“TEXT OF AMENDMENTS” published by Congressional Record on May 14, 2003

Volume 149, No. 72 covering the 1st Session of the 108th Congress (2003 - 2004) was published by the Congressional Record.

The Congressional Record is a unique source of public documentation. It started in 1873, documenting nearly all the major and minor policies being discussed and debated.

“TEXT OF AMENDMENTS” mentioning the Department of Interior was published in the Senate section on pages S6266-S6404 on May 14, 2003.

The publication is reproduced in full below:

TEXT OF AMENDMENTS

SA 544. Mr. KENNEDY (for himself, Mr. Daschle, Mr. Bingaman, Mr. Durbin, Mr. Reed, Mrs. Clinton, Ms. Cantwell, Mr. Sarbanes, Mr. Levin, Mrs. Murray, Mr. Rockefeller, Mr. Kerry, Mr. Baucus, Mr. Schumer, Mr. Dodd, and Mr. Corzine) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows:

At the end, add the following:

TITLE--UNEMPLOYMENT COMPENSATION

Subtitle A--Extension and Enhancement of Temporary Extended

Unemployment Compensation

SEC. ____01. EXTENSION OF THE TEMPORARY EXTENDED UNEMPLOYMENT

COMPENSATION ACT OF 2002.

(a) In General.--Section 208 of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30), as amended by Public Law 108-1 (117 Stat. 3), is amended--

(1) in subsection (a)(2), by striking ``before June 1'' and inserting ``on or before November 30'';

(2) in subsection (b)(1), by striking ``May 31, 2003'' and inserting ``November 30, 2003'';

(3) in subsection (b)(2)--

(A) in the heading, by striking ``may 31, 2003'' and inserting ``november 30, 2003''; and

(B) by striking ``May 31, 2003'' and inserting ``November 30, 2003''; and

(4) in subsection (b)(3), by striking ``August 30, 2003'' and inserting ``February 28, 2004''.

(b) Effective Date.--The amendments made by this section shall take effect as if included in the enactment of the Temporary Extended Unemployment Compensation Act of 2002

(Public Law 107-147; 116 Stat. 21).

SEC. ____02. ENTITLEMENT TO ADDITIONAL WEEKS OF TEMPORARY

EXTENDED UNEMPLOYMENT COMPENSATION.

(a) Entitlement to Additional Weeks.--

(1) In general.--Paragraph (1) of section 203(b) of the Temporary Extended Unemployment Compensation Act of 2002

(Public Law 107-147; 116 Stat. 28) is amended--

(A) in subparagraph (A), by striking ``50 percent'' and inserting ``100 percent''; and

(B) in subparagraph (B), by striking ``13 times'' and inserting ``26 times''.

(2) Repeal of restriction on augmentation during transitional period.--Section 208(b) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147), as amended by Public Law 108-1 (117 Stat. 3) and section ____01(a), is amended--

(A) in paragraph (1)--

(i) by striking ``paragraphs (2) and (3)'' and inserting

``paragraph (2)''; and

(ii) by inserting before the period at the end the following: ``, including such compensation payable by reason of amounts deposited in such account after such date pursuant to the application of subsection (c) of such section'';

(B) by striking paragraph (2); and

(3) Extension of transition limitation.--Section 208(b)(2) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147), as amended by Public Law 108-1

(117 Stat. 3) and section ____01(a)(4) and as redesignated by paragraph (2), is amended by striking ``February 28, 2004'' and inserting ``May 29, 2004''.

(4) Conforming amendment for augmented benefits.--Section 203(c)(1) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) is amended by striking ``the amount originally established in such account

(as determined under subsection (b)(1))'' and inserting ``7 times the individual's average weekly benefit amount for the benefit year''.

(b) Effective Date and Application.--

(1) In general.--The amendments made by subsection (a) shall apply with respect to weeks of unemployment beginning on or after the date of enactment this Act.

(2) TEUC-X amounts deposited in account prior to date of enactment deemed to be the additional teuc amounts provided by this section.--In applying the amendments made by subsection (a) under the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 26), the Secretary of Labor shall deem any amounts deposited into an individual's temporary extended unemployment compensation account by reason of section 203(c) of such Act (commonly known as ``TEUC-X amounts'') prior to the date of enactment of this Act to be amounts deposited in such account by reason of section 203(b) of such Act, as amended by subsection (a)

(commonly known as ``TEUC amounts'').

(3) Application to exhaustees and current beneficiaries.--

(A) Exhaustees.--In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) who exhausted such individual's rights to such compensation (by reason of the payment of all amounts in such individual's temporary extended unemployment compensation account) before such date,

such individual's eligibility for any additional weeks of temporary extended unemployment compensation by reason of the amendments made by subsection (a) shall apply with respect to weeks of unemployment beginning on or after the date of enactment of this Act.

(B) Current beneficiaries.--In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) as to whom the condition described in subparagraph

(A)(ii) does not apply,

such individual shall be eligible for temporary extended unemployment compensation (in accordance with the provisions of the Temporary Extended Unemployment Compensation Act of 2002, as amended by subsection (a)) with respect to weeks of unemployment beginning on or after the date of enactment of this Act.

(4) Redetermination of eligibility for augmented amounts for individuals for whom such a determination was made prior to the date of enactment.--Any determination of whether the individual's State is in an extended benefit period under section 203(c) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) made prior to the date of enactment of this Act shall be disregarded and the determination under such section shall be made as follows:

(A) Individuals who exhausted all teuc and teuc-x amounts prior to the date of enactment.--In the case of an individual whose temporary extended unemployment account has, prior to the date of enactment of this Act, been both augmented under such section 203(c) and exhausted of all amounts by which it was so augmented, the determination shall be made as of such date of enactment.

(B) All other individuals.--In the case of an individual who is not described in subparagraph (A), the determination shall be made at the time that the individual's account established under such section 203, as amended by subsection

(a), is exhausted.

(5) No effect on provisions related to displaced airline related workers.--The amendments made by this section and section ____01 shall have no effect on the provisions of section 4002 of the Emergency Wartime Supplemental Appropriations Act, 2003 (Public Law 108-11).

Subtitle B--Temporary Enhanced Regular Unemployment Compensation

SEC. ____11. FEDERAL-STATE AGREEMENTS.

(a) In General.--Any State which desires to do so may enter into and participate in an agreement under this title with the Secretary of Labor (in this title referred to as the

``Secretary''). Any State which is a party to an agreement under this title may, upon providing 30 days' written notice to the Secretary, terminate such agreement.

(b) Provisions of Agreement.--

(1) In general.--Subject to paragraph (3), any agreement under subsection (a) shall provide that the State agency of the State, in addition to any amounts of regular compensation to which an individual may be entitled under the State law, shall make payments of temporary enhanced regular unemployment compensation to an individual in an amount and to the extent that the individual would be entitled to regular compensation if the State law were applied with the modifications described in paragraph (2).

(2) Modifications described.--The modifications described in this paragraph are as follows:

(A) In the case of an individual who is not eligible for regular compensation under the State law because of the use of a definition of base period that does not count wages earned in the most recently completed calendar quarter, then eligibility for compensation shall be determined by applying a base period ending at the close of the most recently completed calendar quarter.

(B) In the case of an individual who is not eligible for regular compensation under the State law because such individual does not meet requirements relating to availability for work, active search for work, or refusal to accept work, because such individual is seeking, or is available for, less than full-time work, then compensation shall not be denied by such State to an otherwise eligible individual who seeks less than full-time work or fails to accept full-time work.

(3) Reduction of amounts of regular compensation available for individuals who sought part-time work or failed to accept full-time work.--Any agreement under subsection (a) shall provide that the State agency of the State shall reduce the amount of regular compensation available to an individual who has received temporary enhanced regular unemployment compensation as a result of the application of the modification described in paragraph (2)(B) by the amount of such temporary enhanced regular unemployment compensation.

(c) Coordination Rule.--The modifications described in subsection (b)(2) shall also apply in determining the amount of benefits payable under any Federal law to the extent that those benefits are determined by reference to regular compensation payable under the State law of the State involved.

SEC. ____12. PAYMENTS TO STATES HAVING AGREEMENTS UNDER THIS

TITLE.

(a) General Rule.--There shall be paid to each State which has entered into an agreement under this title an amount equal to--

(1) 100 percent of any temporary enhanced regular unemployment compensation; and

(2) 100 percent of any regular compensation which is paid to individuals by such State by reason of the fact that its State law contains provisions comparable to the modifications described in subparagraphs (A) and (B) of section ____11(b)(2), but only to the extent that those amounts would, if such amounts were instead payable by virtue of the State law's being deemed to be so modified pursuant to section ____11(b)(1), have been reimbursable under paragraph

(1).

(b) Determination of Amount.--Sums under subsection (a) payable to any State by reason of such State having an agreement under this title shall be payable, either in advance or by way of reimbursement (as may be determined by the Secretary), in such amounts as the Secretary estimates the State will be entitled to receive under this title for each calendar month, reduced or increased, as the case may be, by any amount by which the Secretary finds that the Secretary's estimates for any prior calendar month were greater or less than the amounts which should have been paid to the State. Such estimates may be made on the basis of such statistical, sampling, or other method as may be agreed upon by the Secretary and the State agency of the State involved.

SEC. ____13. FINANCING PROVISIONS.

(a) In General.--Funds in the extended unemployment compensation account (as established by section 905(a) of the Social Security Act (42 U.S.C. 1105(a))), and the Federal unemployment account (as established by section 904(g) of such Act (42 U.S.C. 1104(g))), of the Unemployment Trust Fund

(as established by section 904(a) of such Act (42 U.S.C. 1104(a))) shall be used for the making of payments to States having agreements entered into under this title.

(b) Certification.--The Secretary shall from time to time certify to the Secretary of the Treasury for payment to each State the sums which are payable to such State under this title. The Secretary of the Treasury, prior to audit or settlement by the General Accounting Office, shall make payments to the State in accordance with such certification by transfers from the extended unemployment compensation account (as so established), or, to the extent that there are insufficient funds in that account, from the Federal unemployment account, to the account of such State in the Unemployment Trust Fund (as so established).

(c) Assistance to States.--There are appropriated out of the employment security administration account of the Unemployment Trust Fund (as established by section 901(a) of the Social Security Act (42 U.S.C. 1101(a))) $500,000,000 to reimburse States for the costs of the administration of agreements under this title (including any improvements in technology in connection therewith) and to provide reemployment services to unemployment compensation claimants in States having agreements under this title. Each State's share of the amount appropriated by the preceding sentence shall be determined by the Secretary according to the factors described in section 302(a) of the Social Security Act (42 U.S.C. 502(a)) and certified by the Secretary to the Secretary of the Treasury.

(d) Appropriations for Certain Payments.--There are appropriated from the general fund of the Treasury, without fiscal year limitation, to the extended unemployment compensation account (as so established) of the Unemployment Trust Fund (as so established) such sums as the Secretary estimates to be necessary to make the payments under this section in respect of--

(1) compensation payable under chapter 85 of title 5, United States Code; and

(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies.

Amounts appropriated pursuant to the preceding sentence shall not be required to be repaid.

SEC. ____14. DEFINITIONS.

For purposes of this title, the terms ``compensation'',

``base period'', ``regular compensation'', ``State'', ``State agency'', ``State law'', and ``week'' have the respective meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970.

SEC. ____15. APPLICABILITY.

(a) In General.--Except as provided in subsection (b), an agreement entered into under this title shall apply to weeks of unemployment--

(1) beginning after the date on which such agreement is entered into; and

(2) ending before July 1, 2004.

(b) Phase-Out of TERUC.--

(1) In general.--Subject to paragraph (2), in the case of an individual who has established eligibility for temporary enhanced regular unemployment compensation, but who has not exhausted all rights to such compensation, as of the last day of the week ending before July 1, 2004, such compensation shall continue to be payable to such individual for any week beginning after such date for which the individual meets the eligibility requirements of this title.

(2) Limitation.--No compensation shall be payable by reason of paragraph (1) for any week beginning after December 31, 2004.

SEC. ____16. COORDINATION WITH THE TEMPORARY EXTENDED

UNEMPLOYMENT COMPENSATION ACT OF 2002.

(a) In General.--The Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30) is amended--

(1) in section 202(b)(1), by inserting ``, and who have exhausted all rights to temporary enhanced regular unemployment compensation'' before the semicolon at the end;

(2) in section 202(b)(2), by inserting ``, temporary enhanced regular unemployment compensation,'' after ``regular compensation'';

(3) in section 202(c), by inserting ``(or, as the case may be, such individual's rights to temporary enhanced regular unemployment compensation)'' after ``State law'' in the matter preceding paragraph (1);

(4) in section 202(c)(1), by inserting ``and no payments of temporary enhanced regular unemployment compensation can be made'' after ``under such law'';

(5) in section 202(d)(1), by inserting ``or the amount of any temporary enhanced regular unemployment compensation

(including dependents' allowances) payable to such individual for such a week,'' after ``total unemployment'';

(6) in section 202(d)(2)(A), by inserting ``, or, as the case may be, to temporary enhanced regular unemployment compensation,'' after ``State law'';

(7) in section 203(b)(1)(A), by inserting ``plus the amount of any temporary enhanced regular unemployment compensation payable to such individual for such week,'' after ``under such law''; and

(8) in section 203(b)(2), by inserting ``or the amount of any temporary enhanced regular unemployment compensation payable to such individual for such week,'' after ``total unemployment''.

(b) Amount of TEUC Offset by Amount of TERUC.--Section 203(b)(1) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 28) is amended--

(1) in subparagraph (B), by striking the period at the end and inserting a comma; and

(2) by adding at the end the following:

``minus the number of weeks in which the individual was entitled to temporary enhanced regular unemployment compensation as a result of the application of the modification described in section ____11(b)(2)(A) of the ________ Act of 2003 (relating to the alternative base period) multiplied by the individual's average weekly benefit amount for the benefit year.''.

(c) Temporary Enhanced Regular Unemployment Compensation Defined.--Section 207 of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30) is amended to read as follows:

``SEC. 207. DEFINITIONS.

``In this title:

``(1) General definitions.--The terms `compensation',

`regular compensation', `extended compensation', `additional compensation', `benefit year', `base period', `State', `State agency', `State law', and `week' have the respective meanings given such terms under section 205 of the Federal-State Extended Unemployment Compensation Act of 1970 (26 U.S.C. 3304 note).

``(2) Temporary enhanced regular unemployment compensation.--The term `temporary enhanced regular unemployment compensation' means temporary enhanced regular unemployment benefits payable under title II of the ________ Act of 2003.''.

Subtitle C--Railroad Unemployment Insurance

SEC. ____21. TEMPORARY INCREASE IN EXTENDED UNEMPLOYMENT

BENEFITS UNDER THE RAILROAD UNEMPLOYMENT

INSURANCE ACT.

Section 2(c)(2) of the Railroad Unemployment Insurance Act

(45 U.S.C. 352(c)(2)) is amended by adding at the end the following:

``(D) Temporary increase in extended unemployment benefits.--

``(i) Employees with 10 or more years of service.--Subject to clause (iii), in the case of an employee who has 10 or more years of service (as so defined), with respect to extended unemployment benefits--

``(I) subparagraph (A) shall be applied by substituting

``130 days of unemployment'' for ``65 days of unemployment''; and

``(II) subparagraph (B) shall be applied by inserting

``(or, in the case of unemployment benefits, 13 consecutive 14-day periods'' after ``7 consecutive 14-day periods''.

``(ii) Employees with less than 10 years of service.--Subject to clause (iii), in the case of an employee who has less than 10 years of service (as so defined), with respect to extended unemployment benefits, this paragraph shall apply to such an employee in the same manner as this paragraph would apply to an employee described in clause (i) if such clause had not been enacted.

``(iii) Application.--The provisions of clauses (i) and

(ii) shall apply to--

``(I) an employee who received normal benefits for days of unemployment under this Act during the period beginning on July 1, 2002, and ending on November 30, 2003; and

``(II) days of unemployment beginning on or after the date of enactment of ____ Act of 2003.''.

Subtitle D--Revenue Provision

SEC. ____31. ELIMINATION OF ACCELERATION OF TOP RATE

REDUCTION IN INDIVIDUAL INCOME TAX RATES.

(a) In General.--Notwithstanding the amendment made by section 102(a) of this Act, in lieu of the percent specified in the last column of the table in paragraph (2) of section 1(i) of the Internal Revenue Code of 1986, as amended by such section 102(a), for taxable years beginning during calendar years 2003, 2004, and 2005, the following percentages shall be substituted for such years:

(1) For 2003, 38.6%.

(2) For 2004 and 2005, 37.6%.

(b) Effective Date.--Subsection (a) shall take effect on the date of enactment of this Act.

______

SA 545. Mr. KENNEDY (for himself, Mr. Graham of Florida, Mr. Rockefeller, Mr. Johnson, and Mr. Corzine) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of subtitle C of title V, add the following:

SEC. ____. REPEAL OF PARTIAL EXCLUSION OF DIVIDENDS AND

ELIMINATION OF ACCELERATION OF TOP RATE

REDUCTION IN INDIVIDUAL INCOME TAX RATES.

(a) Repeal of Partial Exclusion of Dividends.--Section 201 of this Act, and the amendments made by such section, are repealed.

(b) Elimination of Acceleration of Top Rate Reduction In Individual Income Tax Rates.--Notwithstanding the amendment made by section 102(a) of this Act, in lieu of the percent specified in the last column of the table in paragraph (2) of section 1(i) of the Internal Revenue Code of 1986, as amended by such section 102(a), for taxable years beginning during calendar years 2003, 2004, and 2005, the following percentages shall be substituted for such years:

(1) For 2003, 38.6%.

(2) For 2004 and 2005, 37.6%.

______

SA 546. Mr. KENNEDY submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of end of subtitle C of title V add the following:

SEC. ____. REPEAL OF PARTIAL EXCLUSION OF DIVIDENDS AND

ELIMINATION OF ACCELERATION OF TOP RATE

REDUCTION IN INDIVIDUAL INCOME TAX RATES.

(a) Repeal of Partial Exclusion of Dividends.--Section 201 of this Act, and the amendments made by such section, are repealed.

(1) For 2003, 38.6%.

(2) For 2004 and 2005, 37.6%.

______

SA 547. Mr. KENNEDY submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of end of subtitle C of title V add the following:

SEC. ____. REPEAL OF PARTIAL EXCLUSION OF DIVIDENDS AND

ELIMINATION OF ACCELERATION OF TOP RATE

REDUCTION IN INDIVIDUAL INCOME TAX RATES.

(a) Repeal of Partial Exclusion of Dividends.--Section 201 of this Act, and the amendments made by such section, are repealed.

(1) For 2003, 38.6%.

(2) For 2004 and 2005, 37.6%.

______

SA 548. Mr. KENNEDY submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of end of subtitle C of title V add the following:

SEC. ____. ELIMINATION OF ACCELERATION OF TOP RATE REDUCTION

IN INDIVIDUAL INCOME TAX RATES.

(1) For 2003, 38.6%.

(2) For 2004 and 2005, 37.6%.

(b) Effective Date.--Subsection (a) shall take effect on the date of enactment of this Act.

______

SA 549. Mr. BAUCUS submitted an amendment intended to be proposed by him to the bill S. 1054, to provide reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

On page 2, strike line 13 and insert:

(b) Increase in Penalties.--Section 7206(a) (as redesignated by subsection (a)) is amended--

(1) by striking ``$100,000'' and inserting ``$250,000'',

(2) by striking ``$500,000'' and inserting ``$1,000,000'', and

(3) by striking ``3 years'' and inserting ``5 years''.

______

SA 550. Mr. WARNER (for himself, Mr. Allen, and Ms. Collins) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows

At the end of subtitle C of title V, insert the following:

SEC. ____. EXPANSION OF ABOVE-THE-LINE DEDUCTION FOR CERTAIN

EXPENSES OF ELEMENTARY AND SECONDARY SCHOOL

TEACHERS.

(a) In General.--Subparagraph (D) of section 62(a)(2)

(relating to certain trade and business deductions of employees) is amended to read as follows:

``(D) Certain expenses of elementary and secondary school teachers.--The deductions allowed by section 162 which consist of expenses, not in excess of $500, paid or incurred by an eligible educator--

``(i) by reason of the participation of the educator in professional development courses related to the curriculum and academic subjects in which the educator provides instruction or to the students for which the educator provides instruction, and

``(ii) in connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) and other equipment, and supplementary materials used by the eligible educator in the classroom.''.

(b) Effective Date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2002.

______

SA 551. Mr. SCHUMER (for himself and Mrs. Clinton) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of subtitle C of title V, insert the following:

SEC. ____. EXPANSION OF DESIGNATED RENEWAL COMMUNITY AREA

BASED ON 2000 CENSUS DATA.

(a) Renewal Communities.--

(1) In general.--Section 1400E (relating to designation of renewal communities) is amended by adding at the end the following new subsection:

``(g) Expansion of Designated Areas.--

``(1) Expansion based on 2000 Census.--At the request of the nominating entity with respect to a renewal community, the Secretary of Housing and Urban Development may expand the area of a renewal community to include any census tract--

``(A) which, at the time such community was nominated, met the requirements of this section for inclusion in such community but for the failure of such tract to meet 1 or more of the population and poverty rate requirements of this section using 1990 census data, and

``(B) which meets all failed population and poverty rate requirements of this section using 2000 census data.

``(2) Expansion to certain areas which do not meet population requirements.--

``(A) In general.--At the request of 1 or more local governments and the State or States in which an area described in subparagraph (B) is located, the Secretary of Housing and Urban Development may expand a designated area to include such area.

``(B) Area.--An area is described in this subparagraph if--

``(i) the area is adjacent to at least 1 other area designated as a renewal community,

``(ii) the area has a population less than the population required under subsection (c)(2)(C), and

``(iii) the area meets the requirements of subparagraphs

(A) and (B) of subsection (c)(2) and subparagraph (A) of subsection (c)(3).

``(3) Applicability.--Any expansion of a renewal community under this section shall take effect as provided in subsection (b).''.

(2) Effective date.--The amendment made by this subsection shall take effect as if included in the amendments made by section 101 of the Community Renewal Tax Relief Act of 2000.

(b) Change of Top Income Rate.--

(1) In general.--The table in paragraph (2) of section 1(i)

(relating to reductions in rates after June 30, 2001), as amended by section 102 of this Act, is amended by striking

``35.0%'' in the last column and inserting ``37.6%''.

(2) Effective date.--The amendment made by this section shall apply to taxable years beginning after December 31, 2002.

(3) Application of EGTRRA.--The amendment made by this subsection shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 to the same extent and in the same manner as the provision of such Act to which such amendment relates.

______

SA 552. Mr. Schumer (for himself and Mrs. Clinton) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of subtitle C of title V, insert the following:

SEC. ____. EXPANSION OF DESIGNATED RENEWAL COMMUNITY AREA

BASED ON 2000 CENSUS DATA.

(a) In General.--Section 1400E of the Internal Revenue Code of 1986 (relating to designation of renewal communities) is amended by adding at the end the following new subsection:

``(g) Expansion of Designated Areas.--

``(1) Expansion based on 2000 census.--At the request of the nominating entity with respect to a renewal community, the Secretary of Housing and Urban Development may expand the area of a renewal community to include any census tract--

``(B) which meets all failed population and poverty rate requirements of this section using 2000 census data.

``(2) Expansion to certain areas which do not meet population requirements.--

``(B) Area.--An area is described in this subparagraph if--

``(i) the area is adjacent to at least 1 other area designated as a renewal community,

``(ii) the area has a population less than the population required under subsection (c)(2)(C), and

``(iii) the area meets the requirements of subparagraphs

(A) and (B) of subsection (c)(2) and subparagraph (A) of subsection (c)(3).

``(3) Applicability.--Any expansion of a renewal community under this section shall take effect as provided in subsection (b).''.

(b) Effective Date.--The amendment made by subsection (a) shall take effect as if included in the amendments made by section 101 of the Community Renewal Tax Relief Act of 2000.

______

SA 553. Mr. SCHUMER (for himself, Mr. Corzine, Mrs. Boxer, Mrs. Feinstein, Mr. Edwards, and Mr. Kerry) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

Section 371 is amended by striking subsections (c) through

(g) and inserting the following:

(c) Certifications.--In order to receive a payment under this section, the State shall provide the Secretary with certifications that--

(1) the State's proposed uses of the funds are consistent with subsection (b); and

(2) the State will allocate 50 percent of the funds directly to units of general local government based on the relative local population proportion for the State (as defined in subsection (d)(5)) and not use the funds to supplant State funding or revenue that the State otherwise provides to units of general local government.

(d) Amount of Payment.--

(1) In general.--The amount of payment made to a State under this section shall be the minimum payment amount described in paragraph (2) plus the relative population proportion amount described in paragraph (3).

(2) Minimum payment amount.--The minimum payment amount described in this paragraph is--

(A) in the case of any of the several States, the District of Columbia, or the Commonwealth of Puerto Rico, one-quarter of 1 percent of the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act); and

(B) in the case of the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa, one-twentieth of 1 percent of such aggregate amount

(after the application of section 1903(x)(3) of the Social Security Act).

(3) Relative population proportion amount.--The relative population proportion amount described in this paragraph is the product of--

(A) the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act) minus the total of all of the minimum payment amounts determined under paragraph (2); and

(B) the relative State population proportion (as defined in paragraph (4)).

(4) Relative state population proportion defined.--In this section, the term ``relative State population proportion'' means, with respect to a State, the amount equal to the quotient of--

(A) the population of the State (as reported in the most recent decennial census); and

(B) the total population of all States (as reported in the most recent decennial census).

(5) Relative local population proportion defined.--In this section, the term ``relative local population proportion'' means, with respect to a unit of general local government within a State, the amount equal to the quotient of--

(A) the population of such unit of general local government

(as reported in the most recent decennial census); and

(B) the total population of the State (as reported in the most recent decennial census).

(e) Appropriation.--There is authorized to be appropriated and is appropriated for making payments under this section,

$40,000,000,000 for fiscal year 2003. Amounts appropriated under this subsection shall remain available for expenditure through December 31, 2004.

(f) Increased Payments To States Under the Medicaid Program.--Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following:

``(x) Temporary Increased Payments To States.--

``(1) In general.--From the amounts made available under paragraph (3), the Secretary shall increase payments to States under this section for the third and fourth calendar quarters of fiscal year 2003, each calendar quarter of fiscal year 2004, and the first calendar quarter of fiscal year 2005.

``(2) Method of increase.--The Secretary shall determine the appropriate method for increasing payments to States in accordance with this subsection.

``(3) Funding.--Notwithstanding section 371(e) of the Jobs and Growth Tax Relief Reconciliation Act of 2003, from the amounts appropriated in such section for fiscal year 2003,

$499,999 of such amount is hereby transferred and made available for the purpose of increasing payments to States under this section in accordance with this subsection. Amounts transferred under this paragraph shall remain available for expenditure through December 31, 2004.''.

(g) Repeal.--Effective as of January 1, 2005, this section and the amendments made by this section are repealed.

(h) Elimination of 20 Percent Partial Exclusion of Dividends Received By Individuals.--

(1) In general.--Section 116(a)(2)(B), as added by section 201 of this Act, is amended by striking ``(20 percent in the case of taxable years beginning after 2007)''.

(2) Nonapplication.--Subsection (g) of this section shall not apply to the amendment made by paragraph (1).

______

SA 554. Mr. SCHUMER submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

Section 371 is amended by striking subsections (c) through

(g) inserting the following:

(c) Certifications.--In order to receive a payment under this section, the State shall provide the Secretary with certifications that--

(1) the State's proposed uses of the funds are consistent with subsection (b); and

(d) Amount of Payment.--

(2) Minimum payment amount.--The minimum payment amount described in this paragraph is--

(A) in the case of any of the several States, the District of Columbia, or the Commonwealth of Puerto Rico, one-third of 1 percent of the aggregate amount made available for payments under this section (after the application of section 1903(x)(3) of the Social Security Act); and

(B) in the case of the United States Virgin Islands, Guam, the Commonwealth of the Northern Mariana Islands, or American Samoa, one-fifteenth of 1 percent of such aggregate amount

(after the application of section 1903(x)(3) of the Social Security Act).

(3) Relative population proportion amount.--The relative population proportion amount described in this paragraph is the product of--

(B) the relative State population proportion (as defined in paragraph (4)).

(4) Relative state population proportion defined.--In this section, the term ``relative State population proportion'' means, with respect to a State, the amount equal to the quotient of--

(A) the population of the State (as reported in the most recent decennial census); and

(B) the total population of all States (as reported in the most recent decennial census).

(A) the population of such unit of general local government

(as reported in the most recent decennial census); and

(B) the total population of the State (as reported in the most recent decennial census).

(e) Appropriation.--There is authorized to be appropriated and is appropriated for making payments under this section,

$30,000,000,000 for fiscal year 2003. Amounts appropriated under this subsection shall remain available for expenditure through December 31, 2004.

(f) Increased Payments To States Under the Medicaid Program.--Section 1903 of the Social Security Act (42 U.S.C. 1396b) is amended by adding at the end the following:

``(x) Temporary Increased Payments To States.--

``(2) Method of increase.--The Secretary shall determine the appropriate method for increasing payments to States in accordance with this subsection.

``(3) Funding.--Notwithstanding section 371(e) of the Jobs and Growth Tax Relief Reconciliation Act of 2003, from the amounts appropriated in such section for fiscal year 2003,

(g) Repeal.--Effective as of January 1, 2005, this section and the amendments made by this section are repealed.

(h) Revision of Partial Exclusion of Dividends Received By Individuals.--

(1) In general.--Section 116(a)(2)(B), as added by section 201 of this Act, is amended by striking ``2007'' and inserting ``2010''.

(2) Application of sunset.--Section 601(a) of this Act shall apply to the amendment made by paragraph (1).

(3) Nonapplication.--Subsection (g) of this section shall not apply to the amendment made by paragraph (1).

______

SA 555. Mr. GRASSLEY proposed an amendment to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows:

At the end of part I of subtitle C of title III add the following:

SEC. 335. INCREASE IN CRIMINAL MONETARY PENALTY LIMITATION

FOR THE UNDERPAYMENT OR OVERPAYMENT OF TAX DUE

TO FRAUD.

(a) In General.--Section 7206 (relating to fraud and false statements) is amended--

(1) by striking ``Any person who--'' and inserting ``(a) In General.--Any person who--'', and

(2) by adding at the end the following new subsection:

``(b) Increase in Monetary Limitation for Underpayment or Overpayment of Tax Due To Fraud.--If any portion of any underpayment (as defined in section 6664(a)) or overpayment

(as defined in section 6401(a)) of tax required to be shown on a return is attributable to fraudulent action described in subsection (a), the applicable dollar amount under subsection

(a) shall in no event be less than an amount equal to such portion. A rule similar to the rule under section 6663(b) shall apply for purposes of determining the portion so attributable.''.

(b) Effective Date.--The amendments made by this section shall apply to underpayments and overpayments attributable to actions occurring after the date of the enactment of this Act.

______

SA 556. Mr. DORGAN (for himself, Mr. Baucus, Mr. Conrad, and Mr. Corzine) proposed an amendment to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows:

Strike section 102.

Strike title II.

At the end of subtitle C of title V, add the following:

SEC. ____. REPEAL OF 1993 INCOME TAX INCREASE ON SOCIAL

SECURITY BENEFITS.

(a) Restoration of Prior Law Formula.--Subsection (a) of section 86 is amended to read as follows:

``(a) In General.--Gross income for the taxable year of any taxpayer described in subsection (b) (notwithstanding section 207 of the Social Security Act) includes social security benefits in an amount equal to the lesser of--

``(1) one-half of the social security benefits received during the taxable year, or

``(2) one-half of the excess described in subsection

(b)(1).''

(b) Repeal of Adjusted Base Amount.--Subsection (c) of section 86 is amended to read as follows:

``(c) Base Amount.--For purposes of this section, the term

`base amount' means--

``(1) except as otherwise provided in this subsection,

$25,000,

``(2) $32,000 in the case of a joint return, and

``(3) zero in the case of a taxpayer who--

``(A) is married as of the close of the taxable year

(within the meaning of section 7703) but does not file a joint return for such year, and

``(B) does not live apart from his spouse at all times during the taxable year.''

(1) Subparagraph (A) of section 871(a)(3) is amended by striking ``85 percent'' and inserting ``50 percent''.

(2)(A) Subparagraph (A) of section 121(e)(1) of the Social Security Amendments of 1983 (Public Law 98-21) is amended--

(i) by striking ``(A) There'' and inserting ``There'';

(ii) by striking ``(i)'' immediately following ``amounts equivalent to''; and

(iii) by striking ``, less (ii)'' and all that follows and inserting a period.

(B) Paragraph (1) of section 121(e) of such Act is amended by striking subparagraph (B).

(C) Paragraph (3) of section 121(e) of such Act is amended by striking subparagraph (B) and by redesignating subparagraph (C) as subparagraph (B).

(D) Paragraph (2) of section 121(e) of such Act is amended in the first sentence by striking ``paragraph (1)(A)'' and inserting ``paragraph (1)''.

(d) Maintenance of Transfers to Hospital Insurance Trust Fund.--There are hereby appropriated to the Hospital Insurance Trust Fund established under section 1817 of the Social Security Act amounts equal to the reduction in revenues to the Treasury by reason of the enactment of this section. Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund had this section not been enacted.

(e) Effective Dates.--

(1) In general.--Except as otherwise provided in this subsection, the amendments made by this section shall apply to taxable years beginning after December 31, 2003.

(2) Subsection (c)(1).--The amendment made by subsection

(c)(1) shall apply to benefits paid after December 31, 2003.

(3) Subsection (c)(2).--The amendments made by subsection

(c)(2) shall apply to tax liabilities for taxable years beginning after December 31, 2003.

______

SA 557. Mr. SCHUMER (for himself, Mr. Biden, Mrs. Boxer, Mr. Durbin, Ms. Cantwell, and Mr. Lieberman) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows:

At the end of subtitle C of title V, insert the following:

SEC. ____. EXPANSION OF DEDUCTION FOR HIGHER EDUCATION

EXPENSES.

(a) In General.--

(1) Amount of deduction.--Subsection (b) of section 222

(relating to deduction for qualified tuition and related expenses) is amended to read as follows:

``(b) Limitations.--

``(1) Dollar limitations.--

``(A) In general.--Except as provided in paragraph (2), the amount allowed as a deduction under subsection (a) with respect to the taxpayer for any taxable year shall not exceed the applicable dollar limit.

``(B) Applicable dollar limit.--The applicable dollar limit for any taxable year shall be determined as follows:

Applicable

``Taxable year: dollar amount:

2003......................................................$8,000 ....

2004 and thereafter......................................$12,000.....

``(2) Limitation based on modified adjusted gross income.--

``(A) In general.--The amount which would (but for this paragraph) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under subparagraph (B).

``(B) Amount of reduction.--The amount determined under this subparagraph equals the amount which bears the same ratio to the amount which would be so taken into account as--

``(i) the excess of--

``(I) the taxpayer's modified adjusted gross income for such taxable year, over

``(II) $65,000 ($130,000 in the case of a joint return), bears to

``(ii) $15,000 ($30,000 in the case of a joint return).

``(C) Modified adjusted gross income.--For purposes of this paragraph, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined--

``(i) without regard to this section and sections 911, 931, and 933, and

``(ii) after the application of sections 86, 135, 137, 219, 221, and 469.For purposes of the sections referred to in clause (ii), adjusted gross income shall be determined without regard to the deduction allowed under this section.

``(D) Inflation adjustments.--

``(i) In general.--In the case of any taxable year beginning in a calendar year after 2003, both of the dollar amounts in subparagraph (B)(i)(II) shall be increased by an amount equal to--

``(I) such dollar amount, multiplied by

``(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2002' for

`calendar year 1992' in subparagraph (B) thereof.

``(ii) Rounding.--If any amount as adjusted under clause

(i) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.''.

(2) Qualified tuition and related expenses of eligible students.--

(A) In general.--Section 222(a) (relating to allowance of deduction) is amended by inserting ``of eligible students'' after ``expenses''.

(B) Definition of eligible student.--Section 222(d)

(relating to definitions and special rules) is amended by redesignating paragraphs (2) through (6) as paragraphs (3) through (7), respectively, and by inserting after paragraph

(1) the following new paragraph:

``(2) Eligible student.--The term `eligible student' has the meaning given such term by section 25A(b)(3).''.

(3) Effective date.--The amendments made by this subsection shall apply to payments made in taxable years beginning after December 31, 2002.

(b) Slower Acceleration of Top Income Rate.--

(1) In general.--The table in paragraph (2) of section 1(i)

(relating to reductions in rates after June 30, 2001), as amended by this Act, is amended to read as follows:

------------------------------------------------------------------------

The corresponding percentages shall

be substituted for the following

``In the case of taxable years percentages:

beginning during calendar year: ------------------------------------

28% 31% 36% 39.6%

------------------------------------------------------------------------

2001............................... 27.5% 30.5% 35.5% 39.1%

2002............................... 27.0% 30.0% 35.0% 38.6%

2003............................... 25.0% 28.0% 33.0% 38.6%

2004............................... 25.0% 28.0% 33.0% 37.6%

2005............................... 25.0% 28.0% 33.0% 37.6%

2006 and thereafter................ 25.0% 28.0% 33.0% 35.0%''.

------------------------------------------------------------------------

(2) Effective date.--The amendment made by this subsection shall apply to taxable years beginning after December 31, 2002.

(c) Application of EGTRRA.--The amendment made by subsection (b) shall be subject to title IX of the Economic Growth and Tax Relief Reconciliation Act of 2001 to the same extent and in the same manner as the provision of such Act to which such amendment relates.

______

SA 558. Mr. SCHUMER (for himself, Mr. Biden, Mrs. Boxer, Mr. Durbin, and Ms. Cantwell) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of subtitle C of title V, insert the following: SEC. ____. EXPANSION OF DEDUCTION FOR HIGHER EDUCATION

EXPENSES.

(a) In General.--

(1) Amount of deduction.--Subsection (b) of section 222

(relating to deduction for qualified tuition and related expenses) is amended to read as follows:

``(b) Limitations.--

``(1) Dollar limitations.--

``(B) Applicable dollar limit.--The applicable dollar limit for any taxable year shall be determined as follows:

Applicable

``Taxable year: dollar amount:

2003......................................................$8,000 ....

2004 and thereafter......................................$12,000.....

``(2) Limitation based on modified adjusted gross income.--

``(A) In general.--The amount which would (but for this paragraph) be taken into account under subsection (a) shall be reduced (but not below zero) by the amount determined under subparagraph (B).

``(B) Amount of reduction.--The amount determined under this subparagraph equals the amount which bears the same ratio to the amount which would be so taken into account as--

``(i) the excess of--

``(I) the taxpayer's modified adjusted gross income for such taxable year, over

``(II) $65,000 ($130,000 in the case of a joint return), bears to

``(ii) $15,000 ($30,000 in the case of a joint return).

``(C) Modified adjusted gross income.--For purposes of this paragraph, the term `modified adjusted gross income' means the adjusted gross income of the taxpayer for the taxable year determined--

``(i) without regard to this section and sections 911, 931, and 933, and

``(D) Inflation adjustments.--

``(i) In general.--In the case of any taxable year beginning in a calendar year after 2003, both of the dollar amounts in subparagraph (B)(i)(II) shall be increased by an amount equal to--

``(I) such dollar amount, multiplied by

``(II) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, by substituting `calendar year 2002' for

`calendar year 1992' in subparagraph (B) thereof.

``(ii) Rounding.--If any amount as adjusted under clause

(i) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.''.

(2) Qualified tuition and related expenses of eligible students.--

(A) In general.--Section 222(a) (relating to allowance of deduction) is amended by inserting ``of eligible students'' after ``expenses''.

(B) Definition of eligible student.--Section 222(d)

(relating to definitions and special rules) is amended by redesignating paragraphs (2) through (6) as paragraphs (3) through (7), respectively, and by inserting after paragraph

(1) the following new paragraph:

``(2) Eligible student.--The term `eligible student' has the meaning given such term by section 25A(b)(3).''.

(3) Effective date.--The amendments made by this subsection shall apply to payments made in taxable years beginning after December 31, 2002 and before January 1, 2009.

(b) Interest on Higher Education Loans.--

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

``SEC. 25C. INTEREST ON HIGHER EDUCATION LOANS.

``(a) Allowance of Credit.--In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the interest paid by the taxpayer during the taxable year on any qualified education loan.

``(b) Maximum Credit.--

``(1) In general.--Except as provided in paragraph (2), the credit allowed by subsection (a) for the taxable year shall not exceed $1,500.

``(2) Limitation based on modified adjusted gross income.--

``(A) In general.--If the modified adjusted gross income of the taxpayer for the taxable year exceeds $50,000 ($100,000 in the case of a joint return), the amount which would (but for this paragraph) be allowable as a credit under this section shall be reduced (but not below zero) by the amount which bears the same ratio to the amount which would be so allowable as such excess bears to $20,000 ($40,000 in the case of a joint return).

``(B) Modified adjusted gross income.--The term `modified adjusted gross income' means adjusted gross income determined without regard to sections 911, 931, and 933.

``(C) Inflation adjustment.--In the case of any taxable year beginning after 2003, the $50,000 and $100,000 amounts referred to in subparagraph (A) shall be increased by an amount equal to--

``(i) such dollar amount, multiplied by

``(ii) the cost-of-living adjustment determined under section (1)(f)(3) for the calendar year in which the taxable year begins, by substituting `2002' for `1992'.

``(D) Rounding.--If any amount as adjusted under subparagraph (C) is not a multiple of $50, such amount shall be rounded to the nearest multiple of $50.

``(c) Dependents Not Eligible for Credit.--No credit shall be allowed by this section to an individual for the taxable year if a deduction under section 151 with respect to such individual is allowed to another taxpayer for the taxable year beginning in the calendar year in which such individual's taxable year begins.

``(d) Limit on Period Credit Allowed.--A credit shall be allowed under this section only with respect to interest paid on any qualified education loan during the first 60 months

(whether or not consecutive) in which interest payments are required. For purposes of this paragraph, any loan and all refinancings of such loan shall be treated as 1 loan.

``(e) Definitions.--For purposes of this section--

``(1) Qualified education loan.--The term `qualified education loan' has the meaning given such term by section 221(e)(1).

``(2) Dependent.--The term `dependent' has the meaning given such term by section 152.

``(f) Special Rules.--

``(1) Denial of double benefit.--No credit shall be allowed under this section for any amount taken into account for any deduction under any other provision of this chapter.

``(2) Married couples must file joint return.--If the taxpayer is married at the close of the taxable year, the credit shall be allowed under subsection (a) only if the taxpayer and the taxpayer's spouse file a joint return for the taxable year.

``(3) Marital status.--Marital status shall be determined in accordance with section 7703.''.

(2) Conforming amendment.--The table of sections for subpart A of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 25B the following new item:

``Sec. 25C. Interest on higher education loans.''.

(3) Effective date.--The amendments made by this subsection shall apply to any qualified education loan (as defined in section 25C(e)(1) of the Internal Revenue Code of 1986, as added by this section) incurred on, before, or after the date of the enactment of this Act, but only with respect to any loan interest payment due after December 31, 2002 and before January 1, 2009.

(1) In general.--Subparagraph (B) of section 116(a)(2)

(relating to partial exclusion of received by individuals), as added by section 201 of this Act, is amended by striking

``(20 percent in the case of taxable years beginning after 2007)''.

(2) Effective date.--The amendment made by this subsection shall apply to taxable years beginning after December 31, 2003.

______

SA 559. Mr. BURNS (for himself and Mr. Rockefeller) submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

At the end of subtitle C of title V, add the following:

SEC. ____. EXPENSING OF BROADBAND INTERNET ACCESS

EXPENDITURES.

(a) In General.--Part VI of subchapter B of chapter 1

(relating to itemized deductions for individuals and corporations) is amended by inserting after section 190 the following new section:

``SEC. 191. BROADBAND EXPENDITURES.

``(a) Treatment of Expenditures.--

``(1) In general.--A taxpayer may elect to treat any qualified broadband expenditure which is paid or incurred by the taxpayer as an expense which is not chargeable to capital account. Any expenditure which is so treated shall be allowed as a deduction.

``(2) Election.--An election under paragraph (1) shall be made at such time and in such manner as the Secretary may prescribe by regulation.

``(b) Qualified Broadband Expenditures.--For purposes of this section--

``(1) In general.--The term `qualified broadband expenditure' means, with respect to any taxable year, any direct or indirect costs incurred and properly taken into account with respect to the purchase or installation of qualified equipment (including any upgrades thereto), together with any direct or indirect costs incurred and properly taken into account with respect to the connection of such qualified equipment to any qualified subscriber, but only if such costs are incurred after December 31, 2003, and before January 1, 2005.

``(2) Certain satellite expenditures excluded.--Such term shall not include any costs incurred with respect to the launching of any satellite equipment.

``(3) Leased equipment.--Such term shall include so much of the purchase price paid by the lessor of equipment subject to a lease described in subsection (c)(2)(B) as is attributable to expenditures incurred by the lessee which would otherwise be described in paragraph (1).

``(4) Limitation with regard to current generation broadband services.--Only 50 percent of the amounts taken into account under paragraph (1) with respect to qualified equipment through which current generation broadband services are provided shall be treated as qualified broadband expenditures.

``(c) When Expenditures Taken Into Account.--For purposes of this section--

``(1) In general.--Qualified broadband expenditures with respect to qualified equipment shall be taken into account with respect to the first taxable year in which--

``(A) current generation broadband services are provided through such equipment to qualified subscribers, or

``(B) next generation broadband services are provided through such equipment to qualified subscribers.

``(2) Limitation.--

``(A) In general.--Qualified expenditures shall be taken into account under paragraph (1) only with respect to qualified equipment--

``(i) the original use of which commences with the taxpayer, and

``(ii) which is placed in service,after December 31, 2003.

``(B) Sale-leasebacks.--For purposes of subparagraph (A), if property--

``(i) is originally placed in service after December 31, 2003, by any person, and

``(ii) sold and leased back by such person within 3 months after the date such property was originally placed in service,

such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in clause (ii).

``(d) Special Allocation Rules.--

``(1) Current generation broadband services.--For purposes of determining the amount of qualified broadband expenditures under subsection (a)(1) with respect to qualified equipment through which current generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified broadband expenditures shall be multiplied by a fraction--

``(A) the numerator of which is the sum of the number of potential qualified subscribers within the rural areas and the underserved areas which the equipment is capable of serving with current generation broadband services, and

``(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with current generation broadband services.

``(2) Next generation broadband services.--For purposes of determining the amount of qualified broadband expenditures under subsection (a)(1) with respect to qualified equipment through which next generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified expenditures shall be multiplied by a fraction--

``(A) the numerator of which is the sum of--

``(i) the number of potential qualified subscribers within the rural areas and underserved areas, plus

``(ii) the number of potential qualified subscribers within the area consisting only of residential subscribers not described in clause (i),

which the equipment is capable of serving with next generation broadband services, and

``(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with next generation broadband services.

``(e) Definitions.--For purposes of this section--

``(1) Antenna.--The term `antenna' means any device used to transmit or receive signals through the electromagnetic spectrum, including satellite equipment.

``(2) Cable operator.--The term `cable operator' has the meaning given such term by section 602(5) of the Communications Act of 1934 (47 U.S.C. 522(5)).

``(3) Commercial mobile service carrier.--The term

`commercial mobile service carrier' means any person authorized to provide commercial mobile radio service as defined in section 20.3 of title 47, Code of Federal Regulations.

``(4) Current generation broadband service.--The term

`current generation broadband service' means the transmission of signals at a rate of at least 1,000,000 bits per second to the subscriber and at least 128,000 bits per second from the subscriber.

``(5) Multiplexing or demultiplexing.--The term

`multiplexing' means the transmission of 2 or more signals over a single channel, and the term `demultiplexing' means the separation of 2 or more signals previously combined by compatible multiplexing equipment.

``(6) Next generation broadband service.--The term `next generation broadband service' means the transmission of signals at a rate of at least 22,000,000 bits per second to the subscriber and at least 5,000,000 bits per second from the subscriber.

``(7) Nonresidential subscriber.--The term `nonresidential subscriber' means any person who purchases broadband services which are delivered to the permanent place of business of such person.

``(8) Open video system operator.--The term `open video system operator' means any person authorized to provide service under section 653 of the Communications Act of 1934

(47 U.S.C. 573).

``(9) Other wireless carrier.--The term `other wireless carrier' means any person (other than a telecommunications carrier, commercial mobile service carrier, cable operator, open video system operator, or satellite carrier) providing current generation broadband services or next generation broadband service to subscribers through the radio transmission of energy.

``(10) Packet switching.--The term `packet switching' means controlling or routing the path of any digitized transmission signal which is assembled into packets or cells.

``(11) Provider.--The term `provider' means, with respect to any qualified equipment--

``(A) a cable operator,

``(B) a commercial mobile service carrier,

``(C) an open video system operator,

``(D) a satellite carrier,

``(E) a telecommunications carrier, or

``(F) any other wireless carrier,

providing current generation broadband services or next generation broadband services to subscribers through such qualified equipment.

``(12) Provision of services.--A provider shall be treated as providing services to 1 or more subscribers if--

``(A) such a subscriber has been passed by the provider's equipment and can be connected to such equipment for a standard connection fee,

``(B) the provider is physically able to deliver current generation broadband services or next generation broadband services, as applicable, to such a subscriber without making more than an insignificant investment with respect to such subscriber,

``(C) the provider has made reasonable efforts to make such subscribers aware of the availability of such services,

``(D) such services have been purchased by 1 or more such subscribers, and

``(E) such services are made available to such subscribers at average prices comparable to those at which the provider makes available similar services in any areas in which the provider makes available such services.

``(13) Qualified equipment.--

``(A) In general.--The term `qualified equipment' means equipment which provides current generation broadband services or next generation broadband services--

``(i) at least a majority of the time during periods of maximum demand to each subscriber who is utilizing such services, and

``(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no deduction is allowed under subsection (a)(1).

``(B) Only certain investment taken into account.--Except as provided in subparagraph (C) or (D), equipment shall be taken into account under subparagraph (A) only to the extent it--

``(i) extends from the last point of switching to the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a telecommunications carrier,

``(ii) extends from the customer side of the mobile telephone switching office to a transmission/receive antenna

(including such antenna) owned or leased by a subscriber in the case of a commercial mobile service carrier,

``(iii) extends from the customer side of the headend to the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a cable operator or open video system operator, or

``(iv) extends from a transmission/receive antenna

(including such antenna) which transmits and receives signals to or from multiple subscribers, to a transmission/receive antenna (including such antenna) on the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a satellite carrier or other wireless carrier, unless such other wireless carrier is also a telecommunications carrier.

``(C) Packet switching equipment.--Packet switching equipment, regardless of location, shall be taken into account under subparagraph (A) only if it is deployed in connection with equipment described in subparagraph (B) and is uniquely designed to perform the function of packet switching for current generation broadband services or next generation broadband services, but only if such packet switching is the last in a series of such functions performed in the transmission of a signal to a subscriber or the first in a series of such functions performed in the transmission of a signal from a subscriber.

``(D) Multiplexing and demultiplexing equipment.--Multiplexing and demultiplexing equipment shall be taken into account under subparagraph (A) only to the extent it is deployed in connection with equipment described in subparagraph (B) and is uniquely designed to perform the function of multiplexing and demultiplexing packets or cells of data and making associated application adaptions, but only if such multiplexing or demultiplexing equipment is located between packet switching equipment described in subparagraph

``(14) Qualified subscriber.--The term `qualified subscriber' means--

``(A) with respect to the provision of current generation broadband services--

``(i) any nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, or

``(ii) any residential subscriber residing in a dwelling located in a rural area or underserved area which is not a saturated market, and

``(B) with respect to the provision of next generation broadband services--

``(i) any nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, or

``(ii) any residential subscriber.

``(15) Residential subscriber.--The term `residential subscriber' means any individual who purchases broadband services which are delivered to such individual's dwelling.

``(16) Rural area.--The term `rural area' means any census tract which--

``(A) is not within 10 miles of any incorporated or census designated place containing more than 25,000 people, and

``(B) is not within a county or county equivalent which has an overall population density of more than 500 people per square mile of land.

``(17) Rural subscriber.--The term `rural subscriber' means any residential subscriber residing in a dwelling located in a rural area or nonresidential subscriber maintaining a permanent place of business located in a rural area.

``(18) Satellite carrier.--The term `satellite carrier' means any person using the facilities of a satellite or satellite service licensed by the Federal Communications Commission and operating in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of such Code to establish and operate a channel of communications for distribution of signals, and owning or leasing a capacity or service on a satellite in order to provide such point-to-multipoint distribution.

``(19) Saturated market.--The term `saturated market' means any census tract in which, as of the date of the enactment of this section--

``(A) current generation broadband services have been provided by a single provider to 85 percent or more of the total number of potential residential subscribers residing in dwellings located within such census tract, and

``(B) such services can be utilized--

``(i) at least a majority of the time during periods of maximum demand by each such subscriber who is utilizing such services, and

``(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no deduction is allowed under subsection (a)(1).

``(20) Subscriber.--The term `subscriber' means any person who purchases current generation broadband services or next generation broadband services.

``(21) Telecommunications carrier.--The term

`telecommunications carrier' has the meaning given such term by section 3(44) of the Communications Act of 1934 (47 U.S.C. 153(44)), but--

``(A) includes all members of an affiliated group of which a telecommunications carrier is a member, and

``(B) does not include a commercial mobile service carrier.

``(22) Total potential subscriber population.--The term

`total potential subscriber population' means, with respect to any area and based on the most recent census data, the total number of potential residential subscribers residing in dwellings located in such area and potential nonresidential subscribers maintaining permanent places of business located in such area.

``(23) Underserved area.--The term `underserved area' means any census tract which is located in--

``(A) an empowerment zone or enterprise community designated under section 1391,

``(B) the District of Columbia Enterprise Zone established under section 1400,

``(C) a renewal community designated under section 1400E, or

``(D) a low-income community designated under section 45D.

``(24) Underserved subscriber.--The term `underserved subscriber' means any residential subscriber residing in a dwelling located in an underserved area or nonresidential subscriber maintaining a permanent place of business located in an underserved area.

``(f) Special Rules.--

``(1) Property used outside the united states, etc., not qualified.--No expenditures shall be taken into account under subsection (a)(1) with respect to the portion of the cost of any property referred to in section 50(b) or with respect to the portion of the cost of any property taken into account under section 179.

``(2) Basis reduction.--

``(A) In general.--For purposes of this title, the basis of any property shall be reduced by the portion of the cost of such property taken into account under subsection (a)(1).

``(B) Ordinary income recapture.--For purposes of section 1245, the amount of the deduction allowable under subsection

(a)(1) with respect to any property which is of a character subject to the allowance for depreciation shall be treated as a deduction allowed for depreciation under section 167.

``(3) Coordination with section 38.--No credit shall be allowed under section 38 with respect to any amount for which a deduction is allowed under subsection (a)(1).''.

(b) Special Rule for Mutual or Cooperative Telephone Companies.--Section 501(c)(12)(B) (relating to list of exempt organizations) is amended by striking ``or'' at the end of clause (iii), by striking the period at the end of clause

(iv) and inserting ``, or'', and by adding at the end the following:

``(v) from the sale of property subject to a lease described in section 191(c)(2)(B), but only to the extent such income does not in any year exceed an amount equal to the qualified broadband expenditures which would be taken into account under section 191 for such year if the mutual or cooperative telephone company was not exempt from taxation and was treated as the owner of the property subject to such lease.''.

(1) Section 263(a)(1) (relating to capital expenditures) is amended by striking ``or'' at the end of subparagraph (G), by striking the period at the end of subparagraph (H) and inserting ``, or'', and by adding at the end the following new subparagraph:

``(I) expenditures for which a deduction is allowed under section 191.''.

(2) Section 1016(a) of such Code is amended by striking

``and'' at the end of paragraph (27), by striking the period at the end of paragraph (28) and inserting ``, and'', and by adding at the end the following new paragraph:

``(29) to the extent provided in section 191(f)(2).''.

(3) The table of sections for part VI of subchapter A of chapter 1 of such Code is amended by inserting after the item relating to section 190 the following new item:

``Sec. 191. Broadband expenditures.''.

(d) Designation of Census Tracts.--

(1) In general.--The Secretary of the Treasury shall, not later than 90 days after the date of the enactment of this Act, designate and publish those census tracts meeting the criteria described in paragraphs (16), (22), and (23) of section 191(e) of the Internal Revenue Code of 1986 (as added by this section). In making such designations, the Secretary of the Treasury shall consult with such other departments and agencies as the Secretary determines appropriate.

(2) Saturated market.--

(A) In general.--For purposes of designating and publishing those census tracts meeting the criteria described in subsection (e)(19) of such section 191--

(i) the Secretary of the Treasury shall prescribe not later than 30 days after the date of the enactment of this Act the form upon which any provider which takes the position that it meets such criteria with respect to any census tract shall submit a list of such census tracts (and any other information required by the Secretary) not later than 60 days after the date of the publication of such form, and

(ii) the Secretary of the Treasury shall publish an aggregate list of such census tracts and the applicable providers not later than 30 days after the last date such submissions are allowed under clause (i).

(B) No subsequent lists required.--The Secretary of the Treasury shall not be required to publish any list of census tracts meeting such criteria subsequent to the list described in subparagraph (A)(ii).

(C) Authority to disregard false submissions.--In addition to imposing any other applicable penalties, the Secretary of the Treasury shall have the discretion to disregard any form described in subparagraph (A)(i) on which a provider knowingly submitted false information.

(e) Other Regulatory Matters.--

(1) Prohibition.--No Federal or State agency or instrumentality shall adopt regulations or ratemaking procedures that would have the effect of confiscating any deduction or portion thereof allowed under section 191 of the Internal Revenue Code of 1986 (as added by this section) or otherwise subverting the purpose of this section.

(2) Treasury regulatory authority.--It is the intent of Congress in providing the election to deduct qualified broadband expenditures under section 191 of the Internal Revenue Code of 1986 (as added by this section) to provide incentives for the purchase, installation, and connection of equipment and facilities offering expanded broadband access to the Internet for users in certain low income and rural areas of the United States, as well as to residential users nationwide, in a manner that maintains competitive neutrality among the various classes of providers of broadband services. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 191 of such Code, including--

(A) regulations to determine how and when a taxpayer that incurs qualified broadband expenditures satisfies the requirements of section 191 of such Code to provide broadband services, and

(B) regulations describing the information, records, and data taxpayers are required to provide the Secretary to substantiate compliance with the requirements of section 191 of such Code.

(f) Effective Date.--The amendments made by this section shall apply to expenditures incurred after December 31, 2003.

______

SA 560. Mr. REID proposed an amendment to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; as follows:

At the appropriate place, insert the following:

SEC. ____. MECHANISM TO PROTECT SOCIAL SECURITY

(a) Certification.--

(1) In general.--Each year, beginning in 2003, when the Final Monthly Treasury Statement for the most recently completed fiscal year is issued, the Secretary of the Treasury shall--

(A) certify whether there was a on-budget balance or surplus in that fiscal year; and

(B) estimate whether there would be an on-budget deficit in any of the succeeding 10 fiscal years if section 201 of this Act takes effect January 1 of the following year.

(2) Estimate.--The calculations for the estimate under paragraph (1)(B) shall be consistent with the baseline rules specified in section 257 of the Balanced Budget and Emergency Deficit Control Act of 1995, except for the assumption that these provisions take effect and remain in effect permanently.

(b) Delay in Dividend Tax Cut.--Notwithstanding any other provision of law or this Act, section 201 of this Act shall not take effect until January 1 of the year following--

(1) a certification by the Secretary of the Treasury pursuant to paragraph (a)(1)(A) that no on-budget deficit existed in the preceding fiscal year; and

(2) an estimate by the Secretary of the Treasury pursuant to paragraph (a)(1)(B) that no on-budget deficits will occur in any of the 10 succeeding fiscal years even if section 201 takes effect.

______

SA 561. Mr. DASCHLE submitted an amendment intended to be proposed by him to the bill S. 1054, to provide for reconciliation pursuant to section 201 of the concurrent resolution on the budget for fiscal year 2004; which was ordered to lie on the table; as follows:

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE; AMENDMENT OF 1986 CODE; TABLE OF

CONTENTS.

(a) Short Title.--This Act may be cited as the ``Jobs, Opportunity, and Prosperity Act of 2003''.

(b) Amendment of 1986 Code.--Except as otherwise expressly provided, whenever in this Act an amendment or repeal is expressed in terms of an amendment to, or repeal of, a section or other provision, the reference shall be considered to be made to a section or other provision of the Internal Revenue Code of 1986.

Sec. 1. Short title; amendment of 1986 Code; table of contents.

TITLE I--TAX CREDIT FOR EVERY WORKING AMERICAN

Sec. 101. Tax credit for every working American.

TITLE II--CHILD TAX CREDIT

Sec. 201. Acceleration of increase in, and refundability of, child tax credit.

TITLE III--MARRIAGE PENALTY RELIEF

Sec. 301. Acceleration of marriage penalty relief for earned income credit.

Sec. 302. Acceleration of increase in standard deduction for married taxpayers filing joint returns.

TITLE IV--BUSINESS TAX CUT

Sec. 401. Small business tax credit for 50 percent of health premiums.

Sec. 402. Increased bonus depreciation.

Sec. 403. Modifications to expensing under section 179.

Sec. 404. Broadband Internet access tax credit.

TITLE V--STATE FISCAL RELIEF

Sec. 501. General revenue sharing with States and their local governments.

Sec. 502. Temporary State FMAP relief.

TITLE VI--UNEMPLOYMENT COMPENSATION

Subtitle A--Extension and Enhancement of Temporary Extended

Unemployment Compensation

Sec. 601. Extension of the temporary extended unemployment compensation act of 2002.

Sec. 602. Entitlement to additional weeks of temporary extended unemployment compensation.

Subtitle B--Temporary Enhanced Regular Unemployment Compensation

Sec. 611. Federal-state agreements.

Sec. 612. Payments to States having agreements under this title.

Sec. 613. Financing provisions.

Sec. 614. Definitions.

Sec. 615. Applicability.

Sec. 616. Coordination with the Temporary Extended Unemployment

Compensation Act of 2002.

TITLE VII--LONG-TERM FISCAL DISCIPLINE

Subtitle A--Provisions Designed To Curtail Tax Shelters

Sec. 701. Clarification of economic substance doctrine.

Sec. 702. Penalty for failing to disclose reportable transaction.

Sec. 703. Accuracy-related penalty for listed transactions and other reportable transactions having a significant tax avoidance purpose.

Sec. 704. Penalty for understatements attributable to transactions lacking economic substance, etc.

Sec. 705. Modifications of substantial understatement penalty for nonreportable transactions.

Sec. 706. Tax shelter exception to confidentiality privileges relating to taxpayer communications.

Sec. 707. Disclosure of reportable transactions.

Sec. 708. Modifications to penalty for failure to register tax shelters.

Sec. 709. Modification of penalty for failure to maintain lists of investors.

Sec. 710. Modification of actions to enjoin certain conduct related to tax shelters and reportable transactions.

Sec. 711. Understatement of taxpayer's liability by income tax return preparer.

Sec. 712. Penalty on failure to report interests in foreign financial accounts.

Sec. 713. Frivolous tax submissions.

Sec. 714. Regulation of individuals practicing before the Department of

Treasury.

Sec. 715. Penalty on promoters of tax shelters.

Sec. 716. Statute of limitations for taxable years for which listed transactions not reported.

Sec. 717. Denial of deduction for interest on underpayments attributable to nondisclosed reportable and noneconomic substance transactions.

Sec. 718. Authorization of appropriations for tax law enforcement.

Subtitle B--Other Corporate Governance Provisions

Sec. 721. Affirmation of consolidated return regulation authority.

Sec. 722. Signing of corporate tax returns by chief executive officer.

Subtitle C--Provisions to Discourage Corporate Expatriation

Sec. 731. Tax treatment of inverted corporate entities.

Sec. 732. Excise tax on stock compensation of insiders in inverted corporations.

Sec. 733. Reinsurance of United States risks in foreign jurisdictions.

Subtitle D--Imposition of Customs User Fees

Sec. 741. Customs user fees.

Subtitle E--Budget Points of Order

Sec. 751. Extension of pay-as-you-go enforcement in the Senate.

Sec. 752. Application of EGTRRA sunset to various titles.

Sec. 753. Sunset.

TITLE I--TAX CREDIT FOR EVERY WORKING AMERICAN

SEC. 101. TAX CREDIT FOR EVERY WORKING AMERICAN.

(a) In General.--The Secretary of the Treasury shall pay, out of any money in the Treasury not otherwise appropriated, to each eligible taxpayer an amount equal to 10 percent of the eligible portion of the taxpayer's adjusted gross income

(as defined in section 62 of the Internal Revenue Code of 1986) for a taxable year beginning in 2002.

(b) Eligible Taxpayer.--For purposes of this section, the term ``eligible taxpayer'' means any individual other than--

(1) any estate or trust,

(2) any nonresident alien, or

(3) any individual with respect to whom a deduction under section 151 of such Code is allowable to another taxpayer for a taxable year beginning in 2003.

(1) In general.--With respect to each eligible taxpayer, the eligible portion shall be equal to the sum of--

(A) $3,000 ($6,000 in the case of a taxpayer filing a joint return under section 6013 of such Code), plus

(B) $3,000 for each qualifying child of the taxpayer, not to exceed $6,000.

(2) Qualifying child.--The term ``qualifying child'' has the meaning given such term by section 24(c) of such Code.

(d) Remittance of Payment.--The Secretary of the Treasury shall remit the payment described in subsection (a) to the taxpayer as soon as practicable after the date of the enactment of this section.

TITLE II--CHILD TAX CREDIT

SEC. 201. ACCELERATION OF INCREASE IN, AND REFUNDABILITY OF,

CHILD TAX CREDIT.

(a) Acceleration of Increase in Credit.--The table contained in section 24(a)(2) (relating to per child amount) is amended to read as follows:

The per child amount is--e year beginning in--

2003........................................................$700 ....

2004, 2005, 2006, 2007, 2008, or 2009...................... 800 ....

2010 or thereafter......................................1,000.''.....

(b) Expansion of Credit Refundability.--Section 24(d)(1)(B)(i) (relating to portion of credit refundable) is amended by striking ``(10 percent in the case of taxable years beginning before January 1, 2005)''.

(1) In general.--Subchapter B of chapter 65 (relating to abatements, credits, and refunds) is amended by adding at the end the following new section:

``SEC. 6429. ADVANCE PAYMENT OF PORTION OF INCREASED CHILD

CREDIT FOR 2003.

``(a) In General.--Each taxpayer who claimed a credit under section 24 on the return for the taxpayer's first taxable year beginning in 2002 shall be treated as having made a payment against the tax imposed by chapter 1 for such taxable year in an amount equal to the child tax credit refund amount

(if any) for such taxable year.

``(b) Child Tax Credit Refund Amount.--For purposes of this section, the child tax credit refund amount is the amount by which the aggregate credits allowed under part IV of subchapter A of chapter 1 for such first taxable year would have been increased if--

``(1) the per child amount under section 24(a)(2) for such year were $700,

``(2) only qualifying children (as defined in section 24(c)) of the taxpayer for such year who had not attained age 17 as of December 31, 2003, were taken into account, and

``(3) section 24(d)(1)(B)(ii) did not apply.

``(c) Timing of Payments.--In the case of any overpayment attributable to this section, the Secretary shall, subject to the provisions of this title, refund or credit such overpayment as rapidly as possible and, to the extent practicable, before October 1, 2003. No refund or credit shall be made or allowed under this section after December 31, 2003.

``(d) Coordination with Child Tax Credit.--

``(1) In general.--The amount of credit which would (but for this subsection and section 26) be allowed under section 24 for the taxpayer's first taxable year beginning in 2003 shall be reduced (but not below zero) by the payments made to the taxpayer under this section. Any failure to so reduce the credit shall be treated as arising out of a mathematical or clerical error and assessed according to section 6213(b)(1).

``(2) Joint returns.--In the case of a payment under this section with respect to a joint return, half of such payment shall be treated as having been made to each individual filing such return.

``(e) No Interest.--No interest shall be allowed on any overpayment attributable to this section.''.

(2) Clerical amendment.--The table of sections for subchapter B of chapter 65 is amended by adding at the end the following new item:

``Sec. 6429. Advance payment of portion of increased child credit for

2003.''.

(d) Effective Dates.--

(1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2002.

(2) Subsection (c).--The amendments made by subsection (c) shall take effect on the date of the enactment of this Act.

TITLE III--MARRIAGE PENALTY RELIEF

SEC. 301. ACCELERATION OF MARRIAGE PENALTY RELIEF FOR EARNED

INCOME CREDIT.

(a) In General.--Section 32(b)(2)(B) (relating to joint returns) is amended by striking ```increased by--'' and all that follows and inserting ``increased by $3,000.''.

(b) Inflation Adjustment.--Clause (ii) of section 32( j)(1)(B) (relating to inflation adjustments) is amended to read as follows:

``(ii) in the case of the $3,000 amount in subsection

(b)(2)(B), by substituting `calendar year 2003' for `calendar year 1992' in subparagraph (B) of such section 1.''.

(c) Conforming Amendment.--Section 303(i)(2) of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking ``2004'' and inserting ``2003''.

(d) Effective Dates.--

(1) In general.--Except as provided in paragraph (2), the amendments made by this section shall apply to taxable years beginning after December 31, 2002.

(2) Conforming amendment.--The amendment made by subsection

SEC. 302. ACCELERATION OF INCREASE IN STANDARD DEDUCTION FOR

MARRIED TAXPAYERS FILING JOINT RETURNS.

(a) In General.--Paragraph (2) of section 63(c) (relating to basic standard deduction) is amended to read as follows:

``(2) Basic standard deduction.--For purposes of paragraph

(1), the basic standard deduction is--

``(A) 200 percent of the dollar amount in effect under subparagraph (C) for the taxable year in the case of--

``(i) a joint return, or

``(ii) a surviving spouse (as defined in section 2(a)),

``(B) $4,400 in the case of a head of household (as defined in section 2(b)), or

``(C) $3,000 in any other case.''.

(b) Conforming Amendments.--

(1) Section 63(c)(4) is amended by striking ``(2)(D)'' each place it occurs and inserting ``(2)(C)''.

(2) Section 63(c) is amended by striking paragraph (7).

(3) Section 301(d) of the Economic Growth and Tax Relief Reconciliation Act of 2001 is amended by striking ``2004'' and inserting ``2002''.

TITLE IV--BUSINESS TAX CUT

SEC. 401. SMALL BUSINESS TAX CREDIT FOR 50 PERCENT OF HEALTH

PREMIUMS.

(a) In General.--Subpart D of part IV of subchapter A of chapter 1 (relating to business-related credits) is amended by adding at the end the following:

``SEC. 45G. EMPLOYEE HEALTH INSURANCE EXPENSES.

``(a) General Rule.--For purposes of section 38, in the case of a qualified small employer, the employee health insurance expenses credit determined under this section is an amount equal to the applicable percentage of the amount paid by the taxpayer during the taxable year for qualified employee health insurance expenses.

``(b) Applicable Percentage.--For purposes of subsection

(a), the applicable percentage is equal to--

``(1) 50 percent in the case of an employer with less than 26 qualified employees,

``(2) 40 percent in the case of an employer with more than 25 but less than 36 qualified employees, and

``(3) 30 percent in the case of an employer with more than 35 but less than 51 qualified employees.

``(c) Per Employee Dollar Limitation.--The amount of qualified employee health insurance expenses taken into account under subsection (a) with respect to any qualified employee for any taxable year shall not exceed the maximum employer contribution for self-only coverage or family coverage (as applicable) determined under section 8906(a) of title 5, United States Code, for the calendar year in which such taxable year begins.

``(d) Definitions and Special Rules.--For purposes of this section--

``(1) Qualified small employer.--

``(A) In general.--The term `qualified small employer' means any small employer which provides eligibility for health insurance coverage (after any waiting period (as defined in section 9801(b)(4)) to all qualified employees of the employer.

``(B) Small employer.--

``(i) In general.--For purposes of this paragraph, the term

`small employer' means, with respect to any calendar year, any employer if such employer employed an average of not less than 2 and not more than 50 qualified employees on business days during either of the 2 preceding calendar years. For purposes of the preceding sentence, a preceding calendar year may be taken into account only if the employer was in existence throughout such year.

``(ii) Employers not in existence in preceding year.--In the case of an employer which was not in existence throughout the 1st preceding calendar year, the determination under clause (i) shall be based on the average number of qualified employees that it is reasonably expected such employer will employ on business days in the current calendar year.

``(2) Qualified employee health insurance expenses.--

``(A) In general.--The term `qualified employee health insurance expenses' means any amount paid by an employer for health insurance coverage to the extent such amount is attributable to coverage provided to any employee while such employee is a qualified employee.

``(B) Exception for amounts paid under salary reduction arrangements.--No amount paid or incurred for health insurance coverage pursuant to a salary reduction arrangement shall be taken into account under subparagraph (A).

``(C) Health insurance coverage.--The term `health insurance coverage' has the meaning given such term by paragraph (1) of section 9832(b) (determined by disregarding the last sentence of paragraph (2) of such section).

``(3) Qualified employee.--The term `qualified employee' means an employee of an employer who, with respect to any period, is not provided health insurance coverage under--

``(A) a health plan of the employee's spouse,

``(B) title XVIII, XIX, or XXI of the Social Security Act,

``(C) chapter 17 of title 38, United States Code,

``(D) chapter 55 of title 10, United States Code,

``(E) chapter 89 of title 5, United States Code, or

``(F) any other provision of law.

``(4) Employee--The term `employee'--

``(A) means any individual, with respect to any calendar year, who is reasonably expected to receive at least $5,000 of compensation from the employer during such year,

``(B) does not include an employee within the meaning of section 401(c)(1), and

``(C) includes a leased employee within the meaning of section 414(n).

``(5) Compensation.--The term `compensation' means amounts described in section 6051(a)(3).

``(e) Certain Rules Made Applicable.--For purposes of this section, rules similar to the rules of section 52 shall apply.

``(f) Denial of Double Benefit.--No deduction or credit under any other provision of this chapter shall be allowed with respect to qualified employee health insurance expenses taken into account under subsection (a).

``(g) Termination.--This section shall not apply to taxable years beginning after December 31, 2003.''.

(b) Credit To Be Part of General Business Credit.--Section 38(b) (relating to current year business credit) is amended by striking ``plus'' at the end of paragraph (14), by striking the period at the end of paragraph (15) and inserting ``, plus'', and by adding at the end the following:

``(16) the employee health insurance expenses credit determined under section 45G.''.

(1) In general.--Subsection (c) of section 38 (relating to limitation based on amount of tax) is amended by redesignating paragraph (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:

``(3) Special rules for employee health insurance credit.--

``(A) In general.--In the case of the employee health insurance credit--

``(i) this section and section 39 shall be applied separately with respect to the credit, and

``(ii) in applying paragraph (1) to the credit--

``(I) the amounts in subparagraphs (A) and (B) thereof shall be treated as being zero, and

``(II) the limitation under paragraph (1) (as modified by subclause (I)) shall be reduced by the credit allowed under subsection (a) for the taxable year (other than the employee health insurance credit).

``(B) Employee health insurance credit.--For purposes of this subsection, the term `employee health insurance credit' means the credit allowable under subsection (a) by reason of section 45G(a).''.

(2) Conforming amendment.--Subclause (II) of section 38(c)(2)(A)(ii) is amended by striking ``(other'' and all that follows through ``credit)'' and inserting ``(other than the empowerment zone employment credit or the employee health insurance credit)''.

(d) No Carrybacks.--Subsection (d) of section 39 (relating to carryback and carryforward of unused credits) is amended by adding at the end the following:

``(11) No carryback of section 45g credit before effective date.--No portion of the unused business credit for any taxable year which is attributable to the employee health insurance expenses credit determined under section 45G may be carried back to a taxable year ending before the date of the enactment of section 45G.''.

(e) Clerical Amendment.--The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following:

``Sec. 45G. Employee health insurance expenses.''.

(f) Employer Outreach.--The Internal Revenue Service shall, in conjunction with the Small Business Administration, develop materials and implement an educational program to ensure that business personnel are aware of--

(1) the eligibility criteria for the tax credit provided under section 45G of the Internal Revenue Code of 1986 (as added by this section),

(2) the methods to be used in calculating such credit,

(3) the documentation needed in order to claim such credit, and

(4) any available health plan purchasing alliances established under title II,

so that the maximum number of eligible businesses may claim the tax credit.

(g) Effective Date.--The amendments made by this section shall apply to amounts paid or incurred in taxable years beginning after December 31, 2002.

SEC. 402. INCREASED BONUS DEPRECIATION.

(a) In General.--Subsection (k) of section 168 (relating to accelerated cost recovery system) is amended--

(1) by adding at the end of paragraph (1) the following new flush sentence:

``In the case of any qualified property acquired by the taxpayer pursuant to a written binding contract which was entered into after December 31, 2002, subparagraph (A) shall be applied by substituting `50 percent' for `30 percent'.'',

(2) by striking ``September 11, 2004'' each place it appears and inserting ``January 1, 2004'',

(3) by striking ``September 11, 2004'' and inserting

``January 1, 2004'', and

(4) by striking ``pre-september 11, 2004'' and inserting

``pre-january 1, 2004''.

(b) Conforming Amendments.--

(1) The heading for clause (i) of section 1400L(b)(2)(C) of the Internal Revenue Code of 1986 is amended by striking ``30 percent additional'' and inserting ``Additional''.

(2) Section 1400L(b)(2)(D) of such Code is amended by inserting ``(as in effect on the day after the date of the enactment of this section)'' after ``section 168(k)(2)(D)''.

SEC. 403. MODIFICATIONS TO EXPENSING UNDER SECTION 179.

(a) Increase of Amount Which May Be Expensed.--

(1) In general.--Paragraph (1) of section 179(b) (relating to dollar limitation) is amended to read as follows:

``(1) Dollar limitation.--The aggregate cost which may be taken into account under subsection (a) for any taxable year shall not exceed $25,000 ($75,000 in the case of any taxable year beginning in 2003).''

(2) Increase in phaseout threshold.--Paragraph (2) of section 179(b) is amended by striking ``$200,000'' and inserting ``$200,000 ($325,000 in the case of any taxable year beginning in 2003)''.

(b) Effective Date.--The amendments made by this section shall apply to property placed in service in taxable years beginning after December 31, 2002.

SEC. 404. BROADBAND INTERNET ACCESS TAX CREDIT.

(a) In General.--Subpart E of part IV of chapter 1

(relating to rules for computing investment credit) is amended by inserting after section 48 the following new section:

``SEC. 48A. BROADBAND INTERNET ACCESS CREDIT.

``(a) General Rule.--For purposes of section 46, the broadband credit for any taxable year is the sum of--

``(1) the current generation broadband credit, plus

``(2) the next generation broadband credit.

``(b) Current Generation Broadband Credit; Next Generation Broadband Credit.--For purposes of this section--

``(1) Current generation broadband credit.--The current generation broadband credit for any taxable year is equal to 10 percent of the qualified expenditures incurred with respect to qualified equipment providing current generation broadband services to qualified subscribers and taken into account with respect to such taxable year.

``(2) Next generation broadband credit.--The next generation broadband credit for any taxable year is equal to 20 percent of the qualified expenditures incurred with respect to qualified equipment providing next generation broadband services to qualified subscribers and taken into account with respect to such taxable year.

``(c) When Expenditures Taken Into Account.--For purposes of this section--

``(1) In general.--Qualified expenditures with respect to qualified equipment shall be taken into account with respect to the first taxable year in which--

``(A) current generation broadband services are provided through such equipment to qualified subscribers, or

``(B) next generation broadband services are provided through such equipment to qualified subscribers.

``(2) Limitation.--

``(A) In general.--Qualified expenditures shall be taken into account under paragraph (1) only with respect to qualified equipment--

``(i) the original use of which commences with the taxpayer, and

``(ii) which is placed in service,

after December 31, 2002.

``(B) Sale-leasebacks.--For purposes of subparagraph (A), if property--

``(i) is originally placed in service after December 31, 2002, by a person, and

``(ii) sold and leased back by such person within 3 months after the date such property was originally placed in service,such property shall be treated as originally placed in service not earlier than the date on which such property is used under the leaseback referred to in clause (ii).

``(d) Special Allocation Rules.--

``(1) Current generation broadband services.--For purposes of determining the current generation broadband credit under subsection (a)(1) with respect to qualified equipment through which current generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified expenditures shall be multiplied by a fraction--

``(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with current generation broadband services.

``(2) Next generation broadband services.--For purposes of determining the next generation broadband credit under subsection (a)(2) with respect to qualified equipment through which next generation broadband services are provided, if the qualified equipment is capable of serving both qualified subscribers and other subscribers, the qualified expenditures shall be multiplied by a fraction--

``(A) the numerator of which is the sum of--

``(i) the number of potential qualified subscribers within the rural areas and underserved areas, plus

``(ii) the number of potential qualified subscribers within the area consisting only of residential subscribers not described in clause (i),

which the equipment is capable of serving with next generation broadband services, and

``(B) the denominator of which is the total potential subscriber population of the area which the equipment is capable of serving with next generation broadband services.

``(e) Definitions.--For purposes of this section--

``(1) Antenna.--The term `antenna' means any device used to transmit or receive signals through the electromagnetic spectrum, including satellite equipment.

``(2) Cable operator.--The term `cable operator' has the meaning given such term by section 602(5) of the Communications Act of 1934 (47 U.S.C. 522(5)).

``(3) Commercial mobile service carrier.--The term

`commercial mobile service carrier' means any person authorized to provide commercial mobile radio service as defined in section 20.3 of title 47, Code of Federal Regulations.

``(4) Current generation broadband service.--The term

`current generation broadband service' means the transmission of signals at a rate of at least 1,000,000 bits per second to the subscriber and at least 128,000 bits per second from the subscriber.

``(5) Multiplexing or demultiplexing.--The term

``(7) Nonresidential subscriber.--The term `nonresidential subscriber' means a person who purchases broadband services which are delivered to the permanent place of business of such person.

``(8) Open video system operator.--The term `open video system operator' means any person authorized to provide service under section 653 of the Communications Act of 1934

(47 U.S.C. 573).

``(10) Packet switching.--The term `packet switching' means controlling or routing the path of a digitized transmission signal which is assembled into packets or cells.

``(11) Provider.--The term `provider' means, with respect to any qualified equipment--

``(A) a cable operator,

``(B) a commercial mobile service carrier,

``(C) an open video system operator,

``(D) a satellite carrier,

``(E) a telecommunications carrier, or

``(F) any other wireless carrier,

providing current generation broadband services or next generation broadband services to subscribers through such qualified equipment.

``(12) Provision of services.--A provider shall be treated as providing services to a subscriber if--

``(A) a subscriber has been passed by the provider's equipment and can be connected to such equipment for a standard connection fee,

``(B) the provider is physically able to deliver current generation broadband services or next generation broadband services, as applicable, to such subscribers without making more than an insignificant investment with respect to any such subscriber,

``(C) the provider has made reasonable efforts to make such subscribers aware of the availability of such services,

``(D) such services have been purchased by one or more such subscribers, and

``(13) Qualified equipment.--

``(A) In general.--The term `qualified equipment' means equipment which provides current generation broadband services or next generation broadband services--

``(i) at least a majority of the time during periods of maximum demand to each subscriber who is utilizing such services, and

``(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no credit is allowed under subsection

(a)(1).

``(B) Only certain investment taken into account.--Except as provided in subparagraph (C) or (D), equipment shall be taken into account under subparagraph (A) only to the extent it--

``(i) extends from the last point of switching to the outside of the unit, building, dwelling, or office owned or leased by a subscriber in the case of a telecommunications carrier,

``(ii) extends from the customer side of the mobile telephone switching office to a transmission/receive antenna

(including such antenna) owned or leased by a subscriber in the case of a commercial mobile service carrier,

``(iv) extends from a transmission/receive antenna

``(14) Qualified expenditure.--

``(A) In general.--The term `qualified expenditure' means any amount--

``(i) chargeable to capital account with respect to the purchase and installation of qualified equipment (including any upgrades thereto) for which depreciation is allowable under section 168, and

``(ii) incurred after December 31, 2002, and before January 1, 2004.

``(B) Certain satellite expenditures excluded.--Such term shall not include any expenditure with respect to the launching of any satellite equipment.

``(15) Qualified subscriber.--The term `qualified subscriber' means--

``(A) with respect to the provision of current generation broadband services--

``(i) a nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, or

``(ii) a residential subscriber residing in a dwelling located in a rural area or underserved area which is not a saturated market, and

``(B) with respect to the provision of next generation broadband services--

``(i) a nonresidential subscriber maintaining a permanent place of business in a rural area or underserved area, or

``(ii) a residential subscriber.

``(16) Residential subscriber.--The term `residential subscriber' means an individual who purchases broadband services which are delivered to such individual's dwelling.

``(17) Rural area.--The term `rural area' means any census tract which--

``(A) is not within 10 miles of any incorporated or census designated place containing more than 25,000 people, and

``(B) is not within a county or county equivalent which has an overall population density of more than 500 people per square mile of land.

``(18) Rural subscriber.--The term `rural subscriber' means a residential subscriber residing in a dwelling located in a rural area or nonresidential subscriber maintaining a permanent place of business located in a rural area.

``(19) Satellite carrier.--The term `satellite carrier' means any person using the facilities of a satellite or satellite service licensed by the Federal Communications Commission and operating in the Fixed-Satellite Service under part 25 of title 47 of the Code of Federal Regulations or the Direct Broadcast Satellite Service under part 100 of title 47 of such Code to establish and operate a channel of communications for distribution of signals, and owning or leasing a capacity or service on a satellite in order to provide such distribution.

``(20) Saturated market.--The term `saturated market' means any census tract in which, as of the date of the enactment of this section--

``(A) current generation broadband services have been provided by one or more providers to 85 percent or more of the total number of potential residential subscribers residing in dwellings located within such census tract, and

``(B) such services can be utilized--

``(i) at least a majority of the time during periods of maximum demand by each such subscriber who is utilizing such services, and

``(ii) in a manner substantially the same as such services are provided by the provider to subscribers through equipment with respect to which no credit is allowed under subsection

(a)(1).

``(21) Subscriber.--The term `subscriber' means a person who purchases current generation broadband services or next generation broadband services.

``(22) Telecommunications carrier.--The term

`telecommunications carrier' has the meaning given such term by section 3(44) of the Communications Act of 1934 (47 U.S.C. 153(44)), but--

``(A) includes all members of an affiliated group of which a telecommunications carrier is a member, and

``(B) does not include a commercial mobile service carrier.

``(23) Total potential subscriber population.--The term

``(24) Underserved area.--The term `underserved area' means any census tract which is located in--

``(A) an empowerment zone or enterprise community designated under section 1391,

``(B) the District of Columbia Enterprise Zone established under section 1400,

``(C) a renewal community designated under section 1400E, or

``(D) a low-income community designated under section 45D.

``(25) Underserved subscriber.--The term `underserved subscriber' means a residential subscriber residing in a dwelling located in an underserved area or nonresidential subscriber maintaining a permanent place of business located in an underserved area.''.

(b) Credit To Be Part of Investment Credit.--Section 46

(relating to the amount of investment credit) is amended by striking ``and'' at the end of paragraph (2), by striking the period at the end of paragraph (3) and inserting ``, and'', and by adding at the end the following:

``(4) the broadband Internet access credit.''

(c) Special Rule for Mutual or Cooperative Telephone Companies.--Section 501(c)(12)(B) (relating to list of exempt organizations) is amended by striking ``or'' at the end of clause (iii), by striking the period at the end of clause

(iv) and inserting ``, or'', and by adding at the end the following new clause:

``(v) from the sale of property subject to a lease described in section 48A(c)(2)(B), but only to the extent such income does not in any year exceed an amount equal to the credit for qualified expenditures which would be determined under section 48A for such year if the mutual or cooperative telephone company was not exempt from taxation and was treated as the owner of the property subject to such lease.''.

(d) Conforming Amendment.--The table of sections for subpart E of part IV of subchapter A of chapter 1 is amended by inserting after the item relating to section 48 the following:

``Sec. 48A. Broadband internet access credit.''.

(e) Designation of Census Tracts.--

(1) In general.--The Secretary of the Treasury shall, not later than 90 days after the date of the enactment of this Act, designate and publish those census tracts meeting the criteria described in paragraphs (17) and (24) of section 48A(e) of the Internal Revenue Code of 1986 (as added by this section). In making such designations, the Secretary of the Treasury shall consult with such other departments and agencies as the Secretary determines appropriate.

(2) Saturated market.--

(A) In general.--For purposes of designating and publishing those census tracts meeting the criteria described in subsection (e)(20) of such section 48A--

(ii) the Secretary of the Treasury shall publish an aggregate list of such census tracts submitted and the applicable providers not later than 30 days after the last date such submissions are allowed under clause (i).

(C) Penalties for submission of false information.--The Secretary of the Treasury shall designate appropriate penalties for knowingly submitting false information on the form described in subparagraph (A)(i).

(f) Other Regulatory Matters.--

(1) Prohibition.--No Federal or State agency or instrumentality shall adopt regulations or ratemaking procedures that would have the effect of confiscating any credit or portion thereof allowed under section 48A of the Internal Revenue Code of 1986 (as added by this section) or otherwise subverting the purpose of this section.

(2) Treasury regulatory authority.--It is the intent of Congress in providing the broadband Internet access credit under section 48A of the Internal Revenue Code of 1986 (as added by this section) to provide incentives for the purchase, installation, and connection of equipment and facilities offering expanded broadband access to the Internet for users in certain low income and rural areas of the United States, as well as to residential users nationwide, in a manner that maintains competitive neutrality among the various classes of providers of broadband services. Accordingly, the Secretary of the Treasury shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of section 48A of such Code, including--

(A) regulations to determine how and when a taxpayer that incurs qualified expenditures satisfies the requirements of section 48A of such Code to provide broadband services, and

(B) regulations describing the information, records, and data taxpayers are required to provide the Secretary to substantiate compliance with the requirements of section 48A of such Code.

(g) Effective Date.--The amendments made by this section shall apply to expenditures incurred after December 31, 2002, and before January 1, 2004.

TITLE V--STATE FISCAL RELIEF

SEC. 501. GENERAL REVENUE SHARING WITH STATES AND THEIR LOCAL

GOVERNMENTS.

(a) Appropriation.--There is authorized to be appropriated and is appropriated to carry out this section $20,000,000,000 for fiscal year 2003.

(b) Allotments.--From the amount appropriated under subsection (a) for fiscal year 2003, the Secretary of the Treasury shall, as soon as practicable after the date of the enactment of this Act, allot to each of the States as follows, except that no State shall receive less than \1/2\ of 1 percent of such amount:

(1) State level.--$16,000,000,000 shall be allotted among such States on the basis of the relative population of each such State, as determined by the Secretary on the basis of the most recent satisfactory data.

(2) Local government level.--$4,000,000,000 shall be allotted among such States as determined under paragraph (1) for distribution to the various units of general local government within such States on the basis of the relative population of each such unit within each such State, as determined by the Secretary on the basis of the most recent satisfactory data.

(1) State.--The term ``State'' means any of the several States, the District of Columbia, and the Commonwealth of Puerto Rico.

(2) Unit of general local government.--

(A) In general.--The term ``unit of general local government'' means--

(i) a county, parish, township, city, or political subdivision of a county, parish, township, or city, that is a unit of general local government as determined by the Secretary of Commerce for general statistical purposes; and

(ii) the District of Columbia, the Commonwealth of Puerto Rico, and the recognized governing body of an Indian tribe or Alaskan native village that carries out substantial governmental duties and powers.

(B) Treatment of subsumed areas.--For purposes of determining a unit of general local government under this section, the rules under section 6720(c) of title 31, United States Code, shall apply.

SEC. 502. TEMPORARY STATE FMAP RELIEF.

(a) Permitting Maintenance of Fiscal Year 2002 FMAP for Last 2 Calendar Quarters of Fiscal Year 2003.--Notwithstanding any other provision of law, but subject to subsection (e), if the FMAP determined without regard to this subsection for a State for fiscal year 2003 is less than the FMAP as so determined for fiscal year 2002, the FMAP for the State for fiscal year 2002 shall be substituted for the State's FMAP for the third and fourth calendar quarters of fiscal year 2003, before the application of this section.

(b) Permitting Maintenance of Fiscal Year 2003 FMAP for Each Calendar Quarter of Fiscal Year 2004.--Notwithstanding any other provision of law, but subject to subsection (e), if the FMAP determined without regard to this subsection for a State for fiscal year 2004 is less than the FMAP as so determined for fiscal year 2003, the FMAP for the State for fiscal year 2003 shall be substituted for the State's FMAP for each calendar quarter of fiscal year 2004, before the application of this section.

(c) General 4.95 Percentage Points Increase for Last 2 Calendar Quarters of Fiscal Year 2003 and Each Calendar Quarter of Fiscal Year 2004.--Notwithstanding any other provision of law, but subject to subsections (e) and (f), for each State for the third and fourth calendar quarters of fiscal year 2003 and each calendar quarter of fiscal year 2004, the FMAP (taking into account the application of subsections (a) and (b)) shall be increased by 4.95 percentage points.

(d) Increase in Cap on Medicaid Payments To Territories.--Notwithstanding any other provision of law, but subject to subsection (f), with respect to the third and fourth calendar quarters of fiscal year 2003 and each calendar quarter of fiscal year 2004, the amounts otherwise determined for Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa under subsections (f) and (g) of section 1108 of the Social Security Act (42 U.S.C. 1308) shall each be increased by an amount equal to 9.90 percent of such amounts.

(e) Scope of Application.--The increases in the FMAP for a State under this section shall apply only for purposes of title XIX of the Social Security Act and shall not apply with respect to--

(1) disproportionate share hospital payments described in section 1923 of such Act (42 U.S.C. 1396r-4);

(2) payments under title IV or XXI of such Act (42 U.S.C. 601 et seq. and 1397aa et seq.); or

(3) the percentage described in the third sentence of section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)) (relating to amounts expended as medical assistance for services received through an Indian Health Service facility whether operated by the Indian Health Service or by an Indian tribe or tribal organization (as defined in section 4 of the Indian Health Care Improvement Act)).

(f) State Eligibility.--

(1) In general.--Subject to paragraph (2), a State is eligible for an increase in its FMAP under subsection (c) or an increase in a cap amount under subsection (d) only if the eligibility under its State plan under title XIX of the Social Security Act (including any waiver under such title or under section 1115 of such Act (42 U.S.C. 1315)) is no more restrictive than the eligibility under such plan (or waiver) as in effect on July 1, 2003.

(and any subsequent calendar quarters) in which the State has reinstated eligibility that is no more restrictive than the eligibility under such plan (or waiver) as in effect on July 1, 2003.

(3) Rule of construction.--Nothing in paragraph (1) or (2) shall be construed as affecting a State's flexibility with respect to benefits offered under the State medicaid program under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.) (including any waiver under such title or under section 1115 of such Act (42 U.S.C. 1315)).

(g) Definitions.--In this section:

(1) FMAP.--The term ``FMAP'' means the Federal medical assistance percentage, as defined in section 1905(b) of the Social Security Act (42 U.S.C. 1396d(b)).

(2) State.--The term ``State'' has the meaning given such term for purposes of title XIX of the Social Security Act (42 U.S.C. 1396 et seq.).

(h) Repeal.--Effective as of October 1, 2004, this section is repealed.

TITLE VI--UNEMPLOYMENT COMPENSATION

Subtitle A--Extension and Enhancement of Temporary Extended

Unemployment Compensation

SEC. 601. EXTENSION OF THE TEMPORARY EXTENDED UNEMPLOYMENT

COMPENSATION ACT OF 2002.

(a) In General.--Section 208 of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147; 116 Stat. 30), as amended by Public Law 108-1 (117 Stat. 3), is amended--

(1) in subsection (a)(2), by striking ``before June 1'' and inserting ``on or before November 30'';

(2) in subsection (b)(1), by striking ``May 31, 2003'' and inserting ``November 30, 2003'';

(3) in subsection (b)(2)--

(A) in the heading, by striking ``may 31, 2003'' and inserting ``november 30, 2003''; and

(B) by striking ``May 31, 2003'' and inserting ``November 30, 2003''; and

(4) in subsection (b)(3), by striking ``August 30, 2003'' and inserting ``February 28, 2004''.

(b) Effective Date.--The amendments made by this section shall take effect as if included in the enactment of the Temporary Extended Unemployment Compensation Act of 2002

(Public Law 107-147; 116 Stat. 21).

SEC. 602. ENTITLEMENT TO ADDITIONAL WEEKS OF TEMPORARY

EXTENDED UNEMPLOYMENT COMPENSATION.

(a) Entitlement to Additional Weeks.--

(1) In general.--Paragraph (1) of section 203(b) of the Temporary Extended Unemployment Compensation Act of 2002

(Public Law 107-147; 116 Stat. 28) is amended--

(A) in subparagraph (A), by striking ``50 percent'' and inserting ``100 percent''; and

(B) in subparagraph (B), by striking ``13 times'' and inserting ``26 times''.

(A) in paragraph (1)--

(i) by striking ``paragraphs (2) and (3)'' and inserting

``paragraph (2)''; and

(B) by striking paragraph (2); and

(3) Extension of transition limitation.--Section 208(b)(2) of the Temporary Extended Unemployment Compensation Act of 2002 (Public Law 107-147), as amended by Public Law 108-1

(117 Stat. 3) and section 601(a)(4) and as redesignated by paragraph (2), is amended by striking ``February 28, 2004'' and inserting ``May 29, 2004''.

(as determined under subsection (b)(1))'' and inserting ``7 times the individual's average weekly benefit amount for the benefit year''.

(b) Effective Date and Application.--

(1) In general.--The amendments made by subsection (a) shall apply with respect to weeks of unemployment beginning on or after the date of enactment this Act.

(commonly known as ``TEUC amounts'').

(3) Application to exhaustees and current beneficiaries.--

(A) Exhaustees.--In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) who exhausted such individual's rights to such compensation (by reason of the payment of all amounts in such individual's temporary extended unemployment compensation account) before such date,

(B) Current beneficiaries.--In the case of any individual--

(i) to whom any temporary extended unemployment compensation was payable for any week beginning before the date of enactment of this Act; and

(ii) as to whom the condition described in subparagraph

(A)(ii) does not apply,

(a), is exhausted.

(5) No effect on provisions related to displaced airline related workers.--The amendments made by this section and section 601 shall have no effect on the provisions of section 4002 of the Emergency Wartime Supplemental Appropriations Act, 2003 (Public Law 108-11).

Subtitle B--Temporary Enhanced Regular Unemployment Compensation

SEC. 611. FEDERAL-STATE AGREEMENTS.

(a) In General.--Any State which desires to do so may enter into and participate in an agreement under this title with the Secretary of Labor (in this title referred to as the

``Secretary''). Any State which is a party to an agreement under this title may, upon providing 30 days' written notice to the Secretary, terminate such agreement.

(b) Provisions of Agreement.--

(2) Modifications described.--The modifications described in this paragraph are as follows:

TITLE.

(a) General Rule.--There shall be paid to each State which has entered into an agreement under this title an amount equal to--

(1) 100 percent of any temporary enhanced regular unemployment compensation; and

(2) 100 percent of any regular compensation which is paid to individuals by such State by reason of the fact that its State law contains provisions comparable to the modifications described in subparagraphs (A) and (B) of section 611(b)(2), but only to the extent that those amounts would, if such amounts were instead payable by virtue of the State law's being deemed to be so modified pursuant to section 611(b)(1), have been reimbursable under paragraph (1).

SEC. 613. FINANCING PROVISIONS.

(as established by section 904(a) of such Act (42 U.S.C. 1104(a))) shall be used for the making of payments to States having agreements entered into under this title.

(1) compensation payable under chapter 85 of title 5, United States Code; and

(2) compensation payable on the basis of services to which section 3309(a)(1) of the Internal Revenue Code of 1986 applies.

Amounts appropriated pursuant to the preceding sentence shall not be required to be repaid.

SEC. 614. DEFINITIONS.

For purposes of this title, the terms ``compensation'',

SEC. 615. APPLICABILITY.

(a) In General.--Except as provided in subsection (b), an agreement entered into under this title shall apply to weeks of unemployment--

(1) beginning after the date on which such agreement is entered into; and

(2) ending before July 1, 2004.

(b) Phase-Out of TERUC.--

(2) Limitation.--No compensation shall be payable by reason of paragraph (1) for any week beginning after December 31, 2004.

SEC. 616. COORDINATION WITH THE TEMPORARY EXTENDED