-
7 ployment benefits described in subsection (i)(3)
8 for any period of unemployment ending before
9 such date; and
10 (B) shall in no event be payable for any
11 week beginning after the date specified in sub-
12 section (e)(3).
13 (h) DISREGARD OF ADDITIONAL COMPENSATION FOR
14 PURPOSES OF MEDICAID AND SCHIP.-The monthly
15 equivalent of any additional compensation paid under this
16 section shall be disregarded in considering the amount of
17 income of an individual for any purposes under title XIX
18 and title XXI of the Social Security Act.
19 (i) DEFINITIONS.-For purposes of this section-
20 (1) the terms "compensation", "regular com-
21 pensation", "benefit year", "State", "State agency",
22 "State law", and "week" have the respective mean-
23 ings given such terms under section 205 of the Fed-
24 eral-State Extended Unemployment Compensation
25 Act of 1970 (26 U.S.C. 3304 note);

354
1 (2) the term "emergency unemployment com-
2 pensation" means emergency unemployment com-
3 pensation under title IV of the Supplemental Appro-
4 priations Act, 2008 (Public Law 110-252; 122 Stat.
5 2353); and
6 (3) any reference to unemployment benefits de-
7 scribed in this paragraph shall be considered to refer
8 to-
9 (A) extended compensation (as defined by
10 section 205 of the Federal-State Extended Un-
11 employment Compensation Act of 1970); and
12 (B) unemployment compensation (as de-
13 fined by section 85(b) of the Internal Revenue
14 Code of 1986) provided under any program ad-
15 ministered by a State under an agreement with
16 the Secretary.
17 SEC. 2003. SPECIAL TRANSFERS FOR UNEMPLOYMENT
18 COMPENSATION MODERNIZATION.
19 (a) IN GENERAL.-Section 903 of the Social Security
20 Act (42 U.S.C. 1103) is amended by adding at the end
21 the following:
22 "Special Transfers in Fiscal Years 2009, 2010, and 2011
23 for Modernization
24 "(f)(l)(A) In addition to any other amounts, the Sec-
25 retary of Labor shall provide for the making of unemploy-

355
1 ment compensation modernization incentive payments
2 (hereinafter 'incentive payments') to the accounts of the
3 States in the Unemployment Trust Fund, by transfer from
4 amounts reserved for that purpose in the Federal unem-
5 ployment account, in accordance with succeeding provi-
6 sions of this subsection.
7 "(B) The maximum incentive payment allowable
8 under this subsection 'with respect to any State shall, as
9 determined by the Secretary of Labor, be equal to the
10 amount obtained by multiplying $7,000,000,000 by the
11 same ratio as would apply under subsection (a)(2)(B) for
12 purposes of determining such State's share of any excess
13 amount (as described in subsection (a)(l)) that would
14 have been subject to transfer to State accounts, as of Oc-
15 tober 1, 2008, under the provisions of subsection (a).
16 "(C) Of the maximum incentive payment determined
17 under subparagraph (B) with respect to a State-
18 "(i) one-third shall be transferred to the ac-
19 count of such State upon a certification under para-
20 graph (4)(B) that the State law of such State meets
21 the requirements of paragraph (2); and
22 "(ii) the remainder shall be transferred to the
23 account of such State upon a certification under
24 paragraph (4)(B) that the State law of such State
25 meets the requirements of paragraph (3).

356
1 "(2) The State law of a State meets the requirements
2 of this paragTaph if such State law-
3 "(A) uses a base period that includes the most
4 recently completed calendar quarter before the start
5 of the benefit year for purposes of determining eligi-
6 bility for unemployment compensation; or
7 "(B) provides that, in the case of an individual
8 who would not otherwise be eligible for unemploy-
9 ment compensation under the State law because of
10 the use of a base period that does not include the
11 most recently completed calendar quarter before the
12 start of the benefit year, eligibility shall be deter-
13 mined using a base period that includes such cal-
14 elldar quarter.
15 "(3) The State law of a State meets the requirements
16 of tIns paragraph if such State law includes provisions to
17 carry out at least 2 of the following subparagraphs:
18 "(A) An individual shall not be denied regular
19 unemployment compensation under any State law
20 provisions relating to availability for work, active
21 search for work, or refusal to accept work, solely be-
22 cause such individual is seeking only part-time work
23 (as defined by the Secretary of Labor), except that
24 the State law provisions carrying out tIns subpara-
25 graph may exclude an individual if a majority of the

357
1 weeks of work in such individual's base period do
2 not include part-time work (as so defined).
3 "(B) An individual shall not be disqualified
4 from regular unemployment compensation for sepa-
5 rating from employment if that separation is for any
6 compelling family reason. For purposes of this sub-
7 paragTaph, the term 'compelling family reason'
8 means the following:
9 "(i) Domestic violence, verified by such
10 reasonable and confidential documentation as
11 the State law may require, which causes the in-
12 dividual reasonably to believe that such individ-
13 ual's continued employment would jeopardize
14 the safety of the individual or of any member
15 of the individual's immediate family (as defined
16 by the Secretary of Labor).
17 "(ii) The illness or disability of a member
18 of the individual's immediate family (as those
19 terms are defined by the Secretary of Labor).
20 "(iii) The need for the individual to accom-
21 pany such individual's spouse-
22 "(I) to a place from which it IS Im-
23 practical for such individual to commute;
24 and

358
1 "(II) due to a change III location of
2 the spouse's employment.
3 "(CHi) Weekly unemployment compensation is
4 payable under this subparagraph to any individual
5 who is unemployed (as determined under the State
6 unemployment compensation law), has exhausted all
7 rights to regular unemployment compensation under
8 the State law, and is enrolled and making satisfac-
9 tory progress in a State-approved training program
10 or in a job training program authorized under the
11 Workforce Investment Act of 1998, except that such
12 compensation is not required to be paid to an indi-
13 vidual who is receiving similar stipends or other
14 training allowances for non-training costs.
15 "(ii) Each State-approved training program or
16 job training program referred to in clause (i) shall
17 prepare individuals who have been separated from a
18 declining occupation, or who have been involuntarily
19 and indefinitely separated from employment as a re-
20 suIt of a permanent reduction of operations at the
21 individual's place of employment, for entry into a
22 high-demand occupation.
23 "(iii) The amount of unemployment compensa-
24 tion payable under this subparagraph to an indi-

359
1 vidual for a week of unemployment shall be equal
2 to-
3 "(I) the individual's average weekly benefit
4 amount (including dependents' allowances) for
5 the most recent benefit year, less
6 "(II) any deductible income, as determined
7 under State law.
8 The total amount of unemployment compensation
9 payable under this subparagraph to any individual
10 shall be equal to at least 26 times the individual's
11 average weekly benefit amount (including depend-
12 ents' allowances) for the most recent benefit year.
13 "(D) Dependents' allowances are provided, III
14 the case of any individual who is entitled to receive
15 regular unemployment compensation and who has
16 any dependents (as defined by State law), in an
17 amount equal to at least $15 per dependent per
18 week, subject to any aggregate limitation on such al-
19 lowances which the State law may establish (but
20 which aggregate limitation on the total allowance for
21 dependents paid to an individual may not be less
22 than $50 for each week of unemployment or 50 per-
23 cent of the individual's weekly benefit amount for
24 the benefit year, whichever is less), except that a
25 State law may provide for a reasonable reduction in

360
1 the amount of any such allowance for a week of less
2 than total unemployment.
3 "(4)(A) Any State seeking an incentive payment
4 under this subsection shall submit an application therefor
5 at such time, in such manner, and complete with such in-
6 formation as the Secretary of Labor may within 60 days
7 after the date of the enactment of this subsection prescribe
8 (whether by regulation or otherwise), including informa-
9 tion relating to compliance with the requirements of para-
10 graph (2) or (3), as well as how the State intends to use
11 the incentive payment to improve or strengthen the State's
12 unemployment compensation program. The Secretary of
13 Labor shall, within 30 days after receiving a complete ap-
14 plication, notify the State agency of the State of the Sec-
15 retary's findings with respect to the requirements of para-
16 graph (2) or (3) (or both).
17 "(B)(i) If the Secretary of Labor finds that the State
18 law provisions (disregarding any State law provisions
19 which are not then currently in effect as permanent law
20 or which are subject to discontinuation) meet the require-
21 ments of paragraph (2) or (3), as the case may be, the
22 Secretary of Labor shall thereupon make a certification
23 to that effect to the Secretary of the Treasury, together
24 with a certification as to the amount of the incentive pay-
25 ment to be transferred to the State account pursuant to

361
1 that finding. The Secretary of the Treasury shall make
2 the appropriate transfer within 7 days after receiving such
3 certification.
4 "(ii) For purposes of clause (i), State law provisions
5 which are to take effect within 12 months after the date
6 of their certification under this subparagraph shall be con-
7 sidered to be in effect as of the date of such certification.
8 "(CHi) No certification of compliance with the re-
9 quirements of paragraph (2) or (3) may be made with re-
10 spect to any State whose State law is not otherwise eligible
11 for certification under section 303 or approvable under
12 section 3304 of the Federal Unemployment Tax Act.
13 "(ii) No certification of compliance with the require-
14 ments of paragraph (3) may be made with respect to any
15 State whose State law is not in compliance with the re-
16 quirements of paragraph (2).
17 "(iii) No application under subparagraph (A) may be
18 considered if submitted before the date of the enactment
19 of this subsection or after the latest date necessary (as
20 specified by the Secretary of Labor) to ensure that all in-
21 centive payments under this subsection are made before
22 October 1, 2011.
23 " (5)(A) Except as provided in subparagraph (B), any
24 amount transferred to the account of a State under this
25 subsection may be used by such State only in the payment

362
1 of cash benefits to individuals with respect to their unem-
2 ployment (including for dependents' allowances and for
3 unemployment compensation under paragraph (3)(C)), ex-
4 elusive of expenses of administration.
5 "(B) A. State may, subject to the same conditions as
6 set forth in subsection (c)(2) (excluding subparagraph (B)
7 thereof, and deeming the reference to 'subsections (a) and
8 (b)' in subparagraph (D) thereof to include this sub-
9 section), use any amount transferred to the account of
10 such State under this subsection for the administration
11 of its unemploYluent compensation law and public employ-
12 ment offices.
13 "(6) Out of any money in the Federal unemployment
14 account not otherwise appropriated, the Secretary of the
15 Treasury shall reserve $7,000,000,000 for incentive pay-
16 ments under this subsection. Any amount so reserved shall
17 not be taken into account for purposes of any determina-
18 tion under section 902, 910, or 1203 of the amount in
19 the Federal unemployment account as of any given time.
20 Any amount so reserved for which the Secretary of the
21 Treasury has not received a certification under paragTaph
22 (4) (B) by the deadline described in paragraph (4) (C) (iii)
23 shall, upon the close of fiscal year 2011, become unre-
24 stricted as to use as part of the Federal unemployment
25 account.

363
1 "(7) For purposes of this subsection, the terms 'ben-
2 efit year', 'base period', and 'week' have the respective
3 meanings given such terms under section 205 of the Fed-
4 eral-State Extended Unemployment Compensation Act of
5 1970 (26 U.S.C. 3304 note).
6 "Special Transfer in Fiscal Year 2009 for Administration
7 "(g)(l) In addition to any other amounts, the Sec-
8 retary of the Treasury shall transfer from the employment
9 security administration account to the account of each
10 State in the Unemployment Trust Fund, within 30 days
11 after the date of the enactment of this subsection, the
12 amount determined with respect to such State under para-
13 graph (2).
14 "(2) The amount to be transferred under this sub-
15 section to a State account shall (as determined by the Sec-
16 retary of Labor and certified by such Secretary to the Sec-
17 retary of the Treasury) be equal to the amount obtained
18 by multiplying $500,000,000 by the same ratio as deter-
19 mined under subsection (f)(l)(B) with respect to such
20 State.
21 "(3) Any amount transferred to the account of a
22 State as a result of the enactment of this subsection may
23 be used by the State agency of such State only in the pay-
24 ment of expenses incurred by it for-

364
1 "(A) the administration of the provisions of its
2 State law carrying out the purposes of subsection
3 (f)(2) or any subparagraph of subsection (f)(3);
4 "(B) improved outreach to individuals who
5 might be eligible for regular unemploYment com-
6 pensation by virtue of any provisions of the State
7 law which are described in subparagraph (A);
8 "(C) the improvement of unemploYment benefit
9 and unemployment tax operations, including re-
10 sponding to increased demand for unemploYment
11 compensation; and
12 "(D) staff-assisted reemploYment seI'Vlces for
13 unemploYment compensation claimants.".
14 (b) REGULATIONS.-The SecretaIy of Labor may
15 prescribe any regulations, operating instructions, or other
16 guidance necessary to carry out the amendment made by
17 subsection (a).
18 SEC. 2004. TEMPORARY ASSISTANCE FOR STATES WITH AD-
19 VANCES.
20 Section 1202(b) of the Social Security Act (42 U.S.C.
21 1322(b)) is amended by adding at the end the following
22 new paragraph:
23 "(10)(A) With respect to the period beginning on the
24 date of enactment of this paragraph and ending on De-
25 cember 31,2010-

365
1 "(i) any interest payment otherwise due from a
2 State under this subsection during such period shall
3 be deemed to have been made by the State; and
4 "(ii) no interest shall accrue during such period
5 on any advance or advances made under section
6 1201 to a State.
7 "(B) The provisions of subparagraph (A) shall have
8 no effect on the requirement for interest payments under
9 this subsection after the period described in such subpara-
10 graph or on the accrual of interest under this subsection
11 after such period.".
12 SEC. 2005. FULL FEDERAL FUNDING OF EXTENDED UNEM-
13 PLOYMENT COMPENSATION FOR A LIMITED
14 PERIOD.
15 (a) IN GENERAL.-In the case of sharable extended
16 compensation and sharable regular compensation paid for
17 weeks of unemployment beginning after the date of the
18 enactment of this section and before January 1,2010, sec-
19 tion 204(a)(1) of the Federal-State Extended Unemploy-
20 ment Compensation Act of 1970 (26 U.S.C. 3304 note)
21 shall be applied by substituting "100 percent of" for "one-
22 half of".
23 (b) SPECIAL RULE.-At the option of a State, for
24 any weeks of unemployment beginning after the date of
25 the enactment of this section and before January 1, 2010,

366
1 an individual's eligibility period (as described in section
2 203(c) of the Federal-State Extended Unemployment
3 Compensation Act of 1970) shall, for purposes of any de-
4 termination of eligibility for extended compensation under
5 the State law of such State, be considered to include any
6 week which begins-
7 (1) after the date as of which such individual
8 exhausts all rights to emergency unemploYment com-
9 pensation; and
10 (2) during an extended benefit period that
11 began on or before the date described in paragraph
12 (1).
13 (c) LIMITED EXTENSION.-In the case of an indi-
14 vidual who receives extended compensation with respect to
15 1 or more weeks of unemploYment beginning after the date
16 of the enactment of this Act and before January 1, 2010,
17 the provisions of subsections (a) and (b) shall, at the op-
18 tion of a State, be applied by substituting "ending before
19 June 1, 2010" for "before January 1,2010".
20 (d) EXTENSION OF TEMPORARY FEDERAL MATCH-
21 ING FOR THE FIRST WEEK OF EXTENDED BENEFITS FOR
22 STATES WITH No WAITING WEEK.-
23 (1) IN GENERAL.-Section 5 of the Unemploy-
24 ment Compensation Extension Act of 2008 (Public

0: ERNERN09560.LC
367
S.L.C.
1 Law 110-449) is amended by striking "December 8,
2 2009" and inserting "May 30, 2010".
3 (2) EFFEC'l'IVE DA'l'E.-The amendment made
4 by paragraph (1) shall take effect as if included in
5 the enactment of the Unemployment Compensation
6 Extension Act of 2008 (Public Law 110-449).
7 (e) DEFINITIONS.-For purposes of this section-
8 (1) the terms "sharable extended compensa-
9 tion" and "sharable regular compensation" have the
10 respective meanings given such terms under section
11 204 of the Federal-State Extended Unemployment
12 Compensation Act of 1970;
13
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16
17
18
19
20
21
22
23
24
(2) the terms "extended compensation",
"State" "State law" and "week" have the respec-, ,
tive meanings given such terms under section 205 of
the Federal-State Extended Unemployment Com-
pensation Act of 1970;
(3) the term "emergency unemployment com-
pensation" 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 accord-
ance with applicable provisions of the Federal-State

368
1 Extended Unemployment Compensation Act of
2 1970.
3 (f) REGULATIONS.-The Secretary of Labor may pre-
4 scribe any operating instructions or regulations necessary
5 to canJT out this section.
6 SEC. 2006. TEMPORARY INCREASE IN EXTENDED UNEM-
7 PLOYMENT BENEFITS UNDER THE RAILROAD
8 UNEMPLOYMENT INSURANCE ACT.
9 (a) IN GENERAL.-Section 2(c)(2) of the Railroad
10 Unemployment Insurance Act (45 U.S.C. 352(c)(2)) IS
12 "(D) TEMPORARY INCREASE IN EXTENDED
13 UNEMPLOYMENT BENEFITS.-
14 "(i) EMPLOYEES WITH 10 OR MORE
15 YEARS OF SERVICE.-Subject to clause
16 (iii), in the case of an employee who has
17 10 or more years of service (as so defined),
18 with respect to extended unemployment
19 benefits-
20 "(I) subparagraph (A) shall be
21 applied by substituting '130 days of
22 unemployment' for '65 days of unem-
23 ployment'; and
24 "(II) subparagraph (B) shall be
25 applied by inserting '(or, in the case

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369
of unemployment benefits, 13 con-
secutive 14-day periods)' after '7 con-
secutive 14-day periods'.
"(ii) EMPLOYEES "VITH 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 de-
fined), with respect to extended unemploy-
ment benefits, this paragraph shall apply
to such an employee in the same manner
as this paragraph would apply to an em-
ployee described in clause (i) if such clause
had not been enacted.
"(iii) APPLICATION.-The prOVISIOns
of clauses (i) and (ii) shall apply to an em-
ployee who received normal benefits for
days of unemployment under this Act dur-
ing the period beginning July 1, 2008, and
ending on June 30, 2009, except that no
extended benefit period under this para-
graph shall begin after December 31,
2009. Notwithstanding the preceding sen-
tence, no benefits shall be payable under
this subparagraph and clauses (i) and (ii)
shall no longer be applicable upon the ex-

370
1 haustion of the funds appropriated under
2 clause (iv) for payment of benefits under
3 this subparagraph.
4 "(iv) APPROPRIATION.-Out of any
5 funds in the Treasury not otherwise appro-
6 priated, there are appropriated
7 $20,000,000 to cover the cost of additional
8 extended unemployment benefits provided
9 under this subparagraph, to remain avail-
10 able until expended.".
11 (b) FUNDING FOR ADMINISTRATION.-Out of any
12 funds in the Treasury not otherwise appropriated, there
13 are appropriated to the Railroad Retirement Board
14 $80,000 to cover the administrative expenses associated
15 with the payTnent of additional extended unemploYluent
16 benefits under section 2(c)(2)(D) of the Railroad Unem-
17 ployment Insurance Act, as added by subsection (a), to
18 remain available until expended.
19 Subtitle B-Assistance for
20 Vulnerable Individuals
21 SEC. 2101. EMERGENCY FUND FOR TANF PROGRAM.
22 (a) TEMPORARY FUND.-
23 (1) IN GENERAL.-Section 403 of the Social
24 Security Act (42 U.S.C. 603) is amended by adding
25 at the end the following:

371
1 "(c) EMERGENCY FUND.-
2 "(1) ESTABLISHMENT.-There is established in
3 the Treasury of the United States a fund which
4 shall be known as the 'Emergency Contingency
5 Fund for State Temporary Assistance for Needy
6 Families Programs' (in this subsection referred to as
7 the 'Emergency Fund').
8 "(2) DEPOSITS INTO FUND.-
9 "(A) IN GENERAL.-Out of any money in
10 the Treasury of the United States not otherwise
11 appropriated, there are appropriated for fiscal
12 year 2009, $5,000,000,000 for payment to the
13 Emergency Fund.
14 "(B) AVAILABILITY AND USE OF FUNDS.-
15 The amounts appropriated to the Emergency
16 Fund under subparagraph (A) shall remain
17 available through fiscal year 2010 and shall be
18 used to make grants to States in each of fiscal
19 years 2009 and 2010 in accordance with the re-
20 quirements of paragraph (3).
21 "(C) LIMITATION.-In no case may the
22 Secretary make a grant from the Emergellcy
23 Fund for a fiscal year after fiscal year 2010.
24 "(3) GRANTS.-

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372
"(A) GRANT RELATED TO CASELOAD IN-
CREASES.-
"(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 REQUIRE-
MENT.-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 month-
ly 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 subpara-
graph 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

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373
the SecretaIy) III the quarter, whether
under the State program funded under this
part or as qualified State expenditures, ex-
ceeds 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 EX-
PENDITURES FOR NON-RECURRENT SHORT
TERM BENEFITS.-
"(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 tIns part or as

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374
qualified State expenditures, exceeds the
total expenditures of the State for non-re-
current short term benefits in the cor-
responding quarter in the emergency fund
base year of the State.
"(iii) AIVIOUNT OF GRANT.-Subject to
paragraph (5), the amount of the grant to
be made to a State under this subpara-
graph for a quarter shall be an amount
equal to 80 percent of the excess described
in clause (ii).
"(0) GRANT RELATED TO INCREASED EX-
PENDITURES FOR SUBSIDIZED EMPLOYMENT.-
"(ii) SUBSIDIZED EMPLOYMENT EX-
PENDITURE REQUIREMENT.-A State
meets the requirement of this clause for a
quarter if the total expenditures of the

375
1 State for subsidized employment in the
2 quarter, whether under the State program
3 funded under this part or as qualified
4 State expenditures, exceeds the total such
5 expenditures of the State in the cor-
6 responding quarter in the emergency fund
7 base year of the State.
8 "(iii) Al10UNT OF GRANT.-Subject to
9 paragraph (5), the amount of the grant to
l O b e made to a State under this subpara-
11 graph for a quarter shall be an amount
12 equal to 80 percent of the excess described
13 in clause (ii).
14 "(4) AUTHORITY TO MAlffi NECESSARY ADJUST-
15 MENTS TO DATA AND COLLECT NEEDED DATA.-In
16 determining the size of the caseload of a State and
17 the expenditures of a State for basic assistance, non-
18 recurrent short-term benefits, and subsidized em-
19 ployment, during any period for which the State re-
20 quests funds under this subsection, and during the
21 emergency fund base year of the State, the Sec-
22 retary may make appropriate adjustments to the
23 data, on a State-by-State basis, to ensure that the
24 data are comparable with respect to the groups of
25 families served and the types of aid provided. The

376
1 Secretary may develop a mechanism for collecting
2 expenditure data, including procedures which allow
3 States to make reasonable estimates, and may set
4 deadlines for making revisions to the data.
5 "(5) LIMITATION.-The total amount payable
6 to a single State under subsection (b) and this sub-
7 section for fiscal years 2009 and 2010 combined
8 shall not exceed 50 percent of the annual State fam-
9 ily assistance grant.
10 "(6) LIMITATIONS ON USE OF FUNDS.-A State
11 to which an amount is paid under this subsection
12 may use the amount only as authorized by section
13 404.
14 "(7) TIMING OF IMPLEMENTATION.-The Sec-
15 retary shall implement this subsection as quickly as
16 reasonably possible, pursuant to appropriate guid-
17 ance to States.
18 "(8) APPLICATION TO INDIAN TRIBES.-This
19 subsection shall apply to an Indian tribe with an ap-
20 proved tribal family assistance plan under section
21 412 in the same manner as this subsection applies
22 to a State.
23 "(9) DEFINITIONS.-In this subsection:
24 " (A) AVERAGE MONTHLY ASSISTANCE
25 CASELOAD DEFINED.-The term 'average

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377
monthly assistance caseload' means, with re-
spect 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 'emer-
gency 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 re-
spect to the State is the lesser.
"(ii) CATEGORIES DESCRIBED.-The
categories described in this clause are the
following:
"(I) The average monthly assist-
ance caseload of the State.
"(II) The total expenditures of
the State for non-recurrent short term
benefits, whether under the State pro-
gram funded under this part or as
qualified State expenditures.

378
1 "(III) The total expenditures of
2 the State for subsidized employment,
3 whether under the State program
4 funded under this part or as qualified
5 State expenditures.
6 "(C) QUALIFIED STATE EXPENDITURES.-
7 The term 'qualified State expenditures' has the
8 meaning given the term in section 409(a)(7).".
9 (2) REPEAL.-Effective October 1, 2010, sub-
10 section (c) of section 403 of the Social Security Act
11 (42 U.S.C. 603) (as added by paragraph (1)) is re-
12 pealed, except that paragraph (9) of such subsection
13 shall remain in effect until October 1, 2011, but
14 only with respect to section 407(b)(3)(A)(i) of such
15 Act.
16 (b) TEMPORARY MODIFICATION OF CASELOAD RE-
17 DUCTION CREDIT.-Section 407(b)(3)(A)(i) of such Act
18 (42 U.S.C. 607(b)(3)(A)(i)) is amended by inserting "(or
19 if the immediately preceding fiscal year is fiscal year 2008,
20 2009, or 2010, then, at State option, during the emer-
21 gency fund base year of the State with respect to the aver-
22 age monthly assistance caseload of the State (within the
23 meaning of section 403(c)(9)), except that, if a State
24 elects such option for fiscal year 2008, the emergency fund

379
1 base year of the State with respect to such caseload shall
2 be fiscal year 2007))" before "under the State".
3 (c) DISREGARD FROM LIMITATION ON TOTAL PAY-
4 MENTS TO TERRITORIES.-Section 1108(a)(2) of the So-
5 cial Security Act (42 U.S.C. 1308(a)(2)) is amended by
6 inserting "403(c)(3)," after "403(a)(5),".
7 (d) SUNSET OF OTHER TEMPORARY PROVISIONS.-
8 (1) DISREGARD FROM LIMITATION ON TOTAL
9 PAYMENTS TO TERRITORIES.-Effective October 1,
10 2010, section 1108(a)(2) of the Social Security Act
11 (42 U.S.C. 1308(a)(2)) is amended by striking
12 "403(c)(3)," (as added by subsection (c)).
13 (2) CASELOAD REDUCTION CREDIT.-Effective
14 October 1, 2011, section 407(b)(3)(A)(i) of such Act
15 (42 U.S.C. 607(b)(3)(A)(i)) is amended by striking
16 "(or if the immediately preceding fiscal year is fiscal
17 year 2008, 2009, or 2010, then, at State option,
18 during the emergency fund base year of the State
19 with respect to the average monthly assistance case-
20 load of the State (within the meaning of section
21 403(c)(9)), except that, if a State elects such option
22 for fiscal year 2008, the emergency fund base year
23 of the State with respect to such caseload shall be
24 fiscal year 2007))" (as added by subsection (b)).

380
1 SEC. 2102. EXTENSION OF TANF SUPPLEMENTAL GRANTS.
2 (a) EXTENSION THROUGH FISCAL YEAR 2010.-Sec-
3 tion 7101(a) of the Deficit Reduction Act of 2005 (Public
4 Law 109-171; 120 Stat. 135), as amended by section
5 301(a) of the Medicare Improvements for Patients and
6 Providers Act of 2008 (Public Law 110-275), is amended
7 by striking "fiscal year 2009" and inserting "fiscal year
8 2010".
9 (b) CONFORMING AMENDMENT.-Section
10 403(a)(3)(H)(ii) of the Social Security Act (42 U.S.C.
11 603(a)(3)(H)(ii)) is amended to read as follows:
12 "(ii) subparagraph (G) shall be ap-
13 plied as if 'fiscal year 2010' were sub-
14 stituted for 'fiscal year 2001'; and".
15 SEC. 2103. CLARIFICATION OF AUTHORITY OF STATES TO
16 USE TANF FUNDS CARRIED OVER FROM
17 PRIOR YEARS TO PROVIDE TANF BENEFITS
18 AND SERVICES.
19 Section 404(e) of the Social Security Act (42 U.S.C.
20 604(e)) is amended to read as follows:
21 "(e) AUTHORITY TO CARRY OVER CERTAIN
22 AIVIOUNTS FOR BENEFITS OR SERVICES OR FOR FUTURE
23 CONTINGENCIES.-A State or tribe may use a grant made
24 to the State or tribe under tIns part for any fiscal year
25 to provide, without fiscal year limitation, any benefit or

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381
S.L.C.
1 service that may be provided under the State or tribal pro-
2 gram funded under this part.".
3 SEC. 2104. TEMPORARY RESUMPTION OF PRIOR CHILD
4 SUPPORT LAW.
5 During the period that begins on October 1, 2008,
6 and ends on September 30, 2010, section 455(a)(1) of the
7 Social Security Act (42 U.S.C. 655(a)(1)) shall be applied
8 and administered as if the phrase "from amounts paid to
9 the State under section 458 or" does not appear in such
10 section.
11 Subtitle C-Economic Recovery
12 Payments to Certain Individuals
13 SEC. 2201. ECONOMIC RECOVERY PAYMENT TO RECIPIENTS
14 OF SOCIAL SECURITY, SUPPLEMENTAL SECD-
15 RITY INCOME, RAILROAD RETIREMENT BENE-
16 FITS, AND VETERANS DISABILITY COMPENSA-
17 TION OR PENSION BENEFITS.
18 (a) AUTHORITY TO MAKE PAYMENTS.-
19 (1) ELIGIBILITY.-
20 (A) IN GENERAL.-Subject to paragraph
21 (5) (B), the Secretary of the Treasury shall dis-
22 burse a $250 payment to each individual who,
23 for any month during the 3-month period end-
24 ing with the month which ends prior to the
25 month that includes the date of the enactment

382
1 of this Act, is entitled to a benefit payment de-
2 scribed in clause (i), (ii), or (iii) of subpara-
3 gTaph (B) or is eligible for a SSI cash benefit
4 described in subparagraph (C).
5 (B) BENEFIT PAYIVIENT DESCRIBED.-For
6 purposes of subparagraph (A):
7 (i) TITLE II BENEFIT.-A benefit pay-
8 ment described in this clause is a monthly
9 insurance benefit payable (vrithout regard
10 to sections 202(j)(1) and 223(b) of the So-
II cial Security Act (42 U.S.C. 402(j)(1),
12 423(b)) under-
13 (I) section 202(a) of such Act
14 (42 U.S.C. 402(a));
15 (II) section 202(b) of such Act
16 (42 U.S.C. 402(b));
17 (III) section 202(c) of such Act
18 (42 U.S.C. 402(c));
19 (IV) section 202(d)(1)(B)(ii) of
20 such Act (42 U.S.C.
21 402(d)(1)(B)(ii));
22 (V) section 202(e) of such Act
23 (42 U.S.C. 402(e));
24 (VI) section 202(f) of such Act
25 (42 U.S.C. 402(f));

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383
(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 BEN-
EFIT.-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-
(1) 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)(l)(ii) of such
Act (45 U.S.C. 231a(d)(1)(ii));

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(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)(l)(iv) of such
Act (45 U.S.C. 231a(d)(1)(iv));
(VII) section 2(d)(l)(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 com-
pensation 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

385
1 (IV) section 1805, 1815, or 1821
2 of title 38, United States Code,
3 to a veteran, surviving spouse, child, or
4 parent as described in paragraph (2), (3),
5 (4)(A) (ii), or (5) of section 101, title 38,
6 United States Code, who received that ben-
7 efit during any month within the 3 month
8 period ending with the month which ends
9 prior to the month that includes the date
11 (C) SSI CASH BENEFIT DESCRIBED.-A
12 SSI cash benefit described in this subparagraph
13 is a cash benefit payable under section 1611
14 (other than under subsection (e)(l)(B) of such
15 section) or 1619(a) of the Social Security Act
16 (42 U.S.C. 1382, 1382h).
17 (2) REQUIREMENT.-A payment shall be made
18 under paragraph (1) only to individuals who reside
19 in 1 of the 50 States, the District of Columbia,
20 Puerto Rico, Guam, the United States Virgin Is-
21 lands, American Samoa, or the Northern Mariana
22 Islands. For purposes of the preceding sentence, the
23 determination of the individual's residence shall be
24 based on the current address of record under a pro-
25 gram specified in paragraph (1).

386
1 (3) No DOUBLE PAYMEN'l'S.-An individual
2 shall be paid only 1 payment under this section, re-
3 gardless of whether the individual is entitled to, or
4 eligible for, more than 1 benefit or cash payment de-
5 scribed in paragraph (1).
6 (4) LIMITATION.-A payment under this section
7 shall not be made-
8 (A) in the case of an individual entitled to
9 a benefit specified in paragraph (l)(B)(i) or
10 paragraph (l)(B)(ii)(VIII) if, for the most re-
11 cent month of such individual's entitlement in
12 the 3-month period described in paragraph (1),
13 such individual's benefit under such paragraph
14 was not payable by reason of subsection (x) or
15 (y) of section 202 the Social Security Act (42
16 U.S.C. 402) or section 1129A of such Act (42
17 U.S.C. 1320a-8a);
18 (B) in the case of an individual entitled to
19 a benefit specified in paragraph (l)(B)(iii) if,
20 for the most recent month of such individual's
21 entitlement in the 3 month period described in
22 paragraph (1), such individual's benefit under
23 such paragraph was not payable, or was re-
24 duced, by reason of section 1505, 5313, or
25 5313B of title 38, United States Code;

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(C) in the case of an individual entitled to
a benefit specified in paragraph (l)(C) if, for
such most recent month, such individual's ben-
efit under such paragraph was not payable by
reason of subsection (e)(1)(A) or (e)(4) of sec-
tion 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 Sec-
retary of the Treasury may disburse any pay-
ment electronically to an individual in such
manner as if such payment was a benefit pay-
ment or cash benefit to such individual under
the applicable program described in subpara-
graph (B) or (C) of paragraph (1).
(B) DEADLINE.-No payments shall be
disbursed under this section after December 31,

388
1 2010, regardless of any determinations of enti-
2 tlement to, or eligibility for, such payments
3 made after such date.
4 (b) IDENTIFICATION OF RECIPIENTS.-The Commis-
5 siOller of Social Security, the Railroad Retirement Board,
6 and the Secretary of Veterans Mfairs shall certify the in-
7 dividuals entitled to receive payments under this section
8 and provide the Secretary of the Treasury with the infor-
9 mation needed to disburse such payments. A certification
10 of an individual shall be unaffected by any subsequent de-
II termination or redetermination of the individual's entitle-
12 ment to, or eligibility for, a benefit specified in subpara-
13 graph (B) or (C) of subsection (a)(l).
14 (c) TREATMENT OF PAYMENTS.-
15 (1) PAYMENT TO BE DISREGARDED FOR PUR-
16 POSES OF ALL FEDERAL AND FEDERALLY ASSISTED
17 PROGRAMS.-A payment under subsection (a) shall
18 not be regarded as income and shall not be regarded
19 as a resource for the month of receipt and the fol-
20 lowing 9 months, for purposes of determining the
21 eligibility of the recipient (or the recipient's spouse
22 or family) for benefits or assistance, or the amount
23 or extent of benefits or assistance, under any Fed-
24 eral program or under any State or local program fi-
25 nanced in whole or in part with Federal funds.

389
1 (2) PAYMENT NOT CONSIDERED INCOME FOR
2 PURPOSES OF TAXATION.-A payment under sub-
3 section (a) shall not be considered as gross income
4 for purposes of the Internal Revenue Code of 1986.
5 (3) PAYlV[ENTS PROTECTED FROM ASSIGN-
6 MENT.-The prOVISIOns of sections 207 and
7 1631(d)(1) of the Social Security Act (42 U.S.C.
8 407, 1383(d)(1)), section 14(a) of the Railroad Re-
9 tirement Act of 1974 (45 U.S.C. 231m(a)), and sec-
10 tion 5301 of title 38, United States Code, shall
11 apply to any payment made under subsection (a) as
12 if such payment was a benefit payment or cash ben-
13 efit to such individual under the applicable program
14 described in subparagraph (B) or (C) of subsection
15 (a)(l).
16 (4) PAYMENTS SUBJECT TO OFFSET.-Notwith-
17 standing paragraph (3), for purposes of section
18 3716 of title 31, United States Code, any payment
19 made under tIns section shall not be considered a
20 benefit payment or cash benefit made under the ap-
21 plicable program described in subparagraph (B) or
22 (C) of subsection (a)(l) and all amounts paid shall
23 be subject to offset to collect delinquent debts.
24 (d) PAYMENT TO REPRESENTATIVE PAYEES AND FI-
25 DUCIARIES.-

390
1 (1) IN GENERAL.-In any case in which an in-
2 dividual who is entitled to a payment under sub-
3 section (a) and whose benefit payment or cash ben-
4 efit described in paragraph (1) of that subsection is
5 paid to a representative payee or fiduciary, the pay-
6 . ment under subsection (a) shall be made to the indi-
7 vidual's representative payee or fiduciary and the en-
8 tire payment shall be used only for the benefit of the
9 individual who is entitled to the payment.
10 (2) APPLICABILITY.-
11 (A) PAYMENT ON THE BASIS OF A TITLE
12 II OR SSI BENEFIT.-Section 1129(a)(3) of the
13 Social Security Act (42 U.S.C. 1320a-8(a)(3))
14 shall apply to any payment made on the basis
15 of an entitlement to a benefit specified in para-
16 graph (l)(B)(i) or (l)(C) of subsection (a) in
17 the same manner as such section applies to a
18 payment under title II or XVI of such Act.
19 (B) PAYMENT ON THE BASIS OF A RAIL-
20 ROAD RETIREMENT BENEFIT.-Section 13 of
21 the Railroad Retirement Act (45 U.S.C. 2311)
22 shall apply to any payment made on the basis
23 of an entitlement to a benefit specified in para-
24 gTaph (l)(B)(ii) of subsection (a) in the same

391
1 manner as such section applies to a payment
2 under such Act.
3 (C) PAYMENT ON THE BASIS OF A VET-
4 ERANS BENEFIT.-Sections 5502, 6106, and
5 6108 of title 38, United States Code, shall
6 apply to any payment made on the basis of an
7 entitlement to a benefit specified in paragraph
8 (l)(B)(iii) of subsection (a) in the same manner
9 as those sections apply to a payment under that
10 title.
11 (e) APPROPRIATION.-Out of any sums in the Treas-
12 ury of the United States not otherwise appropriated, the
13 following sums are appropriated for the period of fiscal
14 years 2009 through 2011, to remain available until ex-
15 pended, to carry out this section:
16 (1) For the Secretary of the Treasury,
17 $131,000,000 for administrative costs incurred in
18 carrying out tIns section, section 2202, section 36A
19 of the Internal Revenue Code of 1986 (as added by
20 this Act), and other provisions of this Act or the
21 amendments made by this Act relating to the Inter-
22 nal Revenue Code of 1986.
23 (2) For the Commissioner of Social Security-
24 (A) such sums as may be necessary for
25 paynlents to individuals certified by the Com-

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392
mlSSlOner of Social Security as entitled to re-
ceive 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 Rail-
road 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 ad-
ministrative costs incurred in carrying out this
section.
(4) (A) For the SecretaIy of Veterans Mfairs-
(i) such sums as may be necessary for
the Compensation and Pensions account,
for payments to individuals certified by the
Secretary of Veterans Mfairs as entitled to
receive a payment under this section; and
(ii) $100,000 for the Information Sys-
tems Technology account and $7,100,000
for the General Operating Expenses ac-

393
1 count for administrative costs incurred in
2 carrying out this section.
3 (B) The Department of Veterans Affairs· Com-
4 pensation and Pensions account shall hereinafter be
5 available for payments authorized under subsection
6 (a)(l)(A) to individuals entitled to a benefit payment
7 described in subsection (a)(l)(B)(iii).
8 SEC. 2202. SPECIAL CREDIT FOR CERTAIN GOVERNMENT
9 RETIREES.
10 (a) IN GENERAL.-In the case of an eligible indi-
11 vidual, there shall be allowed as a credit against the tax
12 imposed by subtitle A of the Internal Revenue Code of
13 1986 for the first taxable year beginning in 2009 an
14 amount equal $250 ($500 in the case of a joint return
15 where both spouses are eligible individuals).
16 (b) ELIGIBLE INDIVIDUAh-For purposes of this
17 section-
18 (1) IN GENERAL.-The term "eligible indi-
19 vidual" means any individual-
20 (A) who receives during the first taxable
21 year beginning in 2009 any amount as a pen-
22 sion or annuity for service performed in the em-
23 ploy of the United States or any State, or any
24 instrumentality thereof, which is not considered

394
1 employment for purposes of chapter 21 of the
2 Internal Revenue Code of 1986, and
3 (B) who does not receive a payment under
4 section 2201 during such taxable year.
5 (2) IDENTIFICATION NUMBER REQUIREMENT.-
6 Such term shall not include any individual who does
7 not include on the return of tax for the taxable
8 year-
9 (A) such individual's social security ac-
10 count number, and
11 (B) in the case of a joint return, the social
12 security account number of one of the taxpayers
13 on such return.
14 For purposes of the preceding sentence, the social
15 security account number shall not include a TIN (as
16 defined in section 7701(a)(41) of the Internal Rev-
17 enue Code of 1986) issued by the Internal Revenue
18 Service. Any omission of a correct social security ac-
19 count number required under this .subparagraph
20 shall be treated as a mathematical or clerical error
21 for purposes of applying section 6213(g)(2) of such
22 Code to such omission.
23 (c) TREATMENT OF CREDIT.-
24 (1) REFUNDABLE CREDIT.-

395
1 (A) IN GENERAL.-The credit allowed by
2 subsection (a) shall be treated as allowed by
3 subpart C of part IV of subchapter A of chap-
4 tel' 1 of the Internal Revenue Code of 1986.
5 (B) APPROPRIATIONS.-For purposes of
6 section 1324(b)(2) of title 31, United States
7 Code, the credit allowed by subsection (a) shall
8 be treated in the same manner a refund from
9 the credit allowed under section 36A of the In-
10 ternal Revenue Code of 1986 (as added by this
11 Act).
12 (2) DEFICIENCY RULES.-For purposes of sec-
13 tion 6211(b)(4)(A) of the Internal Revenue Code of
14 1986, the credit allowable by subsection (a) shall be
15 treated in the same manner as the credit allowable
16 under section 36A of the Internal Revenue Code of
17 1986 (as added by this Act).
18 (d) REFUNDS DISREGARDED IN THE ADMINISTRA-
19 TION OF FEDERAL PROGRAMS AND FEDERALLY As-
20 SISTED PROGRAMS.-AllY credit or refund allowed or
21 made to any individual by reason of this section shall not
22 be taken into account as income and shall not be taken
23 into account as resources for the month of receipt and the
24 following 2 months, for purposes of determining the eligi-
25 bility of such individual or any other individual for benefits

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396
S.L.C.
1 or assistance, or the amount or extent of benefits or assist-
2 ance, under any Federal program or under any State or
3 local program financed in whole or in part with Federal
4 funds.
5 TITLE III-PREMIUM ASSIST·
6 ANCE FOR COBRA BENEFITS
7 SEC. 3000. TABLE OF CONTENTS.
8 The table of contents of this title is as follows:
TITLE III-PREMIUM ASSISTANCE FOR COBRA BENEFITS
See. 3000. Table of eontents.
See. 3001. Premium assistanee for COBRA benefits.
9 SEC. 3001. PREMIUM ASSISTANCE FOR COBRA BENEFITS.
10 (a) PREMIUM ASSISTANCE FOR COBRA CONTINU-
11 ATION COVERAGE FOR INDIVIDUALS AND THEIR FAMI-
12 LIES.-
13
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16
17
18
19
20
21
22
23
(1) PROVISION OF PREMIUM ASSISTANCE.-
(A) REDUCTION OF PREMIUMS PAY-
ABLE.-In the case of any premium for a pe-
riod of coverage beginning on or after the date
of the enactment of this Act for COBRA con-
tinuation coverage with respect to any assist-
ance eligible individual, such individual shall be
treated for purposes of any COBRA continu-
ation provision as having paid the amount of
such premium if such individual pays (or a per-
son other than such individual's employer pays

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397
on behalf of such individual) 35 percent of the
amount of such premium (as determined with-
out regard to this subsection).
(B) PLAN ENROLLMENT OPTION.-
(i) IN GENERAL.-Notwithstanding
the COBRA continuation provisions, an as-
sistance 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 in-
volved, or the employee organization in-
volved (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 con-
tinuation coverage provision.
(ii) REQUIREMENTS.-All assistance
eligible individual may elect to enroll in

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398
different coverage as described in clause (i)
only if-
(I) the employer involved has
made a determination that such em-
ployer will permit assistance eligible
individuals to enroll in different cov-
erage as provided for this subpara-
graph;
(II) the premmm for such dif-
ferent coverage does not exceed the
premium for coverage in which the in-
dividual 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 ac-
tive employees of the employer at the
time at which such election is made;
and
(IV) the different coverage IS
not-
(8080) coverage that provides
only dental, vision, counseling, or
referral services (or a combina-
tion of such services);

399
1 (bb) a flexible spending ar-
2 rangement (as defined in section
3 106(c)(2) of the Internal Rev-
4 enue Code of 1986); or
5 (cc) coverage that provides
6 coverage for services or treat-
7 ments furnished in an on-site
8 medical facility maintained by
9 the employer and that consists
10 primarily of first-aid servIces,
11 prevention and wellness care, or
12 similar care (or a combination of
13 such care).
14 (C) PREMIUM REIMBURSEMENT.-For pro-
15 visions providing the balance of such premium,
16 see section 6432 of the Internal Revenue Code
17 of 1986, as added by paragraph (12).
18 (2) LIMITATION OF PERIOD OF PREMIUM AS-
19 SISTANCE.-
20 (A) IN GENERAL.-Paragraph (l)(A) shall
21 not apply 'with respect to any assistance eligible
22 individual for months of coverage beginning on
23 or after the earlier of-
24 (i) the first date that such individual
25 IS eligible for coverage under any other

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400
group health plan (other than coverage
consisting of only dental, vision, coun-
seling, or referral services (or a combina-
tion thereof), coverage under a flexible
spending arrangement (as defined in sec-
tion 106(c)(2) of the Internal Revenue
Code of 1986), or coverage of treatment
that is furnished in an on-site medical fa-
cility maintained by the employer and that
consists primarily of first-aid services, pre-
vention 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 (l)(A) applies with re-
spect to such individual,
(II) the date following the expira-
tion of the maximum period of con-
tinuation coverage required under the
applicable COBRA continuation cov-
erage prOVlSlOn, or

401
1 (III) the date following the expi-
2 ration of the period of continuation
3 coverage allowed under paragraph
4 (4)(B)(ii).
5 (B) TIMING OF ELIGIBILI'l'Y FOR ADDI-
6 TIONAL COVERAGE.-For purposes of subpara-
7 graph (A)(i), an individual shall not be treated
8 as eligible for coverage under a group health
9 plan before the first date on which such indi-
10 vidual could be covered under such plan.
11 (C) NOTIFICATION REQUIREMENT.-An
12 assistance eligible individual shall notify in ,vrit-
13 ing the group health plan with respect to which
14 paragraph (l)(A) applies if such paragraph
15 ceases to apply by reason of subparagraph
16 (A)(i). Such notice shall be provided to the
17 group health plan in such time and manner as
18 may be specified by the Secretary of Labor.
19 (3) ASSISTANCE ELIGIBLE INDIVIDUAL.-For
20 purposes of this section, the term "assistance eligible
21 individual" means any qualified beneficiary if-
22 (A) at any time during the period that be-
23 gins with September 1, 2008, and ends with
24 December 31, 2009, such qualified beneficiary
25 is eligible for COBRA continuation coverage,

402
1 (B) such qualified beneficiary elects such
2 coverage, and
3 (C) the qualifying event with respect to the
4 COBRA continuation coverage consists of the
5 involuntary termination of the covered employ-
6 ee's employment and occurred during such pe-
7 riod.
8 (4) EXTENSION OF ELECTION PERIOD AND EF-
9 FECT ON COVERAGE.-
10 (A) IN GENERAL.-For purposes of apply-
11 ing section 605(a) of the Employee Retirement
12 Income Security Act of 1974, section
13 4980B(f)(5)(A) of the Internal Revenue Code
14 of 1986, section 2205(a) of the Public Health
15 Service Act, and section 8905a(c)(2) of title 5,
16 United States Code, in the case of an individual
17 who does not have an election of COBRA con-
18 tinuation coverage in effect on the date of the
19 enactment of this Act but who would be an as-
20 sistance eligible individual if such election were
21 so in effect, such individual may elect the
22 COBRA continuation coverage under the
23 COBRA continuation coverage provisions con-
24 tainillg such sections during the period begin-
25 lung on the date of the enactment of this Act

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403
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 cov-
erage elected by a qualified beneficiary during
an extended election period under subparagTaph
(A)-
(i) shall commence with the first pe-
riod 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 appli-
cable COBRA continuation coverage provi-
sion if the coverage had been elected as re-
quired under such provision.
(C) PREEXISTING CONDITIONS.-With re-
spect to a qualified beneficiary who elects
COBRA continuation coverage pursuant to sub-
paragraph (A), the period-
(i) beginning on the date of the quali-
fying event, and
(ii) ending with the beginning of the
period described in subparagraph (B)(i),

404
1 shall be disregarded for purposes of deter-
2 mining the 63-day periods referred to in section
3 701(c)(2) of the Employee Retirement Income
4 Security Act of 1974, section 9801(c)(2) of the
5 Internal Revenue Code of 1986, and section
6 2701(c)(2) of the Public Health Service Act.
7 (5) EXPEDITED REVIEW OF DENIALS OF PRE-
8 MIUM ASSISTANCE.-In any case in which an indi-
9 vidual requests treatment as an assistance eligible
10 individual and is denied such treatment by the group
11 health plan, the Secretary of Labor (or the Sec-
12 retary of Health and Human Services in connection
13 with COBRA continuation coverage which is pro-
14 vided other than pursuant to part 6 of subtitle B of
15 title I of the Employee Retirement Income Security
16 Act of 1974), in consultation with the Secretary of
17 the Treasury, shall provide for expedited review of
18 such denial. An individual shall be entitled to such
19 review upon application to such Secretary in such
20 form and manner as shall be provided by such Sec-
21 retary. Such Secretary shall make a determination
22 regarding such individual's eligibility within 15 busi-
23 ness days after receipt of such individual's applica-
24 tion for review under this paragraph. Either Sec-
25 retary's determination upon review of the denial

405
1 shall be de novo and shall be the final determination
2 of such Secretary. A reviewing court shall gTant def-
3 erence to such Secretary's determination. The provi-
4 sions of tIns paragraph, paragTaphs (1) through (4),
5 and paragraph (7) shall be treated as provisions of
6 title I of the Employee Retirement Income Security
7 Act of 1974 for purposes of part 5 of subtitle B of
8 such title.
9 (6) DISREGARD OF SUBSIDIES FOR PURPOSES
10 OF FEDERAL AND STATE PROGRAMS.-Notwith-
11 standing any other provision of law, any premium
12 reduction with respect to an assistance eligible indi-
13 vidual under this subsection shall not be considered
14 income or resources in determining eligibility for, or
15 the amount of assistance or benefits provided under,
16 any other public benefit provided under Federal law
17 or the law of any State or political subdivision there-
18 of.
19 (7) NOTICES TO INDIVIDUALS.-
20 (A) GENERAL NOTICE.-
21 (i) IN GENERAL.-In the case of no-
22 tices provided under section 606(a)(4) of
23 the Employee Retirement Income Security
24 Act of 1974 (29 U.S.C. 1166(4)), section
25 4980B(f)(6)(D) of the Internal Revenue

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406
Code of 1986, section 2206(4) of the Pub-
lic 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 indi-
viduals who, during the period described in
paragraph (3)(A), become entitled to elect
COBRA continuation coverage, the re-
quirements 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 ,vith respect to such cov-
erage under this subsection, and
(II) the option to enroll in dif-
ferent coverage if the employer per-
mits assistance eligible individuals to
elect enrollment in different coverage
(as described in paragraph (l)(B)).
(ii) ALTERNATIVE NOTICE.-1n the
case of COBRA continuation coverage to
which the notice provision under such sec-
tions does not apply, the Secretary of
Labor, in consultation ,vith the Secretary
of the Treasury and the Secretary of

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407
Health and Human Services, shall, in con-
sultation with administrators of the group
health plans (or other entities) that provide
or administer the COBRA continuation
coverage involved, provide rules reqUlrmg
the provision of such notice.
(iii) FORM:.-The requirement of the
additional notification under this subpara-
gTaph may be met by amendment of exist-
ing notice forms or by inclusion of a sepa-
rate document with the notice otherwise
required.
(B) SPECIFIC REQUIREMENTs.-Each ad-
ditional notification under subparagraph (A)
shall include-
(i) the forms necessary for estab-
lishing eligibility for premium reduction
under this subsection,
(ii) the name, address, and telephone
number necessary to contact the plan ad-
ministrator and any other person main-
taining relevant information in connection
with such premium reduction,

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408
(iii) a description of the extended elec-
tion 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 continu-
ation 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 Inter-
nal Revenue Code of 1986 for failure to so
notify the plan,
(v) a description, displayed in a
prominent manner, of the qualified bene-
ficiary's right to a reduced premium and
any conditions on entitlement to the re-
duced premium, and
(vi) a description of the option of the
qualified beneficiary to enroll in different
coverage if the employer permits such ben-
eficiary to elect to enroll in such different
coverage under paragraph (l)(B).
(C) NOTICE IN CONNECTION WITH EX-
TENDED ELECTION PERIODS.-In the case of

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409
any assistance eligible individual (or any indi-
vidual described in paragraph (4)(A)) who be-
came entitled to elect COBRA continuation cov-
erage 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 ap-
plicable 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 con-
sultation with the Secretary of the Treas-
ury 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 noti-
fication provided pursuant to subpara-
graph (A) under section 8905a(f)(2)(A) of
title 5, United States Code, the Office of

410
1 Personnel Management shall prescribe a
2 model for such additional notification.
3 (8) REGULATIONS.-The Secretary of the
4 Treasury may prescribe such regulations or other
5 guidance as may be necessary or appropriate to
6 carry out the provisions of this subsection, including
7 the prevention of fraud and abuse under this sub-
8 section, except that the Secretary of Labor and the
9 Secretary of Health and Human Services may pre-
10 scribe such regulations (including interim final regu-
11 lations) or other guidance as may be necessary or
. 12 appropriate to carry out the provisions of para-
13 graphs (5), (7), and (9).
14 (9) OUTREACH.-The Secretary of Labor, in
15 consultation with the Secretary of the Treasury and
16 the Secretary of Health and Human Services, shall
17 provide outreach consisting of public education and
18 enrollment assistance relating to premium reduction
19 provided under this subsection. Such outreach shall
20 target employers, group health plan administrators,
21 public assistance programs, States, insurers, and
22 other entities as determined appropriate by such
23 Secretaries. Such outreach shall include an initial
24 focus on those individuals electing continuation cov-
25 erage who are referred to in paragraph (7)(C). 1n-

411
1 formation on such premium reduction, including eu-
2 rollment, shall also be made available on websites of
3 the Departments of Labor, Treasury, and Health
4 and Human Services.
5 (10) DEFINITIONS.-For purposes of this
6 section-
7 (A) ADMINISTRATOR.-The term "admin-
8 istrator" has the meaning given such term in
9 section 3(16)(A) of the Employee Retirement
10 Income Security Act of 1974.
11 (B) COBRA CONTINUATION COVERAGE.-
12 The term "COBRA continuation coverage"
13 means continuation coverage provided pursuant
14 to part 6 of subtitle B of title I of the Em-
15 ployee Retirement Income Security Act of 1974
16 (other than under section 609), title XXII of
17 the Public Health Service Act, section 4980B of
18 the Internal Revenue Code of 1986 (other than
19 subsection (f)(l) of such section insofar as it
20 relates to pediatric vaccines), or section 8905a
21 of title 5, United States Code, or under a State
22 program that provides comparable continuation
23 coverage. Such term does not include coverage
24 under a health flexible spending arrangement
25 under a cafeteria plan within the meaning of

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412
section 125 of the Internal Revenue Code of
1986.
(C) COBRA CONTINUATION PROVISION.-
The term "COBRA continuation provision"
means the prOVlSlOns of law described in sub-
paragraph (B).
(D) COVERED EMPLOYEE.-The term
"covered employee" has the meaning given such
term in section 607(2) of the Employee Retire-
ment 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 gwen
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, Amer-
ican Samoa, and the Commonwealth of the
Northern Mariana Islands.
(H) PERIOD OF COVERAGE.-Any ref-
erence in this subsection to a period of coverage

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413
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 cov-
erage.
(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 Com-
mittee 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 re-
garding the premium reduction provided under
this subsection that includes-
(i) the number of individuals provided
such assistance as of the date of the re-
port; 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 prac-
ticable after the last period of COBRA continu-
ation coverage for which premium reduction is

414
1 provided under this section, the Secretary of the
2 Treasury shall submit a final report to each
3 Committee referred to in subparagraph (A) that
4 includes-
5 (i) the number of individuals provided
6 pren:rium reduction under this section;
7 (ii) the average dollar amount
8 (monthly and annually) of premium reduc-
9 tions provided to such individuals; and
10 (iii) the total amount of expenditures
11 incurred (,vith administrative expenditures
12 noted separately) in connection with pre-
13 mium reduction under this section.
14 (12) COBRA PREMIUM ASSISTANCE.-
15 (A) IN GENERAL.-Subchapter B of chap-
16 tel' 65 of the Internal Revenue Code of 1986,
17 as amended by tills Act, is amended by adding
18 at the end the following new section:
19 "SEC. 6432. COBRA PREMIUM ASSISTANCE.
20 "(a) IN GENERAL.-The person to whom premiums
21 are payable under COBRA continuation coverage shall be
22 reimbursed as provided in subsection (c) for the amount
23 of premiums not paid by assistance eligible individuals by
24 reason of section 3002(a) of the Health Insurance Assist-
25 ance for the Unemployed Act of 2009.

"(iv) title 5, United States Code, or
"(B) under which some or all of the cov-
erage is not provided by insurance,
the employer maintaining the plan, and
415
1 "(b) PERSON ENTITLED TO REIMBURSEMENT.-For
2 purposes of subsection (a), except as otherwise provided
3 by the Secretary, the person to whom premiums are pay-
4 able under COBRA continuation coverage shall be treated
5 as being-
6 "(1) in the case of any group health plan which
7 is a multiemployer plan (as defined in section 3(37)
8 of the Employee Retirement Income Security Act of
9 1974), the plan,
10 "(2) in the case of any group health plan not
11 described in paragraph (1)-
12 "(A) which is subject to the COBRA con-
13 tinuation provisions contained in-
14 "(i) the Internal Revenue Code of
15 1986,
16 "(ii) the Employee Retirement Income
17 Security Act of 1974,
18 "(iii) the Public Health Service Act,
19 or
20
21
22
23

416
1 "(3) in the case of any gTOUp health plan not
2 described in paragraph (1) or (2), the insurer pro-
3 viding the coverage under the group health plan.
4 "(c) METHOD OF REIMBURSEMENT.-Except as oth-
5 erwise provided by the Secretary-
6 "(1) TREATMENT AS PAYIVIENT OF PAYROLL
7 TAXEs.-Each person entitled to reilnbursement
8 under subsection (a) (and filing a claim for such re-
9 imbursement at such time and in such manner as
10 the Secretary may require) shall be treated for pur-
11 poses of this title and section 1324(b)(2) of title 31,
12 United States Code, as having paid to the Secretary,
13 on the date that the assistance eligible individual's
14 premium payment is received, payroll taxes in an
15 amount equal to the portion of such reimbursement
16 which relates to such premium. To the extent that
17 the amount treated as paid under the preceding sen-
18 tence exceeds the amount of such person's liability
19 for such taxes, the Secretary shall credit or refund
20 such excess in the same manner as if it were an
21 overpayment of such taxes.
22 "(2) OVERSTATEMENTs.-Any overstatement of
23 the reimbursement to which a person is entitled
24 under tIns section (and any amount paid by the Sec-
25 retary as a result of such overstatement) shall be

417
1 treated as an underpayment of payroll taxes by such
2 person and may be assessed and collected by the
3 Secretary in the same manner as payroll taxes.
4 "(3) REIMBURSEMENT CONTINGENT ON PAY-
S MENT OF REIVIAINING PREMIUM.-No reimbursement
6 may be made under this section to a person with re-
7 spect to any assistance eligible individual until after
8 the reduced premIum required under section
9 3002(a)(1)(A) of such Act with respect to such indi-
10 vidual has been received.
11 "(d) DEFINITIONS.-For purposes of this section-
12 "(1) PAYROLL TAXES.-The term 'payroll
13 taxes'means-
14 "(A) amounts required to be deducted and
15 withheld for the payroll period under section
16 3402 (relating to wage withholding),
17 "(B) amounts required to be deducted for
18 the payroll period under section 3102 (relating
19 to FICA employee taxes), and
20 "(C) amounts of the taxes imposed for the
21 payroll period under section 3111 (relating to
22 FICA employer taxes).
23 "(2) PERSON.-The term 'person' includes any
24 governmental entity.

418
1 "(e) REPORTING.-Each person entitled to rmm-
2 bursement under subsection (a) for any period shall sub-
3 mit such reports (at such time and in such manner) as
4 the Secretary may require, including-
5 "(1) an attestation of involuntary termination
6 of employment for each covered employee on the
7 basis of whose termination entitlement to reimburse-
8 ment is claimed under subsection (a),
9 "(2) a report of the amount of payroll taxes off-
10 set under subsection (a) for the reporting period and
11 the estimated offsets of such taxes for the subse-
12 quent reporting period in connection with reimburse-
13 ments under subsection (a), and
14 "(3) a report containing the TINs of all covered
15 employees, the amount of subsidy reimbursed with
16 respect to each covered employee and qualified bene-
17 ficiaries, and a desigllation with respect to each cov-
18 ered employee as to whether the subsidy reimburse-
19 ment is for coverage of 1 individual or 2 or more in-
20 dividuals.
21 "(f) REGULATIONS.-The Secretary shall issue such
22 regulations or other guidance as may be necessary or ap-
23 propriate to cany out this section, including-
24 "(1) the requirement to report information or
25 the establishment of other methods for verifying the

419
1 correct amounts of reimbursements under this sec-
2 tion, and
3 "(2) the application of this section to group
4 health plans that are multiemployer plans (as de-
5 fined in section 3(37) of the Employee Retirement
6 Income Security Act of 1974).".
7 (B) SOCIAL SECURITY TRUST FUNDS HELD
8 HARMLESS.-In determining any amount trans-
9 ferred or appropriated to any fund under the
10 Social Security Act, section 6432 of the Inter-
11 nal Revenue Code of 1986 shall not be taken
12 into account.
13 (C) CLERICAL AMENDMENT.-The table of
14 sections for subchapter B of chapter 65 of the
15 Internal Revenue Code of 1986 is amended by
16 adding at the end the following new item:
"See. 6432. COBRA premium assistanee.".
17
18
19
20
21
22
23
24
25
(D) EFFECTIVE DATE.-The amendments
made by this paragraph shall apply to pre-
miums to which subsection (a)(l)(A) applies.
(E) SPECIAL RULE.-
(i) IN GENERAL.-In the case of an
assistance eligible individual who pays,
,vith respect to the first period of COBRA
continuation coverage to which subsection
(a)(l)(A) applies or the immediately subse-

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quent period, the full premium amount for
such coverage, the person to whom such
payment is payable shall-
(I) make a reimbursement pay-
ment to such individual for the
amount of such premium paid in ex-
cess of the amount required to be paid
under subsection (a)(I)(A); or
(II) provide credit to the indi-
vidual for such amount in a manner
that reduces one or more subsequent
premium paY111ents that the individual
is required to pay under such sub-
section 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 paYIuent 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 paYIuent in clause (i) (II) will
be used by the assistance eligible individual
within 180 days of the date on which the

421
1 person receIves from the individual the
2 payment of the full premium amount, a
3 person to which clause (i) applies shall
4 make the payment required under such
5 clause to the individual within 60 days of
6 such payment of the full premium amount.
7 If, as of any day within the 180-day pe-
8 riod, it is no longer reasonable to believe
9 that the credit will be used during that pe-
10 riod, payment equal to the remainder of
11 the credit outstanding shall be made to the
12 individual within 60 days of such day.
13 (13) PENALTY FOR FAILURE TO NOTIFY
14 HEALTH PLAN OF CESSATION OF ELIGIBILITY FOR
15 PREMIUM ASSISTANCE.-
16 (A) IN GENERAL.-Part I of subchapter B
17 of chapter 68 of the Internal Revenue Code of
18 1986 is amended by adding at the end the fol-
19 lowing new section:
20 "SEC. 6720C. PENALTY FOR FAll.URE TO NOTIFY HEALTH
21 PLAN OF CESSATION OF ELIGmILITY FOR
22 COBRA PREMIUM ASSISTANCE.
23 "(a) IN GENERAL.-Any person required to notify a
24 group health plan under section 3002(a)(2)(C)) of the
25 Health Insurance Assistance for the Unemployed Act of

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S.L.C.
1 2009 who fails to make such a notification at such time
2 and in such manner as the Secretmy of Labor may require
3 shall pay a penalty of 110 percent of the premium reduc-
4 tion provided under such section after termination of eligi-
5 bility under such subsection.
6 "(b) REASONABLE CAUSE EXCEPTION.-No penalty
7 shall be imposed under subsection (a) ·with respect to any
8 failure if it is shmvn that such failure is due to reasonable
9 cause and not to willful neglect.".
10
11
12
13
14
15
16
17
18
19
20
21
22
23
(B) CLERICAL AiiENDMENT.-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:
"See. 6720C. Penalty for failme to notifY health plan of eessation of eligibility
for COBRA premiulll assistanee.".
(C) EFFECTIVE DATE.-The amendments
made by this paragraph shall apply to failures
occurrmg after the date of the enactment of
this Act.
(14) COORDINATION WITH HCTC.-
(A) IN GENERAL.-Subsection (g) of sec-
tion 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:

423
1 "(9) COBRA PREMIUM ASSIS'l'ANCE.-In the
2 case of an assistance eligible individual who receives
3 premium reduction for COBRA continuation cov-
4 erage under section 3002(a) of the Health Insurance
5 Assistance for the Unemployed Act of 2009 for any
6 month during the taxable year, such individual shall
7 not be treated as an eligible individual, a certified
8 individual, or a qualifying family member for pur-
9 poses of this section or section 7527 with respect to
10 such month.".
11 (B) EFFECTIVE DATE.-The amendment
12 made by subparagraph (A) shall apply to tax-
13 able years ending after the date of the enact-
14 ment of this Act.
15 (15) EXCLUSION OF COBRA PREMIUM ASSIST-
16 ANCE FROM GROSS INCOME.-
.17 (A) IN GENERAL.-Part III of subchapter
18 B of chapter 1 of the Internal Revenue Code of
19 1986 is amended by inserting after section
20 139B the following new section:
21 "SEC. 139C. COBRA PREMIUM ASSISTANCE.
22 "In the case of an assistance eligible individual (as
23 defined in section 3002 of the Health Insurance Assist-
24 ance for the Unemployed Act of 2009), gross income does

424
1 not include any premium reduction provided under sub-
2 section (a) of such section.".
3 (B) CLERICAL AMENDMENT.-The table of
4 sections for part III of subchapter B of chapter
5 1 of such Code is amended by inserting after
6 the item relating to section 139B the following
7 new item:
"See. 139C. COBRA premium assistanee.".
8 (C) EFFECTIVE DATE.-The amendments
9 made by this paragraph shall apply to taxable
10 years ending after the date of the enactment of
11 this Act.
12 (b) ELIMINATION OF PREMIUM SUBSIDY FOR HIGH-
13 INCOME INDIVIDUALS.-
14 (1) RECAPTURE OF SUBSIDY FOR HIGH-INCOME
15 INDIVIDUALS.-If-
16 (A) premium assistance is provided under
17 tIns section with respect to any COBRA con-
18 tinuation coverage which covers the taxpayer,
19 the taxpayer's spouse, or any dependent (within
20 the meaning of section 152 of the Internal Rev-
21 enue Code of 1986, determined without regard
22 to subsections (b)(l), (b)(2), and (d)(l)(B)
23 thereof) of the taxpayer during any portion of
24 the taxable year, and

425
1 (B) the taxpayer's modified adjusted gTOSS
2 income for such taxable year exceeds $125,000
3 ($250,000 in the case of a joint return),
4 then the tax imposed by chapter 1 of such Code with
5 respect to the taxpayer for such taxable year shall
6 be increased by the amount of such assistance.
7 (2) PHASE-IN OF RECAPTURE.-
8 (A) IN GENERAL.-In the case of a tax-
9 payer whose modified adjusted gross income for
10 the taxable year does not exceed $145,000
11 ($290,000 in the case of a joint return), the in-
12 crease in the tax imposed under paragraph (1)
13 shall not exceed the phase-in percentage of such
14 increase (determined without regard to this
15 paragraph).
16 (B) PHASE-IN PERCENTAGE.-For pur-
17 poses of this subsection, the term "phase-in
18 percentage" means the ratio (expressed as a
19 percentage) obtained by dividing-
20 (i) the excess of described in subpara-
21 graph (B) of paragraph (1), by
22 (ii) $20,000 ($40,000 in the case of a
23 joint return).
24 (3) OPTION FOR HIGH-INCOME INDIVIDUALS TO
25 WAIVE ASSISTANCE AND AVOID RECAPTURE.-Not-

426
1 withstanding subsection (a)(3), an individual shall
2 not be treated as an assistance eligible individual for
3 purposes of this section and section 6432 of the In-
4 ternal Revenue Code of 1986 if such individual-
5 (A) makes a permanent election (at such
6 time and in such form and manner as the Sec-
7 retary of the Treasury may prescribe) to waive
8 the right to the premium assistance provided
9 under this section, and
10 (B) notifies the entity to whom premiums
11 are reimbursed under section 6432(a) of such
12 Code of such election.
13 (4) MODIFIED ADJUSTED GROSS INCOME.-For
14 purposes of this subsection, the term "modified ad-
15 justed gTOSS income" means the adjusted gross in-
16 come (as defined in section 62 of the Internal Rev-
17 enue Code of 1986) of the taxpayer for the taxable
18 year increased by any amount excluded from gross
19 income under section 911, 931, or 933 of such Code.
20 (5) CREDITS NOT ALLOWED AGAINST TAX,
21 ETC.-For purposes determining regular tax liability
22 under section 26(b) of such Code, the increase in tax
23 under this subsection shall not be treated as a tax
24 imposed under chapter 1 of such Code.

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427
(6) REGULATIONS.-The Secretmy of the
2 TreasUl'Y shall issue such regulations or other guid-
3 ance as are neceSSaI'Y or appropriate to carl'Y out
4 this subsection, including requirements that the enti-
5 ty to whom premiums are reimbursed under section
6 6432(a) of the Internal Revenue Code of 1986 re-
7 port to the SecretaI'Y, and to each assistance eligible
8 individual, the amount of premium assistance pro-
9 vided under subsection (a) ,vith respect to each such
10 individual.
11 (7) EFFECTIVE DATE.-The prOVlSlOns of this
12 subsection shall apply to taxable years ending after
14 TITLE IV-MEDICARE AND MED-
15 ICAID HEALTH INFORMATION
16 TECHNOLOGY; MISCELLA-
17 NEOUS MEDICARE PROVI-
18 SIONS
19 SEC. 4001. TABLE OF CONTENTS OF TITLE.
TITLE IV-MEDICARE AND IVIEDICAID HEALTH INFORJVIATION
TECHNOLOGY; MISCELLANEOUS MEDICARE PROVISIONS
See. 4001. Table of eontents of title.
Subtitle A-Medieare Ineentives
See. 4101. Ineentives for eligible professionals.
See. 4102. Ineentives for hospitals.
See. 4103. Treatment of payments and savings; implementation funding.
See. 4104. Studies and reports on health information teehnology.
Subtitle B-Medieaid Illeentives

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S.L.C.
See. 4201. Medieaid provider HIT adoption and operation payments; implemen-
tation funding.
Subtitle C--Miseellaneous Medieare Provisions
See. 4301. Moratoria on eertain Medieare regulations.
See. 4302. Long-term care hospital teehnieal eOl'l'eetions.
1 Subtitle A-Medicare Incentives
2 SEC. 4101. INCENTIVES FOR ELIGmLE PROFESSIONALS.
3 (a) INCENTIVE PAYMENTS.-Section 1848 of the So-
4 cial Security Act (42 U.S.C. 1395w-4) is amended by add-
5 ing at the end the following new subsection:
6 "(0) INCENTIVES FOR ADOPTION AND MEANINGFUL
7 USE OF CERTIFIED EHR TECHNOLOGY.-
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
"(1) INCENTIVE PAYMENTS.-
"(A) IN GENERAL.-
"(i) IN GENERAL.-Subject to the
succeeding subparagraphs of this para-
gTaph, with respect to covered professional
services furnished by an eligible profes-
sional during a payment year (as defined
in subparagraph (E)), if the eligible profes-
sional is a meaningful EHR user (as deter-
mined 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

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(A) of section 1842(b)(6)), from the Fed-
eral Supplementary Medical Insurance
Trust Fund established under section 1841
an amount equal to 75 percent of the Sec-
retary's estimate (based on claims sub-
mitted not later than 2 months after the
end of the paynlent year) of the allowed
charges under this part for all such cov-
ered professional services furnished by the
eligible professional during such year.
"(ii) No INCENTIVE PAYMENTS WITH
RESPECT TO YEARS AFTER 2016.-No in-
centive paynlents may be made under this
subsection with respect to a year after
2016.
"(B) LIMITATIONS ON AMOUNTS OF IN-
CENTIVE PAYMENTS.-
"(i) IN GENERAL.-In no case shall
the amount of the incentive payment pro-
vided under this paragraph for an eligible
professional for a paYlnent year exceed the
applicable amount specified under this sub-
paragraph with respect to such eligible
professional and such year.

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"(ii) AMOUNT.-Subject to clauses
(iii) through (v), the applicable amount
specified in this subparagraph for an eligi-
ble professional is as follows:
"(I) For the first payment year
for such professional, $15,000 (or, if
the first payment year for such eligi-
ble professional is 2011 or 2012,
$18,000).
"(II) For the second payment
year for such professional, $12,000.
"(III) For the third payment
"(IV) For the fourth payment
"(V) For the fifth payment year
for such professional, $2,000.
"(VI) For any succeeding pay-
ment year for such professional, $0.
"(iii) PHASE DOWN FOR ELIGIBLE
PROFESSIONALS FIRST ADOPTING ERR
AFTER 2013.-lf 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

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431
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 ELIGI-
BLE 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 profes-
sional 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 in-
creased by 10 percent. In implementing
the preceding sentence, the Secretary may,
as determined appropriate, apply provi-
sions of subsections (m) and (u) of section
1833 in a similar manner as such proVI-
sions 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

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specified in this subparagraph for such
professional for such year and any subse-
quent year shall be $0.
"(C) NON-APPLICATION TO HOSPITAL-
BASED ELIGIBLE PROFESSIONALS.-
"(i) IN GENERAL.-No incentive pay-
ment may be made under this paragraph
in the case of a hospital-based eligible pro-
fessional.
"(ii) HOSPITAL-BASED ELIGIBLE PRO-
FESSIONAL.-For purposes of clause (i),
the term 'hospital-based eligible profes-
sional' means, with respect to covered pro-
fessional services furnished by an eligible
professional during the EHR reporting pe-
riod for a payment year, an eligible profes-
sional, such as a pathologist, anesthesiol-
ogist, or emergency physician, who fur-
nishes substantially all of such services in
a hospital setting (whether inpatient or
outpatient) and through the use of the fa-
cilities and equipment, including qualified
electronic health records, of the hospital.
The determination of whether an eligible
professional is a hospital-based eligible pro-

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fessional 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 pay-
ment 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 pro-
fessional services in more than one practice
(as specified by the Secretary), the Sec-
retary shall establish rules to coordinate
the incentive payments, including the ap-
plication of the limitation on amounts of
such incentive payments under this para-
graph, among such practices.
"(iii) COORDINATION WITH MED-
ICAID.-The Secretary shall seek, to the
maximum extent practicable, to avoid du-

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plicative requirements from Federal and
State governments to demonstrate mean-
ingful use of certified EHR technology
under this title and title XIX. The Sec-
retmy may also adjust the reporting peri-
ods under such title and such subsections
in order to carry out this clause.
"(E) PAYMENT YEAR DEFINED.-
"(i) IN GENERAL.-For purposes of
tIns 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 profes-
sional, the first year for which an incentive
payment is made for such services under
this subsection. The terms 'second pay-
ment year', 'third payment year', 'fourth
payment year', and 'fifth payment year'
mean, with respect to covered professional
services furnished by such eligible profes-
sional, each· successive year immediately
following the first payment year for such
professional.

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"(2) MEANINGFUL ERR USER.-
"(A) IN GENERAL.-For purposes of para-
graph (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 (aH7), for an EHR re-
porting period under such subsection for a
year) if each of the following requirements IS
met:
"(i) MEANINGFUL USE OF CERTIFIED
ERR TECRNOLOGY.-The eligible profes-
sional demonstrates to the satisfaction of
the SecretaIy, in accordance with subpara-
graph (CHi), that during such period the
professional is using certified EHR tech-
nology in a meaningful manner, which
shall include the use of electronic pre-
scribing 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 (CHi), that during such
period such certified EHR technology is
connected in a manner that provides, in

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accordance with law and standards appli-
cable to the exchange of information, for
the electronic exchange of health informa-
tion to improve the quality of health care,
such as promoting care coordination.
"(iii) REPORTING ON MEASURES
USING ERR.-Subject to subparagraph
(B)(ii) and using such certified ERR tech-
nology, the eligible professional submits in-
formation 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 alter-
native means for meeting the requirements of
clauses (i), (ii), and (iii) in the case of an eligi-
ble 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 strin-
gent measures of meaningful use selected under
this paragraph.
"(B) REPORTING ON MEASURES.-

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"(i) SELECTION.-The Secretary shall
select measures for purposes of subpara-
graph (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 in-
formation electronically, which may be on
a pilot basis.
"(iii) COORDINATION OF REPORTING
OF INFORMATION.-1n selecting such
measures, and in establishing the form and

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manner for reporting measures under sub-
paragraph (A)(iii), the SecretaIy 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 IN-
FORMATION 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 encoun-
ter was documented using certified
ERR technology);
"(III) a survey response;
"(IV) reporting under subpara-
graph (A)(iii); and
"(V) other means specified by the
Secretary.

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"(ii) USE OF PAR'!' D DATA.-Not-
withstanding 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 sub-
section (k) shall apply for purposes of this sub-
section in the same manner as they apply for
purposes of such subsection.
"(B) COORDINATION WITH OTHER PAY-
MENTS.-The provisions of this subsection shall
not be taken into account in applying the provi-
sions 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 sub-
section.
"(C) LIMITATIONS ON REVIEw.-There
shall be no administrative or judicial review
under section 1869, section 1878, or otherwise,
of-

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"(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 (l)(B) and co-
ordination under clauses (ii) and (iii) of
paragraph (l)(D);
"(ii) the methodology and standards
for determining a meaningful ERR user
under paragraph (2), including selection of
measures under paragraph (2)(B), speci-
fication of the means of demonstrating
meaningful ERR 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 (l)(C); and
"(iv) the specification of reporting pe-
riods under paragraph (5)· and the selec-
tion of the form of payment under para-
graph (l)(D)(i).
"(D) POSTING ON 'WEBSITE.-The Sec-
retary shall post on the Internet website of the
Centers for Medicare & Medicaid Services, in an

441
1 easily understandable format, a list of the
2 names, business addresses, and business phone
3 numbers of the eligible professionals who are
4 meaningful EHR users and, as determined ap-
5 propriate by the Secretary, of group practices
6 receIVIng incentive payments under paragraph
7 (1).
8 "(4) CERTIFIED EHR TECHNOLOGY DEFINED.-
9 For purposes of this section, the term 'certified
10 EHR technology' means a qualified electronic health
11 record (as defined in section 3000(13) of the Public
12 Health Service Act) that is certified pursuant to sec-
13 tion 3001(c)(5) of such Act as meeting standards
14 adopted under section 3004 of such Act that are ap-
15 plicable to the type of record involved (as determined
16 by the Secretary, such as an ambulatory electronic
17 health record for office-based physicians or an inpa-
18 tient hospital electronic health record for hospitals).
19 "(5) DEFINITIONS.-For purposes of this sub-
20 section:
21 "(A) COVERED PROFESSIONAL SERV-
22 ICES.-The term 'covered professional services'
23 has the meaning given such term in subsection
24 (k)(3).

442
1 "(B) EHR REPORTING PERIOD.-The
2 term 'EHR reporting period' means, with re-
3 spect to a payment year, any period (or peri-
4 ods) as specified by the Secretal'Y.
5 "(C) ELIGIBLE PROFESSIONAL.-The term
6 'eligible professional' means a physician, as de-
7 fined in section 1861(1').".
8 (b) INCENTIVE PAYMENT ADJUSTMENT.-Section
9 1848(a) of the Social Security Act (42 U.S.C. 1395w-
10 4(a)) is amended by adding at the end the following new
11 paragraph:
12 "(7) INCENTIVES FOR MEANINGFUL USE OF
13 CERTIFIED ERR TECRNOLOGY.-
14 "(A) ADJUSTMENT.-
15 "(i) IN GENERAL.-Subject to sub-
16 paragraphs (B) and (D), with respect to
17 covered professional services furnished by
18 an eligible professional during 2015 or any
19 subsequent payment year, if the eligible
20 professional is not a meaningful EHR user
21 (as determined under subsection (0)(2)) for
22 an EHR reporting period for the year, the
23 fee schedule amount for such services fur-
24 rushed by such professional during the year
25 (including the fee schedule amount for pur-

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443
poses of determining a payment based on
such amount) shall be equal to the applica-
ble percent of the fee schedule amount that
would otherwise apply to such services
under this subsection (determined after ap-
plication of paragraph (3) but without re-
gard 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 paYlnent adjustment under section
1848(a)(5) for 2014, 98 percent);
"(II) for 2016, 98 percent; and
"(III) for 2017 and each subse-
quent year, 97 percent.
"(iii) AUTHORITY TO DECREASE AP-
PLICABLE 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 (0)(2)) is less than 75

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444
percent, the applicable percent shall be de-
creased by 1 percentage point from the ap-
plicable percent in the preceding year, but
in no case shall the applicable percent be
less than 95 percent.
"(B) SIGNIFICANT HARDSHIP EXCEP-
TION.-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 ERR
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 mayan eligible pro-
fessional be granted an exemption under tIns
subparagraph for more than 5 years.
"(C) APPLICATION OF PHYSICIAN REPORT-
ING 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.-N0 pay-

445
1 ment adjustment may be made under subpara-
2 graph (A) in the case of hospital-based eligible
3 professionals (as defined III subsection
4 (0 )( l)(e)(ii)).
5 "(E) DEFINITIONS.-For purposes of this
6 paragraph:
7 "(i) COVERED PROFESSIONAL SERV-
8 ICES.-The term 'covered professional
9 services' has the meaning given such term
10 in subsection (k)(3).
11 "(ii) ERR REPORTING PERIOD.-The
12 term 'ERR reporting period' means, with
13 respect to a year, a period (or periods)
14 specified by the Secretary.
15 "(iii) ELIGIBLE PROFESSIONAL.-The
16 term 'eligible professional' means a physi-
17 cian, as defined in section 1861(1') .".
18 (c) APPLICATION TO CERTAIN MA-AFFILIATED ELI-
19 GIBLE PROFESSIONALs.-Section 1853 of the Social Secu-
20 rity Act (42 U.S.C. 1395w-23) is amended by adding at
22 "(1) APPLICATION OF ELIGIBLE PROFESSIONAL IN-
23 CENTIVES FOR CERTAIN MA ORGANIZATIONS FOR ADop-
24 TION AND liEANINGFUL USE OF CERTIFIED ERR TECH-
25 NOLOGY.-

446
1 "(1) IN GENERAL.-Subject to paragraphs (3)
2 and (4), in the case of a qualifying MA org'anization,
3 the provisions of sections 1848(0) and 1848(a)(7)
4 shall apply with respect to eligible professionals de-
5 scribed in paragraph (2) of the organization who the
6 organization attests under paragraph (6) to be
7 meaningful ERR users in a similar manner as they
8 apply to eligible professionals under such sections.
9 Incentive payments under paragraph (3) shall be
10 made to and payment adjustments under paragraph
11 (4) shall apply to such qualifying organizations.
12 "(2) ELIGIBLE PROFESSIONAL DESCRIBED.-
13 With respect to a qualifying MA organization, an eli-
14 gible professional described in this paragraph is an
15 eligible professional (as defined for purposes of sec-
16 tion 1848(0)) who-
17 "(A)(i) is employed by the organization; or
18 "(ii)(I) is employed by, or is a partner of,
19 an entity that through contract with the organi-
20 zation furnishes at least 80 percent of the enti-
21 ty's Medicare patient care services to enrollees
22 of such organization; and
23 "(II) furnishes at least 80 percent of the
24 professional services of the eligible professional

447
1 covered under this title to enrollees of the orga-
2 nization; and
3 "(B) furnishes, on average, at least 20
4 hours per week of patient care services.
5 "(3) ELIGIBLE PROFESSIONAL INCENTIVE PAY-
6 MENTS.-
7 "(A) IN GENERAL.-In applying section
8 1848(0) under paragraph (1), instead of the ad-
9 ditional payment amount under section
10 1848(0)(1)(A) and subject to subparagraph
11 (B), the Secretary may substitute an amount
12 determined by the Secretary to the extent fea-
13 sible and practical to be similar to the esti-
14 mated amount in the aggregate that would be
15 payable if payment for services furnished by
16 such professionals was payable under part B in-
17 stead of this part.
18 "(B) AVOIDING DUPLICATION OF PAY-
19 MENTS.-
20 "(i) IN GENERAL.-In the case of an
21 eligible professional described in paragraph
22 (2)-
23 "(I) that is eligible for the max-
24 imum incentive payment under section
25 1848(0)(1)(A) for the same paYluent

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448
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 pay-
ment incentive shall be made only
under this subsection and not under
section 1848(0)(1)(A).
"(ii) METHoDs.-1n the case of an el-
igible professional described in paragraph
(2) who is eligible for an incentive paYluent
under section 1848(0)(1)(A) but is not de-
scribed in clause (i) for the same paYluent
period, the Secretary shall develop a
process-
"(I) to ensure that duplicate pay-
ments are not made with respect to
an eligible professional both under
this subsection and under section
1848(0)(1)(A); and
"(II) to collect data from Medi-
care Advantage organizations to en-
sure against such duplicate payments.

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449
"(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 eli-
gible professionals with respect to such organi-
zation.
"(4) PAYMENT ADJUSTMENT.-
"(A) IN GENERAL.-In applying section
1848(a)(7) under paragraph (1), instead of the
payment adjustment being an applicable per-
cent 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-

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450
"(i) the number of percentage points
by which the applicable percent (under sec-
tion 1848(a)(7)(A)(ii)) for the year is less
than 100 percent; and
"(ii) the Medicare physician expendi-
ture proportion specified in subparagraph
(C) for the year.
"(C) MEDICARE PHYSICIAN EXPENDITURE
PROPORTION.-The Medicare physician expend-
iture proportion under this subparagraph for a
year is the Secretary's estimate of the propor-
tion, of the expenditures under parts A and B
that are not attributable to this part, that are
attributable to expenditures for physicians'
seI'Vlces.
"(D) APPLICATION OF PAYMENT ADJUST-
MENT.-In the case that a qualifying MA orga-
nization attests that not all eligible profes-
sionals of the organization are meaningful EHR
users with respect to a year, the Secretary shall
apply the payment adjustment under this para-
graph based on the proportion of all such eligi-
ble professionals of the organization that are
not meaningful EHR users for such year.

451
1 "(5) QUALIFYING MA ORGANIZATION DE-
2 FINED.-In tIns subsection and subsection (m), the
3 term 'qualifying MA organization' means a Medicare
4 Advantage organization that is organized as a health
5 maintenance organization (as defined in section
6 2791(b)(3) of the Public Health Service Act).
7 "(6) MEANINGFUL ERR USER ATTESTATION.-
8 For purposes of this subsection and subsection (m),
9 a qualifying MA organization shall submit an attes-
10 tation, in a form and manner specified by the Sec-
11 retary which may include the submission of such at-
12 testation as part of submission of the initial bid
13 under section 1854(a)(1)(A)(iv), identifying-
14 "(A) whether each eligible professional de-
15 scribed in paragraph (2), with respect to such
16 organization is a meaningful EHR user (as de-
17 fined in section 1848(0)(2)) for a year specified
18 by the Secretary; and
19 "(B) whether each eligible hospital de-
20 scribed in subsection (m)(l), with respect to
21 such organization, is a meaningful EHR user
22 (as defined in section 1886(n)(3)) for an appli-
23 cable period specified by the Secretary.
24 "(7) POSTING ON WEBSITE.-The Secretary
25 shall post on the Internet website of the Centers for

452
1 Medicare & Medicaid Services, III an easily under-
2 standable format, a list of the names, business ad-
3 dresses, and business phone numbers of-
4 "(A) each qualifying MA organization re-
5 ceiving an incentive paYment under this sub-
6 section for eligible professionals of the organiza-
7 tiOll; and
8 " (B) the eligible professionals of such 01'-
9 ganization for which such incentive payment is
10 based.
11 "(8) LIMITATION ON REVIEW.-There shall be
12 no administrative or judicial review under section
13 1869, section 1878, or otherwise, of-
14 "(A) the methodology and standards for
15 determining payment amounts and paYment ad-
16 justments under this subsection, including
17 avoiding duplication of paYments under para-
18 graph (3)(B) and the specification of rules for
19 the fixed schedule for application of limitation
20 on incentive paYments for all eligible profes-
21 sionals under paragraph (3)(C);
22 " (B) the methodology and standards for
23 determining eligible professionals under para-
24 graph (2); and

453
1 "(C) the methodology and standards for
2 determining a meaningful EHR user under sec-
3 tion 1848(0)(2), including specification of the
4 means of demonstrating meaningful EHR use
5 under section 1848(0)(3)(C) and selection of
6 measures under section 1848(0)(3)(B).".
7 (d) STUDY AifD REPORT RELATING TO MA ORGANI-
8 ZATIONS.-
9 (1) STUDY.-The Secretary of Health and
10 Human Services shall conduct a study on the extent
11 to which and manner in which payment incentives
12 and adjustments (such as under sections 1848(0)
13 and 1848(a)(7) of the Social Security Act) could be
14 made available to professionals, as defined in
15 1861(1'), who are not eligible for HIT incentive pay-
16 ments under section 1848(0) and receive payments
17 for Medicare patient services nearly-exclusively
18 through contractual arrangements with one or more
19 Medicare Advantage organizations, or an inter-
20 mediary organization or organizations with contracts
21 with Medicare Advantage organizations. Such study
22 shall assess approaches for measuring meaningful
23 use of qualified EHR technology among such profes-
24 sionals and mechanisms for delivering incentives and
25 adjustments to those professionals, including

454
1 through incentive payments and adjustments
2 through Medicare Advantage organizations or inter-
3 medimy organizations.
4 (2) REPORT.-Not later than 120 days after
5 the date of the enactment of this Act, the Secretary
6 of Health and Human Services shall submit to Con-
7 gress a report on the findings and the conclusions of
8 the study conducted under paragraph (1), together
9 with recommendations for such legislation and ad-
10 ministrative action as the Secretary determines ap-
11 propriate.
12 (e) CONFORMING AMENDMENTS.-Section 1853 of
13 the Social Security Act (42 U.S.C. 1395w-23) IS
14 amended-
15 (1) III subsection (a)(1)(A), by striking "and
16 (i)" and inserting"(i), and (1)";
17 (2) in subsection (c)-
18 (A) in paragraph (1)(D)(i), by striking
19 "section 1886(h)" and inserting "sections
20 1848(0) and 1886(h)"; and
21 (B) in paragraph (6)(A), by inserting after
22 "under part B," the following: "excluding ex-
23 penditures attributable to subsections (a)(7)
24 and (0) of section 1848,"; and

0: ERNERN09560.LC
455
S.L.C.
(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 profes-
sional (or, in the case of a group practice under
paragraph (3)(C), to the group practice) if, for
the ERR reporting period the eligible profes-
1 (3) in subsection (f), by inserting "and for pay-
2 ments under subsection 0)" after "with the organi-
3 zation".
4 (f) CONFORMING Al1ENDMENTS TO E-PRE-
5 SCRIBING.-
6 (1) Section 1848(a)(5)(A) of the Social Security
7 Act (42 U.S.C. 1395w-4(a)(5)(A)) is amended-
8 (A) in clause (i), by striking "or any sub-
9 sequent year" and inserting ", 2013 or 2014";
10 and
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25

456
1 sional (or group practice) receives an incentive
2 payment under subsection (o)(l)(A) with re-
3 spect to a certified EHR technology (as defined
4 in subsection (0)(4)) that has the capability of
5 electronic prescribing.".
6 SEC. 4102. INCENTIVES FOR HOSPITALS.
7 (a) INCENTIVE PAYMENT.-
9 Security Act (42 U.S.C. 1395ww) is amended by
10 adding at the end the following new subsection:
11 "(n) INCENTIVES FOR ADOPTION AND MEANINGFUL
12 USE OF CERTIFIED EHR TECHNOLOGY.-
13 "(1) IN GENERAL.-Subject to the succeeding
14 provisions of this subsection, with respect to inpa-
15 tient hospital services furnished by an eligible hos-
16 pital during a payment year (as defined in para-
17 graph (2)(G)), if the eligible hospital is a meaningful
18 EHR user (as determined under paragraph (3)) for
19 the EHR reporting period with respect to such year,
20 in addition to the amount otherwise paid under this
21 section, there also shall be paid to the eligible hos-
22 pital, from the Federal Hospital Insurance Trust
23 Fund established under section 1817, an amount
24 equal to the applicable amount specified in para-
25 graph (2)(A) for the hospital for such payment year.

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457
"(2) PAYMENT AMOUNT.-
"(A) IN GENERAL.-Subject to the suc-
ceeding subparagTaphs of this paragraph, the
applicable amount specified in this subpara-
graph for an eligible hospital for a payment
year is equal to the product of the following:
"(i) INITIAL AJ.iIOUNT.-The sum of-
"(I) the base amount specified in
subparagraph (B); plus
"(II) the discharge related
amount specified in subparagraph (0)
for a 12-month period selected by the
Secretary with respect to such pay-
luent year.
"(ii) MEDICARE SHARE.-The Medi-
care share as specified in subparagraph
(D) for the eligible hospital for a period se-
lected 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 pay-
ment year.
"(B) BASE Al'lOUNT.-The base amount
specified in this subparagTaph is $2,000,000.

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458
"(0) DISCHARGE RELATED Al1:0UNT.-The
discharge related amount specified in this sub-
paragTaph for a 12-month period selected by
the Secretary shall be determined as the sum of
the amount, estimated based upon total dis-
charges for the eligible hospital (regardless of
any source of payment) for the period, for each
discharge up to the 23,000th discharge as fol-
lows:
"(i) For the first through 1,149th dis-
charge, $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 pay:ment 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 in-
patient-bed-days (as established by

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459
the Secretary) which are attributable
to individuals with respect to whom
payment may be made under part A;
and
"(II) the estimated number of in-
patient-bed-days (as so established)
which are attributable to individuals
who are enrolled with a Medicare Ad-
vantage 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 pe-
riod; and
"(II) the estimated total amount
of the eligible hospital's charges dur-
ing such period, not including any
charges that are attributable to char-
ity care (as such term is used for pur-
poses of hospital cost reporting under
this title), divided by the estimated
total amount of the hospital's charges
during such period.

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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 elimi-
nate bad debt data from uncompensated care
data. In the absence of the data necessary, with
respect to a hospital, for the Secretary to com-
pute 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 de-
scribed in clause (i)(II), the amount under such
clause shall be deemed to be O.
"(E) TRANSITION FACTOR SPECIFIED.-
"(i) IN GENERAL.-Subject to clause
(ii), the transition factor specified in tIns
subparagraph for an eligible hospital for a
payment year is as follows:
"(I) For the first payment year
for such hospital, l.
"(II) For the second payment
year for such hospital, 3/4 .

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"(III) For the third payment
year for such hospital, l/2.
" (IV) For the fourth payment
year for such hospital, l/4.
"(V) For any succeeding pay-
ment year for such hospital, O.
"(ii) PHASE DOWN FOR ELIGIBLE
HOSPITALS FIRST ADOPTING EHR AFTER
2013.-If the first paYInent year for an eli-
gible hospital is after 2013, then the tran-
sition factor specified in this subparagraph
for a payment year for such hospital is the
same as the amount specified in clause (i)
for such paYInent year for an eligible hos-
pital for which the first paYInent year is
2013. If the first payment year for an eli-
gible hospital is after 2015 then the transi-
tion factor specified in this subparagraph
for such hospital and for such year and
any subsequent year shall be O.
"(F) FORM OF PAYMENT.-The payment
under tIns subsection for a paYInent year may
be in the form of a single consolidated paYInent
or in the form of such periodic installments as
the Secretary may specify.

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462
"(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 pay-
ment 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 ERR USER.-
"(A) IN GENERAL.-For purposes of para-
graph (1), an eligible hospital shall be treated
as a meaningful EHR user for an EHR report-
ing period for a payment year (or, for purposes
of subsection (b)(3)(B)(ix), for an EHR report-
ing period under such subsection for a fiscal

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463
year) if each of the following requirements are
met:
"(i) MEANINGFUL USE OF CERTIFIED
ERR TECRNOLOGy.-The eligible hospital
demonstrates to the satisfaction of the Sec-
retary, in accordance with subparagraph
(CHi), that during such period the hospital
is using certified EHR technology in a
meaningful manner.
"(ii) INFORMATION EXCHANGE.-The
eligible hospital demonstrates to the satis-
faction of the Secretary, in accordance
with subparagraph (CHi), that during such
period such certified EHR technology is
connected in a manner that provides, in
accordance with law and standards appli-
cable to the exchange of information, for
the electronic exchange of health informa-
tion to improve the quality of health care,
such as promoting care coordination.
"(iii) REPORTING ON MEASURES
USING ERR.-Subject to subparagraph
(BHii) and using such certified EHR tech-
nology, the eligible hospital submits infor-
mation for such period, in a form and

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464
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 para-
graph.
"(B) REPORTING ON MEASURES.-
"(i) SELECTION.-The Secretary shall
select measures for purposes of subpara-
graph (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 en-
tity 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 ap-
plying subsection (b)(3)(B)(viii))

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465
being selected under this subpara-
graph, 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 in-
formation 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 sub-
paragraph (A) (iii), the Secretary shall seek
to avoid redundant or duplicative reporting
with reporting otherwise required, includ-
Ing reporting under subsection
(b)(3) (B) (viii).
"(C) DEMONSTRATION OF MEANINGFUL
USE OF CERTIFIED EHR TECHNOLOGY AND IN-
FORMATION EXCHANGE.-

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466
"(i) IN GENERAL.-An eligible hos-
pital may satisfy the demonstration re-
quirement of clauses (i) and (ii) of sub-
paragraph (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 ERR
technology);
"(III) a survey response;
"(IV) reporting under subpara-
graph (A)(iii); and
"(V) other means specified by the
Secretary.
"(ii) USE OF PART D DATA.-Not-
'withstanding 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.-

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467
"(A) LIMITATIONS ON REVIEW.-There
shall be no administrative or judicial review
under section 1869, section 1878, or other'wise,
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 para-
graph (2)(0) and inpatient-bed-days, hos-
pital charges, charity charges, and Medi-
care 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), speci-
fication of the means of demonstrating
meaningful EHR use under paragraph
(3)(0), and the hardship exception under
subsection (b)(3)(B)(ix)(II); and
"(iii) the specification of EHR report-
Ing periods under paragraph (6)(B) and

468
1 the selection of the form of payment under
2 paragraph (2)(F).
3 "(B) POSTING ON WEBSITE.-The Sec-
4 retary shall post on the Internet website of the
5 Centers for Medicare & Medicaid Services, in an
6 easily understandable format, a list of the
7 names of the eligible hospitals that are mean-
8 ingful ERR users under this subsection or sub-
9 section (b)(3)(B)(ix) (and a list of the names of
10 critical access hospitals to which paragraph (3)
11 or (4) of section 1814(1) applies), and other rel-
12 evant data as determined appropriate by the
13 Secretary. The Secretary shall ensure that an
14 eligible hospital (or critical access hospital) has
15 the opportunity to review the other relevant
16 data that are to be made public with respect to
17 the hospital (or critical access hospital) prior to
18 such data being made public.
19 "(5) CERTIFIED EHR TECHNOLOGY DEFINED.-
20 The term 'certified ERR technology' has the mean-
21 ing given such term in section 1848(0)(4).
23 section:
24 "(A) ERR REPORTING PERIOD.-The term
25 'ERR reporting period' means, with respect to

469
1 a payment year, any period (or periods) as
2 specified by the Secretary.
3 "(B) ELIGIBLE HOSPITAL.-The term 'eli-
4 gible hospital' means a subsection (d) hos-
5 pital.".
6 (2) CRITICAL ACCESS HOSPITALS.-Section
7 1814(1) of the Social Security Act (42 U.S.C.
8 1395f(l)) is amended-
9 (A) in paragraph (1), by striking "para-
10 graph (2)" and inserting "the subsequent para-
11 graphs of this subsection"; and
13 paragraph:
14 "(3)(A) The following rules shall apply in deter-
15 mining payment and reasonable costs under paragraph (1)
16 for costs described in subparagraph (C) for a critical ac-
17 cess hospital that would be a meaningful EHR user (as
18 would be determined under paragraph (3) of section
19 1886(n)) for an EHR reporting period for a cost reporting
20 period beginning during a payment year if such critical
21 access hospital was treated as an eligible hospital under
22 such section:
23 "(i) The Secretary shall compute reasonable
24 costs by expensing such costs in a single payment
25 year and not depreciating such costs over a period

470
1 of years (and shall include as costs with respect to
2 cost reporting periods beginning during a payment
3 year costs from previous cost reporting periods to
4 the extent they have not been fully depreciated as of
5 the period involved).
6 "(ii) There shall be substituted for the Medi-
7 care share that would otherwise be applied under
8 paragraph (1) a percent (not to exceed 100 percent)
9 equal to the sum of-
10 "(I) the Medicare share (as would be speci-
11 fied under paragraph (2)(D) of section
12 1886(n)) for such critical access hospital if such
13 critical access hospital was treated as an eligible
14 hospital under such section; and
15 "(II) 20 percentage points.
16 "(B) The payment under this paragraph with respect
17 to a critical access hospital shall be paid through a prompt
.18 interim payment (subject to reconciliation) after submis-
19 sion and review of such information (as specified by the
20 Secretary) necessary to make such payment, including in-
21 formation necessary to apply this paragraph. In no case
22 may payment under this paragraph be made with respect
23 to a cost reporting period beginning during a payment
24 year after 2015 and in no case maya critical access hos-

471
1 pital receive payment under tIns paragTaph with respect
2 to more than 4 consecutive payment years.
3 "(C) The costs described in this subparagraph are
4 costs for the purchase of certified ERR technology to
5 wInch purchase depreciation (excluding interest) would
6 apply if payment was made under paragraph (1) and not
7 under this paragraph.
8 "(D) For purposes of this paragraph, paragraph (4),
9 and paragraph (5), the terms 'certified ERR technology',
10 'eligible hospital', 'ERR reporting period', and 'payment
11 year' have the meanings given such terms in sections
12 1886(n).".
13 (b) INCENTIVE MARKET BASKET ADJUSTMENT.-
14 (1) IN GENERAL.-Section 1886(b)(3)(B) of
15 the Social Security Act (42 U.S.C.
16 1395ww(b)(3)(B)) is amended-
17 (A) in clause (viii)(I) , by inserting "(or,
18 beginning with fiscal year 2015, by one-quar-
19 ter)" after "2.0 percentage points"; and
21 clause:
22 "(ix)(I) For purposes of clause (i) for fiscal year
23 2015 and each subsequent fiscal year, in the case of an
24 eligible hospital (as defined in subsection (n)(6)(A)) that
25 is not a meaningful ERR user (as defined in subsection

472
1 (n)(3)) for an ERR reporting period for such fiscal year,
2 three-quarters of the applicable percentage increase other-
3 wise applicable under clause (i) for such fiscal year shall
4 be reduced by 33lf3 percent for fiscal year 2015, 66213 per-
5 cent for fiscal year 2016, and 100 percent for fiscal year
6 2017 and each subsequent fiscal year. Such reduction
7 shall apply only with respect to the fiscal year involved
8 and the Secretary shall not take into account such reduc-
9 tion in computing the applicable percentage increase under
10 clause (i) for a subsequent fiscal year.
11 "(II) The Secretary may, on a case-by-case basis, ex-
12 empt a subsection (d) hospital from the application of sub-
13 clause (I) with respect to a fiscal year if the Secretary
14 determines, subject to annual renewal, that requiring such
15 hospital to be a meaningful ERR user during such fiscal
16 year would result in a significant hardship, such as in the
17 case of a hospital in a rural area without sufficient Inter-
18 net access. In no case may a hospital be granted an ex-
19 emption under this subclause for more than 5 years.
20 "(III) For fiscal year 2015 and each subsequent fis-
21 cal year, a State in which hospitals are paid for services
22 under section 1814(b)(3) shall adjust the payments to
23 each subsection (d) hospital in the State that is not a
24 meaningful ERR user (as defined in subsection (n)(3))
25 in a manner that is designed to result in an aggregate

473
1 reduction in payments to hospitals III the State that is
2 equivalent to the aggregate reduction that would have oc-
3 curred if payments had been reduced to each subsection
4 (d) hospital in the State in a manner comparable to the
5 reduction under the previous provisions of this clause. The
6 State shall report to the Secretary the methodology it will
7 use to make the payment adjustment under the previous
8 sentence.
9 "(IV) For purposes of this clause, the term 'EHR
10 reporting period' means, with respect to a fiscal year, any
11 period (or periods) as specified by the Secretary.".
12 (2) CRITICAL ACCESS HOSPITALS.-Section
13 1814(1) of the Social Security Act (42 U.S.C.
14 1395f(1)), as amended by subsection (a)(2), is fur-
15 ther amended by adding at the end the following
16 new paragraphs:
17 "(4)(A) Subject to subparagraph (C), for cost report-
18 ing periods beginning in fiscal year 2015 or a subsequent
19 fiscal year, in the case of a critical access hospital that
20 is not a meaningful EHR user (as would be determined
21 under paragraph (3) of section 1886(n) if such critical ac-
22 cess hospital was treated as an eligible hospital under such
23 section) for an EHR reporting period with respect to such
24 fiscal year, paragraph (1) shall be applied by substituting

474
1 the applicable percent under subparagraph (B) for the
2 percent described in such paragraph (1).
3 "(B) The percent described in this subparagraph is-
4 "(i) for fiscal year 2015, 100.66 percent;
5 "(ii) for fiscal year 2016, 100.33 percent; and
6 "(iii) for fiscal year 2017 and each subsequent
7 fiscal year, 100 percent.
8 "(0) The provisions of subclause (II) of section
9 1886(b)(3)(B)(ix) shall apply with respect to subpara-
10 graph (A) for a critical access hospital with respect to a
11 cost reporting period beginning in a fiscal year in the same
12 manner as such subclause applies with respect to sub-
13 clause (I) of such section for a subsection (d) hospital with
14 respect to such fiscal year.
15 "(5) There shall be no administrative or judicial re-
16 view under section 1869, section 1878, or otherwise, of-
17 "(A) the methodology and standards for deter-
18 mining the amount of payment and reasonable cost
19 under paragraph (3) and payment adjustments
20 under paragraph (4), including selection of periods
21 under section 1886(n)(2) for determining, and mak-
22 ing estimates or using proxies of, inpatient-bed-days,
23 hospital charges, charity charges, and Medicare
24 share under subparagraph (D) of section
25 1886(n)(2);

475
1 " (B) the methodology and standards for deter-
2 mining a meaningful EHR user under section
3 1886(n)(3) as would apply if the hospital was treat-
4 ed as an eligible hospital under section 1886(n), and
5 the hardship exception under paragraph (4)(C);
6 "(C) the specification of EHR reporting periods
7 under section 1886(n)(6)(B) as applied under para-
8 graphs (3) and (4); and
9 "(D) the identification of costs for purposes of
10 paragraph (3)(C).".
11 (c) APPLICATION TO CERTAIN MA-AFFILIATED ELI-
12 GIBLE HOSPITALs.-Section 1853 of the Social Security
13 Act (42 U.S.C. 1395w-23), as amended by section
14 4101(c), is further amended by adding at the end the fol-
16 "(m) APPLICATION OF ELIGIBLE HOSPITAL INCEN-
17 TIVES FOR CERTAIN MA ORGANIZATIONS FOR ADOPTION
18 AND MEANINGFUL USE OF CERTIFIED EHR TECH-
19 NOLOGY.-
20 "(1) APPLIcATION.-Subject to paragraphs (3)
21 and (4), in the case of a qualifying MA organization,
22 the prOVISIOns of sections 1886(n) and
23 1886(b)(3)(B)(ix) shall apply with respect to eligible
24 hospitals described in paragraph (2) of the organiza-
25 tion which the organization attests under subsection

476
1 (1)(6) to be meaningful EHR users in a similar man-
2 ner as they apply to eligible hospitals under such
3 sections. Incentive payments under paragyaph (3)
4 shall be made to and payment adjustments under
5 paragraph (4) shall apply to such qualifying organi-
6 zations.
7 "(2) ELIGIBLE HOSPITAL DESCRIBED.-With
8 respect to a qualifying MA organization, an eligible
9 hospital described in this paragyaph is an eligible
10 hospital (as defined in section 1886(n)(6)(A)) that is
11 under common corporate governance with such orga-
12 nization and serves individuals enrolled under an
13 MA plan offered by such organization.
14 "(3) ELIGIBLE HOSPITAL INCENTIVE PAY-
15 MENTS.-
16 "(A) IN GENERAL.-In applying section
17 1886(11)(2) under paragyaph (1), instead of the
18 additional payment amount under section
19 1886(n)(2), there shall be substituted an
20 amount determined by the Secretary to be simi-
21 lar to the estimated amount in the aggyegate
22 that would be payable if payment for services
23 furnished by such hospitals was payable under
24 part A instead of this part. In implementing the
25 previous sentence, the Secretary-

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477
"(i) shall, insofar as data to deter-
mine the discharge related amount under
section 1886(n)(2)(0) for an eligible hos-
pital 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 deter-
mine the medicare share described in sec-
tion 1886(n)(2)(D) for an eligible hospital
are not available to the Secretary, use such
alternative data and methodology to esti-
mate such share, which data and method-
ology may include use of the inpatient-bed-
days (or discharges) with respect to an eli-
gible hospital during the appropriate pe-
riod which are attributable to both individ-
uals for whom payment may be made
under part A or individuals enrolled in an
MA plan under a Medicare Advantage or-
ganization 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.

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478
"(B) AVOIDING DUPLICATION OF PAY-
l1ENTS.-
"(i) IN GENERAL.-In the case of a
hospital that for a payment year is an eli-
gible hospital described in paragraph (2)
and for which at least one-third of their
discharges (or bed-days) of Medicare pa-
tients 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 de-
scribed in paragraph (2) and also is eligi-
ble 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-
"(1) to ensure that duplicate pay-
ments are not made with respect to
an eligible hospital both under this
subsection and under section 1886(n);
and

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8.L.C.
479
"(II) to collect data from Medi-
care Advantage organizations to en-
sure 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(1)(5)), if, according to the attesta-
tion of the organization submitted under sub-
section (1)(6) for an applicable period, one or
more eligible hospitals (as defined in section
1886(n)(6)(A)) that are under common cor-
porate governance with such organization and
that serve individuals enrolled under a plan of-
fered by such organization are not meaningful
ERR users (as defined in section 1886(n)(3))
with respect to a period, the payment amount
payable under this section for such organization
for such period shall be the percent specified in
subparagraph (B) for such period of the pay-
ment amount otherwise provided under this sec-
tion 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-

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480
"(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 expendi-
ture proportion specified in subparagraph
(0) for the year.
"(0) MEDICARE HOSPITAL EXPENDITURE
PROPORTION.-The Medicare hospital expendi-
ture proportion under this subparagraph for a
year is the Secretary's estimate of the propor-
tion, of the expenditures under parts A and B
that are not attributable to this part, that are
attributable to expenditures for inpatient hos-
pital services.
"(D) APPLICATION OF PAYMENT ADJUST-
MENT.-In the case that a qualifying MA orga-
nization attests that not all eligible hospitals
are meaningful ERR users with respect to an
applicable period, the Secretary shall apply the
payment adjustment under this paragraph
based on a methodology specified by the Sec-
retary, taking into account the proportion of
such eligible hospitals, or discharges from such
hospitals, that are not meaningful ERR users
for such period.

481
1 "(5) POSTING ON WEBSITE.-The Secretary
2 shall post on the Internet website of the Centers for
3 Medicare & Medicaid Services, in an easily under-
4 standable format-
S "(A) a list of the names, business address-
6 es, and business phone numbers of each quali-
7 fying MA organization receiving an incentive
8 payment under this subsection for eligible hos-
9 pitals described in paragraph (2); and
10 " (B) a list of the names of the eligible hos-
11 pitals for which such incentive payment is
12 based.
13 "(6) LIMITATIONS ON REVIEw.-There shall be
14 no administrative or judicial review under section
15 1869, section 1878, or otherwise, of-
16 "(A) the methodology and standards for
17 determining payment amounts and payment ad-
18 justments under this subsection, including
19 avoiding duplication of payments under para-
20 graph (3)(B);
21 "(B) the methodology and standards for
22 determining eligible hospitals under paragraph
23 (2); and
24 "(C) the methodology and standards for
25 determining a meaningful ERR user under sec-

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482
tion 1886(n)(3), including specification of the
means of demonstrating meaningful ERR use
under subparagraph (C) of such section and se-
lection 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 pre-
ceding subparagraph (A), by inserting ", sub-
ject 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
20 striking "and 1886(h)(3)(D)" and inserting
21 "1886(h)(3)(D), and 1853(m)".
22 (3) Section 1853 of the Social Security Act (42
23 U.S.C. 1395w-23), as amended by section 4101(d),
24 is amended-
25 (A) in subsection (c)--

483
1 (i) in paragraph (l)(D)(i), by striking
2 "1848(0)" and inserting ", 1848(0), and
3 1886(n)"; and
4 (ii) in paragraph (6)(A), by inserting
5 "and subsections (b)(3)(B)(ix) and (n) of
6 section 1886" after "section 1848"; and
7 (B) in subsection (f), by inserting "and
8 subsection (m)" after "under subsection (1)".
9 SEC. 4103. TREATMENT OF PAYMENTS AND SAVINGS; 1M-
10 PLEMENTATION FUNDING.
11 (a) PREMIUM HOLD HARMLESS.-
12 (1) IN GENERAL.-Section 1839(a)(1) of the
13 Social Security Act (42 U.S.C. 1395r(a)(1)) is
14 amended by adding at the end the follmving: "In ap-
15 plying this paragraph there shall not be taken into
16 account additional payments under section 1848(0)
17 and section 1853(1)(3) and the Government con-
18 tribution under section 1844(a)(3).".
19 (2) PAYMENT.-Section 1844(a) of such Act
20 (42 U.S.C. 1395w(a)) is amended-
21 (A) in paragraph (2), by striking the pe-
22 riod at the end and inserting "; plus"; and
24 paragraph:

484
1 "(3) a Government contribution equal to the
2 amount of payment incentives payable under sec-
3 tions 1848(0) and 1853(1)(3).".
4 (b) MEDICARE IMPROVEMENT FUND.-Section 1898
5 of the Social Security Act (42 U.S.C. 1395iii), as added
6 by section 7002(a) of the Supplemental Appropriations
7 Act, 2008 (Public Law 110-252) and as amended by sec-
8 tion 188(a)(2) of the Medicare Improvements for Patients
9 and Providers Act of 2008 (Public Law 110-275; 122
10 Stat. 2589) and by section 6 of the QI Program Supple-
11 mental Funding Act of 2008, is amended-
13 (A) by inserting "medicare" before "fee-
14 for-service"; and
15 (B) by inserting before the period at the
16 end the following: "including, but not limited
17 to, an increase in the conversion factor under
18 section 1848(d) to address, in whole or in part,
19 any projected shortfall in the conversion factor
20 for 2014 relative to the conversion factor for
21 2008 and adjustments to payments for items
22 and services furnished by providers of services
23 and suppliers under such original medicare fee-
24 for-service program"; and

485
(A) in paragraph (1), by striking "during
fiscal year 2014," and all that follows and in-
serting the following: "during-
"(A) fiscal year 2014, $22,290,000,000;
1
2
3
4
5 and
6 "(B) fiscal year 2020 and each subsequent
7 fiscal year, the Secretary's estimate, as of July
8 1 of the fiscal year, of the aggregate reduction
9 in expenditures under this title during the pre-
10 ceding fiscal year directly resulting from the re-
11 duction in payment amounts under sections
12 1848(a)(7), 1853(1)(4), 1853(m)(4), and
13 1886(b)(3)(B)(ix)."; and
15 paragraph:
16 "(4) No EFFECT ON PAYMENTS IN SUBSE-
17 QUENT YEARS.-In the case that expenditures from
18 the Fund are applied to, or otherwise affect, a pay-
19 ment rate for an item or service under this title for
20 a year, the payment rate for such item or service
21 shall be computed for a subsequent year as if such
22 application or effect had never occurred.".
23 (c) IMPLEMENTATION FUNDING.-In addition to
24 funds otherwise available, out of any funds in the Treas-
25 ury not otherwise appropriated, there are appropriated to

486
1 the Secretary of Health and Human Services for the Cen-
2 tel' for Medicare & Medicaid Services Program Manage-
3 ment Account, $100,000,000 for each of fiscal years 2009
4 through 2015 and $45,000,000 for fiscal year 2016, which
5 shall be available for purposes of carrying out the provi-
6 sions of (and amendments made by) this subtitle.
7 .AJ.nounts appropriated under this subsection for a fiscal
8 year shall be available until expended.
9 SEC. 4104. STUDIES AND REPORTS ON HEALTH INFORMA-
l O T I O N TECHNOLOGY.
11 (a) STUDY AND REPORT ON APPLICATION OF EHR
12 PAYMENT INCENTIVES FOR PROVIDERS NOT RECEIVING
13 OTHER INCENTIVE PAYMENTS.-
14 (1) STUDY.-
15 (A) IN GENERAL.-The Secretary of
16 Health and Human Services shall conduct a
17 study to determine the extent to which and
18 manner in which payment incentives (such as
19 under title XVIII or XIX of the Social Security
20 Act) and other funding for purposes of imple-
21 menting and using certified EHR technology
22 (as defined in section 1848(0)(4) of the Social
23 Security Act, as added by section 4101(a))
24 should be made available to health care pro-
25 viders who are receiving minimal or no payment

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487
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 pur-
poses.
(B) DETAILS OF STUDY.-Such study shall
include an examination of-
(i) the adoption rates of certified
ERR technology by such health care pro-
viders;
(ii) the clinical utility of such tech-
nology 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 other-
WIse;
(v) the potential costs and the poten-
tial benefits of making payment incentives

(i) the current availability of open
source health information technology sys-
(1) STUDY.-
(A) IN GENERAL.-The Secretary of
Health and Human Services shall, in consulta-
tion 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 Adminis-
trator of the Health Resources and Services Ad-
ministration, and the Chairman of the Federal
Communications Commission, conduct a study
on-
488
1 and other funding available to such health
2 care providers; and
3 (vi) any other Issues the Secretary
4 deems to be appropriate.
5 (2) REPORT.-Not later than June 30, 2010,
6 the Secretary shall submit to Congress a report on
7 the findings and conclusions of the study conducted
8 under paragraph (1).
9 (b) STUDY AND REPORT ON AVAlLABILITY OF OPEN
HEALTH INFORMATION TECHNOLOGY SyS-10 SOURCE
11 TEMS.-
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489
1 tems to Federal safety net providers (in-
2 cluding small, rural providers);
3 (ii) the total cost of ownership of such
4 systems in comparison to the cost of pro-
S prietary commercial products available;
6 (iii) the ability of such systems to re-
7 spond to the needs of, and be applied to,
8 various populations (including children and
9 disabled individuals); and
10 (iv) the capacity of such systems to
11 facilitate interoperability.
12 (B) CONSIDERATIONS.-In conducting the
13 study under subparagraph (A), the Secretary of
14 Health and Human Services shall take into ac-
15 count the circumstances of smaller health care
16 providers, health care providers located in rural
17 or other medically underserved areas, and safe-
18 ty net providers that deliver a significant level
19 of health care to uninsured individuals, Med-
20 icaid beneficiaries, SCHIP beneficiaries, and
21 other vulnerable individuals.
22 (2) REPORT.-Not later than October 1, 2010,
23 the Secretary of Health and Human Services shall
24 submit to Congress a report on the findings and the
25 conclusions of the study conducted under paragraph

490
1 (1), together with recommendations for such legisla-
2 tion and administrative action as the Secretary de-
3 termines appropriate.
4 Subtitle B-Medicaid Incentives
5 SEC. 4201. MEDICAID PROVIDER HIT ADOPTION AND OPER·
6 ATION PAYMENTS; IMPLEMENTATION FUND-
7 ING.
8 (a) IN GENERAL.-Section 1903 of the Social Secu-
9 rity Act (42 U.S.C. 1396b) is amended-
10 (1) in subsection (a)(3)-
11 (A) by striking "and" at the end of sub-
12 paragraph (D);
13 (B) by striking "plus" at the end of sub-
14 paragraph (E) and inserting "and"; and
15 (C) by adding at the end the following new
16 subparagraph:
17 "(F)(i) 100 percent of so much of the
18 sums expended during such quarter as are at-
19 tributable to payments to Medicaid providers
20 described in subsection (t)(l) to encourage the
21 adoption and use of certified EHR technology;
22 and
23 "(ii) 90 percent of so much of the sums ex-
24 pended during such quarter as are attributable
25 to payments for reasonable administrative ex-

491
1 penses related to the administration of pay-
2 ments described in clause (i) if the State meets
3 the condition described in subsection (t)(9);
4 plus"; and
5 (2) by inserting after subsection (s) the fol-
7 "(t)(l) For purposes of subsection (a)(3)(F), the pay-
8 ments described in this paragraph to encourage the adop-
9 tion and use of certified EHR technology are payments
10 made by the State in accordance with this subsection -
11 "(A) to Medicaid providers described in para-
12 graph (2)(A) not in excess of 85 percent of net aver-
13 age allowable costs (as defined in paragraph (3)(E))
14 for certified EHR technology (and support services
15 including maintenance and training that is for, or is
16 necessary for the adoption and operation of, such
17 technology) with respect to such providers; and
18 " (B) to Medicaid providers described in para-
19 graph (2)(B) not in excess of the maximum amount
20 permitted under paragraph (5) for the provider in-
21 volved.
22 "(2) In this subsection and subsection (a)(3)(F), the
23 term 'Medicaid provider' means-
24 " (A) an eligible professional (as defined III
25 paragraph (3)(B))-

492
1 "(i) who is not hospital-based and has at
2 least 30 percent of the professional's patient
3 volume (as estimated in accordance with a
4 methodology established by the Secretary) at-
5 tributable to individuals who are receiving med-
6 ical assistance under this title;
7 "(ii) who is not described in clause (i), who
8 is a pediatrician, who is not hospital-based, and
9 who has at least 20 percent of the profes-
10 sional's patient volume (as estimated in accord-
11 ance with a methodology established by the Sec-
12 retary) attributable to individuals who are re-
13 ceiving medical assistance under this title; and
14 "(iii) who practices predominantly in a
15 Federally qualified health center or rural health
16 clinic and has at least 30 percent of the profes-
17 sional's patient volume (as estimated in accord-
19 retary) attributable to needy individuals (as de-
20 fined in paragraph (3)(F)); and
21 "(B)(i) a children's hospital, or
22 "(ii) an acute-care hospital that is not described
23 in clause (i) and that has at least 10 percent of the
24 hospital's patient volume (as estimated in accord-

493
1 retary) attributable to individuals who are reC81vmg
2 medical assistance under this title.
3 An eligible professional shall not qualify as a Medicaid
4 provider under this subsection unless any right to payment
5 under sections 1848(0) and 1853(1) with respect to the
6 eligible professional has been waived in a manner specified
7 by the Secretary. For purposes of calculating patient vol-
8 ume under subparagraph (A)(iii), insofar as it is related
9 to uncompensated care, the Secretary may require the ad-
10 justment of such uncompensated care data so that it
11 would be an appropriate proxy for charity care, including
12 a downward adjustment to eliminate bad debt data from
13 uncompensated care. In applying subparagraphs (A) and
14 (B)(ii), the methodology established by the Secretary for
15 patient volume shall include individuals enrolled in a Med-
16 icaid managed care plan (under section 1903(m) or sec-
17 tion 1932).
18 "(3) In this subsection and subsection (a)(3)(F):
19 "(A) The term 'certified EHR technology'
20 means a qualified electronic health record (as de-
21 fined in 3000(13) of the Public Health Service Act)
22 that is certified pursuant to section 3001(c)(5) of
23 such Act as meeting standards adopted under sec-
24 tion 3004 of such Act that are applicable to the type
25 of record involved (as determined by the Secretary,

494
1 such as an ambulatory electronic health record for
2 office-based physicians or an inpatient hospital elec-
3 tronic health record for hospitals).
4 "(B) The term 'eligible professional' means a-
5 "(i) physician;
6 "(ii) dentist;
7 "(iii) certified nurse mid-wife;
8 "(iv) nurse practitioner; and
9 "(v) physician assistant insofar as the as-
10 sistant is practicing in a rural health clinic that
11 is led by a physician assistant or is practicing
12 in a Federally qualified health center that is so
13 led.
14 "(0) The term 'average allowable costs' means,
15 with respect to certified ERR technology of Med-
16 icaid providers described in paragraph (2)(A) for-
17 "(i) the first year of payment with respect
18 to such a provider, the average costs for the
19 purchase and initial implementation or upgTade
20 of such technology (and support services includ-
21 ing training that is for, or is necessary for the
22 adoption and initial operation of, such tech-
23 nology) for such providers, as determined by
24 the Secretary based upon studies conducted
25 under paragraph (4)(0); and

495
1 "(ii) a subsequent year of paYlnent with
2 respect to such a provider, the average costs
3 not described in clause (i) relating to the oper-
4 ation, maintenance, and use of such technology
5 for such providers, as determined by the Sec-
6 retary based upon studies conducted under
7 paragraph (4)(C).
8 "(D) The term 'hospital-based' means, with re-
9 spect to an eligible professional, a professional (such
10 as a pathologist, anesthesiologist, or emergency phy-
11 sician) who furnishes substantially all of the individ-
12 ual's professional services in a hospital setting
13 (whether inpatient or outpatient) and through the
14 use of the facilities and equipment, including quali-
15 fied electronic health records, of the hospital. The
16 determination of whether an eligible professional is
17 a hospital-based eligible professional shall be made
18 on the basis of the site of service (as defined by the
19 Secretary) and without regard to any employment or
20 billing arrangement between the eligible professional
21 and any other provider.
22 "(E) The term 'net average allowable costs'
23 means, with respect to a Medicaid provider described
24 in paragraph (2) (A), average allowable costs reduced
25 by any payment that is made to such Medicaid pro-

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graph (0).
videI' from any other source (other than under this
subsection or by a State or local government) that
is directly attributable to payment for certified ERR
technology or support services described in subpara-
"(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
1
2
3
4
5
6
7
8
9
10
11 XXI;
12 "(iii) who is furnished uncompensated care
13 by the provider; or
14 "(iv) for whom charges are reduced by the
15 provider on a sliding scale basis based on an in-
16 dividual's ability to pay.
17 "(4)(A) With respect to a Medicaid provider de-
18 scribed in paragraph (2)(A), subject to subparagraph (B),
19 in no case shall-
20 "(i) the net average allowable costs under
21 this subsection for the first year of payment
22 (which may not be later than 2016), which is
23 intended to cover the costs described in para-
24 graph (3)(0)(i), exceed $25,000 (or such lesser

497
1 amount as the Secretary determines based on
2 studies conducted under subparagraph (C));
3 "(ii) the net average allowable costs under
4 this subsection for a subsequent year of pay-
5 ment, which is intended to cover costs described
6 in paragraph (3)(C)(ii), exceed $10,000; and
7 "(iii) payments be made for costs described
8 III clause (ii) after 2021 or over a period of
9 longer than 5 years.
10 "(B) In the case of Medicaid provider described in
11 paragraph (2)(A)(ii), the dollar amounts specified in sub-
12 paragraph (A) shall be 2/3 of the dollar amounts otherwise
13 specified.
14 "(C) For the purposes of determining average allow-
15 able costs under this subsection, the Secretary shall study
16 the average costs to Medicaid providers described in para-
17 graph (2)(A) of purchase and initial implementation and
18 upgrade of certified ERR technology described in para-
19 graph (3)(C)(i) and the average costs to such providers
20 of operations, maintenance, and use of such technology de-
21 scribed in paragraph (3)(C)(ii). In determining such costs
22 for such providers, the Secretary may utilize studies of
23 such amounts submitted by States.

498
1 "(5) (A) In no case shall the payments described in
2 paragraph (1) (B) with respect to a Medicaid provider de-
3 scribed in paragraph (2)(B) exceed-
4 "(i) in the aggregate the product of-
5 "(I) the overall hospital EHR amount
6 for the provider computed under subpara-
7 graph (B); and
8 "(II) the Medicaid share for such pro-
9 vider computed under subparagraph (0);
10 "(ii) in any year 50 percent of the product de-
II scribed in clause (i); and
12 "(iii) in any 2-year period 90 percent of such
13 product.
14 "(B) For purposes of this paragraph, the overall hos-
15 pital EHR amount, with respect to a Medicaid provider,
16 is the sum of the applicable amounts specified in section
17 1886(n)(2)(A) for such provider for the first 4 payment
18 years (as estimated by the Secretary) determined as if the
19 Medicare share specified in clause (ii) of such section were
20 1. The Secretary shall establish, in consultation with the
21 State, the overall hospital EHR amount for each such
22 Medicaid provider eligible for payments under paragraph
23 (l)(B). For purposes of this subparagraph in computing
24 the amounts under section 1886(n)(2)(0) for payment
25 years after the first payment year, the Secretary shall as-

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1 sume that in subsequent payment years discharges in-
2 crease at the average annual rate of growth of the most
3 recent 3 years for which discharge data are available per
4 year.
5 "(C) The Medicaid share computed under this sub-
6 paragraph, for a Medicaid provider for a period specified
7 by the Secretary, shall be calculated in the same manner
8 as the Medicare share under section 1886(n)(2)(D) for
9 such a hospital and period, except that there shall be sub-
10 stituted for the numerator under clause (i) of such section
11 the amount that is equal to the number of inpatient-bed-
12 days (as established by the Secretary) which are attrib-
13 utable to individuals who are receiving medical assistance
14 under this title and who are not described in section
15 1886(n)(2)(D)(i). In computing inpatient-bed-days under
16 the previous sentence, the Secretary shall take into ac-
17 count inpatient-bed-days attributable to inpatient-bed-
18 days that are paid for individuals enrolled in a Medicaid
19 managed care plan (under section 1903(m) or section
20 1932).
21 "(D) In no case may the payments described in para-
22 graph (l)(B) with respect to a Medicaid provider de-
23 scribed in paragraph (2)(B) be paid-

500
1 "(i) for any year beginning after 2016 unless
2 the provider has been provided payment under para-
3 graph (1) (B) for the previous year; and
4 "(ii) over a period of more than 6 years of pay-
5 ment.
6 "(6) Payments described in paragraph (1) are not in
7 accordance with this subsection unless the following re-
8 quirements are met:
9 "(A)(i) The State provides assurances satisfac-
10 tOIY to the Secretary that amounts received under
11 subsection (a)(3)(F) with respect to payments to a
12 Medicaid provider are paid, subject to clause (ii), di-
13 rectly to such provider (or to an employer or facility
14 to which such provider has assigned payments) with-
15 out any deduction or rebate.
16 "(ii) Amounts described in clause (i) may also
17 be paid to an entity promoting the adoption of cer-
18 tified ERR technology, as designated by the State,
19 if participation in such a payment arrangement is
20 voluntary for the eligible professional involved and if
21 such entity does not retain more than 5 percent of
22 such payments for costs not related to certified
23 ERR technology (and support services including
24 maintenance and training) that is for, or IS nec-
25 essary for the operation of, such technology.

501
1 "(B) A Medicaid provider described in para-
2 graph (2HA) is responsible for payment of the re-
3 manllng 15 percent of the net average allowable
4 cost.
5 "(CHi) Subject to clause (ii), with respect to
6 paYlnents to a Medicaid provider-
7 "(I) for the first year of payment to the
8 Medicaid provider under this subsection, the
9 Medicaid provider demonstrates that it is en-
10 gaged in efforts to adopt, implement, or up-
11 grade certified EHR technology; and
12 "(II) for a year of payment, other than the
13 first year of payment to the Medicaid provider
14 under this subsection, the Medicaid provider
15 demonstrates meaningful use of certified EHR
16 technology through a means that is approved by
17 the State and acceptable to the Secretary, and
18 that may be based upon the methodologies ap-
19 plied under section 1848(0) or 1886(n).
20 "(ii) In the case of a Medicaid provider who has
21 completed adopting, implementing, or upgrading
22 such technology prior to the first year of payment to
23 the Medicaid provider under this subsection, clause
24 (i) (I) shall not apply and clause (i) (II) shall apply
25 to each year of paYlnent to the Medicaid provider

502
1 under this subsection, including the first year of
2 payment.
3 "(D) To the extent specified by the Secretary,
4 the certified ERR technology is compatible with
5 State or Federal administrative management sys-
6 tems.
7 For purposes of subparagTaph (B), a Medicaid provider
8 described in paragraph (2)(A) may accept payments for
9 the costs described in such subparagTaph from a State or
10 local government. For purposes of subparagraph (C), in
11 establishing the means described in such subparagraph,
12 which may include clinical quality reporting to the State,
13 the State shall ensure that populations with unique needs,
14 such as children, are appropriately addressed.
15 "(7) With respect to Medicaid providers described in
16 paragraph (2)(A) , the Secretary shall ensure coordination
17 of payment with respect to such providers under sections
18 1848(0) and 1853(1) and under this subsection to assure
19 no duplication of funding. Such coordination shall include,
20 to the extent practicable, a data matching process between
21 State Medicaid agencies and the Centers for Medicare &
22 Medicaid Services using national provider identifiers. For
23 such purposes, the Secretary may require the submission
24 of such data relating to payments to such Medicaid pro-
25 viders as the Secretary may specify.

" (A.) is using the funds provided for the pur-
poses of administering payments under this sub-
section, 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 report-
ing mechanisms; and
"(C) is pursuing initiatives to encourage the
adoption of certified ERR technology to promote
503
1 "(8) In carrying out paragraph (6)(C), the State and
2 Secretary shall seek, to the maximum extent practicable,
3 to avoid duplicative requirements from Federal and State
4 governments to demonstrate meaningful use of certified
5 ERR technology under this title and title XVIII. In doing
6 so, the Secretary may deem satisfaction of requirements
7 for such meaningful use for it payment year under title
8 XVIII to be sufficient to qualify as meaningful use under
9 this subsection. The Secretary may also specify the report-
10 ing periods under this subsection in order to carry out this
11 paragraph.
12 "(9) In order to be provided Federal financial partici-
13 pation under subsection (a)(3)(F)(ii), a State must dem-
14 onstrate to the satisfaction of the Secretary, that the
15 State-
16
17
18
19
20
21
22
23
24
25

504
1 health care quality and the exchange of health care
2 information under this title, subject to applicable
3 laws and regulations governing such exchange.
4 "(10) The Secretary shall periodically submit reports
5 to the Committee on Energy and Commerce of the House
6 of Representatives and the Committee on Finance of the
7 Senate on status, progress, and oversight of payments de-
8 scribed in paragTaph (1), including steps taken to carry
9 out paragraph (7). Such reports shall also describe the
10 extent of adoption of certified EHR technology among
11 Medicaid providers resulting from the provisions of this
12 subsection and any improvements in health outcomes, clin-
13 ical quality, or efficiency resulting from such adoption.".
14 (b) IMPLEMENTATION FUNDING.-In addition to
15 funds otherwise available, out of any funds in the Treas-
16 ury not otherwise appropriated, there are appropriated to
17 the Secretary of Health and Human Services for the Cen-
18 tel'S for Medicare & Medicaid Services Program Manage-
19 ment Account, $40,000,000 for each of fiscal years 2009
20 through 2015 and $20,000,000 for fiscal year 2016, which
21 shall be available for purposes of carrying out the provi-
22 sions of (and the amendments made by) this section.
23 Amounts appropriated under this subsection for a fiscal
24 year shall be available until expended.

505
1 Subtitle C-Miscellaneous
2 Medicare Provisions
3 SEC. 4301. MORATORIA ON CERTAIN MEDICARE REGULA-
4 TIONS.
5 (a) DELAY IN PHASE OUT OF MEDICARE HOSPICE
6 BUDGET NEUTRALITY ADJUSTMENT FACTOR DURING
7 FISCAL YEAR 2009.-Notwithstanding any other provi-
8 sion of law, including the final rule published on August
9 8, 2008, 73 Federal Register 46464 et seq., relating to
10 Medicare ProgTam; Hospice Wage Index for Fiscal Year
11 2009, the Secretary of Health and Human Services shall
12 not phase out or eliminate the budget neutrality adjust-
13 ment factor in the Medicare hospice wage index before Oc-
14 tober 1, 2009, and the Secretary shall recompute and
15 apply the final Medicare hospice wage index for fiscal year
16 2009 as if there had been no reduction in the budget neu-
17 trality adjustment factor.
18 (b) NON-APPLICATION OF PHASED-OUT INDIRECT
19 MEDICAL EDUCATION (IME) ADJUSTMENT FACTOR FOR
20 FISCAL YEAR 2009.-
21 (1) IN GENERAL.-Section 412.322 of title 42,
22 Code of Federal Regulations, shall be applied with-
23 out regard to paragTaph (c) of such section, and the
24 Secretary of Health and Human Services shall re-
25 compute payments for discharges occurring 011 or

506
1 after October 1, 2008, as if such paragyaph had
2 never been in effect.
3 (2) No EFFECT ON SUBSEQUENT YEARS.-
4 Nothing in paragyaph (1) shall be construed as hav-
5 ing any effect on the application of paragraph (d) of
6 section 412.322 of title 42, Code of Federal Regula-
7 tions.
8 (c) FUNDING FOR IMPLEMENTATION.-In addition to
9 funds otherwise available, for purposes of implementing
10 the provisions of subsections (a) and (b), including costs
11 incurred in reprocessing claims in carrying out such provi-
12 sions, the Secretary of Health and Human Services shall
13 provide for the transfer from the Federal Hospital Insur-
14 . ance Trust Fund established under section 1817 of the
15 Social Security Act (42 U.S.C. 1395i) to the Centers for
16 Medicare & Medicaid Services Progyam Management Ac-
17 count of $2,000,000 for fiscal year 2009.
18 SEC. 4302. LONG-TERM CARE HOSPITAL TECHNICAL COR-
19 RECTIONS.
20 (a) PAYMENT.-Subsection (c) of section 114 of the
21 Medicare, Medicaid, and SCHIP Extension Act of 2007
22 (Public Law 110-173) is amended-
23 (1) in paragyaph (1)-
24 (A) by amending the heading to read as
25 follows: "DELAY IN APPLICATION OF 25 PER-

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CENT PATIENT THRESHOLD PAYMENT ADJUST-
MENT"·,
(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
vlith an entity that is a provider-based, off-cam-
pus 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 insert-
ing "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 sec-
25 tion is amended by striking "if the hospital or facility"

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1 and inserting "if the hospital or facility obtained a certifi-
2 cate of need for an increase in beds that is in a State
3 for which such certificate of need is required and that was
4 issued on or after April 1, 2005, and before December
5 29,2007, or if the hospital or facility".
7 this section shall be effective and apply as if included in
8 the enactment of the Medicare, Medicaid, and SCRIP Ex-
9 tension Act of 2007 (Public Law 110-173).
10 TITLE V-STATE FISCAL RELIEF
11 SEC. 5000. PURPOSES; TABLE OF CONTENTS.
12 (a) PURPOSES.-The purposes of this title are as fol-
(1) To provide fiscal relief to States in a period
of economic downturn.
(2) To protect and maintain State Medicaid
progTams during a period of economic downturn, in-
cluding by helping to avert cuts to provider payment
rates and benefits or services, and to prevent con-
strictions of income eligibility requirements for such
programs, but not to promote increases in such re-
quirements.
(b) TABLE OF CONTENTS.-The table of contents for
24 this title is as follows:
TITLE V-STATE FISCAL RELIEF
See. 5000. Pmvosesj table of eontents.

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H.L.C./S.L.C.
See. 5001. Temporary inerease of lVIedieaid F1VIAP.
See. 5002. Temporary inel'ease in DSH allotments during reeession.
See. 5003. Extension of moratoria on eertain lVIedieaid final regulations.
See. 5004. Extension of transitionalmedieal assistanee (TlVIA).
See. 5005. Extension of the quali(ying' individual (QI) progTam.
See. 5006. Proteetions for Indians under lVIedieaid and CHIP.
See. 5007. Funding for oversig'ht and implementation.
See. 5008. GAO study and report regarding' State needs during periods of na-
tional eeonomie downturn.
1 SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP.
2 (a) PERMITTING MAINTENANCE OF FMAP.-Subject
3 to subsections (e), (f), and (g), if the FMAP determined
4 without regard to this section for a State for-
5 (1) fiscal year 2009 is less than the FMAP as
6 so determined for fiscal year 2008, the FMAP for
7 the State for fiscal year 2008 shall be substituted
8 for the State's FMAP for fiscal year 2009, before
9 the application of this section;
11 so determined for fiscal year 2008 or fiscal year
12 2009 (after the application of paragraph (1)), the
13 greater of such FMAP for the State for fiscal year
14 2008 or fiscal year 2009 shall be substituted for the
15 State's FMAP for fiscal year 2010, before the appli-
16 cation of this section; and
18 so determined for fiscal year 2008, fiscal year 2009
19 (after the application of paragraph (1)), or fiscal
20 year 2010 (after the application of paragraph (2)),
21 the greatest of such F:MAP for the State for fiscal

510
1 year 2008, fiscal year 2009, or fiscal year 2010 shall
2 be substituted for the State's FMAP for fiscal year
3 2011, before the application of this section, but only
4 for the first calendar quarter in fiscal year 2011.
5 (b) GENERAL 6.2 PERCENTAGE POINT INCREASE.-
6 (1) IN GENERAL.-Subject to subsections (e),
7 (f), and (g) and paragraph (2), for each State for
8 calendar quarters during the recession adjustment
9 period (as defined in subsection (h)(3)), the FMAP
10 (after the application of subsection (a)) shall be in-
11 creased (without regard to any limitation otherwise
12 specified in section 1905(b) of the Social Security
13 Act (42 U.S.C. 1396d(b))) by 6.2 percentage points.
14 (2) SPECIAL ELECTION FOR TERRITORIES.-In
15 the case of a State that is not one of the 50 States
16 or the District of Columbia, paragraph (1) shall only
17 apply if the State makes a one-time election, in a
18 form and manner specified by the Secretary and for
19 the entire recession adjustment period, to apply the
20 increase in FMAP under paragraph (1) and a 15
21 percent increase under subsection (d) instead of ap-
22 plying a 30 percent increase under subsection (d).
23 (c) ADDITIONAL RELIEF BASED ON INCREASE IN
24 UNEMPLOYMENT.-

511
1 (1) IN GENERAL.-Subject to subsections (e),
2 (f), and (g), if a State is a qualifying State under
3 paragraph (2) for a calendar quarter occurring dur-
4 ing the recession adjustment period, the FMAP for
5 the State shall be further increased by the number
6 of percentage points equal to the product of-
7 (A) the State percentage applicable for the
8 State under section 1905(b) of the Social Secu-
9 rity Act (42 U.S.C. 1396d(b)) after the applica-
10 tion of subsection (a) and after the application
11 of liz of the increase under subsection (b); and
12 (B) the applicable percent determined in
13 paragraph (3) for the calendar quarter (or, if
14 greater, for a previous such calendar quarter).
15 (2) QUALIFYING CRITERIA.-
16 (A) IN GENERAL.-For purposes of para-
17 graph (1), a State qualifies for additional relief
18 under tIns subsection for a calendar quarter oc-
19 curring during the recession adjustment period
20 .if the State is 1 of the 50 States or the District
21 of Columbia and the State satisfies any of the
22 following criteria for the quarter:
23 (i) The State unemployment increase
24 percentage (as defined in paragraph (4))

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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 per-
centage 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 para-
graph (1), subject to subparagraph (B), the ap-
plicable percent is-
(i) 5.5 percent, if the State satisfies
the criteria described III paragraph
(2)(A)(i) for the calendar quarter;
(ii) 8.5 percent if the State satisfies
the criteria described III paragraph
(2)(A)(ii) for the calendar quarter; and

513
1 (iii) 11.5 percent if the State satisfies
2 the criteria described III paragraph
3 (2)(A)(iii) for the calendar quarter.
4 (B) MAINTENANCE OF HIGHER APPLICA-
5 BLE PERCENT.-
6 (i) HOLD HARMLESS PERIOD.-If the
7 percent applied to a State under subpara-
8 graph (A) for any calendar quarter in the
9 recession adjustment period beginning on
10 or after January 1, 2009, and ending be-
II fore July 1, 2010, (determined without re-
12 gard to this subparagraph) is less than the
13 percent applied for the preceding quarter
14 (as so determined), the higher applicable
15 percent shall continue in effect for each
16 subsequent calendar quarter ending before
17 July 1, 2010.
18 (ii) NOTICE OF LOWER APPLICABLE
19 PERCENT.-The Secretary shall notify a
20 State at least 60 days prior to applying
21 any lower applicable percent to the State
22 under this paragraph.
23 (4) COMPUTATION OF STATE UNEMPLOYMENT
24 INCREASE PERCENTAGE.-

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(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 montWy 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 unem-
ployment rate for the State for any 3-con-
secutive-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 montWy unemployment rate" means
the average of the montWy 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 De-
partment of Labor.
(C) SPECIAL RULE.-With respect to-

515
1 (i) the first 2 calendar quarters of the
2 recession adjustment period, the most re-
3 cent previous 3-consecutive-month period
4 described in subparagraph (A) (i) shall be
5 the 3-consecutive-month period beginning
6 with October 2008; and
7 (ii) the last 2 calendar quarters of the
8 recession adjustment period, the most re-
9 cent previous 3-consecutive-month period
10 described in such subparagraph shall be
11 the 3-consecutive-month period beginning
12 with December 2009, or, if it results in a
13 higher applicable percent under paragraph
14 (3), the 3-consecutive-month period begin-
15 ning ,vith January 2010.
16 (d) INCREASE IN CAP ON MEDICAID PAYMENTS TO
17 TERRITORIES.-Subject to subsections (f) and (g), with
18 respect to entire fiscal years occurring during the reces-
19 sion adjustment period and with respect to fiscal years
20 only a portion of which occurs during such period (and
21 in proportion to the portion of the fiscal year that occurs
22 during such period), the amounts othenvise determined for
23 Puerto Rico, the Virgin Islands, Guam, the Northern Mar-
24 iana Islands, and American Samoa under subsections (f)
25 and (g) of section 1108 of the Social Security Act (42

516
1 6 U.S.C. 1308) shall each be increased by 30 percent (or,
2 in the case of an election under subsection (b)(2), 15 per-
3 cent). In the case of such an election by a territory, sub-
4 section (a)(l) of such section shall be applied without re-
S gard to any increase in payment made to the territory
6 under part E of title IV of such Act that is attributable
7 to the increase in FMAP effected under subsection (b) for
8 the territory.
9 (e) SCOPE OF APPLICATION.-The increases in the
10 FMAP for a State under this section shall apply for pur-
11 poses of title XIX of the Social Security Act and shall
12 not apply with respect to-
13 (1) disproportionate share hospital payments
14 described in section 1923 of such Act (42 U.S.C.
15 13961'-4);
16 (2) payments under title IV of such Act (42
17 U.S.C. 601 et seq.) (except that the increases under
18 subsections (a) and (b) shall apply to payments
19 under part E of title IV of such Act (42 U.S.C. 670
20 et seq.) and, for purposes of the application of this
21 section to the District of Columbia, payments under
22 such part shall be deemed to be made on the basis
23 of the FMAP applied with respect to such District
24 for purposes of title XIX and as increased under
25 subsection (b));

517
1 (3) payments under title XXI of such Act (42
2 U.S.C. 1397aa et seq.);
3 (4) any payments under title XIX of such Act
4 that are based on the enhanced FMAP described in
5 section 2105(b) of such Act (42 U.S.C. 1397ee(b));
6 or
7 (5) any payments under title XIX of such Act
8 that are attributable to expenditures for medical as-
9 sistance provided to individuals made eligible under
lOa State plan under title XIX of the Social Security
11 Act (including under any waiver under such title or
12 under section 1115 of such Act (42 U.S.C. 1315))
13 because of income standards (expressed as a per-
14 centage of the poverty line) for eligibility for medical
15 assistance that are higher than the income stand-
16 ards (as so expressed) for such eligibility as in effect
17 on July 1, 2008, (including as such standards were
18 proposed to be in effect under a State law enacted
19 but not effective as of such date or a State plan
20 amendment or waiver request under title XIX of
21 such Act that was pending approval on such date).
22 (f) STATE INELIGIBILITY; LIMITATION; SPECIAL
23 RULES.-
24 (1) MAINTENANCE OF ELIGIBILITY REQUIRE-
25 MENTS.-

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(A) IN GENERAL.-Subject to subpara-
gTaphs (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 ELIGI-
BILITY PERMITTED.-Subject to subparagraph
(C), a State that has restricted eligibility stand-
ards, methodologies, or procedures under its
State plan under title XIX of the Social Secu-
rity 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 ineli-
gible under subparagraph (A) beginning with
the first calendar quarter in which the State
has reinstated eligibility standards, methodolo-
gies, or procedures that are no more restrictive

519
1 than the eligibility standards, methodologies, or
2 procedures, respectively, under such plan (or
3 waiver) as in effect on July 1, 2008.
4 (C) SPECIAL RULES.-A State shall not be
5 ineligible under subparagraph (A)-
6 (i) for the calendar quarters before
7 July 1, 2009, on the basis of a restriction
8 that was applied after· July 1, 2008, and
9 before the date of the enactment of this
10 Act, if the State prior to July 1, 2009, has
11 reinstated eligibility standards, methodolo-
12 gies, or procedures that are no more re-
13 strictive than the eligibility standards,
14 methodologies, or procedures, respectively,
15 under such plan (or waiver) as in effect on
16 July 1, 2008; or
17 (ii) on the basis of a restriction that
18 was directed to be made under State law
19 as in effect on July 1, 2008, and would
20 have been in effect as of such date, but for
21 a delay in the effective date of a waiver
22 under section 1115 of such Act with re-
23 spect to such restriction.
24 (2) COMPLIANCE WITH PROMPT PAY REQUIRE-
25 MENTS.-

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H.L.C./S.L.C.
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(A) APPLICATION TO PRACTI'l'IONERS.-
(i) IN GENERAL.-Subject to the suc-
ceeding provisions of this subparagTaph, no
State shall be eligible for an increased
FMAP rate as provided under this section
for any claim received by a State from a
practitioner subject to the terms of section
1902(a)(37)(A) of the Social Security Act
(42 U.S.C. 1396a(a)(37)(A)) for such days
during any period in which that State has
failed to pay claims in accordance with
such section as applied under title XIX of
such Act.
(ii) REPORTING REQUIREMENT.-
Each State shall report to the Secretary,
on a quarterly basis, its compliance with
the requirements of clause (i) as such re-
quirements pertain to claims made for cov-
ered services during each month of the
preceding quarter.
(iii) WAIVER AUTHORITY.-The Sec-
retary may waive the application of clause
(i) to a State, or the reporting requirement
imposed under clause (ii), during any pe-
riod in which there are exigent cir-

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H.L.C./S.L.C.
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cumstances, 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 facil-
ity 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 subpara-
graph.
(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.

522
1 (3) STATE'S APPLICATION TOWARD RAINY DAY
2 FUND.-A State is not eligible for an increase in its
3 FMAP under subsection (b) or (c), or an increase in
4 a cap amount under subsection (d), if any amounts
5 attributable (directly or indirectly) to such increase
6 are deposited or credited into any reserve or rainy
7 day fund of the State.
8 (4) No WAIVER AUTHORITY.-Except as pro-
9 vided in paragraph (2)(A)(iii), the Secretary may
10 not waive the application of this subsection or sub-
11 section (g) under section 1115 of the Social Security
12 Act or otherwise.
13 (5) LIMITATION OF FMAP TO 100 PERCENT.-In
14 no case shall an increase in FMAP under this sec-
15 tion result in an FMAP that exceeds 100 percent.
16 (6) TREATMENT OF CERTAIN EXPENDI-
17 TURES.-With respect to expenditures described in
18 section 2105(a)(l)(B) of the Social Security Act (42
19 U.S.C. 1397ee(a)(1)(B)), as in effect before April 1,
20 2009, that are made during the period beginning on
21 October 1, 2008, and ending on March 31, 2009,
22 any additional Federal funds that are paid to a
23 State as a result of this section that are attributable
24 to such expenditures shall not be counted against

523
1 any allotment under section 2104 of such Act (42
2 U.S.C. 1397dd).
3 (g) REQUIREMENTS.-
4 (1) STATE REPORTS.-Each State that is paid
5 additional Federal funds as a result of tIns section
6 shall, not later than September 30, 2011, submit a
7 report to the Secretary, in such form and such man-
8 ner as the Secretary shall determine, regarding how
9 the additional Federal funds were expended.
10 (2) ADDITIONAL REQUIREMENT FOR CERTAIN
11 STATES.-In the case of a State that requires polit-
12 ical subdivisions within the State to contribute to-
13 ward the non-Federal share of expenditures under
14 the State Medicaid plan required under section
15 1902(a)(2) of the Social Security Act (42 U.S.C.
16 1396a(a)(2)), the State is not eligible for an lll-
17 crease in its FMAP under subsection (b) or (c), or
18 an increase in a cap amount under subsection (d),
19 if it requires that such political subdivisions pay for
20 quarters during the recession adjustment period a
21 greater percentage of the non-Federal share of such
22 expenditures, or a greater percentage of the non-
23 Federal share of payments under section 1923, than
24 the respective percentage that would have been re-

524
1 quired by the State under such plan on September
2 30, 2008, prior to application of this section.
3 (h) DEFINITIONS.-In this section, except as other-
4 wise provided:
5 (1) FMAP.-The term "FMAP" means the
6 Federal medical assistance percentage, as defined in
7 section 1905(b) of the Social Security Act (42
8 U.S.C. 1396d(b)), as determined without regard to
9 tIns section except as otherwise specified.
10 (2) POVERTY LINE.-The term "poverty line"
11 has the meaning given such term in section 673(2)
12 of the Community Services Block Grant Act (42
13 U.S.C. 9902(2)), including any revision required by
14 such section.
15 (3) RECESSION ADJUSTMENT PERIOD.-The
16 term "recession adjustment period" means the pe-
17 riod beginning on October 1, 2008, and ending on
18 December 31, 2010.
19 (4) SECRETARY.-The term "Secretary" means
20 the Secretary of Health and Human Services.
21 (5) STATE.-The term "State" has the mean-
22 ing given such term in section 1101(a)(1) of the So-
23 cial Security Act (42 U.S.C. 1301(a)(1)) for pur-
24 poses of title XIX of the Social Security Act (42
25 U.S.C. 1396 et seq.).

525
1 (i) SUNSET.-Tlus section shall not apply to items
2 and services furnished after the end of the recession ad-
3 justment period.
4 (j) LIMITATION ON FMAP CHANGE.-The increase
5 III FMAP effected under section 614 of the Children's
6 Health Insurance Program Reauthorization Act of 2009
7 shall not apply in the computation of the enhanced FMAP
8 under title XXI or XIX of the Social Security Act for any
9 period (notwithstanding subsection (i)).
10 SEC. 5002. TEMPORARY INCREASE IN DSH ALLOTMENTS
11 DURING RECESSION.
12 Section 1923(f)(3) of the Social Security Act (42
13 U.S.C. 1396r-4(f)(3)) is amended-
14 (1) in subparagraph (A), by striking "para-
15 graph (6)" and inserting "paragraph (6) and sub-
16 paragraph (E)"; and
18 paragraph:
19 " (E) TEMPORARY INCREASE IN ALLOT-
20 MENTS DURING RECESSION.-
21 "(i) IN GENERAL.-Subject to clause
22 (ii), the DSH allotment for any State-
23 "(I) for fiscal year 2009 is equal
24 to 102.5 percent of the DSH allot-
25 ment that would be determined under

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this paragraph for the State for fiscal
year 2009 without application of this
subparagraph, notwithstanding sub-
paragraphs (B) and (0);
"(II) for fiscal year 2010 is equal
to 102.5 percent of the DSH allot-
ment 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 de-
termined without applying subclauses
(I) and (II).
"(ii) APPLICATION.-Olause (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.".

0: ERNERN09560.LC II.L.C/S.L.C.
527
1 SEC. 5003. EXTENSION OF MORATORIA ON CERTAIN MED-
2 ICAm FINAL REGULATIONS.
3 (a) FINAL REGULATIONS RELATING TO OPTIONAL
4 CASE l[ANAGElVIENT SERVICES AND ALLOWABLE PRO-
S VIDER TAXEs.-Section 7001(a)(3)(A) of the Supple-
6 mental Appropriations Act, 2008 (Public Law 110-252)
7 is amended by striking "April 1, 2009" and inserting
8 "July 1,2009".
9 (b) FINAL REGULATION RELATING TO SCHOOL-
10 BASED ADMINISTRATION AND SCHOOL-BASED TRANS-
11 PORTATION.-Section 206 of the Medicare, Medicaid, and
12 SCHIP Extension Act of 2007 (Public Law 110-173), as
13 amended by section 7001(a)(2) of the Supplemental Ap-
14 propriations Act, 2008 (Public Law 110-252), is amended
15 by inserting "(July 1, 2009, in the case of the final regula-
16 tion relating to school-based administration and school-
17 based transportation)" after "April 1, 2009,".
18 (c) FINAL REGULATION RELATING TO OUTPATIENT
19 HOSPITAL FACILITY SERVICES.-Notwithstanding any
20 other provision of law, with respect to expenditures for
21 services furnished during the period beginning on Decem-
22 bel' 8, 2008, and ending on June 30, 2009, the Secretary
23 of Health and Human Services shall not take any action
24 (through promulgation of regulation, issuance of regu-
25 latory guidance, use of Federal payment audit procedures,
26 or other administrative action, policy, or practice, includ-

528
1 ing a Medical Assistance Manual transmittal or letter to
2 State Medicaid directors) to implement the final regula-
3 tion relating to clarification of the definition of outpatient
4 hospital facility services under the Medicaid program pub-
S lished on November 7, 2008 (73 Federal Register 66187).
6 (d) SENSE OF CONGRESS.-It is the sense of Con-
7 gress that the Secretary of Health and Human Services
8 should not promulgate as final regulations any of the fol-
9 lowing proposed Medicaid regulations:
10 (1) COST LIMITS FOR CERTAIN PROVIDERS.-
11 The proposed regulation published on J mmary 18,
12 2007, (72 Federal Register 2236) (and the pur-
13 ported final regulation published on May 29, 2007
14 (72 Federal Register 29748) and determined by the
15 United States District Court for the District of Co-
16 lumbia to have been "improperly promulgated", Ala-
17 meda County Medical Center, et al., v. Leavitt, et al.,
18 Civil Action No. 08-0422, Mem. at 4 (D.D.C. May
19 23, 2008)).
20 (2) PAYMENTS FOR GRADUATE MEDICAL EDU-
21 CATION.-The proposed regulation published on May
22 23, 2007 (72 Federal Register 28930).
23 (3) REHABILITATIVE SERVICES.-The proposed
24 regulation published on August 13, 2007 (72 Fed-
25 eral Register 45201).

529
1 SEC. 5004. EXTENSION OF TRANSITIONAL MEDICAL ASSIST-
2 ANCE (TMA).
3 (a) IS-MoNTH EXTENSION.-
4 (1) IN GENERAL.-Sections 1902(e)(I)(B) and
5 1925(f) of the Social Security Act (42 U.S.C.
6 1396a(e)(I)(B), 1396r-6(f)) are each amended by
7 striking "September 30, 2003" and inserting "De-
8 cember 31, 2010".
9 (2) EFFECTIVE DATE.-The amendments made
10 by tIns subsection shall take effect on July 1, 2009.
11 (b) STATE OPTION OF INITIAL 12-MoNTH ELIGI-
12 BILITY.-Section 1925 of the Social Security Act (42
13 U.S.C. 1396r-6) is amended-
14 (1) in subsection (a)(I), by inserting "but sub-
15 ject to paragraph (5)" after "Notwithstanding any
16 other provision of this title";
17 (2) by adding at the end of subsection (a) the
18 following:
19 "(5) OPTION OF 12-MONTH INITIAL ELIGIBILITY
20 PERIOD.-A State may elect to treat any reference
21 in this subsection to a 6-month period (or 6 months)
22 as a reference to a 12-month period (or 12 months).
23 In the case of such an election, subsection (b) shall
24 not apply."; and

530
1 (3) in subsection (b)(l), by inserting "but sub-
2 ject to subsection (a)(5)" after "Notwithstanding
3 any other provision of this title".
4 (c) REMOVAL OF REQUIREMENT FOR PREVIOUS RE-
5 CEIPT OF MEDICAL AsSISTANCE.-Section 1925(a)(1) of
6 such Act (42 U.S.C. 1396r-6(a)(1)), as amended by sub-
7 section (b) (1), is further amended-
8 (1) by inserting "subparagraph (B) and" before
9 "paragraph (5)";
10 (2) by redesignating the matter after "RE-
11 QUIREMENT.-" as a subparagraph (A) with the
12 heading "IN GENERAL.-" and with the same inden-
13 tation as subparagraph (B) (as added by paragraph
14 (3)); and
16 "(B) STATE OPTION TO WAIVE REQUIRE-
17 MENT FOR 3 MONTHS BEFORE RECEIPT OF
18 MEDICAL ASSISTANCE.-A State may, at its op-
19 tion, elect also to apply subparagraph (A) in
20 the case of a family that was receiving such aid
21 for fewer than three months or that had applied
22 for and was eligible for such aid for fewer than
23 3 months during the 6 immediately preceding
24 months described in such subparagraph.".

531
1 (d) CMS REPORT ON ENROLLMENT AND PARTICIPA-
2 TION RATES UNDER TMA.-Section 1925 of such Act (42
. 3 U.S.C. 1396r-6), as amended by this section, is further
4 amended by adding at the end the following new sub-
S section:
6 "(g) COLLECTION AND REPORTING OF PARTICIPA-
7 TION INFORMATION.-
8 "(1) COLLECTION OF INFORMATION FROM
9 STATES.-Each State shall collect and submit to the
10 Secretary (and make publicly available), in a format
11 specified by the Secretary, information on average
12 monthly enrollment and average monthly participa-
13 tion rates for adults and children under this section
14 and of the number and percentage of children who
15 become ineligible for medical assistance under this
16 section whose medical assistance is continued under
17 another eligibility category or who are enrolled under
18 the State's child health plan under title XXI. Such
19 information shall be submitted at the same time and
20 frequency in which other enrollment information
21 under this title is submitted to the Secretary.
22 "(2) ANNUAL REPORTS TO CONGRESS.-Using
23 the information submitted under paragraph (1), the
24 Secretary shall submit to Congress annual reports

(C) by adding at the end the following new
subparagraphs:
"(M) for the period that begins on Janu-
ary 1, 2010, and ends on September 30, 2010,
532
1 concernmg enrollment and participation rates de-
2 scribed in such paragraph.".
4 subsections (b) through (d) shall take effect on July 1,
5 2009.
6 SEC. 5005. EXTENSION OF THE QUALIFYING INDIVIDUAL
7 (QI) PROGRAM.
8 (a) EXTENSION.-Section 1902(a)(10)(E)(iv) of the
9 Social Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is
10 amended by striking "December 2009" and inserting "De-
II cember 2010".
12 (b) EXTENDING TOTAL AIVIOUNT AVAILABLE FOR
13 ALLocATIoN.-Section 1933(g) of such Act (42 U.S.C.
14 1396u-3(g)) is amended-
16 (A) by striking "and" at the end of sub-
17 paragraph (K);
18 (B) in subparagraph (L), by striking the
19 period at the end and inserting a semicolon;
20 and
21
22
23
24

533
1 the total allocation amount IS $412,500,000;
2 and
3 "(N) for the period that begins on October
4 1, 2010, and ends on December 31, 2010, the
5 total allocation amount is $150,000,000."; and
6 (2) in paragraph (3), in the matter preceding
7 subparagraph (A), by striking "or (L)" and insert-
8 ing "(L), or (N)".
9 SEC. 5006. PROTECTIONS FOR INDIANS UNDER MEDICAID
10 AND CIDP.
11 (a) PREMIUMS AND COST SHARING PROTECTION
12 UNDER MEDICAID.-
14 Security Act (42 U.S.C. 13960) is amended-
15 (A) in subsection (a), in the matter pre-
16 ceding paragraph (1), by striking "and (i)" and
17 inserting ii, (i), and (j)"; and
19 subsection:
20 "(j) No PREMIUMS OR COST SHARING FOR INDIANS
21 FURNISHED ITEMS OR SERVICES DIRECTLY BY INDIAN
22 HEALTH PROGRAMS OR THROUGH REFERRAL UNDER
23 CONTRACT HEALTH SERVICES.-

534
1 "(1) No COST SHARING FOR ITEMS OR SERV-
2 ICES FURNISHED TO INDIANS 'l'HROUGH INDIAN
3 HEALTH PROGRAlvrs.-
4 "(A) IN GENERAL.-No enrollment fee,
5 premlUm, or similar charge, and no deduction,
6 copayment, cost sharing, or similar charge shall
7 be imposed against an Indian who is furnished
8 an item or service directly by the Indian Health
9 Service, an Indian Tribe, Tribal Organization,
10 or Urban Indian Organization or through refer-
11 ral under contract health services for which
12 payment may be made under this title.
13 "(B) No REDUCTION IN AMOUNT OF PAY-
14 MENT TO INDIAN HEALTH PROVIDERS.-Pay-
15 ment due under this title to the Indian Health
16 Service, an Indian Tribe, Tribal Organization,
17 or Urban Indian Organization, or a health care
18 provider through referral under contract health
19 services for the furnishing of an item or service
20 to an Indian who is eligible for assistance under
21 such title, may not be reduced by the amount
22 of any enrollment fee, premium, or similar
23 charge, or any deduction, copayment, cost shar-
24 ing, or similar charge that would be due from

535
1 the Indian but for the operation of subpara-
2 gTaph (A).
3 "(2) RULE OF CONSTRUCTION.-Nothing in
4 this subsection shall be construed as restricting the
5 application of any other limitations on the imposi-
6 tion of premiums or cost sharing that may apply to
7 an individual receiving medical assistance under this
8 title who is an Indian.".
9 (2) CONFORMING AMENDMENT.-Section
10 1916A(b)(3) of such Act (42 U.S.C. 13960-1(b)(3))
11 is amended-
12 (A) in subparagraph (A), by adding at the
13 end the following new clause:
14 "(vii) An Indian who is furnished an
15 item or service directly by the Indian
16 Health Service, an Indian Tribe, Tribal
17 Organization or Urban Indian Organiza-
18 tion or through referral under contract
19 health services."; and
20 (B) in subparagraph (B), by adding at the
21 end the following new clause:
22 " (x) Items and services furnished to
23 an Indian directly by the Indian Health
24 Service, an Indian Tribe, Tribal Organiza-
25 tion or Urban Indian Organization or

536
1 through referral under contract health
2 services.".
3 (b) TREATMENT OF CERTAIN PROPERTY FROM RE-
4 SOURCES FOR MEDICAID AND CHIP ELIGIBILITY.-
5 (1) MEDICAID.-Section 1902 of the Social Se-
6 curity Act (42 U.S.C. 1396a), as amended by sec-
7 tions 203(c) and 211(a)(1)(A)(ii) of the Children's
8 Health Insurance Program Reauthorization Act of
9 2009 (Public Law 111-3), is amended by adding at
11 "(ff) Notwithstanding any other requirement of this
12 title or any other provision of Federal or State law, a State
13 shall disregard the following property from resources for
14 purposes of determining the eligibility of an individual who
15 is an Indian for medical assistance under this title:
16 "(1) Property, including real property and im-
17 provements, that is held in trust, subject to Federal
18 restrictions, or otherwise under the supervision of
19 the Secretary of the Interior, located on a reserva-
20 tion, including any federally recognized Indian
21 Tribe's reservation, pueblo, or colony, including
22 former reservations in Oklahoma, Alaska Native re-
23 gions established by the Alaska Native Claims Set-
24 tlement Act, and Indian allotments on or near a res-

537
1 ervation as designated and approved by the Bureau
2 of Indian Affairs of the Department of the Interior.
3 "(2) For any federally recognized Tribe not de-
4 scribed in paragraph (1), property located within the
5 most recent boundaries of a prior Federal reserva-
6 tion.
7 "(3) Ownership interests in rents, leases, royal-
8 ties, or usage rights related to natural resources (in-
9 cluding extraction of natural resources or harvesting
10 of timber, other plants and plant products, animals,
11 fish, and shellfish) resulting from the exercise of fed-
12 erally protected rights.
13 "(4) Ownership interests in or usage rights to
14 items not covered by paragraphs (1) through (3)
15 that have unique religious, spiritual, traditional, or
16 cultural sigl1ificance or rights that support subsist-
17 ence or a traditional lifestyle according to applicable
18 tribal law or custom.".
19 (2) APPLICATION TO CHIP.-Section 2107(e)(1)
20 of such Act (42 U.S.C. 1397gg(e)(1)), as amended
21 by sections 203(a)(2), 203(d)(2), 214(b), 501(d)(2),
22 and 503(a)(1) of the Children's Health Insurance
23 Program Reauthorization Act of 2009 (Public Law
24 111-3), is amended-

538
1 (A) by redesignating subparagTaphs (C)
2 through (I), as subparagraphs (D) through (J),
3 respectively; and
4 (B) by inserting after subparagraph (B),
5 the following new subparagTaph:
6 "(C) Section 1902(ff) (relating to dis-
7 regard of certain property for purposes of mak-
8 ing eligibility determinations).".
9 (c) CONTINUATION OF CURRENT LAW PROTECTIONS
10 OF CERTAIN INDIA.IT PROPERTY FROM MEDICAID ESTATE
11 RECOVERY.-Section 1917(b)(3) of the Social Security
12 Act (42 U.S.C. 1396p(b)(3)) is amended-
13 (1) by inserting "(A)" after "(3)"; and
15 paragraph:
16 "(B) The standards specified by the Sec-
17 retary under subparagraph (A) shall require
18 that the procedures established by the State
19 agency under subparagraph (A) exempt income,
20 resources, and property that are exempt from
21 the application of this subsection as of April 1,
22 2003, under manual instructions issued to carry
23 out this subsection (as in effect on such date)
24 because of the Federal responsibility for Indian
25 Tribes and Alaska Native Villages. Nothing in

539
1 this subparagraph shall be construed as pre-
2 venting the Secretary from providing additional
3 estate recovery exemptions under this title for
4 Indians." .
5 (d) RULES APPLICABLE UNDER MEDICAID AND
6 CHIP TO MANAGED CARE ENTITIES WITH RESPECT TO
7 INDIAN ENROLLEES AND INDIAN HEALTH CARE PRO-
8 VIDERS AND INDIAN MANAGED CARE ENTITIES.-
10 Security Act (42 U.S.C. 1396u-2) is amended by
11 adding at the end the following new subsection:
12 "(h) SPECIAL RULES WITH RESPECT TO INDIAN EN-
13 ROLLEES, INDIAN HEALTH CARE PROVIDERS, AND IN-
14 DIAN IVIANAGED CARE ENTITIES.-
15 "(1) ENROLLEE OPTION TO SELECT AN INDIAN
16 HEALTH CARE PROVIDER AS PRIMARY CARE PRO-
17 VIDER.-In the case of a non-Indian Medicaid man-
18 aged care entity that-
19 "(A) has an Indian enrolled with the enti-
20 ty; and
21 "(B) has an Indian health care provider
22 that is participating as a primary care provider
23 within the network of the entity,
24 insofar as the Indian is otherwise eligible to receive
25 services from such Indian health care provider and

540
1 the Indian health care provider has the capacity to
2 provide primary care services to such Indian, the
3 contract with the entity under section 1903(m) or
4 under section 1905(t)(3) shall require, as a condi-
5 tion of receiving payment under such contract, that
6 the Indian shall be allowed to choose such Indian
7 health care provider as the Indian's primary care
8 provider under the entity.
9 "(2) ASSURANCE OF PAYMENT TO INDIAN
10 HEALTH CARE PROVIDERS FOR PROVISION OF COV-
11 ERED SERVICES.-Each contract with a managed
12 care entity under section 1903(m) or under section
13 1905(t)(3) shall require any such entity, as a condi-
14 tion of receiving payment under such contract, to
15 satisfy the following requirements:
16 "(A) DEMONSTRATION OF ACCESS TO IN-
17 DIAN HEALTH CARE PROVIDERS AND APPLICA-
18 TION OF ALTERNATIVE PAYMENT ARRANGE-
19 MENTS.-Subject to subparagraph (0), t(}-
20 "(i) demonstrate that the number of
21 Indian health care providers that are par-
22 ticipating providers with respect to such
23 entity are sufficient to ensure timely access
24 to covered Medicaid managed care services

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541
for those Indian enrollees who are eligible
to receive services from such providers; and
"(ii) agTee to pay Indian health care
providers, whether such providers are par-
ticipating or nonparticipating providers
with respect to the entity, for covered Med-
icaid 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 ap-
plying the requirements of clause (i) in States
where there are no or few Indian health pro-
viders.
"(B) PROMPT PAYMENT.-To agree to
make prompt payment (consistent with rule for
prompt pay:ment of providers under section
1932(f)) to Indian health care providers that

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542
are participating providers with respect to such
entity or, in the case of an entity to which sub-
paragraph (A)(ii) or (0) applies, that the entity
is required to pay in accordance with that sub-
paragraph.
"(0) APPLICATION OF SPECIAL PAYlVIENT
REQUIREMENTS FOR FEDERALLY-QUALIFIED
HEALTH CENTERS AND FOR SERVICES PRO-
VIDED BY CERTAIN INDIAN HEALTH CARE PRO-
VIDERS.-
"(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 par-
ticipating 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

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H.L.C./S.L.C.
543
,vith respect to the entity but is not
an Indian health care provider for
such services.
"(II) CONTINUED APPLICATION
OF STATE REQUIREMENT TO MAKE
SUPPLEMENTAL PAY1VIENT.-Nothing
in subclause (1) 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 en-
rollee of a managed care entity (re-
gardless 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-quali-
fied health center for services provided by
the provider to an Indian enrollee with the

544
1 managed care entity is less than the rate
2 that applies to the provision of such serv-
3 ices by the provider under the State plan,
4 the plan shall provide for payment to the
5 Indian health care provider, whether the
6 provider is a participating or nonpartici-
7 pating provider with respect to the entity,
8 of the difference between such applicable
9 rate and the amount paid by the managed
10 care entity to the provider for such serv-
11 Ices.
12 "(D) CONSTRUCTION.-Notlung in this
13 paragraph shall be construed as waiving the ap-
14 plication of section 1902(a)(30)(A) (relating to
15 application of standards to assure that pay-
16 ments are consistent with efficiency, economy,
17 and quality of care).
18 "(3) SPECIAL RULE FOR ENROLLMENT FOR IN-
19 DIAN :lV[ANAGED CARE ENTITIEs.-Regarding the ap-
20 plication of a Medicaid managed care program to In-
21 dian Medicaid managed care entities, an Indian
22 Medicaid managed care entity may restrict enroll-
23 ment under such program to Indians in the same
24 manner as Indian Health Programs may restrict the
25 delivery of services to Indians.

545
2 section:
3 "(A) INDIAN HEALTH CARE PROVIDER.-
4 The term 'Indian health care provider' means
5 an Indian Health Program or an Urban Indian
6 Organization.
7 "(B) INDIAN MEDICAID MANAGED CARE
8 ENTITY.-The term 'Indian Medicaid managed
9 care entity' means a managed care entity that
10 is controlled (within the meaning of the last
11 sentence of section 1903(m)(1)(C)) by the In-
12 dian Health Service, a Tribe, Tribal Organiza-
13 tion, or Urban Indian Organization, or a con-
14 sortium, which may be composed of 1 or more
15 Tribes, Tribal Organizations, or Urban Indian
16 Organizations, and which also may include the
17 Service.
18 "(C) NON-INDIAN MEDICAID MANAGED
19 CARE ENTITY.-The term 'non-Indian Medicaid
20 managed care entity' means a managed care en-
21 tity that is not an Indian Medicaid managed
22 care entity.
23 "(D) COVERED MEDICAID MANAGED CARE
24 SERVICEs.-The term 'covered Medicaid man-
25 aged care services' means, with respect to an

546
1 individual enrolled with a managed care entity,
2 items and services for which benefits are avail-
3 able with respect to the individual under the
4 contract between the entity and the State in-
5 volved.
6 "(E) MEDICAID MANAGED CARE PRO-
7 GRAM.-The term 'Medicaid managed care pro-
8 gram' means a program under sections
9 1903(m), 1905(t), and 1932 and includes a
10 managed care program operating under a waiv-
11 er under section 1915(b) or 1115 or other-
12 wise.".
13 (2) APPLICATION TO CHIP.-Section 2107(e)(1)
14 of such Act (42 U.S.C. 1397gg(1)), as amended by
15 subsection (b)(2), is amended-
16 (A) by redesignating subparagraph (J) as
17 subparagraph (K); and
18 (B) by inserting after subparagraph (I) the
20 "(J) Subsections (a)(2)(C) and (h) of sec-
21 tion 1932.".
22 (e) CONSULTATION ON MEDICAID, CHIP, AND OTHER
23 HEALTH CARE PROGRAMS FUNDED UNDER THE SOCIAL
24 SECURITY ACT INVOLVING INDIAN HEALTH PROGRAMS
25 AND URBAN INDIAN ORGANIZATIONS.-

547
1 (1) CONSULTATION WrrH TRIBAL TECHNICAL
2 ADVISORY GROUP (TTAG).-The SecretaIy of Health
3 and Human Services shall maintain within the Cen-
4 tel'S for Medicaid & Medicare Services (CMS) a
5 Tribal Technical AdvisOIY Group (TTAG), which
6 was first established in accordance with require-
7 ments of the charter dated September 30, 2003, and
8 the Secretary of Health and Human Services shall
9 include in such Group a representative of a national
10 urban Indian health organization and a representa-
11 tive of the Indian Health Service. The inclusion of
12 a representative of a national urban Indian health
13 organization in such Group shall not affect the non-
14 application of the Federal Advisory Committee Act
15 (5 U.S.C. App.) to such Group.
16 (2) SOLICITATION OF ADVICE UNDER MEDICAID
17 AND CHIP.-
18 (A) MEDICAID STATE PLAN AMEND-
19 MENT.-Section 1902(a) of the Social Security
20 Act (42 U.S.C. 1396a(a)), as amended by sec-
21 tion 501(d)(1) of the Children's Health Insur-
22 ance Program Reauthorization Act of 2009
23 (Public Law 111-3), (42 U.S.C. 1396a(a)) is
24 amended-

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H.L.C./S.L.C.
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(i) in paragTaph (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 Progl'aITIs or Urban Indian 01'-
ganizations furnishes health care services, provide
for a process under which the State seeks advice on
a regular, ongoing basis from desigllees of such In-
dian Health Programs and Urban Indian Organiza-
tions 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 Organi-
zations and that-
"(A) shall include solicitation of advice
prior to submission of any plan amendments,
waiver requests, and proposals for demonstra-
tion projects likely to have a direct effect on In-
dians, Indian Health Progl'ams, or Urban In-
dian Organizations; and
"(B) may include appointment of an advi-
sory committee and of a desigllee of such In-

549
1 dian Health Programs and Urban Indian Orga-
2 nizations to the medical care advisory com-
3 mittee advising the State on its State plan
4 under this title.".
5 (B) APPLICATION TO CHIP.-Section
6 2107(e)(1) of such Act (42 U.S.C. 1397gg(1)),
7 as amended by subsections (b)(2) and (d) (2),
8 is amended-
9 (i) by redesignating subparagraphs
10 (B), (C), (D), (E), (F), (G), (H), (I), (J),
11 and (K) as subparagraphs (D), (F), (B),
12 (E), (G), (I), (H), (J), (K), and (L), re-
13 spectively;
14 (ii) by moving such subparagraphs so
15 as to appear in alphabetical order; and
16 (iii) by inserting after subparagraph
17 (B) (as so redesiganted and moved) the
19 "(C) Section 1902(a)(73) (relating to re-
20 quiring certain States to seek advice from des-
21 ignees of Indian Health Programs and Urban
22 Indian Organizations).".
23 (3) RULE OF CONSTRUCTION.-Nothing in the
24 amendments made by this subsection shall be con-
25 strued as superseding existing advisory committees,

550
1 working gTOUpS, guidance, or other advisory proce-
2 dures established by the Secretary of Health and
3 Human Services or by any State with respect to the
4 provision of health care to Indians.
5 (f) EFFECTIVE DATE.-The amendments made by
6 this section shall take effect on July 1, 2009.
7 SEC. 5007. FUNDING FOR OVERSIGHT AND IMPLEMENTA-
8 TION.
9 (a) OVERSIGHT.-For purposes of ensuring the prop-
10 er expenditure of Federal funds under title XIX of the
11 Social Security Act (42 U.S.C. 1396 et seq.), there is ap-
12 propriated to the Office of the Inspector General of the
13 Department of Health and Human Services, out of any
14 money in the Treasury not otherwise appropriated and
15 without further appropriation, $31,250,000 for fiscal year
16 2009, which shall remain available for expenditure until
17 September 30, 2011, and shall be in addition to any other
18 amounts appropriated or made available to such Office for
19 such purposes.
20 (b) IMPLEMENTATION OF INCREASED FMAP.-For
21 purposes of carrying out section 5001, there is appro-
22 priated to the Secretary of Health and Human Services,
23 out of any money in the Treasury not otherwise appro-
24 priated and 'without further appropriation, $5,000,000 for
25 fiscal year 2009, which shall remain available for expendi-

551
1 ture until September 30, 2011, and shall be in addition
2 to any other amounts appropriated or made available to
3 such Secretary for such purposes.
4 SEC. 5008. GAO STUDY AND REPORT REGARDING STATE
5 NEEDS DURING PERIODS OF NATIONAL ECO-
6 NOMIC DOWNTURN.
7 (a) IN GENERAL.-The Comptroller General of the
8 United States shall study the period of national economic
9 downturn in effect on the date of enactment of this Act,
10 as well as previous periods of national economic downturn
11 since 1974, for the purpose of developing recommenda-
12 tions for addressing the needs of States during such peri-
13 ods. As part of such analysis, the Comptroller General
14 shall study the past and projected effects of temporary in-
15 creases in the Federal medical assistance percentage
16 under the Medicaid program with respect to such periods.
17 (b) REPORT.-Not later than April 1, 2011, the
18 Comptroller General of the United States shall submit a
19 report to the appropriate committees of Congress on the
20 results of the study conducted under paragraph (1). Such
21 report shall include the following:
22 (1) Such recommendations as the Comptroller
23 General determines appropriate for modifying the
24 national economic downturn assistance formula for
25 temporary adjustment of the Federal medical assist-

552
1 ance percentage under Medicaid (also referred to as
2 a "countercyclical FMAP") described in GAO report
3 number GAO-07-97 to improve the effectiveness of
4 the application of such percentage in addressing the
5 needs of States during periods of national economic
6 downturn, including recommendations for-
7 (A) improvements to the factors that would
8 begin and end the application of such percent-
9 age;
10 (B) how the determination of'the amount
11 of such percentage could be adjusted to address
12 State and regional economic variations during
13 such periods; and
14 (C) how the determination of the amount
15 of such percentage could be adjusted to be more
16 responsive to actual Medicaid costs incurred by
17 States during such periods.
18 (2) An analysis of the impact on States during
19 such periods of-
20 (A) declines in private health benefits cov-
21 erage;
22 (B) declines in State revenues; and
23 (C) caseload maintenance and growth
24 under Medicaid, the Children's Health Insur-
25 ance Program, or any other publicly-funded

0: ERNERN09560.LC
553
S.L.C.
programs to provide health benefits coverage
for State residents.
(3) Identification of, and recommendations for
addressing, the effects on States of any other spe-
cific economic indicators that the Comptroller Gen-
eral determines appropriate.
1
2
3
4
5
6
7 TITLE VI-BROADBAND TECH-
8 NOLOGY OPPORTUNITIES
9 PROGRAM
TITLE VI-BROADBAND TECHNOLOGY OPPORTUNITIES PROGRAM:
Sec. 6000. Table of contents.
Sec. 6001. Broadband Technology Opportunities Program.
12 SEC. 6001. BROADBAND TECHNOLOGY OPPORTUNITIES
13 PROGRAM.
14 (a) The Assistant Secretary of Commerce for Com-
15 mUllications and Information (Assistant Secretary), in
16 consultation with the Federal Communications Commis-
17 sion (Commission), shall establish a national broadband
18 service development and expansion program in conjunction
19 with the technology opportunities program, which shall be
20 referred to as the Broadband Technology Opportunities
21 ProgTam. The Assistant Secretary shall ensure that the
22 program complements and enhances and does not conflict
23 with other Federal broadband initiatives and programs.

554
1 (b) The purposes of the program are to-
2 (1) provide access to broadband service to con-
3 sumers residing in unserved areas of the United
4 States;
5 (2) provide improved access to broadband serv-
6 Ice to consumers residing in underserved areas of
7 the United States;
8 (3) provide broadband education, awareness,
9 training, access, equipment, and support to-
10 (A) schools, libraries, medical and
11 healthcare providers, community colleges and
12 other institutions of higher education, and other
13 community support organizations and entities
14 to facilitate greater use of broadband service by
15 or through these organizations;
16 (B) organizations and agencies that pro-
17 vide outreach, access, equipment, and support
18 services to facilitate greater use of broadband
19 service by low-income, unemployed, aged, and
20 otherwise vulnerable populations; and
21 (C) job-creating strategic facilities located
22 within a State-designated economic zone, Eco-
23 nomic Development District designated by the
24 Department of Commerce, Renewal Community
25 or Empowerment Zone designated by the De-

555
1 partment of Housing and Urban Development,
2 or Enterprise Community desigl1ated by the De-
3 partment of Agriculture;
4 (4) improve access to, and use of, broadband
5 service by public safety agencies; and
6 (5) stimulate the demand for broadband, eco-
7 nomic growth, and job creation.
8 (c) The Assistant Secretary may consult a State, the
9 District of Columbia, or territory or possession of the
10 United States with respect to-
II (1) the identification of areas described in sub-
12 section (b)(l) or (2) located in that State; and
13 (2) the allocation of grant funds within that
14 State for projects in or affecting the State.
15 (d) The Assistant Secretary shall-
16 (1) establish and implement the grant program
17 as expeditiously as practicable;
18 (2) ensure that all awards are made before the
19 end of fiscal year 2010;
20 (3) seek such assurances as may be necessary
21 or appropriate from grantees under the program
22 that they will substantially complete projects sup-
23 ported by the program in accordance with project
24 timelines, not to exceed 2 years following an award;
25 and

556
1 (4) report on the status of the program to the
2 Committees on Appropriations of the House of Rep-
3 resentatives and the Senate, the Committee on En-
4 ergy and Commerce of the House of Representa-
5 tives, and the Committee on Commerce, Science, and
6 Transportation of the Senate, every 90 days.
7 (e) To be eligible for a grant under the program, an
8 applicant shall-
9 (l)(A) be a State or political subdivision there-
10 of, the District of Columbia, a territory or posses-
11 sion of the United States, an Indian tribe (as de-
12 fined in section 4 of the Indian Self-Determination
13 and Education Assistance Act (25 U.S.C. 450(b)) or
14 native Hawaiian organization;
15 (B) a nonprofit-
16 (i) foundation,
17 (ii) corporation,
18 (iii) institution, or
19 (iv) association; or
20 (C) any other entity, including a
21 broadband service or infrastructure provider,
22 that the Assistant Secretary finds by rule to be
23 in the public interest. In establishing such rule,
24 the Assistant Secretary shall to the extent prac-

557
1 ticable promote the purposes of this section in
2 a technologically neutral manner;
3 (2) submit an application, at such time, in such
4 form, and containing such information as the Assist-
5 ant Secretary may require;
6 (3) provide a detailed explanation of how any
7 amount received under the program will be used to
8 carry out the purposes of this section in an efficient
9 and expeditious manner, including a showing that
10 the project would not have been implemented during
11 the grant period without Federal grant assistance;
12 (4) demonstrate, to the satisfaction of the As-
13 sistant Secretary, that it is capable of carrying out
14 the project or function to which the application re-
15 lates in a competent manner in compliance with all
16 applicable Federal, State, and local laws;
17 (5) demonstrate, to the satisfaction of the As-
18 sistant Secretary, that it will appropriate (if the ap-
19 plicant is a State or local government agency) or
20 otherwise unconditionally obligate, from non-Federal
21 sources, funds required to meet the requirements of
22 subsection (f);
23 (6) disclose to the Assistant Secretary the
24 source and amount of other Federal or State fund-
25 ing sources from which the applicant receives, or has

558
1 applied for, funding for activities or projects to
2 which the application relates; and
3 (7) provide such assurances and procedures as
4 the Assistant Secretary may require to ensure that
5 grant funds are used and accounted for in an appro-
6 pl"iate manner.
7 (f) The Federal share of any project may not exceed
8 80 percent, except that the Assistant Secretary may in-
9 crease the Federal share of a project above 80 percent
10 if-
11 (1) the applicant petitions the Assistant Sec-
12 retary for a waiver; and
13 (2) the Assistant Secretary determines that the
14 petition demonstrates financial need.
15 (g) The Assistant Secretary may make competitive
16 grants under the program t(}-
17 (1) acquire equipment, instrumentation, net-
18 working capability, hardware and softvare, digital
19 network technology, and infrastructure for
20 broadband services;
21 (2) construct and deploy broadband service re-
22 lated infrastructure;
23 (3) ensure access to broadband service by com-
24 munity anchor institutions;

559
1 (4) facilitate access to broadband serVIce by
2 low-income, unemployed, aged, and otherwise vulner-
3 able populations in order to provide educational and
4 .employment opportunities to members of such popu-
5 lations;
6 (5) construct and deploy broadband facilities
7 that improve public safety broadband communica-
8 tions services; and
9 (6) undertake such other projects and activities
10 as the Assistant Secretary finds to be consistent
11 with the purposes for which the program is estab-
12 lished.
13 (h) The Assistant Secretary, in awarding grants
14 under this section, shall, to the extent practical-
15 (1) award not less than 1 grant in each State;
16 (2) consider whether an application to deploy
17 infrastructure in an area-
18 (A) will, if approved, lllcrease the afford-
19 ability of, and subscribership to, service to the
20 greatest population of users in the area;
21 (B) will, if approved, provide the greatest
22 broadband speed possible to the greatest popu-
23 latioll of users in the area;
24 (0) will, if approved, enhance servIce for
25 health care delivery, education, or children to

560
1 the greatest population of users III the area;
2 and
3 (D) will, if approved, not result in unjust
4 enrichment as a result of support for non-recur-
S ring costs through another Federal program for
6 service in the area; and
7 (3) consider whether the applicant is a socially
8 and economically disadvantaged small business con-
9 cern as defined under section 8(a) of the Small
10 Business Act (15 U.S.C. 637).
11 (i) The Assistant Secretary-
12 (1) shall require any entity receIVIng a grant
13 pursuant to this section to report quarterly, in a for-
14 mat specified by the Assistant Secretary, on such
15 entity's use of the assistance and progress fulfilling
16 the objectives for which such funds were granted,
17 and the Assistant Secretary shall make these reports
18 available to the public;
19 (2) may establish additional reporting and in-
20 formation requirements for any recipient of any as-
21 sistance made available pursuant to this section;
22 (3) shall establish appropriate mechanisms to
23 ensure appropriate use and compliance with all
24 terms of any use of funds made available pursuant
25 to this section;

561
1 (4) may, in addition to other authority under
2 applicable law, deobligate awards to grantees that
3 demonstrate an insufficient level of performance, or
4 wasteful or fraudulent spending, as defined in ad-
5 vance by the Assistant Secretary, and award these
6 funds competitively to new or existing applicants
7 consistent with this section; and
8 (5) shall create and maintain a fully searchable
9 database, accessible on the Internet at no cost to the
10 public, that contains at least a list of each entity
11 that has applied for a grant under this section, a de-
12 scription of each application, the status of each such
13 application, the name of each entity receiving funds
14 made available pursuant to this section, the purpose
15 for which such entity is receiving such funds, each
16 quarterly report submitted by the entity pursuant to
17 this section, and such other information sufficient to
18 allow the public to understand and monitor grants
19 awarded under the program.
20 (j) Concurrent with the issuance of the Request for
21 Proposal for grant applications pursuant to this section,
22 the Assistant Secretary shall, in coordination with the
23 Commission, publish the non-discrimination and network
24 interconnection obligations that shall be contractual condi-
25 tions of grants awarded under this section, including, at

562
1 a minimum, adherence to the principles contained in the
2 Commission's broadband policy statement (FCC 05-15,
3 adopted August 5, 2005).
4 (k)(l) Not later than 1 year after the date of enact-
S ment of this section, the Commission shall submit to the
6 Committee on Energy and Commerce of the House of
7 Representatives and the Committee on Commerce,
8 Science, and Transportation of the Senate, a report con-
9 taining a national broadband plan.
10 (2) The national broadband plan required by
11 this section shall seek to ensure that all people of
12 the United States have access to broadband capa-
13 bility and shall establish benchmarks for meeting
14 that goal. The plan shall also include-
15 (A) an analysis of the most effective and
16 efficient mechanisms for ensuring broadband
17 access by all people of the United States;
18 (B) a detailed strategy for achieving af-
19 fordability of such service and maximum utiliza-
20 tion of broadband infrastructure and service by
21 the public;
22 (C) an evaluation of the status of deploy-
23 ment of broadband service, including progress
24 of projects supported by the grants made pur-
25 suant to this section; and

563
1 (D) a plan for use of broadband infrastruc-
2 ture and services in advancing consumer wel-
3 fare, civic participation, public safety and home-
4 land security, community development, health
5 care delivery, energy independence and effi-
6 ciency, education, worker training, private sec-
7 tor investment, entrepreneurial activity, job cre-
8 ation and economic gTowth, and other national
9 purposes.
10 (3) In developing the plan, the Commission
11 shall have access to data provided to other Govern-
12 ment agencies under the Broadband Data Improve-
13 ment Act (47 U.S.C. 1301 note).
14 (1) The Assistant Secretary shall develop and main-
15 tain a comprehensive nationwide inventory map of existing
16 broadband service capability and availability in the United
17 States that depicts the geographic extent to which
18 broadband service capability is deployed and available
19 from a commercial provider or public provider throughout
20 each State. Not later than 2 years after the date of the
21 enactment of this Act, the Assistant Secretary shall make
22 the broadband inventory map developed and maintained
23 pursuant to this section accessible by the public on a
24 WorId Wide Web site of the National Telecommunications

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S.L.C.
1 and Information Administration in a form that is inter-
2 active and searchable.
3 (m) The Assistant Secretary shall have the authority
4 to prescribe such rules as are necessary to carry out the
6 TITLE VII-LIMITS ON
7 EXECUTIVE COMPENSATION
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.
10 SEC. 7001. EXECUTIVE COMPENSATION AND CORPORATE
11 GOVERNANCE.
12 Section 111 of the Emergency Economic Stabilization
13 Act of 2008 (12 U.S.C. 5221) is amended to read as fol-
14 lows:
15 "SEC. 111. EXECUTIVE COMPENSATION AND CORPORATE
16 GOVERNANCE.
17 "(a) DEFINITIONS.-For purposes of this section, the
18 following definitions shall apply:
19 "(1) SENIOR EXECUTIVE OFFICER.-The term
20 'senior executive officer' means an individual who is
21 1 of the top 5 most highly paid executives of a pub-
22 lic company, whose compensation is required to be
23 disclosed pursuant to the Securities Exchange Act of

565
1 1934, and any regulations issued thereunder, and
2 non-public company counterparts.
3 "(2) GOLDEN PARACHUTE PAYMENT.-The
4 term 'golden parachute payment' means any pay-
S ment to a senior executive officer for departure from
6 a company for any reason, except for payments for
7 services performed or benefits accrued.
8 "(3) TARP RECIPIENT.-The term 'TARP re-
9 cipient' means any entity that has received or will
10 receive financial assistance under the financial as-
11 sistance provided under the TARP.
12 "(4) COMMISSION.-The term 'Commission'
13 means the Securities and Exchange Commission.
14 "(5) PERIOD IN WHICH OBLIGATION IS OUT-
15 STAiJDING; RULE OF CONSTRUCTION.-For purposes
16 of this section, the period in which any obligation
17 arising from financial assistance provided under the
18 TARP remains outstanding does not include any pe-
19 riod during which the Federal Government only
20 holds warrants to purchase common stock of the
21 TARP recipient.
22 "(b) EXECUTIVE COMPENSATION AND CORPORATE
23 GOVERNANCE.-
24 "(1) ESTABLISHMENT OF STANDARDs.-During
25 the period in which any obligation arising from fi-

566
1 nancial assistance provided under the TARP re-
2 mains outstanding, each TARP recipient shall be
3 subject to-
4 "(A) the standards established by the Sec-
5 retary under this section; and
6 "(B) the provisions of section 162(m)(5) of
7 the Internal Revenue Code of 1986, as applica-
8 ble.
9 "(2) STANDARDS REQUIRED.-The Secretary
10 shall require each TARP recipient to meet appro-
11 priate standards for executive compensation and cor-
12 porate governance.
13 "(3) SPECIFIC REQUIREMENTs.-The standards
14 established under paragraph (2) shall include the
15 following:
16 "(A) Limits on compensation that exclude
17 incentives for senior executive officers of the
18 TARP recipient to take unnecessary and exces-
19 sive risks that threaten the value of such recipi-
20 ent during the period in which any obligation
21 arising from financial assistance provided under
22 the TARP remains outstanding.
23 "(B) A provision for the recovery by such
24 TARP recipient of any bonus, retention award,
25 or incentive compensation paid to a senior exec-

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567
utive officer and any of the next 20 most high-
ly-compensated employees of the TARP recipi-
ent based on statements of earnings, revenues,
gains, or other criteria that are later found to
be materially inaccurate.
"(0) A prohibition on such TARP recipient
making any golden parachute payment to a sen-
ior executive officer or any of the next 5 most
highly-compensated employees of the TARP re-
cipient during the period in which any obliga-
tion arising from financial assistance provided
under the TARP remains outstanding.
"(D)(i) A prohibition on such TARP re-
cipient paying or accruing any bonus, retention
award, or incentive compensation during the pe-
riod in which any obligation arising from finan-
cial assistance provided under the TARP re-
mains 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 pe-
riod in which any obligation arising from

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568
financial assistance provided to that TARP
recipient remains outstanding;
"(II) has a value in an amount that
is not greater than lI3 of the total amount
of annual compensation of the employee re-
ceiving the stock; and
"(III) is subject to such other terms
and conditions as the Secretary may deter-
mine 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 higWy compensated em-
ployee 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 higWy-compensated employees of
the financial institution, or such higher
number as the Secretary may determine is

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569
III the public interest with respect to any
TARP recipient.
"(III) For any financial institution
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 em-
ployees, or such higher number as the Sec-
retary may determine is in the public inter-
est with respect to any TARP recipient.
"(IV) For any financial institution
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 writ-
ten employment contract executed on or before

570
1 Februmy 11, 2009, as such valid employment
2 contracts are determined by the Secretmy or
3 the designee of the Secretmy.
4 "(E) A prohibition on any compensation
5 plan that would encourage manipulation of the
6 reported earnings of such TARP recipient to
7 enhance the compensation of any of its employ-
8 ees.
9 "(F) A requirement for the establishment
10 of a Board Compensation Committee that
11 meets the requirements of subsection (c).
12 "(4) CERTIFICATION OF COMPLIANCE.-The
13 chief executive officer and chief financial officer (or
14 the equivalents thereof) of each TARP recipient
15 shall provide a written certification of compliance by
16 the TARP recipient with the requirements of this
17 section-
18 "(A) in the case of a TARP recipient, the
19 securities of which are publicly traded, to the
20 Securities and Exchange Commission, together
21 with annual filings required under the securities
22 laws; and
23 "(B) in the case of a TARP recipient that
24 IS not a publicly traded company, to the Sec-
25 retmy.

571
1 "(c) BOARD COMPENSATION COMMITTEE.-
2 "(1) ESTABLISHMENT OF BOARD REQUIRED.-
3 Each TARP recipient shall establish a Board Com-
4 pensation Committee, comprised entirely of inde-
5 pendent directors, for the purpose of reviewing em-
6 ployee compensation plans.
7 "(2) MEETINGS.-The Board Compensation
8 Committee of each TARP recipient shall meet at
9 least semiannually to discuss and evaluate employee
10 compensation plans in light of an assessment of any
11 risk posed to the TARP recipient from such plans.
12 "(3) COMPLIANCE BY NON-SEC REG-
13 ISTRANTS.-In the case of any TARP recipient, the
14 common or preferred stock of which is not registered
15 pursuant to the Securities Exchange Act of 1934,
16 and that has received $25,000,000 or less of TARP
17 assistance, the duties of the Board Compensation
18 Committee under this subsection shall be carried out
19 by the board of directors of such TARP recipient.
20 "(d) LIMITATION ON LUXURY EXPENDITURES.-The
21 board of directors of any TARP recipient shall have in
22 place a company-wide policy regarding excessive or luxury
23 expenditures, as identified by the Secretary, which may
24 include excessive expenditures on-
25 "(1) entertainment or events;

572
"(2) office and facility renovations;
"(3) aviation or other transportation serVIces;
1
2
3 or
4 "(4) other activities or events that are not rea-
5 sonable expenditures for staff development, reason-
6 able performance incentives, or other similar meas-
7 ures conducted in the normal course of the business
8 operations of the TARP recipient.
9 "(e) SHAREHOLDER APPROVAL OF EXECUTIVE COM-
10 PENSATION.-
11 "(1) ANNUAL SHAREHOLDER APPROVAL OF EX-
12 ECUTIVE COMPENSATION.-Any proxy or consent or
13 authorization for an annual or other meeting of the
14 shareholders of any TARP recipient during the pe-
lS riod in which any obligation arising from financial
16 assistance provided under the TARP remains out-
17 standing shall permit a separate shareholder vote to
18 approve the compensation of executives, as disclosed
19 pursuant to the compensation disclosure rules of the
20 Commission (which disclosure shall include the com-
21 pensation discussion and analysis, the compensation
22 tables, and any related material).
23 "(2) NONBINDING VOTE.-A shareholder vote
24 described in paragraph (1) shall not be binding on
25 the board of directors of a TARP recipient, and may

573
1 not be construed as overruling a decision by such
2 board, nor to create or imply any additional fidu-
3 ciary duty by such board, nor shall such vote be con-
4 strued to restrict or limit the ability of shareholders
5 to make proposals for inclusion in proxy materials
6 related to executive compensation.
7 "(3) DEADLINE FOR RULEMAKING.-Not later
8 than 1 year after the date of enactment of the
9 American Recovery and Reinvestment Act of 2009,
10 the Commission shall issue any final rules and regu-
11 lations required by this subsection.
12 "(f) REVIEW OF PRIOR PAYMENTS TO EXECU-
13 TIVES.-
14 "(1) IN GENERAL.-The Secretary shall review
15 bonuses, retention awards, and other compensation
16 paid to the senior executive officers and the next 20
17 most higWy-compensated employees of each entity
18 receiving TARP assistance before the date of enact-
19 ment of the AInerican Recovery and Reinvestment
20 Act of 2009, to determine whether any such pay-
21 ments were inconsistent with the purposes of this
22 section or the TARP or were otherwise contrary to
23 the public interest.
24 "(2) NEGOTIATIONS FOR REIMBURSEMENT.-If
25 the Secretary makes a determination described in

574
1 paragTaph (1), the Secretary shall seek to negotiate
2 with the TARP recipient and the subject employee
3 for appropriate reimbursements to the Federal Gov-
4 ernment with respect to compensation or bonuses.
5 "(g) No IMPEDIMENT TO WITHDRAWAL BY TARP
6 RECIPIENTS.-Subject to consultation with the appro-
7 priate Federal banking agency (as that term is defined
8 in section 3 of the Federal Deposit Insurance Act), if any,
9 the Secretary shall permit a TARP recipient to repay any
10 assistance previously provided under the TARP to such
11 financial institution, 'without regard to whether the finan-
12 cial institution has replaced such funds from any other
13 source or to any waiting period, and when such assistance
14 is repaid, the Secretary shall liquidate warrants associated
15 with such assistance at the current market price.
16 "(h) REGULATIONS.-The Secretary shall promul-
17 gate regulations to implement this section.".
18 SEC. 7002. APPLICABILITY WITH RESPECT TO LOAN MODI·
19 FICATIONS.
20 Section 109(a) of the Emergency Economic Stabiliza-
21 tion Act of 2008 (12 U.S.C. 5219(a)) is amended-
22 (1) by striking "To the extent" and inserting
23 the following:
24 "(1) IN GENERAL.-To the extent"; and

575
1 "(2) WAIVER OF CERTAIN PROVISIONS IN CON-
2 NECTION WITH LOAN MODIFICATIONS.-The Sec-
3 retary shall not be required to apply executive com-
4 pensation restrictions under section 111, or to re-
5 ceive warrants or debt instruments under section
6 113, solely in connection with any loan modification
7 under this section.".

And the Senate agreed to the same.
Se-Y,6 Nc-V
-----------

Managers on the part of the
l6 CtV'tl'-
HENRY WAXMAN
Managers on the part of the
SENATE
•~ER~tiEW-lS --

American Recovery and Reinvestment Conference Report Division B

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American Recovery and Reinvestment Conference Report Division B