American Recovery and Reinvestment Act of 2009 - American Recovery and Reinvestment Tax Act of 2009 - Amends the Internal Revenue Code to: (1) allow individual taxpayers a refundable tax credit through 2010 for the lesser of 6.2% of earned income or $500; (2) increase in 2009 or 2010 the earned income tax credit, the refundable portion of the child tax credit, and the Hope scholarship tax credit; (3) allow payment of purchases of computer technology or equipment from qualified tuition plans in 2009 or 2010; (4) extend until September 1, 2009, the first-time home buyer tax credit and waive repayment of credit amounts; (5) exclude from gross income in 2009 the first $2,400 of unemployment compensation; (6) extend through 2009 exemptions from the alternative minimum tax; (7) extend for three years the tax credit for production of electricity from renewable resources; (8) increase allocations of new clean renewable energy and qualified energy conservation bonds; (9) modify and extend the tax credits for nonbusiness energy property and residential energy efficient property; (10) increase and extend through 2010 the tax credit for alternative fuel vehicle refueling property; (11) allow an increased research tax credit in 2009 or 2010 for energy research expenditures; (12) allow a five-year carryback of general business tax credits and a 100% offset of such credits against income tax liabilities; (13) expand the alternative motor vehicle tax credit for the purchase of plug-in electric drive motor vehicles; (14) extend through 2009 bonus depreciation provisions and the increased expensing allowance for depreciable business assets; (15) allow a five-year carryback period for net operating losses, including operating losses of insurance companies, incurred in 2009 or 2010; (16) allow a work opportunity tax credit for the hiring of disconnected youth (certain youth who are not regularly employed or attending school) and certain unemployed veterans in 2009 or 2010; (17) allow the deferral of the recognition of income from the discharge of indebtedness in connection with the repurchase of a debt instrument after 2008 and before 2011; (18) increase the tax exclusion of gain for certain small business stock acquired in 2009 or 2010; (19) allow an investment tax credit for broadband expenditures in rural and underserved areas; and (20) expand tax-exempt bond financing in 2009 or 2010 to include facilities for manufacturing intangible property.
Limits the applicability of Treasury Notice 2008-83 (suspending restrictions on the offset of net operating losses and unrealized built-in losses against the taxable income of certain corporate entities that acquire or merge with other entities) to periods prior to January 16, 2009.
Provides for the issuance of tax-exempt recovery zone economic development, recovery zone facility, and tribal economic development bonds.
Increases the national limitation for allocations of the new markets tax credit.
Disregards in 2009 or 2010: (1) certain limitations on the tax deductibility of interest payments made by financial institutions; and (2) interest earned on tax-exempt private activity bonds for purposes of the alternative minimum tax.
Delays until 2012 the requirement for withholding 3% of payments made to contractors who provide goods or services to governmental entities.
Allows a new tax credit for investment in school construction bonds and build America bonds.
Requires the Secretary of the Treasury to make a one-time $300 economic recovery payment to recipients of specified social security and other federal benefits.
Extends through 2010 provisions of the trade adjustment assistance program.
Prohibits the Secretary of Homeland Security from collecting certain payments of antidumping or countervailing duties made under the Continued Dumping and Subsidy Offset Act of 2000.
Applies federal wage rate requirements for public building and works to certain energy conservation and other projects financed with the proceeds of tax-exempt bonds.
Increases the public debt limit to $12.14 trillion.
Assistance for Unemployed Workers and Struggling Families Act - Amends the Supplemental Appropriations Act, 2008 to extend the Emergency Unemployment Compensation (EUC) program.
Provides for federal-state agreements for increased regular unemployment compensation payments to individuals.
Requires federal payments to states to cover 100% of such additional payments.
Amends the Social Security Act (SSA) to direct the Secretary of Labor to make special transfers to state accounts in the Unemployment Trust Fund for unemployment compensation modernization incentive payments and for administration.
Amends the SSA to deem, for a specified period through December 31, 2010, that interest payments otherwise due from a state for federal advances to its unemployment fund have been made by the state. Prohibits accrual of interest on such advances during such period.
Amends part A (Temporary Assistance for Needy Families) (TANF) of title IV of the SSA to establish in the Treasury the Emergency Contingency Fund for State Temporary Assistance for Needy Families Programs. Directs the Secretary of Health and Human Services (HHS) to make grants from such Fund related to: (1) caseload increases; (2) increased expenditures for non-recurrent short term benefits; and (3) increased expenditures for subsidized employment.
Amends the Deficit Reduction Act of 2005, as amended by the Medicare Improvements for Patients and Providers Act of 2008, to extend TANF supplemental grants.
Authorizes a state or tribe to use a TANF grant to provide, without fiscal year limitation, any benefit or service that may be provided under the state or tribal program funded under TANF.
Reinstates for a specified period the authority of the Secretary of HHS to provide federal matching payments for state spending of child support incentive payments.
Provides for payment of a portion of an individual's premiums for any COBRA coverage (health insurance continuation benefits).
Amends SSA title XIX (Medicaid) to extend transitional medical assistance (TMA) through December 31, 2010.
Gives states the option of simplifying TMA eligibility determinations.
Requires each state to collect and submit to the Secretary of HHS information on: (1) average monthly enrollment and average monthly participation rates for adults and children; and (2) the number and percentage of children who become ineligible for medical assistance whose medical assistance is continued under another eligibility category, or who are enrolled under the state's child health plan under SSA title XXI (State Children's Health Insurance) (SCHIP).
Extends the qualifying individual program from December 2009 to December 2010, as well as the total amount under such program available for allocation.
Prohibits state Medicaid programs from imposing cost-sharing requirements on an Indian when the beneficiary is receiving an item or service directly from an Indian health care provider or through referral from a Contract Health Services provider.
Requires that states disregard certain tribal property in determining the Medicaid or SCHIP eligibility of Indians.
Requires that the procedures used by state Medicaid programs for estate recovery exempt certain income, resources, and property that are exempt from related federal requirements because of the federal responsibility for Indian Tribes and Alaska Native Villages.
Establishes special rules applicable under Medicaid and SCHIP to managed care entities with respect to Indian enrollees and Indian health care providers and Indian managed care entities.
Directs the Secretary to maintain within the Centers for Medicaid & Medicaid Services a Tribal Technical Advisory Group.
Requires state Medicaid and SCHIP programs to seek advice on a regular, ongoing basis from Indian Health Programs and Urban Indian Organizations on all matters likely to have a direct effect on them, including plan amendments, waiver request, and proposals for demonstration projects.
Requires a state plan to apply prompt pay requirements to nursing facilities.
Health Information Technology for Economic and Clinical Health Act or the HITECH Act - Amends the Public Health Service Act to establish the Office of the National Coordinator for Health Information Technology.
Sets forth provisions governing the development and adoption of a nationwide health information technology infrastructure that allows for the electronic use and exchange of information.
Amends SSA title XVIII (Medicare) to establish incentive payments for certain eligible physicians and hospitals that adopt and use certified electronic health record (EHR) technology meaningfully, beginning in FY2011.
Directs the Secretary of HHS to recompute payments for certain inpatient hospital discharges without applying the phased-out indirect medical education adjustment factor.
Directs the Secretary of HHS to study and report to Congress on: (1) the application of EHR payment incentives for providers not receiving other incentive payments; and (2) the availability of open source health information technology systems.
Amends SSA title XIX (Medicaid) to establish incentive payments to encourage the adoption and use by Medicaid providers of qualified electronic health records.
Establishes a temporary increase in the federal medical assistance percentage (FMAP) with respect to Medicaid payments, as well as payments under SSA title IV part E (Foster Care and Adoption Assistance), for FY2009-FY2011 for eligible states, with FMAP increases authorized for specified U.S. territories.
Extends from FY2008 through FY2013 the special rule for increase of Medicaid disproportionate share (DSH) allotments for low DSH states.
Directs the Secretary of HHS to work with each state to reach an agreement on the amount of a payment for the state related to the Medicare program liability as a result of the Special Disability Workload project.
Makes appropriations to the HHS Inspector General.
Directs the Comptroller General to study and report to the appropriate congressional committees on the period of national economic downturn in effect on the date of enactment of this Act, as well as previous periods of national economic downturn since 1974, for the purpose of developing recommendations for addressing the needs of states during such periods.
[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 350 Placed on Calendar Senate (PCS)]
<DOC>
Calendar No. 20
111th CONGRESS
1st Session
S. 350
To provide for a portion of the economic recovery package relating to
revenue measures, unemployment, and health.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 29, 2009
Mr. Baucus, from the Committee on Finance, reported the following
original bill; which was read twice and placed on the calendar
_______________________________________________________________________
A BILL
To provide for a portion of the economic recovery package relating to
revenue measures, unemployment, and health.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``American Recovery and Reinvestment
Act of 2009''.
TITLE I--TAX PROVISIONS
SEC. 1000. SHORT TITLE, ETC.
(a) Short Title.--This title may be cited as the ``American
Recovery and Reinvestment Tax Act of 2009''.
(b) Reference.--Except as otherwise expressly provided, whenever in
this title an amendment or repeal is expressed in terms of an amendment
to, or repeal of, a section or other provision, the reference shall be
considered to be made to a section or other provision of the Internal
Revenue Code of 1986.
(c) Table of Contents.--The table of contents for this title is as
follows:
TITLE I--TAX PROVISIONS
Sec. 1000. Short title, etc.
Subtitle A--Tax Relief for Individuals and Families
PART I--General Tax Relief
Sec. 1001. Making work pay credit.
Sec. 1002. Temporary increase in earned income tax credit.
Sec. 1003. Temporary increase of refundable portion of child credit.
Sec. 1004. American opportunity tax credit.
Sec. 1005. Computer technology and equipment allowed as a qualified
higher education expense for section 529
accounts in 2009 and 2010.
Sec. 1006. Extension of first-time homebuyer credit; waiver of
requirement to repay.
Sec. 1007. Suspension of tax on portion of unemployment compensation.
PART II--Alternative Minimum Tax Relief
Sec. 1011. Extension of alternative minimum tax relief for
nonrefundable personal credits.
Sec. 1012. Extension of increased alternative minimum tax exemption
amount.
Subtitle B--Energy Incentives
PART I--Renewable Energy Incentives
Sec. 1101. Extension of credit for electricity produced from certain
renewable resources.
Sec. 1102. Election of investment credit in lieu of production credit.
Sec. 1103. Repeal of certain limitations on credit for renewable energy
property.
PART II--Increased Allocations of New Clean Renewable Energy Bonds and
Qualified Energy Conservation Bonds
Sec. 1111. Increased limitation on issuance of new clean renewable
energy bonds.
Sec. 1112. Increased limitation on issuance of qualified energy
conservation bonds.
PART III--Energy Conservation Incentives
Sec. 1121. Extension and modification of credit for nonbusiness energy
property.
Sec. 1122. Modification of credit for residential energy efficient
property.
Sec. 1123. Temporary increase in credit for alternative fuel vehicle
refueling property.
PART IV--Energy Research Incentives
Sec. 1131. Increased research credit for energy research.
PART V--General Business Credit
Sec. 1141. 5-year carryback of general business credits.
Sec. 1142. Temporary provision allowing general business credits to
offset 100 percent of Federal income tax
liability.
PART VI--Modification of Credit for Carbon Dioxide Sequestration
Sec. 1151. Application of monitoring requirements to carbon dioxide
used as a tertiary injectant.
PART VII--Plug-In Electric Drive Motor Vehicles
Sec. 1161. Modification of credit for qualified plug-in electric motor
vehicles.
Subtitle C--Tax Incentives for Business
PART I--Temporary Investment Incentives
Sec. 1201. Special allowance for certain property acquired during 2009.
Sec. 1202. Temporary increase in limitations on expensing of certain
depreciable business assets.
PART II--5-Year Carryback of Operating Losses
Sec. 1211. 5-year carryback of operating losses.
Sec. 1212. Exception for TARP recipients.
PART III--Incentives for New Jobs
Sec. 1221. Incentives to hire unemployed veterans and disconnected
youth.
PART IV--Cancellation of Indebtedness
Sec. 1231. Deferral and ratable inclusion of income arising from
indebtedness discharged by the repurchase
of a debt instrument.
PART V--Qualified Small Business Stock
Sec. 1241. Special rules applicable to qualified small business stock
for 2009 and 2010.
PART VI--Parity for Transportation Fringe Benefits
Sec. 1251. Increased exclusion amount for commuter transit benefits and
transit passes.
PART VII--S Corporations
Sec. 1261. Temporary reduction in recognition period for built-in gains
tax.
PART VIII--Broadband Incentives
Sec. 1271. Broadband Internet access tax credit.
PART IX--Clarification of Regulations Related to Limitations on Certain
Built-In Losses Following an Ownership Change
Sec. 1281. Clarification of regulations related to limitations on
certain built-in losses following an
ownership change.
Subtitle D--Manufacturing Recovery Provisions
Sec. 1301. Temporary expansion of availability of industrial
development bonds to facilities
manufacturing intangible property.
Sec. 1302. Credit for investment in advanced energy facilities.
Subtitle E--Economic Recovery Tools
Sec. 1401. Recovery zone bonds.
Sec. 1402. Tribal economic development bonds.
Sec. 1403. Modifications to new markets tax credit.
Subtitle F--Infrastructure Financing Tools
PART I--Improved Marketability for Tax-Exempt Bonds
Sec. 1501. De minimis safe harbor exception for tax-exempt interest
expense of financial institutions.
Sec. 1502. Modification of small issuer exception to tax-exempt
interest expense allocation rules for
financial institutions.
Sec. 1503. Temporary modification of alternative minimum tax
limitations on tax-exempt bonds.
Sec. 1504. Modification to high speed intercity rail facility bonds.
PART II--Delay in Application of Withholding Tax on Government
Contractors
Sec. 1511. Delay in application of withholding tax on government
contractors.
PART III--Tax Credit Bonds for Schools
Sec. 1521. Qualified school construction bonds.
Sec. 1522. Extension and expansion of qualified zone academy bonds.
PART IV--Build America Bonds
Sec. 1531. Build America bonds.
Subtitle G--Economic Recovery Payments to Certain Individuals
Sec. 1601. Economic recovery payment to recipients of Social Security,
supplemental security income, railroad
retirement benefits, and veterans
disability compensation or pension
benefits.
Subtitle H--Trade Adjustment Assistance
Sec. 1701. Temporary extension of Trade Adjustment Assistance program.
Subtitle I--Prohibition on Collection of Certain Payments Made Under
the Continued Dumping and Subsidy Offset Act of 2000
Sec. 1801. Prohibition on collection of certain payments made under the
Continued Dumping and Subsidy Offset Act of
2000.
Subtitle J--Other Provisions
Sec. 1901. Application of certain labor standards to projects financed
with certain tax-favored bonds.
Sec. 1902. Increase in public debt limit.
Subtitle A--Tax Relief for Individuals and Families
PART I--GENERAL TAX RELIEF
SEC. 1001. MAKING WORK PAY CREDIT.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
is amended by inserting after section 36 the following new section:
``SEC. 36A. MAKING WORK PAY CREDIT.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
subtitle for the taxable year an amount equal to the lesser of--
``(1) 6.2 percent of earned income of the taxpayer, or
``(2) $500 ($1,000 in the case of a joint return).
``(b) Limitation Based on Modified Adjusted Gross Income.--
``(1) In general.--The amount allowable as a credit under
subsection (a) (determined without regard to this paragraph and
subsection (c)) for the taxable year shall be reduced (but not
below zero) by 4 percent of so much of the taxpayer's modified
adjusted gross income as exceeds $75,000 ($150,000 in the case
of a joint return).
``(2) Modified adjusted gross income.--For purposes of
subparagraph (A), the term `modified adjusted gross income'
means the adjusted gross income of the taxpayer for the taxable
year increased by any amount excluded from gross income under
section 911, 931, or 933.
``(c) Reduction for Certain Other Payments.--The credit allowed
under subsection (a) for any taxable year shall be reduced by the
amount of any payments received by the taxpayer during such taxable
year under section 1601 of the American Recovery and Reinvestment Tax
Act of 2009.
``(d) Definitions.--For purposes of this section--
``(1) Eligible individual.--The term `eligible individual'
means any individual other than--
``(A) any nonresident alien individual,
``(B) any individual with respect to whom a
deduction under section 151 is allowable to another
taxpayer for a taxable year beginning in the calendar
year in which the individual's taxable year begins, and
``(C) an estate or trust.
Such term shall not include any individual unless the
requirements of section 32(c)(1)(E) are met with respect to
such individual.
``(2) Earned income.--The term `earned income' has the
meaning given such term by section 32(c)(2), except that such
term shall not include net earnings from self-employment which
are not taken into account in computing taxable income. For
purposes of the preceding sentence, any amount excluded from
gross income by reason of section 112 shall be treated as
earned income which is taken into account in computing taxable
income for the taxable year.
``(e) Termination.--This section shall not apply to taxable years
beginning after December 31, 2010.''.
(b) Treatment of Possessions.--
(1) Payments to possessions.--
(A) Mirror code possession.--The Secretary of the
Treasury shall pay to each possession of the United
States with a mirror code tax system amounts equal to
the loss to that possession by reason of the amendments
made by this section with respect to taxable years
beginning in 2009 and 2010. Such amounts shall be
determined by the Secretary of the Treasury based on
information provided by the government of the
respective possession.
(B) Other possessions.--The Secretary of the
Treasury shall pay to each possession of the United
States which does not have a mirror code tax system
amounts estimated by the Secretary of the Treasury as
being equal to the aggregate benefits that would have
been provided to residents of such possession by reason
of the amendments made by this section for taxable
years beginning in 2009 and 2010 if a mirror code tax
system had been in effect in such possession. The
preceding sentence shall not apply with respect to any
possession of the United States unless such possession
has a plan, which has been approved by the Secretary of
the Treasury, under which such possession will promptly
distribute such payments to the residents of such
possession.
(2) Coordination with credit allowed against united states
income taxes.--No credit shall be allowed against United States
income taxes for any taxable year under section 36A of the
Internal Revenue Code of 1986 (as added by this section) to any
person--
(A) to whom a credit is allowed against taxes
imposed by the possession by reason of the amendments
made by this section for such taxable year, or
(B) who is eligible for a payment under a plan
described in paragraph (1)(B) with respect to such
taxable year.
(3) Definitions and special rules.--
(A) Possession of the united states.--For purposes
of this subsection, the term ``possession of the United
States'' includes the Commonwealth of Puerto Rico and
the Commonwealth of the Northern Mariana Islands.
(B) Mirror code tax system.--For purposes of this
subsection, the term ``mirror code tax system'' means,
with respect to any possession of the United States,
the income tax system of such possession if the income
tax liability of the residents of such possession under
such system is determined by reference to the income
tax laws of the United States as if such possession
were the United States.
(C) Treatment of payments.--For purposes of section
1324(b)(2) of title 31, United States Code, the
payments under this subsection shall be treated in the
same manner as a refund due from the credit allowed
under section 36A of the Internal Revenue Code of 1986
(as added by this section).
(c) Refunds Disregarded in the Administration of Federal Programs
and Federally Assisted Programs.--Any credit or refund allowed or made
to any individual by reason of section 36A of the Internal Revenue Code
of 1986 (as added by this section) or by reason of subsection (b) of
this section shall not be taken into account as income and shall not be
taken into account as resources for the month of receipt and the
following 2 months, for purposes of determining the eligibility of such
individual or any other individual for benefits or assistance, or the
amount or extent of benefits or assistance, under any Federal program
or under any State or local program financed in whole or in part with
Federal funds.
(d) Authority Relating to Clerical Errors.--Section 6213(g)(2) is
amended by striking ``and'' at the end of subparagraph (L)(ii), by
striking the period at the end of subparagraph (M) and inserting ``,
and'', and by adding at the end the following new subparagraph:
``(N) an omission of the reduction required under
section 36A(c) with respect to the credit allowed under
section 36A or an omission of the correct TIN required
under section 36A(d)(1).''.
(e) Conforming Amendments.--
(1) Section 6211(b)(4)(A) is amended by inserting ``36A,''
after ``36,''.
(2) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``36A,'' after ``36,''.
(3) The table of sections for subpart C of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 36 the following new item:
``Sec. 36A. Making work pay credit.''.
(f) Effective Date.--This section, and the amendments made by this
section, shall apply to taxable years beginning after December 31,
2008.
SEC. 1002. TEMPORARY INCREASE IN EARNED INCOME TAX CREDIT.
(a) In General.--Subsection (b) of section 32 is amended by adding
at the end the following new paragraph:
``(3) Special rules for 2009 and 2010.--In the case of any
taxable year beginning in 2009 or 2010--
``(A) Increased credit percentage for 3 or more
qualifying children.--In the case of a taxpayer with 3
or more qualifying children, the credit percentage is
45 percent.
``(B) Reduction of marriage penalty.--
``(i) In general.--The dollar amount in
effect under paragraph (2)(B) shall be $5,000.
``(ii) Inflation adjustment.--In the case
of any taxable year beginning in 2010, the
$5,000 amount in clause (i) shall be increased
by an amount equal to--
``(I) such dollar amount,
multiplied by
``(II) the cost of living
adjustment determined under section
1(f)(3) for the calendar year in which
the taxable year begins determined by
substituting `calendar year 2008' for
`calendar year 1992' in subparagraph
(B) thereof.
``(iii) Rounding.--Subparagraph (A) of
subsection (j)(2) shall apply after taking into
account any increase under clause (ii).''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 1003. TEMPORARY INCREASE OF REFUNDABLE PORTION OF CHILD CREDIT.
(a) In General.--Paragraph (4) of section 24(d) is amended to read
as follows:
``(4) Special rule for 2009 and 2010.--Notwithstanding
paragraph (3), in the case of any taxable year beginning in
2009 or 2010, the dollar amount in effect for such taxable year
under paragraph (1)(B)(i) shall be $6,000.''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 1004. AMERICAN OPPORTUNITY TAX CREDIT.
(a) In General.--Section 25A (relating to Hope scholarship credit)
is amended by redesignating subsection (i) as subsection (j) and by
inserting after subsection (h) the following new subsection:
``(i) American Opportunity Tax Credit.--In the case of any taxable
year beginning in 2009 or 2010--
``(1) Increase in credit.--The Hope Scholarship Credit
shall be an amount equal to the sum of--
``(A) 100 percent of so much of the qualified
tuition and related expenses paid by the taxpayer
during the taxable year (for education furnished to the
eligible student during any academic period beginning
in such taxable year) as does not exceed $2,000, plus
``(B) 25 percent of such expenses so paid as
exceeds $2,000 but does not exceed $4,000.
``(2) Credit allowed for first 4 years of post-secondary
education.--Subparagraphs (A) and (C) of subsection (b)(2)
shall be applied by substituting `4' for `2'.
``(3) Qualified tuition and related expenses to include
required course materials.--Subsection (f)(1)(A) shall be
applied by substituting `tuition, fees, and course materials'
for `tuition and fees'.
``(4) Increase in agi limits for hope scholarship credit.--
In lieu of applying subsection (d) with respect to the Hope
Scholarship Credit, such credit (determined without regard to
this paragraph) shall be reduced (but not below zero) by the
amount which bears the same ratio to such credit (as so
determined) as--
``(A) the excess of--
``(i) the taxpayer's modified adjusted
gross income (as defined in subsection (d)(3))
for such taxable year, over
``(ii) $80,000 ($160,000 in the case of a
joint return), bears to
``(B) $10,000 ($20,000 in the case of a joint
return).
``(5) Credit allowed against alternative minimum tax.--In
the case of a taxable year to which section 26(a)(2) does not
apply, so much of the credit allowed under subsection (a) as is
attributable to the Hope Scholarship Credit shall not exceed
the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
subpart (other than this subsection and sections 23,
25D, and 30D) and section 27 for the taxable year.
Any reference in this section or section 24, 25, 26, 25B, 904,
or 1400C to a credit allowable under this subsection shall be
treated as a reference to so much of the credit allowable under
subsection (a) as is attributable to the Hope Scholarship
Credit.
``(6) Portion of credit made refundable.--30 percent of so
much of the credit allowed under subsection (a) as is
attributable to the Hope Scholarship Credit (determined after
application of paragraph (4) and without regard to this
paragraph and section 26(a)(2) or paragraph (5), as the case
may be) shall be treated as a credit allowable under subpart C
(and not allowed under subsection (a)). The preceding sentence
shall not apply to any taxpayer for any taxable year if such
taxpayer is a child to whom subsection (g) of section 1 applies
for such taxable year.
``(7) Coordination with midwestern disaster area
benefits.--In the case of a taxpayer with respect to whom
section 702(a)(1)(B) of the Heartland Disaster Tax Relief Act
of 2008 applies for any taxable year, such taxpayer may elect
to waive the application of this subsection to such taxpayer
for such taxable year.''.
(b) Conforming Amendments.--
(1) Section 24(b)(3)(B) is amended by inserting ``25A(i),''
after ``23,''.
(2) Section 25(e)(1)(C)(ii) is amended by inserting
``25A(i),'' after ``24,''.
(3) Section 26(a)(1) is amended by inserting ``25A(i),''
after ``24,''.
(4) Section 25B(g)(2) is amended by inserting ``25A(i),''
after ``23,''.
(5) Section 904(i) is amended by inserting ``25A(i),''
after ``24,''.
(6) Section 1400C(d)(2) is amended by inserting ``25A(i),''
after ``24,''.
(7) Section 1324(b)(2) of title 31, United States Code, is
amended by inserting ``25A,'' before ``35''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
(d) Application of EGTRRA Sunset.--The amendment made by subsection
(b)(1) shall be subject to title IX of the Economic Growth and Tax
Relief Reconciliation Act of 2001 in the same manner as the provision
of such Act to which such amendment relates.
(e) Treasury Studies Regarding Education Incentives.--
(1) Study regarding coordination with non-tax educational
incentives.--The Secretary of the Treasury, or the Secretary's
delegate, shall study how to coordinate the credit allowed
under section 25A of the Internal Revenue Code of 1986 with the
Federal Pell Grant program under section 401 of the Higher
Education Act of 1965.
(2) Study regarding imposition of community service
requirements.--The Secretary of the Treasury, or the
Secretary's delegate, shall study the feasibility of requiring
students to perform community service as a condition of taking
their tuition and related expenses into account under section
25A of the Internal Revenue Code of 1986.
(3) Report.--Not later than 1 year after the date of the
enactment of this Act, the Secretary of the Treasury, or the
Secretary's delegate, shall report to Congress on the results
of the studies conducted under this paragraph.
SEC. 1005. COMPUTER TECHNOLOGY AND EQUIPMENT ALLOWED AS A QUALIFIED
HIGHER EDUCATION EXPENSE FOR SECTION 529 ACCOUNTS IN 2009
AND 2010.
(a) In General.--Section 529(e)(3)(A) is amended by striking
``and'' at the end of clause (i), by striking the period at the end of
clause (ii), and by adding at the end the following:
``(iii) expenses paid or incurred in 2009
or 2010 for the purchase of any computer
technology or equipment (as defined in section
170(e)(6)(F)(i)) or Internet access and related
services, if such technology, equipment, or
services are to be used by the beneficiary and
the beneficiary's family during any of the
years the beneficiary is enrolled at an
eligible educational institution.
Clause (iii) shall not include expenses for computer
software designed for sports, games, or hobbies unless
the software is predominantly educational in nature.''.
(b) Effective Date.--The amendments made by this section shall
apply to expenses paid or incurred after December 31, 2008.
SEC. 1006. EXTENSION OF FIRST-TIME HOMEBUYER CREDIT; WAIVER OF
REQUIREMENT TO REPAY.
(a) Extension.--
(1) In general.--Section 36(h) is amended by striking
``July 1, 2009'' and inserting ``September 1, 2009''.
(2) Conforming amendment.--Section 36(g) is amended by
striking ``July 1, 2009'' and inserting ``September 1, 2009''.
(b) Waiver of Recapture.--
(1) In general.--Paragraph (4) of section 36(f) is amended
by adding at the end the following new subparagraph:
``(D) Waiver of recapture for purchases in 2009.--
In the case of any credit allowed with respect to the
purchase of a principal residence after December 31,
2008, and before September 1, 2009--
``(i) paragraph (1) shall not apply, and
``(ii) paragraph (2) shall apply only if
the disposition or cessation described in
paragraph (2) with respect to such residence
occurs during the 36-month period beginning on
the date of the purchase of such residence by
the taxpayer.''.
(2) Conforming amendment.--Subsection (g) of section 36 is
amended by striking ``subsection (c)'' and inserting
``subsections (c) and (f)(4)(D)''.
(c) Effective Date.--The amendments made by this section shall
apply to residences purchased after December 31, 2008.
SEC. 1007. SUSPENSION OF TAX ON PORTION OF UNEMPLOYMENT COMPENSATION.
(a) In General.--Section 85 of the Internal Revenue Code of 1986
(relating to unemployment compensation) is amended by adding at the end
the following new subsection:
``(c) Special Rule for 2009.--In the case of any taxable year
beginning in 2009, gross income shall not include so much of the
unemployment compensation received by an individual as does not exceed
$2,400.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2008.
PART II--ALTERNATIVE MINIMUM TAX RELIEF
SEC. 1011. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.
(a) In General.--Paragraph (2) of section 26(a) (relating to
special rule for taxable years 2000 through 2008) is amended--
(1) by striking ``or 2008'' and inserting ``2008, or
2009'', and
(2) by striking ``2008'' in the heading thereof and
inserting ``2009''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 1012. EXTENSION OF INCREASED ALTERNATIVE MINIMUM TAX EXEMPTION
AMOUNT.
(a) In General.--Paragraph (1) of section 55(d) (relating to
exemption amount) is amended--
(1) by striking ``($69,950 in the case of taxable years
beginning in 2008)'' in subparagraph (A) and inserting
``($70,950 in the case of taxable years beginning in 2009)'',
and
(2) by striking ``($46,200 in the case of taxable years
beginning in 2008)'' in subparagraph (B) and inserting
``($46,700 in the case of taxable years beginning in 2009)''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
Subtitle B--Energy Incentives
PART I--RENEWABLE ENERGY INCENTIVES
SEC. 1101. EXTENSION OF CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN
RENEWABLE RESOURCES.
(a) In General.--Subsection (d) of section 45 is amended--
(1) by striking ``2010'' in paragraph (1) and inserting
``2013'',
(2) by striking ``2011'' each place it appears in
paragraphs (2), (3), (4), (6), (7) and (9) and inserting
``2014'', and
(3) by striking ``2012'' in paragraph (11)(B) and inserting
``2014''.
(b) Technical Amendment.--Paragraph (5) of section 45(d) is amended
by striking ``and before'' and all that follows and inserting `` and
before October 3, 2008.''.
(c) Effective Date.--
(1) In general.--The amendments made by subsection (a)
shall apply to property placed in service after the date of the
enactment of this Act.
(2) Technical amendment.--The amendment made by subsection
(b) shall take effect as if included in section 102 of the
Energy Improvement and Extension Act of 2008.
SEC. 1102. ELECTION OF INVESTMENT CREDIT IN LIEU OF PRODUCTION CREDIT.
(a) In General.--Subsection (a) of section 48 is amended by adding
at the end the following new paragraph:
``(5) Election to treat qualified facilities as energy
property.--
``(A) In general.--In the case of any qualified
investment credit facility--
``(i) such facility shall be treated as
energy property for purposes of this section,
and
``(ii) the energy percentage with respect
to such property shall be 30 percent.
``(B) Denial of production credit.--No credit shall
be allowed under section 45 for any taxable year with
respect to any qualified investment credit facility.
``(C) Qualified investment credit facility.--For
purposes of this paragraph, the term `qualified
investment credit facility' means any of the following
facilities if no credit has been allowed under section
45 with respect to such facility and the taxpayer makes
an irrevocable election to have this paragraph apply to
such facility:
``(i) Wind facilities.--Any facility
described in paragraph (1) of section 45(d) if
such facility is placed in service in 2009,
2010, 2011, or 2012.
``(ii) Other facilities.--Any facility
described in paragraph (2), (3), (4), (6), (7),
(9), or (11) of section 45(d) if such facility
is placed in service in 2009, 2010, 2011, 2012,
or 2013.''.
(b) Effective Date.--The amendments made by this section shall
apply to facilities placed in service after December 31, 2008.
SEC. 1103. REPEAL OF CERTAIN LIMITATIONS ON CREDIT FOR RENEWABLE ENERGY
PROPERTY.
(a) Repeal of Limitation on Credit for Qualified Small Wind Energy
Property.--Paragraph (4) of section 48(c) is amended by striking
subparagraph (B) and by redesignating subparagraphs (C) and (D) as
subparagraphs (B) and (C).
(b) Repeal of Limitation on Property Financed by Subsidized Energy
Financing.--
(1) In general.--Section 48(a)(4) is amended by adding at
the end the following new subparagraph:
``(D) Termination.--This paragraph shall not apply
to periods after December 31, 2008, under rules similar
to the rules of section 48(m) (as in effect on the day
before the date of the enactment of the Revenue
Reconciliation Act of 1990).''.
(2) Conforming amendments.--
(A) Section 25C(e)(1) is amended by striking ``(8),
and (9)'' and inserting ``and (8)''.
(B) Section 25D(e) is amended by striking paragraph
(9).
(C) Section 48A(b)(2) is amended by inserting
``(without regard to subparagraph (D) thereof)'' after
``section 48(a)(4)''.
(D) Section 48B(b)(2) is amended by inserting
``(without regard to subparagraph (D) thereof)'' after
``section 48(a)(4)''.
(c) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendment made by this section shall apply to periods after
December 31, 2008, under rules similar to the rules of section
48(m) of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of the Revenue
Reconciliation Act of 1990).
(2) Conforming amendments.--The amendments made by
subsection (b)(2) shall apply to taxable years beginning after
December 31, 2008.
PART II--INCREASED ALLOCATIONS OF NEW CLEAN RENEWABLE ENERGY BONDS AND
QUALIFIED ENERGY CONSERVATION BONDS
SEC. 1111. INCREASED LIMITATION ON ISSUANCE OF NEW CLEAN RENEWABLE
ENERGY BONDS.
Subsection (c) of section 54C is amended by adding at the end the
following new paragraph:
``(4) Additional limitation.--The national new clean
renewable energy bond limitation shall be increased by
$1,600,000,000. Such increase shall be allocated by the
Secretary consistent with the rules of paragraphs (2) and
(3).''.
SEC. 1112. INCREASED LIMITATION ON ISSUANCE OF QUALIFIED ENERGY
CONSERVATION BONDS.
Section 54D(d) is amended by striking ``800,000,000'' and inserting
``$3,200,000,000''.
PART III--ENERGY CONSERVATION INCENTIVES
SEC. 1121. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY
PROPERTY.
(a) In General.--Section 25C is amended by striking subsections (a)
and (b) and inserting the following new subsections:
``(a) Allowance of Credit.--In the case of an individual, there
shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 30 percent of the sum of--
``(1) the amount paid or incurred by the taxpayer during
such taxable year for qualified energy efficiency improvements,
and
``(2) the amount of the residential energy property
expenditures paid or incurred by the taxpayer during such
taxable year.
``(b) Limitation.--The aggregate amount of the credits allowed
under this section for taxable years beginning in 2009 and 2010 with
respect to any taxpayer shall not exceed $1,500.''.
(b) Extension.--Section 25C(g)(2) is amended by striking ``December
31, 2009'' and inserting ``December 31, 2010''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
PROPERTY.
(a) Removal of Credit Limitation for Property Placed in Service.--
(1) In general.--Paragraph (1) of section 25D(b) is amended
to read as follows:
``(1) Maximum credit for fuel cells.--In the case of any
qualified fuel cell property expenditure, the credit allowed
under subsection (a) (determined without regard to subsection
(c)) for any taxable year shall not exceed $500 with respect to
each half kilowatt of capacity of the qualified fuel cell
property (as defined in section 48(c)(1)) to which such
expenditure relates.''.
(2) Conforming amendment.--Paragraph (4) of section 25D(e)
is amended--
(A) by striking all that precedes subparagraph (B)
and inserting the following:
``(4) Fuel cell expenditure limitations in case of joint
occupancy.--In the case of any dwelling unit with respect to
which qualified fuel cell property expenditures are made and
which is jointly occupied and used during any calendar year as
a residence by two or more individuals the following rules
shall apply:
``(A) Maximum expenditures for fuel cells.--The
maximum amount of such expenditures which may be taken
into account under subsection (a) by all such
individuals with respect to such dwelling unit during
such calendar year shall be $1,667 in the case of each
half kilowatt of capacity of qualified fuel cell
property (as defined in section 48(c)(1)) with respect
to which such expenditures relate.'', and
(B) by striking subparagraph (C).
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
SEC. 1123. TEMPORARY INCREASE IN CREDIT FOR ALTERNATIVE FUEL VEHICLE
REFUELING PROPERTY.
(a) In General.--Section 30C(e) is amended by adding at the end the
following new paragraph:
``(6) Special rule for property placed in service during
2009 and 2010.--In the case of property placed in service in
taxable years beginning after December 31, 2008, and before
January 1, 2011--
``(A) in the case of any such property which does
not relate to hydrogen--
``(i) subsection (a) shall be applied by
substituting `50 percent' for `30 percent',
``(ii) subsection (b)(1) shall be applied
by substituting `$50,000' for `$30,000', and
``(iii) subsection (b)(2) shall be applied
by substituting `$2,000' for `$1,000', and
``(B) in the case of any such property which
relates to hydrogen, subsection (b)(1) shall be applied
by substituting `$200,000' for `$30,000'.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2008.
PART IV--ENERGY RESEARCH INCENTIVES
SEC. 1131. INCREASED RESEARCH CREDIT FOR ENERGY RESEARCH.
(a) In General.--Section 41 is amended by redesignating subsection
(h) as subsection (i) and by inserting after subsection (g) the
following new subsection:
``(h) Energy Research Credit.--In the case of any taxable year
beginning in 2009 or 2010--
``(1) In general.--The credit determined under subsection
(a)(1) shall be increased by 20 percent of the qualified energy
research expenses for the taxable year.
``(2) Qualified energy research expenses.--For purposes of
this subsection--
``(A) In general.--The term `qualified energy
research expenses' means so much of the taxpayer's
qualified research expenses as are related to the
fields of fuel cells and battery technology, renewable
energy and renewable fuels, energy conservation
technology, efficient transmission and distribution of
electricity, and carbon capture and sequestration.
``(B) Coordination with qualifying advanced energy
project credit.--Such term shall not include
expenditures taken into account in determining the
amount of the credit under section 48 or 48C.
``(3) Coordination with other research credits.--
``(A) In general.--The amount of qualified energy
research expenses taken into account under subsection
(a)(1)(A) shall not exceed the base amount.
``(B) Alternative simplified credit.--For purposes
of subsection (c)(5), the amount of qualified energy
research expenses taken into account for the taxable
year for which the credit is being determined shall not
exceed--
``(i) in the case of subsection (c)(5)(A),
50 percent of the average qualified research
expenses for the 3 taxable years preceding the
taxable year for which the credit is being
determined, and
``(ii) in the case of subsection
(c)(5)(B)(ii), zero.
``(C) Basic research and energy research consortium
payments.--Any amount taken into account under
paragraph (1) shall not be taken into account under
paragraph (2) or (3) of subsection (a).''.
(b) Conforming Amendment.--Subparagraph (B) of section 41(i)(1)(B),
as redesignated by subsection (a), is amended by inserting ``(in the
case of the increase in the credit determined under subsection (h),
December 31, 2010)'' after ``December 31, 2009''.
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
PART V--GENERAL BUSINESS CREDIT
SEC. 1141. 5-YEAR CARRYBACK OF GENERAL BUSINESS CREDITS.
(a) In General.--Subsection (a) of section 39 is amended by adding
at the end the following new paragraph:
``(4) Special rule for 2008 and 2009 business credits.--In
the case of any current year business credit for a taxable year
ending in 2008 or 2009--
``(A) paragraph (1)(A) shall be applied by
substituting `each of the 5 taxable years' for `the
taxable year' in subparagraph (A) thereof, and
``(B) paragraph (2) shall be applied--
``(i) by substituting `25 taxable years'
for `21 taxable years', and
``(ii) by substituting `24 taxable years'
for `20 taxable years'.''.
(b) Effective Date.--The amendment made by this subsection shall
apply to taxable years ending after December 31, 2007, and to
carrybacks of business credits from such taxable years.
SEC. 1142. TEMPORARY PROVISION ALLOWING GENERAL BUSINESS CREDITS TO
OFFSET 100 PERCENT OF FEDERAL INCOME TAX LIABILITY.
(a) In General.--Subsection (c) of section 38 is amended by adding
at the end the following new paragraph:
``(6) Temporary provision allowing general business credits
to offset 100 percent of federal income tax liability.--
``(A) In general.--In the case of a taxable year
ending in 2008 or 2009--
``(i) the limitation under paragraph (1)
shall be the net income tax (as defined in
paragraph (1)) for purposes of determining the
amount of the credit allowed under subsection
(a) for such taxable year, and
``(ii) the excess credit for such taxable
year shall, solely for purposes of determining
the amount of such excess credit which may be
carried back to a preceding taxable year, be
increased by the amount of business credit
carryforwards which are carried to such taxable
year and which are not allowed for such taxable
year by reason of the limitation under
paragraph (1) (as modified by clause (i)).
``(B) Increase in limitation for taxable years to
which excess credits for 2008 and 2009 are carried
back.--
``(i) In general.--Solely for purposes of
determining the portion of any excess credit
described in subparagraph (A)(ii) for which
credit will be allowed under subsection (a)(3)
for any preceding taxable year, the limitation
under paragraph (1) for such preceding taxable
year shall be the net income tax (as defined in
paragraph (1)).
``(ii) Ordering rule.--If the excess credit
described in subparagraph (A)(ii) includes
business credit carryforwards from preceding
taxable years, such excess credit shall be
treated as allowed for any preceding taxable
year on a first-in first-out basis.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years ending after December 31, 2007, and to carrybacks of
credits from such taxable years.
PART VI--MODIFICATION OF CREDIT FOR CARBON DIOXIDE SEQUESTRATION
SEC. 1151. APPLICATION OF MONITORING REQUIREMENTS TO CARBON DIOXIDE
USED AS A TERTIARY INJECTANT.
(a) In General.--Section 45Q(a)(2) is amended by striking ``and''
at the end of subparagraph (A), by striking the period at the end of
subparagraph (B) and inserting ``, and'', and by adding at the end the
following new subparagraph:
``(C) disposed of by the taxpayer in secure
geological storage.''.
(b) Conforming Amendment.--Section 45Q(d)(2) is amended by striking
``subsection (a)(1)(B)'' and inserting ``paragraph (1)(B) or (2)(C) of
subsection (a)''.
(c) Effective Date.--The amendments made by this section shall
apply to carbon dioxide captured after the date of the enactment of
this Act.
PART VII--PLUG-IN ELECTRIC DRIVE MOTOR VEHICLES
SEC. 1161. MODIFICATION OF CREDIT FOR QUALIFIED PLUG-IN ELECTRIC MOTOR
VEHICLES.
(a) Increase in Vehicles Eligible for Credit.--Section 30D(b)(2)(B)
is amended by striking ``250,000'' and inserting ``500,000''.
(b) Exclusion of Neighborhood Electric Vehicles From Existing
Credit.--Section 30D(e)(1) is amended to read as follows:
``(1) Motor vehicle.--The term `motor vehicle' means a
motor vehicle (as defined in section 30(c)(2)), which is
treated as a motor vehicle for purposes of title II of the
Clean Air Act.''.
(c) Credit for Certain Other Vehicles.--Section 30D is amended--
(1) by redesignating subsections (f) and (g) as subsections
(g) and (h), respectively, and
(2) by inserting after subsection (e) the following new
subsection:
``(f) Credit for Certain Other Vehicles.--For purposes of this
section--
``(1) In general.--In the case of a specified vehicle, this
section shall be applied with the following modifications:
``(A) For purposes of subsection (a)(1), in lieu of
the applicable amount determined under subsection
(a)(2), the applicable amount shall be 10 percent of so
much of the cost of the specified vehicle as does not
exceed $40,000.
``(B) Subsection (b) shall not apply and no
specified vehicle shall be taken into account under
subsection (b)(2).
``(C) Subsection (c)(3) shall not apply.
``(2) Specified vehicle.--For purposes of this subsection--
``(A) In general.--The term `specified vehicle'
means--
``(i) any 2- or 3-wheeled motor vehicle, or
``(ii) any low-speed motor vehicle,
which is placed in service after December 31, 2009, and
before January 1, 2012.
``(B) 2- or 3-wheeled motor vehicle.--The term `2-
or 3-wheeled motor vehicle' means any vehicle--
``(i) which would be described in section
30(c)(2) except that it has 2 or 3 wheels,
``(ii) with motive power having a seat or
saddle for the use of the rider and designed to
travel on not more than 3 wheels in contact
with the ground,
``(iii) which has an electric motor that
produces in excess of 5-brake horsepower,
``(iv) which draws propulsion from 1 or
more traction batteries, and
``(v) which has been certified to the
Department of Transportation pursuant to
section 567 of title 49, Code of Federal
Regulations, as conforming to all applicable
Federal motor vehicle safety standards in
effect on the date of the manufacture of the
vehicle.
``(C) Low-speed motor vehicle.--The term `low-speed
motor vehicle' means a motor vehicle (as defined in
section 30(c)(2)) which meets the requirements of
section 571.500 of title 49, Code of Federal
Regulations.''.
(d) Effective Dates.--
(1) Increase in vehicles eligible for credit.--The
amendment made by subsection (a) shall take effect on the date
of the enactment of this Act.
(2) Other modifications.--The amendments made by
subsections (b) and (c) shall apply to property placed in
service after December 31, 2009, in taxable years beginning
after such date.
Subtitle C--Tax Incentives for Business
PART I--TEMPORARY INVESTMENT INCENTIVES
SEC. 1201. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED DURING 2009.
(a) Extension of Special Allowance.--
(1) In general.--Paragraph (2) of section 168(k) is
amended--
(A) by striking ``January 1, 2010'' and inserting
``January 1, 2011'', and
(B) by striking ``January 1, 2009'' each place it
appears and inserting ``January 1, 2010''.
(2) Conforming amendments.--
(A) The heading for subsection (k) of section 168
is amended by striking ``January 1, 2009'' and
inserting ``January 1, 2010''.
(B) The heading for clause (ii) of section
168(k)(2)(B) is amended by striking ``pre-january 1,
2009'' and inserting ``pre-january 1, 2010''.
(C) Subparagraph (B) of section 168(l)(5) is
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(D) Subparagraph (C) of section 168(n)(2) is
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(E) Subparagraph (B) of section 1400N(d)(3) is
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(3) Technical amendment.--Subparagraph (D) of section
168(k)(4) is amended--
(A) by striking ``and'' at the end of clause (i),
(B) by redesignating clause (ii) as clause (iii),
and
(C) by inserting after clause (i) the following new
clause:
``(ii) `April 1, 2008' shall be substituted
for `January 1, 2008' in subparagraph
(A)(iii)(I) thereof, and''.
(b) Extension of Election To Accelerate the AMT and Research
Credits in Lieu of Bonus Depreciation.--Section 168(k)(4) (relating to
election to accelerate the AMT and research credits in lieu of bonus
depreciation) is amended--
(1) by striking ``2009'' and inserting ``2010''in
subparagraph (D)(iii) (as redesignated by subsection (a)(3)),
and
(2) by adding at the end the following new subparagraph:
``(H) Special rules for extension property.--
``(i) Taxpayers previously electing
acceleration.--In the case of a taxpayer who
made the election under subparagraph (A) for
its first taxable year ending after March 31,
2008--
``(I) the taxpayer may elect not to
have this paragraph apply to extension
property, but
``(II) if the taxpayer does not
make the election under subclause (I),
in applying this paragraph to the
taxpayer a separate bonus depreciation
amount, maximum amount, and maximum
increase amount shall be computed and
applied to eligible qualified property
which is extension property and to
eligible qualified property which is
not extension property.
``(ii) Taxpayers not previously electing
acceleration.--In the case of a taxpayer who
did not make the election under subparagraph
(A) for its first taxable year ending after
March 31, 2008--
``(I) the taxpayer may elect to
have this paragraph apply to its first
taxable year ending after December 31,
2008, and each subsequent taxable year,
and
``(II) if the taxpayer makes the
election under subclause (I), this
paragraph shall only apply to eligible
qualified property which is extension
property.
``(iii) Extension property.--For purposes
of this subparagraph, the term `extension
property' means property which is eligible
qualified property solely by reason of the
extension of the application of the special
allowance under paragraph (1) pursuant to the
amendments made by section 1201(a) of the
American Recovery and Reinvestment Tax Act of
2009 (and the application of such extension to
this paragraph pursuant to the amendment made
by section 1201(b)(1) of such Act).''.
(c) Inclusion of Films or Videotape as Qualified Property.--
(1) In general.--Section 168(k)(2) is amended by adding at
the end the following new subparagraph:
``(H) Certain films.--The term `qualified property'
includes property--
``(i) which is a motion picture film or
video tape (within the meaning of subsection
(f)(3)) for which a deduction is allowable
under section 167(a) without regard to this
section,
``(ii) the original use of which commences
with the taxpayer after December 31, 2008,
``(iii) which is--
``(I) acquired by the taxpayer
after December 31, 2008, and before
January 1, 2010, but only if no written
binding contract for the acquisition
was in effect before January 1, 2009,
or
``(II) acquired by the taxpayer
pursuant to a written binding contract
which was entered into after December
31, 2008, and before January 1, 2010,
``(iv) which is placed in service by the
taxpayer before January 1, 2010, or, in the
case of property described in subparagraph (B),
before January 1, 2011, and
``(v) the production of which is a
qualified film or television production (as
defined in section 181(d) (determined without
regard to paragraph (2)(B)(ii) thereof)) with
respect to which an election is not in effect
under section 181.''.
(2) Conforming amendments.--
(A) Subclause (I) of section 168(k)(2)(B)(i) is
amended by inserting ``subparagraph (H) or'' after
``requirements of''.
(B) Subclause (II) of section 168(k)(2)(B)(i) is
amended by striking ``or is transportation property''
and inserting ``, is transportation property, or is
property described in subparagraph (H)''.
(C) Clause (iii) of section 168(k)(2)(D) is amended
by adding at the end the following new sentence: ``For
purposes of the preceding sentence, all property
described in subparagraph (H) shall be treated as one
class of property.''.
(D) Subparagraph (E) of section 168(k)(2) is
amended by adding at the end the following new clause:
``(v) Application to film and videotape
property.--In the case of property described in
subparagraph (H), clauses (i), (ii), (iii), and
(iv) of this subparagraph shall be applied--
``(I) by substituting `December 31,
2008' for `December 31, 2007' each
place it appears, and
``(II) by treating any reference to
a clause of subparagraph (A) as a
reference to the corresponding clause
of subparagraph (H).''.
(d) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property placed
in service after December 31, 2008, in taxable years ending
after such date.
(2) Technical amendment.--The amendments made by subsection
(a)(3) shall apply to taxable years ending after March 31,
2008.
SEC. 1202. TEMPORARY INCREASE IN LIMITATIONS ON EXPENSING OF CERTAIN
DEPRECIABLE BUSINESS ASSETS.
(a) In General.--Paragraph (7) of section 179(b) is amended--
(1) by striking ``2008'' and inserting ``2008, or 2009'',
and
(2) by striking ``2008'' in the heading thereof and
inserting ``2008, and 2009''.
(b) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2008.
PART II--5-YEAR CARRYBACK OF OPERATING LOSSES
SEC. 1211. 5-YEAR CARRYBACK OF OPERATING LOSSES.
(a) In General.--Subparagraph (H) of section 172(b)(1) is amended
to read as follows:
``(H) Carryback for 2008 and 2009 net operating
losses.--
``(i) In general.--In the case of an
applicable 2008 or 2009 net operating loss with
respect to which the taxpayer has elected the
application of this subparagraph--
``(I) subparagraph (A)(i) shall be
applied by substituting any whole
number elected by the taxpayer which is
more than 2 and less than 6 for `2',
``(II) subparagraph (E)(ii) shall
be applied by substituting the whole
number which is one less than the whole
number substituted under subclause (II)
for `2', and
``(III) subparagraph (F) shall not
apply.
``(ii) Applicable 2008 or 2009 net
operating loss.--For purposes of this
subparagraph, the term `applicable 2008 or 2009
net operating loss' means--
``(I) the taxpayer's net operating
loss for any taxable year ending in
2008 or 2009, or
``(II) if the taxpayer elects to
have this subclause apply in lieu of
subclause (I), the taxpayer's net
operating loss for any taxable year
beginning in 2008 or 2009.
``(iii) Election.--Any election under this
subparagraph shall be made in such manner as
may be prescribed by the Secretary, and shall
be made by the due date (including extension of
time) for filing the taxpayer's return for the
taxable year of the net operating loss. Any
such election, once made, shall be irrevocable.
``(iv) Coordination with alternative tax
net operating loss deduction.--In the case of a
taxpayer who elects to have clause (ii)(II)
apply, section 56(d)(1)(A)(ii) shall be applied
by substituting `ending during 2001 or 2002 or
beginning during 2008 or 2009' for `ending
during 2001, 2002, 2008, or 2009'.''.
(b) Alternative Tax Net Operating Loss Deduction.--Subclause (I) of
section 56(d)(1)(A)(ii) is amended to read as follows:
``(I) the amount of such deduction
attributable to the sum of carrybacks
of net operating losses from taxable
years ending during 2001, 2002, 2008,
or 2009 and carryovers of net operating
losses to such taxable years, or''.
(c) Loss From Operations of Life Insurance Companies.--Subsection
(b) of section 810 is amended by adding at the end the following new
paragraph:
``(4) Carryback for 2008 and 2009 losses.--
``(A) In general.--In the case of an applicable
2008 or 2009 loss from operations with respect to which
the taxpayer has elected the application of this
paragraph, paragraph (1)(A) shall be applied, at the
election of the taxpayer, by substituting `5' or `4'
for `3'.
``(B) Applicable 2008 or 2009 loss from
operations.--For purposes of this paragraph, the term
`applicable 2008 or 2009 loss from operations' means--
``(i) the taxpayer's loss from operations
for any taxable year ending in 2008 or 2009, or
``(ii) if the taxpayer elects to have this
clause apply in lieu of clause (i), the
taxpayer's loss from operations for any taxable
year beginning in 2008 or 2009.
``(C) Election.--Any election under this paragraph
shall be made in such manner as may be prescribed by
the Secretary, and shall be made by the due date
(including extension of time) for filing the taxpayer's
return for the taxable year of the loss from
operations. Any such election, once made, shall be
irrevocable.
``(D) Coordination with alternative tax net
operating loss deduction.--In the case of a taxpayer
who elects to have subparagraph (B)(ii) apply, section
56(d)(1)(A)(ii) shall be applied by substituting
`ending during 2001 or 2002 or beginning during 2008 or
2009' for `ending during 2001, 2002, 2008, or 2009'.''.
(d) Conforming Amendment.--Section 172 is amended by striking
subsection (k) and by redesignating subsection (l) as subsection (k).
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply to
net operating losses arising in taxable years ending after
December 31, 2007.
(2) Alternative tax net operating loss deduction.--The
amendment made by subsection (b) shall apply to taxable years
ending after 1997.
(3) Loss from operations of life insurance companies.--The
amendment made by subsection (d) shall apply to losses from
operations arising in taxable years ending after December 31,
2007.
(4) Transitional rule.--In the case of a net operating loss
(or, in the case of a life insurance company, a loss from
operations) for a taxable year ending before the date of the
enactment of this Act--
(A) any election made under section 172(b)(3) or
810(b)(3) of the Internal Revenue Code of 1986 with
respect to such loss may (notwithstanding such section)
be revoked before the applicable date,
(B) any election made under section 172(k) or
810(b)(4) of such Code with respect to such loss shall
(notwithstanding such section) be treated as timely
made if made before the applicable date, and
(C) any application under section 6411(a) of such
Code with respect to such loss shall be treated as
timely filed if filed before the applicable date.
For purposes of this paragraph, the term ``applicable date''
means the date which is 60 days after the date of the enactment
of this Act.
SEC. 1212. EXCEPTION FOR TARP RECIPIENTS.
The amendments made by this part shall not apply to--
(1) any taxpayer if--
(A) the Federal Government acquires, at any time,
an equity interest in the taxpayer pursuant to the
Emergency Economic Stabilization Act of 2008, or
(B) the Federal Government acquires, at any time,
any warrant (or other right) to acquire any equity
interest with respect to the taxpayer pursuant to such
Act,
(2) the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, and
(3) any taxpayer which at any time in 2008 or 2009 is a
member of the same affiliated group (as defined in section 1504
of the Internal Revenue Code of 1986, determined without regard
to subsection (b) thereof) as a taxpayer described in paragraph
(1) or (2).
PART III--INCENTIVES FOR NEW JOBS
SEC. 1221. INCENTIVES TO HIRE UNEMPLOYED VETERANS AND DISCONNECTED
YOUTH.
(a) In General.--Subsection (d) of section 51 is amended by adding
at the end the following new paragraph:
``(14) Credit allowed for unemployed veterans and
disconnected youth hired in 2009 or 2010.--
``(A) In general.--Any unemployed veteran or
disconnected youth who begins work for the employer
during 2009 or 2010 shall be treated as a member of a
targeted group for purposes of this subpart.
``(B) Definitions.--For purposes of this
paragraph--
``(i) Unemployed veteran.--The term
`unemployed veteran' means any veteran (as
defined in paragraph (3)(B), determined without
regard to clause (ii) thereof) who is certified
by the designated local agency as--
``(I) having been discharged or
released from active duty in the Armed
Forces during 2008, 2009, or 2010, and
``(II) being in receipt of
unemployment compensation under State
or Federal law for not less than 4
weeks during the 1-year period ending
on the hiring date.
``(ii) Disconnected youth.--The term
`disconnected youth' means any individual who
is certified by the designated local agency--
``(I) as having attained age 16 but
not age 25 on the hiring date,
``(II) as not regularly attending
any secondary, technical, or post-
secondary school during the 6-month
period preceding the hiring date,
``(III) as not regularly employed
during such 6-month period, and
``(IV) as not readily employable by
reason of lacking a sufficient number
of basic skills.''.
(b) Effective Date.--The amendments made by this section shall
apply to individuals who begin work for the employer after December 31,
2008.
PART IV--CANCELLATION OF INDEBTEDNESS
SEC. 1231. DEFERRAL AND RATABLE INCLUSION OF INCOME ARISING FROM
INDEBTEDNESS DISCHARGED BY THE REPURCHASE OF A DEBT
INSTRUMENT.
(a) In General.--Section 108 (relating to income from discharge of
indebtedness) is amended by adding at the end the following new
subsection:
``(i) Deferral and Ratable Inclusion of Income Arising From
Indebtedness Discharged by the Repurchase of a Debt Instrument.--
``(1) In general.--Notwithstanding section 61, income from
the discharge of indebtedness in connection with the repurchase
of a debt instrument after December 31, 2008, and before
January 1, 2011, shall be includible in gross income ratably
over the 8-taxable-year period beginning with--
``(A) in the case of a repurchase occurring in
2009, the second taxable year following the taxable
year in which the repurchase occurs, and
``(B) in the case of a repurchase occurring in
2010, the taxable year following the taxable year in
which the repurchase occurs.
``(2) Debt instrument.--For purposes of this subsection,
the term `debt instrument' means a bond, debenture, note,
certificate, or any other instrument or contractual arrangement
constituting indebtedness (within the meaning of section
1275(a)(1)).
``(3) Repurchase.--For purposes of this subsection, the
term `repurchase' means, with respect to any debt instrument, a
cash purchase of the debt instrument by--
``(A) the debtor which issued the debt instrument,
or
``(B) any person related to such debtor.
For purposes of subparagraph (B), the determination of whether
a person is related to another person shall be made in the same
manner as under subsection (e)(4).
``(4) Authority to prescribe regulations.--The Secretary
may prescribe such regulations as may be necessary or
appropriate for purposes of applying this subsection.''.
(b) Effective Date.--The amendments made by this section shall
apply to discharges in taxable years ending after December 31, 2008.
PART V--QUALIFIED SMALL BUSINESS STOCK
SEC. 1241. SPECIAL RULES APPLICABLE TO QUALIFIED SMALL BUSINESS STOCK
FOR 2009 AND 2010.
(a) In General.--Section 1202(a) is amended by adding at the end
the following new paragraph:
``(3) Special rules for 2009 and 2010.--In the case of
qualified small business stock acquired after the date of the
enactment of this paragraph and before January 1, 2011--
``(A) paragraph (1) shall be applied by
substituting `75 percent' for `50 percent', and
``(B) paragraph (2) shall not apply.''.
(b) Effective Date.--The amendment made by this section shall apply
to stock acquired after the date of the enactment of this Act.
PART VI--PARITY FOR TRANSPORTATION FRINGE BENEFITS
SEC. 1251. INCREASED EXCLUSION AMOUNT FOR COMMUTER TRANSIT BENEFITS AND
TRANSIT PASSES.
(a) In General.--Paragraph (2) of section 132(f) is amended by
adding at the end the following flush sentence:
``In the case of any month beginning on or after the date of
the enactment of this sentence and before January 1, 2011,
subparagraph (A) shall be applied as if the dollar amount
therein were the same as the dollar amount under subparagraph
(B) (as in effect for such month).''.
(b) Effective Date.--The amendment made by this section shall apply
to months beginning on or after the date of the enactment of this
section.
PART VII--S CORPORATIONS
SEC. 1261. TEMPORARY REDUCTION IN RECOGNITION PERIOD FOR BUILT-IN GAINS
TAX.
(a) In General.--Paragraph (7) of section 1374(d) (relating to
definitions and special rules) is amended to read as follows:
``(7) Recognition period.--
``(A) In general.--The term `recognition period'
means the 10-year period beginning with the 1st day of
the 1st taxable year for which the corporation was an S
corporation.
``(B) Special rule for 2009 and 2010.--In the case
of any taxable year beginning in 2009 or 2010, no tax
shall be imposed on the net unrecognized built-in gain
of an S corporation if the 7th taxable year in the
recognition period preceded such taxable year. The
preceding sentence shall be applied separately with
respect to any asset to which paragraph (8) applies.
``(C) Special rule for distributions to
shareholders.--For purposes of applying this section to
any amount includible in income by reason of
distributions to shareholders pursuant to section
593(e)--
``(i) subparagraph (A) shall be applied
without regard to the phrase `10-year', and
``(ii) subparagraph (B) shall not apply.''.
(b) Effective Date.--The amendment made by this section shall apply
to taxable years beginning after December 31, 2008.
PART VIII--BROADBAND INCENTIVES
SEC. 1271. BROADBAND INTERNET ACCESS TAX CREDIT.
(a) In General.--Subpart E of part IV of chapter 1 of the Internal
Revenue Code of 1986 (relating to rules for computing investment
credit), as amended by this Act, is amended by inserting after section
48C the following new section:
``SEC. 48D. 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 (20 percent in the case of qualified subscribers which
are unserved subscribers) of the qualified broadband
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 broadband 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 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 broadband 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, 2008, and before January 1, 2011.
``(B) Sale-leasebacks.--For purposes of
subparagraph (A), if property--
``(i) is originally placed in service after
December 31, 2008, 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 for 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 broadband expenditures
shall be multiplied by a fraction--
``(1) the numerator of which is the sum of the number of
potential qualified subscribers within the rural areas and the
underserved areas and the unserved areas which the equipment is
capable of serving with current generation broadband services,
and
``(2) 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.
``(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 5,000,000 bits per second to
the subscriber and at least 1,000,000 bits per second from the
subscriber (at least 3,000,000 bits per second to the
subscriber and at least 768,000 bits per second from the
subscriber in the case of service through radio transmission of
energy).
``(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 100,000,000 bits per second to the
subscriber (or its equivalent when the data rate is measured
before being compressed for transmission) and at least
20,000,000 bits per second from the subscriber (or its
equivalent as so measured).
``(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 a digitized transmission
signal which is assembled into packets or cells.
``(11) Provider.--The term `provider' means, with respect
to any qualified equipment any--
``(A) cable operator,
``(B) commercial mobile service carrier,
``(C) open video system operator,
``(D) satellite carrier,
``(E) telecommunications carrier, or
``(F) 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 property with respect to which depreciation (or
amortization in lieu of depreciation) is allowable and
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 or broadband-over-powerline operator,
``(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 (C) and the subscriber's premises.
``(14) Qualified broadband expenditure.--
``(A) In general.--The term `qualified broadband
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, 2008,
and before January 1, 2011.
``(B) Certain satellite expenditures excluded.--
Such term shall not include any expenditure with
respect to the launching of any satellite equipment.
``(C) 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
subparagraph (A).
``(15) 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, an underserved area, or an unserved
area, or
``(ii) any residential subscriber residing
in a dwelling located in a rural area, an
underserved area, or an unserved 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, an underserved area, or an unserved
area , or
``(ii) any residential subscriber.
``(16) Residential subscriber.--The term `residential
subscriber' means any 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
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.
``(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 point-to-multipoint 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 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 credit is allowed under subsection
(a)(1).
``(21) Subscriber.--The term `subscriber' means any 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 any commercial mobile
service carrier.
``(23) 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.
``(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 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.
``(26) Unserved area.--The term `unserved area' means any
census tract in which no current generation broadband services
are provided, as certified by the State in which such tract is
located not later than September 30, 2009.
``(27) Unserved subscriber.--The term `unserved subscriber'
means any residential subscriber residing in a dwelling located
in an unserved area or nonresidential subscriber maintaining a
permanent place of business located in an unserved area.''.
(b) Credit To Be Part of Investment Credit.--Section 46 (relating
to the amount of investment credit), as amended by this Act, is amended
by striking ``and'' at the end of paragraph (4), by striking the period
at the end of paragraph (5) and inserting ``, and'', and by adding at
the end the following:
``(6) 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 48D(c)(2)(B), but
only to the extent such income does not in any
year exceed an amount equal to the credit for
qualified broadband expenditures which would be
determined under section 48D 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 Amendments.--
(1) Section 49(a)(1)(C), as amended by this Act, is amended
by striking ``and'' at the end of clause (iv), by striking the
period at the end of clause (v) and inserting ``, and'', and by
adding after clause (v) the following new clause:
``(vi) the portion of the basis of any
qualified equipment attributable to qualified
broadband expenditures under section 48D.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1, as amended by this Act, is amended
by inserting after the item relating to section 48C the
following:
``Sec. 48D. 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), (23), (24), and (26) of section
48D(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 48D--
(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
submitted 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.
(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 eliminating or
reducing any credit or portion thereof allowed under section
48D 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 48D 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
48D of such Code, including--
(A) regulations to determine how and when a
taxpayer that incurs qualified broadband expenditures
satisfies the requirements of section 48D 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 48D of such Code.
(g) Effective Date.--The amendments made by this section shall
apply to expenditures incurred after December 31, 2008.
PART IX--CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON CERTAIN
BUILT-IN LOSSES FOLLOWING AN OWNERSHIP CHANGE
SEC. 1281. CLARIFICATION OF REGULATIONS RELATED TO LIMITATIONS ON
CERTAIN BUILT-IN LOSSES FOLLOWING AN OWNERSHIP CHANGE.
(a) Findings.--Congress finds as follows:
(1) The delegation of authority to the Secretary of the
Treasury under section 382(m) of the Internal Revenue Code of
1986 does not authorize the Secretary to provide exemptions or
special rules that are restricted to particular industries or
classes of taxpayers.
(2) Internal Revenue Service Notice 2008-83 is inconsistent
with the congressional intent in enacting such section 382(m).
(3) The legal authority to prescribe Internal Revenue
Service Notice 2008-83 is doubtful.
(4) However, as taxpayers should generally be able to rely
on guidance issued by the Secretary of the Treasury legislation
is necessary to clarify the force and effect of Internal
Revenue Service Notice 2008-83 and restore the proper
application under the Internal Revenue Code of 1986 of the
limitation on built-in losses following an ownership change of
a bank.
(b) Determination of Force and Effect of Internal Revenue Service
Notice 2008-83 Exempting Banks From Limitation on Certain Built-in
Losses Following Ownership Change.--
(1) In general.--Internal Revenue Service Notice 2008-83--
(A) shall be deemed to have the force and effect of
law with respect to any ownership change (as defined in
section 382(g) of the Internal Revenue Code of 1986)
occurring on or before January 16, 2009, and
(B) shall have no force or effect with respect to
any ownership change after such date.
(2) Binding contracts.--Notwithstanding paragraph (1),
Internal Revenue Service Notice 2008-83 shall have the force
and effect of law with respect to any ownership change (as so
defined) which occurs after January 16, 2009, if such change--
(A) is pursuant to a written binding contract
entered into on or before such date, or
(B) is pursuant to a written agreement entered into
on or before such date and such agreement was described
on or before such date in a public announcement or in a
filing with the Securities and Exchange Commission
required by reason of such ownership change.
Subtitle D--Manufacturing Recovery Provisions
SEC. 1301. TEMPORARY EXPANSION OF AVAILABILITY OF INDUSTRIAL
DEVELOPMENT BONDS TO FACILITIES MANUFACTURING INTANGIBLE
PROPERTY.
(a) In General.--Subparagraph (C) of section 144(a)(12) is
amended--
(1) by striking ``For purposes of this paragraph, the
term'' and inserting ``For purposes of this paragraph--
``(i) In general.--The term'', and
(2) by striking the last sentence and inserting the
following new clauses:
``(ii) Certain facilities included.--Such
term includes facilities which are directly
related and ancillary to a manufacturing
facility (determined without regard to this
clause) if--
``(I) such facilities are located
on the same site as the manufacturing
facility, and
``(II) not more than 25 percent of
the net proceeds of the issue are used
to provide such facilities.
``(iii) Special rules for bonds issued in
2009 and 2010.--In the case of any issue made
after the date of enactment of this clause and
before January 1, 2011, clause (ii) shall not
apply and the net proceeds from a bond shall be
considered to be used to provide a
manufacturing facility if such proceeds are
used to provide--
``(I) a facility which is used in
the creation or production of
intangible property which is described
in section 197(d)(1)(C)(iii), or
``(II) a facility which is
functionally related and subordinate to
a manufacturing facility (determined
without regard to this subclause) if
such facility is located on the same
site as the manufacturing facility.''.
(b) Effective Date.--The amendments made by this section shall
apply to bonds issued after the date of the enactment of this Act.
SEC. 1302. CREDIT FOR INVESTMENT IN ADVANCED ENERGY FACILITIES.
(a) In General.--Section 46 (relating to amount of credit) is
amended by striking ``and'' at the end of paragraph (3), by striking
the period at the end of paragraph (4), and by adding at the end the
following new paragraph:
``(5) the qualifying advanced energy project credit.''.
(b) Amount of Credit.--Subpart E of part IV of subchapter A of
chapter 1 (relating to rules for computing investment credit) is
amended by inserting after section 48B the following new section:
``SEC. 48C. QUALIFYING ADVANCED ENERGY PROJECT CREDIT.
``(a) In General.--For purposes of section 46, the qualifying
advanced energy project credit for any taxable year is an amount equal
to 30 percent of the qualified investment for such taxable year with
respect to any qualifying advanced energy project of the taxpayer.
``(b) Qualified Investment.--
``(1) In general.--For purposes of subsection (a), the
qualified investment for any taxable year is the basis of
eligible property placed in service by the taxpayer during such
taxable year which is part of a qualifying advanced energy
project--
``(A)(i) the construction, reconstruction, or
erection of which is completed by the taxpayer after
October 31, 2008, or
``(ii) which is acquired by the taxpayer if the
original use of such eligible property commences with
the taxpayer after October 31, 2008, and
``(B) with respect to which depreciation (or
amortization in lieu of depreciation) is allowable.
``(2) Special rule for certain subsidized property.--Rules
similar to section 48(a)(4) (without regard to subparagraph (D)
thereof) shall apply for purposes of this section.
``(3) Certain qualified progress expenditures rules made
applicable.--Rules similar to the rules of subsections (c)(4)
and (d) of section 46 (as in effect on the day before the
enactment of the Revenue Reconciliation Act of 1990) shall
apply for purposes of this section.
``(4) Limitation.--The amount which is treated for all
taxable years with respect to any qualifying advanced energy
project shall not exceed the amount designated by the Secretary
as eligible for the credit under this section.
``(c) Definitions.--
``(1) Qualifying advanced energy project.--
``(A) In general.--The term `qualifying advanced
energy project' means a project--
``(i) which re-equips, expands, or
establishes a manufacturing facility for the
production of property which is--
``(I) designed to be used to
produce energy from the sun, wind,
geothermal deposits (within the meaning
of section 613(e)(2)), or other
renewable resources,
``(II) designed to manufacture fuel
cells, microturbines, or an energy
storage system for use with electric or
hybrid-electric motor vehicles,
``(III) designed to manufacture
electric grids to support the
transmission of intermittent sources of
renewable energy,
``(IV) designed to capture and
sequester carbon dioxide emissions, or
``(V) designed to refine or blend
renewable fuels or to produce energy
conservation technologies (including
energy-conserving lighting technologies
and smart grid technologies), and
``(ii) any portion of the qualified
investment of which is certified by the
Secretary under subsection (d) as eligible for
a credit under this section.
``(B) Exception.--Such term shall not include any
portion of a project for the production of any property
which is used in the refining or blending of any
transportation fuel (other than renewable fuels).
``(2) Eligible property.--The term `eligible property'
means any property which is part of a qualifying advanced
energy project and is necessary for the production of property
described in paragraph (1)(A)(i).
``(d) Qualifying Advanced Energy Project Program.--
``(1) Establishment.--
``(A) In general.--Not later than 180 days after
the date of enactment of this section, the Secretary,
in consultation with the Secretary of Energy, shall
establish a qualifying advanced energy project program
to consider and award certifications for qualified
investments eligible for credits under this section to
qualifying advanced energy project sponsors.
``(B) Limitation.--The total amount of credits that
may be allocated under the program shall not exceed
$2,000,000,000.
``(2) Certification.--
``(A) Application period.--Each applicant for
certification under this paragraph shall submit an
application containing such information as the
Secretary may require during the 3-year period
beginning on the date the Secretary establishes the
program under paragraph (1).
``(B) Time to meet criteria for certification.--
Each applicant for certification shall have 2 years
from the date of acceptance by the Secretary of the
application during which to provide to the Secretary
evidence that the requirements of the certification
have been met.
``(C) Period of issuance.--An applicant which
receives a certification shall have 5 years from the
date of issuance of the certification in order to place
the project in service and if such project is not
placed in service by that time period then the
certification shall no longer be valid.
``(3) Selection criteria.--In determining which qualifying
advanced energy projects to certify under this section, the
Secretary shall take into consideration only those projects
where there is a reasonable expectation of commercial
viability.
``(4) Review and redistribution.--
``(A) Review.--Not later than 6 years after the
date of enactment of this section, the Secretary shall
review the credits allocated under this section as of
the date which is 6 years after the date of enactment
of this section.
``(B) Redistribution.--The Secretary may reallocate
credits awarded under this section if the Secretary
determines that--
``(i) there is an insufficient quantity of
qualifying applications for certification
pending at the time of the review, or
``(ii) any certification made pursuant to
paragraph (2) has been revoked pursuant to
paragraph (2)(B) because the project subject to
the certification has been delayed as a result
of third party opposition or litigation to the
proposed project.
``(C) Reallocation.--If the Secretary determines
that credits under this section are available for
reallocation pursuant to the requirements set forth in
paragraph (2), the Secretary is authorized to conduct
an additional program for applications for
certification.
``(5) Disclosure of allocations.--The Secretary shall, upon
making a certification under this subsection, publicly disclose
the identity of the applicant and the amount of the credit with
respect to such applicant.
``(e) Denial of Double Benefit.--A credit shall not be allowed
under this section for any qualified investment for which a credit is
allowed under section 48, 48A, or 48B.''.
(c) Conforming Amendments.--
(1) Section 49(a)(1)(C) is amended by striking ``and'' at
the end of clause (iii), by striking the period at the end of
clause (iv) and inserting ``, and'', and by adding after clause
(iv) the following new clause:
``(v) the basis of any property which is
part of a qualifying advanced energy project
under section 48C.''.
(2) The table of sections for subpart E of part IV of
subchapter A of chapter 1 is amended by inserting after the
item relating to section 48B the following new item:
``48C. Qualifying advanced energy project credit.''.
(d) Effective Date.--The amendments made by this section shall
apply to periods after the date of the enactment of this Act, under
rules similar to the rules of section 48(m) of the Internal Revenue
Code of 1986 (as in effect on the day before the date of the enactment
of the Revenue Reconciliation Act of 1990).
Subtitle E--Economic Recovery Tools
SEC. 1401. RECOVERY ZONE BONDS.
(a) In General.--Subchapter Y of chapter 1 is amended by adding at
the end the following new part:
``PART III--RECOVERY ZONE BONDS
``Sec. 1400U-1. Allocation of recovery zone bonds.
``Sec. 1400U-2. Recovery zone economic development bonds.
``Sec. 1400U-3. Recovery zone facility bonds.
``SEC. 1400U-1. ALLOCATION OF RECOVERY ZONE BONDS.
``(a) Allocations.--
``(1) In general.--The Secretary shall allocate the
national recovery zone economic development bond limitation and
the national recovery zone facility bond limitation among the
States--
``(A) by allocating 1 percent of each such
limitation to each State, and
``(B) by allocating the remainder of each such
limitation among the States in the proportion that each
State's 2008 State employment decline bears to the
aggregate of the 2008 State employment declines for all
of the States.
``(2) 2008 state employment decline.--For purposes of this
subsection, the term `2008 State employment decline' means,
with respect to any State, the excess (if any) of--
``(A) the number of individuals employed in such
State determined for December 2007, over
``(B) the number of individuals employed in such
State determined for December 2008.
``(3) Allocations by states.--
``(A) In general.--Each State with respect to which
an allocation is made under paragraph (1) shall
reallocate such allocation among the counties and large
municipalities in such State in the proportion the each
such county's or municipality's 2008 employment decline
bears to the aggregate of the 2008 employment declines
for all the counties and municipalities in such State.
``(B) Large municipalities.--For purposes of
subparagraph (A), the term `large municipality' means a
municipality with a population of more than 100,000.
``(C) Determination of local employment declines.--
For purposes of this paragraph, the employment decline
of any municipality or county shall be determined in
the same manner as determining the State employment
decline under paragraph (2), except that in the case of
a municipality any portion of which is in a county,
such portion shall be treated as part of such
municipality and not part of such county.
``(4) National limitations.--
``(A) Recovery zone economic development bonds.--
There is a national recovery zone economic development
bond limitation of $10,000,000,000.
``(B) Recovery zone facility bonds.--There is a
national recovery zone facility bond limitation of
$15,000,000,000.
``(b) Recovery Zone.--For purposes of this part, the term `recovery
zone' means--
``(1) any area designated by the issuer as having
significant poverty, unemployment, rate of home foreclosures,
or general distress, and
``(2) any area for which a designation as an empowerment
zone or renewal community is in effect.
``SEC. 1400U-2. RECOVERY ZONE ECONOMIC DEVELOPMENT BONDS.
``(a) In General.--In the case of a recovery zone economic
development bond--
``(1) such bond shall be treated as a qualified bond for
purposes of section 6431, and
``(2) subsection (b) of such section shall be applied by
substituting `40 percent' for `35 percent'.
``(b) Recovery Zone Economic Development Bond.--
``(1) In general.--For purposes of this section, the term
`recovery zone economic development bond' means any build
America bond (as defined in section 54AA(d)) issued before
January 1, 2011, as part of issue if--
``(A) 100 percent of the available project proceeds
(as defined in section 54A) of such issue are to be
used for one or more qualified economic development
purposes, and
``(B) the issuer designates such bond for purposes
of this section.
``(2) Limitation on amount of bonds designated.--The
maximum aggregate face amount of bonds which may be designated
by any issuer under paragraph (1) shall not exceed the amount
of the recovery zone economic development bond limitation
allocated to such issuer under section 1400U-1.
``(c) Qualified Economic Development Purpose.--For purposes of this
section, the term `qualified economic development purpose' means
expenditures for purposes of promoting development or other economic
activity in a recovery zone, including--
``(1) capital expenditures paid or incurred with respect to
property located in such zone,
``(2) expenditures for public infrastructure and
construction of public facilities, and
``(3) expenditures for job training and educational
programs.
``SEC. 1400U-3. RECOVERY ZONE FACILITY BONDS.
``(a) In General.--For purposes of part IV of subchapter B
(relating to tax exemption requirements for State and local bonds), the
term `exempt facility bond' includes any recovery zone facility bond.
``(b) Recovery Zone Facility Bond.--
``(1) In general.--For purposes of this section, the term
`recovery zone facility bond' means any bond issued as part of
an issue if--
``(A) 95 percent or more of the net proceeds (as
defined in section 150(a)(3)) of such issue are to be
used for recovery zone property,
``(B) such bond is issued before January 1, 2011,
and
``(C) the issuer designates such bond for purposes
of this section.
``(2) Limitation on amount of bonds designated.--The
maximum aggregate face amount of bonds which may be designated
by any issuer under paragraph (1) shall not exceed the amount
of recovery zone facility bond limitation allocated to such
issuer under section 1400U-1.
``(c) Recovery Zone Property.--For purposes of this section--
``(1) In general.--The term `recovery zone property' means
any property to which section 168 applies (or would apply but
for section 179) if--
``(A) such property was acquired by the taxpayer by
purchase (as defined in section 179(d)(2)) after the
date on which the designation of the recovery zone took
effect,
``(B) the original use of which in the recovery
zone commences with the taxpayer, and
``(C) substantially all of the use of which is in
the recovery zone and is in the active conduct of a
qualified business by the taxpayer in such zone.
``(2) Qualified business.--The term `qualified business'
means any trade or business except that--
``(A) the rental to others of real property located
in a recovery zone shall be treated as a qualified
business only if the property is not residential rental
property (as defined in section 168(e)(2)), and
``(B) such term shall not include any trade or
business consisting of the operation of any facility
described in section 144(c)(6)(B).
``(3) Special rules for substantial renovations and sale-
leaseback.--Rules similar to the rules of subsections (a)(2)
and (b) of section 1397D shall apply for purposes of this
subsection.
``(d) Nonapplication of Certain Rules.--Sections 146 (relating to
volume cap) and 147(d) (relating to acquisition of existing property
not permitted) shall not apply to any recovery zone facility bond.''.
(b) Clerical Amendment.--The table of parts for subchapter Y of
chapter 1 of such Code is amended by adding at the end the following
new item:
``Part III. Recovery Zone Bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 1402. TRIBAL ECONOMIC DEVELOPMENT BONDS.
(a) In General.--Section 7871 is amended by adding at the end the
following new subsection:
``(f) Tribal Economic Development Bonds.--
``(1) Allocation of limitation.--
``(A) In general.--The Secretary shall allocate the
national tribal economic development bond limitation
among the Indian tribal governments in such manner as
the Secretary, in consultation with the Secretary of
the Interior, determines appropriate.
``(B) National limitation.--There is a national
tribal economic development bond limitation of
$2,000,000,000.
``(2) Bonds treated as exempt from tax.--In the case of a
tribal economic development bond--
``(A) notwithstanding subsection (c), such bond
shall be treated for purposes of this title in the same
manner as if such bond were issued by a State,
``(B) the Indian tribal government issuing such
bond and any instrumentality of such Indian tribal
government shall be treated as a State for purposes of
section 141, and
``(C) section 146 shall not apply.
``(3) Tribal economic development bond.--
``(A) In general.--For purposes of this section,
the term `tribal economic development bond' means any
bond issued by an Indian tribal government--
``(i) the interest on which would be exempt
from tax under section 103 if issued by a State
or local government, and
``(ii) which is designated by the Indian
tribal government as a tribal economic
development bond for purposes of this
subsection.
``(B) Exceptions.--The term tribal economic
development bond shall not include any bond issued as
part of an issue if any portion of the proceeds of such
issue are used to finance--
``(i) any portion of a building in which
class II or class III gaming (as defined in
section 4 of the Indian Gaming Regulatory Act)
is conducted or housed or any other property
actually used in the conduct of such gaming, or
``(ii) any facility located outside the
Indian reservation (as defined in section
168(j)(6)).
``(C) Limitation on amount of bonds designated.--
The maximum aggregate face amount of bonds which may be
designated by any Indian tribal government under
subparagraph (A) shall not exceed the amount of
national tribal economic development bond limitation
allocated to such government under paragraph (1).''.
(b) Study.--The Secretary of the Treasury, or the Secretary's
delegate, shall conduct a study of the effects of the amendment made by
subsection (a). Not later than 1 year after the date of the enactment
of this Act, the Secretary of the Treasury, or the Secretary's
delegate, shall report to Congress on the results of the study
conducted under this paragraph, including the Secretary's
recommendations regarding such amendment.
(c) Effective Date.--The amendment made by subsection (a) shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 1403. MODIFICATIONS TO NEW MARKETS TAX CREDIT.
(a) Increase in National Limitation.--
(1) In general.--Section 45D(f)(1) is amended--
(A) by striking ``and'' at the end of subparagraph
(C),
(B) by striking ``, 2007, 2008, and 2009.'' in
subparagraph (D), and inserting ``and 2007,'', and
(C) by adding at the end the following new
subparagraphs:
``(E) $5,000,000,000 for 2008, and
``(F) $5,000,000,000 for 2009.''.
(2) Special rule for allocation of increased 2008
limitation.--The amount of the increase in the new markets tax
credit limitation for calendar year 2008 by reason of the
amendments made by subsection (a) shall be allocated in
accordance with section 45D(f)(2) of the Internal Revenue Code
of 1986 to qualified community development entities (as defined
in section 45D(c) of such Code) which--
(A) submitted an allocation application with
respect to calendar year 2008, and
(B)(i) did not receive an allocation for such
calendar year, or
(ii) received an allocation for such calendar year
in an amount less than the amount requested in the
allocation application.
(b) Alternative Minimum Tax Relief.--
(1) In general.--Section 38(c)(4)(B) is amended by
redesignating clauses (v) through (viii) as clauses (vi)
through (ix), respectively, and by inserting after clause (iv)
the following new clause:
``(v) the credit determined under section
45D to the extent that such credit is
attributable to a qualified equity investment
which is designated as such under section
45D(b)(1)(C) pursuant to an allocation of the
new markets tax credit limitation for calendar
year 2009,''.
(2) Effective date.--The amendments made by this subsection
shall apply to credits determined under section 45D of the
Internal Revenue Code of 1986 in taxable years ending after the
date of the enactment of this Act, and to carrybacks of such
credits.
Subtitle F--Infrastructure Financing Tools
PART I--IMPROVED MARKETABILITY FOR TAX-EXEMPT BONDS
SEC. 1501. DE MINIMIS SAFE HARBOR EXCEPTION FOR TAX-EXEMPT INTEREST
EXPENSE OF FINANCIAL INSTITUTIONS.
(a) In General.--Subsection (b) of section 265 is amended by adding
at the end the following new paragraph:
``(7) De minimis exception for bonds issued during 2009 or
2010.--
``(A) In general.--In applying paragraph (2)(A),
there shall not be taken into account tax-exempt
obligations issued during 2009 or 2010.
``(B) Limitation.--The amount of tax-exempt
obligations not taken into account by reason of
subparagraph (A) shall not exceed 2 percent of the
amount determined under paragraph (2)(B).
``(C) Refundings.--For purposes of this paragraph,
a refunding bond (whether a current or advance
refunding) shall be treated as issued on the date of
the issuance of the refunded bond (or in the case of a
series of refundings, the original bond).''.
(b) Treatment as Financial Institution Preference Item.--Clause
(iv) of section 291(e)(1)(B) is amended by adding at the end the
following: ``That portion of any obligation not taken into account
under paragraph (2)(A) of section 265(b) by reason of paragraph (7) of
such section shall be treated for purposes of this section as having
been acquired on August 7, 1986.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2008.
SEC. 1502. MODIFICATION OF SMALL ISSUER EXCEPTION TO TAX-EXEMPT
INTEREST EXPENSE ALLOCATION RULES FOR FINANCIAL
INSTITUTIONS.
(a) In General.--Paragraph (3) of section 265(b) (relating to
exception for certain tax-exempt obligations) is amended by adding at
the end the following new subparagraph:
``(G) Special rules for obligations issued during
2009 and 2010.--
``(i) Increase in limitation.--In the case
of obligations issued during 2009 or 2010,
subparagraphs (C)(i), (D)(i), and (D)(iii)(II)
shall each be applied by substituting
`$30,000,000' for `$10,000,000'.
``(ii) Qualified 501(c)(3) bonds treated as
issued by exempt organization.--In the case of
a qualified 501(c)(3) bond (as defined in
section 145) issued during 2009 or 2010, this
paragraph shall be applied by treating the
501(c)(3) organization for whose benefit such
bond was issued as the issuer.
``(iii) Special rule for qualified
financings.--In the case of a qualified
financing issue issued during 2009 or 2010--
``(I) subparagraph (F) shall not
apply, and
``(II) any obligation issued as a
part of such issue shall be treated as
a qualified tax-exempt obligation if
the requirements of this paragraph are
met with respect to each qualified
portion of the issue (determined by
treating each qualified portion as a
separate issue which is issued by the
qualified borrower with respect to
which such portion relates).
``(iv) Qualified financing issue.--For
purposes of this subparagraph, the term
`qualified financing issue' means any
composite, pooled, or other conduit financing
issue the proceeds of which are used directly
or indirectly to make or finance loans to 1 or
more ultimate borrowers each of whom is a
qualified borrower.
``(v) Qualified portion.--For purposes of
this subparagraph, the term `qualified portion'
means that portion of the proceeds which are
used with respect to each qualified borrower
under the issue.
``(vi) Qualified borrower.--For purposes of
this subparagraph, the term `qualified
borrower' means a borrower which is a State or
political subdivision thereof or an
organization described in section 501(c)(3) and
exempt from taxation under section 501(a).''.
(b) Effective Date.--The amendment made by this section shall apply
to obligations issued after December 31, 2008.
SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE MINIMUM TAX
LIMITATIONS ON TAX-EXEMPT BONDS.
(a) Interest on Private Activity Bonds Issued During 2009 and 2010
Not Treated as Tax Preference Item.--Subparagraph (C) of section
57(a)(5) is amended by adding at the end a new clause:
``(vi) Exception for bonds issued in 2009
and 2010.--For purposes of clause (i), the term
`private activity bond' shall not include any
bond issued after December 31, 2008, and before
January 1, 2011. For purposes of the preceding
sentence, a refunding bond (whether a current
or advance refunding) shall be treated as
issued on the date of the issuance of the
refunded bond (or in the case of a series of
refundings, the original bond).''.
(b) No Adjustment to Adjusted Current Earnings for Interest on Tax-
Exempt Bonds Issued During 2009 and 2010.--Subparagraph (B) of section
56(g)(4) is amended by adding at the end the following new clause:
``(iv) Tax exempt interest on bonds issued
in 2009 and 2010.--Clause (i) shall not apply
in the case of any interest on a bond issued
after December 31, 2008, and before January 1,
2011. For purposes of the preceding sentence, a
refunding bond (whether a current or advance
refunding) shall be treated as issued on the
date of the issuance of the refunded bond (or
in the case of a series of refundings, the
original bond).''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after December 31, 2008.
SEC. 1504. MODIFICATION TO HIGH SPEED INTERCITY RAIL FACILITY BONDS.
(a) In General.--Paragraph (1) of section 142(i) is amended by
striking ``operate at speeds in excess of'' and inserting ``be capable
of attaining a maximum speed in excess of''.
(b) Effective Date.--The amendment made by this section shall apply
to bonds issued after the date of the enactment of this Act.
PART II--DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT
CONTRACTORS
SEC. 1511. DELAY IN APPLICATION OF WITHHOLDING TAX ON GOVERNMENT
CONTRACTORS.
Subsection (b) of section 511 of the Tax Increase Prevention and
Reconciliation Act of 2005 is amended by striking ``December 31, 2010''
and inserting ``December 31, 2011''.
PART III--TAX CREDIT BONDS FOR SCHOOLS
SEC. 1521. QUALIFIED SCHOOL CONSTRUCTION BONDS.
(a) In General.--Subpart I of part IV of subchapter A of chapter 1
is amended by adding at the end the following new section:
``SEC. 54F. QUALIFIED SCHOOL CONSTRUCTION BONDS.
``(a) Qualified School Construction Bond.--For purposes of this
subchapter, the term `qualified school construction bond' means any
bond issued as part of an issue if--
``(1) 100 percent of the available project proceeds of such
issue are to be used for the construction, rehabilitation, or
repair of a public school facility or for the acquisition of
land on which such a facility is to be constructed with part of
the proceeds of such issue,
``(2) the bond is issued by a State or local government
within the jurisdiction of which such school is located, and
``(3) the issuer designates such bond for purposes of this
section.
``(b) Limitation on Amount of Bonds Designated.--The maximum
aggregate face amount of bonds issued during any calendar year which
may be designated under subsection (a) by any issuer shall not exceed
the limitation amount allocated under subsection (d) for such calendar
year to such issuer.
``(c) National Limitation on Amount of Bonds Designated.--There is
a national qualified school construction bond limitation for each
calendar year. Such limitation is--
``(1) $5,000,000,000 for 2009,
``(2) $5,000,000,000 for 2010, and
``(3) except as provided in subsection (e), zero after
2010.
``(d) Limitation Allocated Among States.--
``(1) In general.--The limitation applicable under
subsection (c) for any calendar year shall be allocated by the
Secretary among the States in proportion to the respective
numbers of children in each State who have attained age 5 but
not age 18 for the most recent fiscal year ending before such
calendar year. The limitation amount allocated to a State under
the preceding sentence shall be allocated by the State to
issuers within such State.
``(2) Minimum allocations to states.--
``(A) In general.--The Secretary shall adjust the
allocations under this subsection for any calendar year
for each State to the extent necessary to ensure that
the amount allocated to such State under this
subsection for such year is not less than an amount
equal to such State's adjusted minimum percentage of
the amount to be allocated under paragraph (1) for the
calendar year.
``(B) Minimum percentage.--A State's minimum
percentage for any calendar year is equal to the
product of--
``(i) the quotient of--
``(I) the amount the State is
eligible to receive under section
1124(d) of the Elementary and Secondary
Education Act of 1965 (20 U.S.C.
6333(d)) for the most recent fiscal
year ending before such calendar year,
divided by
``(II) the amount all States are
eligible to receive under section 1124
of such Act (20 U.S.C. 6333) for such
fiscal year, multiplied by
``(ii) 100.
``(3) Allocations to certain possessions.--The amount to be
allocated under paragraph (1) to any possession of the United
States other than Puerto Rico shall be the amount which would
have been allocated if all allocations under paragraph (1) were
made on the basis of respective populations of individuals
below the poverty line (as defined by the Office of Management
and Budget). In making other allocations, the amount to be
allocated under paragraph (1) shall be reduced by the aggregate
amount allocated under this paragraph to possessions of the
United States.
``(4) Allocations for indian schools.--In addition to the
amounts otherwise allocated under this subsection, $200,000,000
for calendar year 2009, and $200,000,000 for calendar year
2010, shall be allocated by the Secretary of the Interior for
purposes of the construction, rehabilitation, and repair of
schools funded by the Bureau of Indian Affairs. In the case of
amounts allocated under the preceding sentence, Indian tribal
governments (as defined in section 7701(a)(40)) shall be
treated as qualified issuers for purposes of this subchapter.
``(e) Carryover of Unused Limitation.--If for any calendar year--
``(1) the amount allocated under subsection (d) to any
State, exceeds
``(2) the amount of bonds issued during such year which are
designated under subsection (a) pursuant to such allocation,
the limitation amount under such subsection for such State for the
following calendar year shall be increased by the amount of such
excess. A similar rule shall apply to the amounts allocated under
subsection (d)(4).''.
(b) Conforming Amendments.--
(1) Paragraph (1) of section 54A(d) is amended by striking
``or'' at the end of subparagraph (C), by inserting ``or'' at
the end of subparagraph (D), and by inserting after
subparagraph (D) the following new subparagraph:
``(E) a qualified school construction bond,''.
(2) Subparagraph (C) of section 54A(d)(2) is amended by
striking ``and'' at the end of clause (iii), by striking the
period at the end of clause (iv) and inserting ``, and'', and
by adding at the end the following new clause:
``(v) in the case of a qualified school
construction bond, a purpose specified in
section 54F(a)(1).''.
(3) The table of sections for subpart I of part IV of
subchapter A of chapter 1 is amended by adding at the end the
following new item:
``Sec. 54F. Qualified school construction bonds.''.
(c) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
SEC. 1522. EXTENSION AND EXPANSION OF QUALIFIED ZONE ACADEMY BONDS.
(a) In General.--Section 54E(c)(1) is amended by striking ``and
2009'' and inserting ``and $1,400,000,000 for 2009 and 2010''.
(b) Effective Date.--The amendment made by this section shall apply
to obligations issued after December 31, 2008.
PART IV--BUILD AMERICA BONDS
SEC. 1531. BUILD AMERICA BONDS.
(a) In General.--Part IV of subchapter A of chapter 1 is amended by
adding at the end the following new subpart:
``Subpart J--Build America Bonds
``Sec. 54AA. Build America bonds.
``SEC. 54AA. BUILD AMERICA BONDS.
``(a) In General.--If a taxpayer holds a build America bond on one
or more interest payment dates of the bond during any taxable year,
there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of the credits
determined under subsection (b) with respect to such dates.
``(b) Amount of Credit.--The amount of the credit determined under
this subsection with respect to any interest payment date for a build
America bond is 35 percent of the amount of interest payable by the
issuer with respect to such date.
``(c) Limitation Based on Amount of Tax.--
``(1) In general.--The credit allowed under subsection (a)
for any taxable year shall not exceed the excess of--
``(A) the sum of the regular tax liability (as
defined in section 26(b)) plus the tax imposed by
section 55, over
``(B) the sum of the credits allowable under this
part (other than subpart C and this subpart).
``(2) Carryover of unused credit.--If the credit allowable
under subsection (a) exceeds the limitation imposed by
paragraph (1) for such taxable year, such excess shall be
carried to the succeeding taxable year and added to the credit
allowable under subsection (a) for such taxable year
(determined before the application of paragraph (1) for such
succeeding taxable year).
``(d) Build America Bond.--
``(1) In general.--For purposes of this section, the term
`build America bond' means any obligation (other than a private
activity bond) if--
``(A) the interest on such obligation would (but
for this section) be excludable from gross income under
section 103,
``(B) such obligation is issued before January 1,
2012, and
``(C) the issuer makes an irrevocable election to
have this section apply.
``(2) Applicable rules.--For purposes of applying paragraph
(1)--
``(A) a build America bond shall not be treated as
federally guaranteed by reason of the credit allowed
under subsection (a) or section 6431,
``(B) the yield on a build America bond shall be
determined without regard to the credit allowed under
subsection (a), and
``(C) a bond shall not be treated as a build
America bond if the issue price has more than a de
minimis amount (determined under rules similar to the
rules of section 1273(a)(3)) of premium over the stated
principal amount of the bond.
``(e) Interest Payment Date.--For purposes of this section, the
term `interest payment date' means any date on which the holder of
record of the build America bond is entitled to a payment of interest
under such bond.
``(f) Special Rules.--
``(1) Interest on build america bonds includible in gross
income for federal income tax purposes.--For purposes of this
title, interest on any build America bond shall be includible
in gross income.
``(2) Application of certain rules.--Rules similar to the
rules of subsections (f), (g), (h), and (i) of section 54A
shall apply for purposes of the credit allowed under subsection
(a).
``(g) Special Rule for Qualified Bonds Issued Before 2011.--In the
case of a qualified bond issued before January 1, 2011--
``(1) Issuer allowed refundable credit.--In lieu of any
credit allowed under this section with respect to such bond,
the issuer of such bond shall be allowed a credit as provided
in section 6431.
``(2) Qualified bond.--For purposes of this subsection, the
term `qualified bond' means any build America bond issued as
part of an issue if--
``(A) 100 percent of the available project proceeds
(as defined in section 54A) of such issue are to be
used for capital expenditures, and
``(B) the issuer makes an irrevocable election to
have this subsection apply.
``(h) Regulations.--The Secretary may prescribe such regulations
and other guidance as may be necessary or appropriate to carry out this
section and section 6431.''.
(b) Credit for Qualified Bonds Issued Before 2011.--Subchapter B of
chapter 65 is amended by adding at the end the following new section:
``SEC. 6431. CREDIT FOR QUALIFIED BONDS ALLOWED TO ISSUER.
``(a) In General.--In the case of a qualified bond issued before
January 1, 2011, the issuer of such bond shall be allowed a credit with
respect to each interest payment under such bond which shall be payable
by the Secretary as provided in subsection (b).
``(b) Payment of Credit.--The Secretary shall pay
(contemporaneously with each interest payment date under such bond) to
the issuer of such bond (or to any person who makes such interest
payments on behalf of the issuer) 35 percent of the interest payable
under such bond on such date.
``(c) Application of Arbitrage Rules.--For purposes of section 148,
the yield on a qualified bond shall be reduced by the credit allowed
under this section.
``(d) Interest Payment Date.--For purposes of this subsection, the
term `interest payment date' means each date on which interest is
payable by the issuer under the terms of the bond.
``(e) Qualified Bond.--For purposes of this subsection, the term
`qualified bond' has the meaning given such term in section 54AA(g).''.
(c) Conforming Amendments.--
(1) Section 1324(b)(2) of title 31, United States Code, is
amended by striking ``or 6428'' and inserting ``6428, or
6431,''.
(2) Section 54A(c)(1)(B) is amended by striking ``subpart
C'' and inserting ``subparts C and J''.
(3) Sections 54(c)(2), 1397E(c)(2), and 1400N(l)(3)(B) are
each amended by striking ``and I'' and inserting ``, I, and
J''.
(4) Section 6401(b)(1) is amended by striking ``and I'' and
inserting ``I, and J''.
(5) The table of subparts for part IV of subchapter A of
chapter 1 is amended by adding at the end the following new
item:
``Subpart J. Build America bonds.''.
(6) The table of section for subchapter B of chapter 65 is
amended by adding at the end the following new item:
``Sec. 6431. Credit for qualified bonds allowed to issuer.''.
(d) Transitional Coordination With State Law.--Except as otherwise
provided by a State after the date of the enactment of this Act, the
interest on any build America bond (as defined in section 54AA of the
Internal Revenue Code of 1986, as added by this section) and the amount
of any credit determined under such section with respect to such bond
shall be treated for purposes of the income tax laws of such State as
being exempt from Federal income tax.
(e) Effective Date.--The amendments made by this section shall
apply to obligations issued after the date of the enactment of this
Act.
Subtitle G--Economic Recovery Payments to Certain Individuals
SEC. 1601. ECONOMIC RECOVERY PAYMENT TO RECIPIENTS OF SOCIAL SECURITY,
SUPPLEMENTAL SECURITY INCOME, RAILROAD RETIREMENT
BENEFITS, AND VETERANS DISABILITY COMPENSATION OR PENSION
BENEFITS.
(a) Authority To Make Payments.--
(1) Eligibility.--
(A) In general.--Subject to paragraph (5)(B), the
Secretary of the Treasury shall make a $300 payment to
each individual who, for any month during the 3-month
period ending with the month which ends prior to the
month that includes the date of the enactment of this
Act, is entitled to a benefit payment described in
clause (i), (ii), or (iii) of subparagraph (B) or is
eligible for a SSI cash benefit described in
subparagraph (C).
(B) Benefit payment described.--For purposes of
subparagraph (A):
(i) Title ii benefit.--A benefit payment
described in this clause is a monthly insurance
benefit payable (without regard to sections
202(j)(1) and 223(b) of the Social Security Act
(42 U.S.C. 402(j)(1), 423(b)) under--
(I) section 202(a) of such Act (42
U.S.C. 402(a));
(II) section 202(b) of such Act (42
U.S.C. 402(b));
(III) section 202(c) of such Act
(42 U.S.C. 402(c));
(IV) section 202(d)(1)(B)(ii) of
such Act (42 U.S.C. 402(d)(1)(B)(ii));
(V) section 202(e) of such Act (42
U.S.C. 402(e));
(VI) section 202(f) of such Act (42
U.S.C. 402(f));
(VII) section 202(g) of such Act
(42 U.S.C. 402(g));
(VIII) section 202(h) of such Act
(42 U.S.C. 402(h));
(IX) section 223(a) of such Act (42
U.S.C. 423(a));
(X) section 227 of such Act (42
U.S.C. 427); or
(XI) section 228 of such Act (42
U.S.C. 428).
(ii) Railroad retirement benefit.--A
benefit payment described in this clause is a
monthly annuity or pension payment payable
(without regard to section 5(a)(ii) of the
Railroad Retirement Act of 1974 (45 U.S.C.
231d(a)(ii)) under--
(I) section 2(a)(1) of such Act (45
U.S.C. 231a(a)(1));
(II) section 2(c) of such Act (45
U.S.C. 231a(c));
(III) section 2(d)(1)(i) of such
Act (45 U.S.C. 231a(d)(1)(i));
(IV) section 2(d)(1)(ii) of such
Act (45 U.S.C. 231a(d)(1)(ii));
(V) section 2(d)(1)(iii)(C) of such
Act to an adult disabled child (45
U.S.C. 231a(d)(1)(iii)(C));
(VI) section 2(d)(1)(iv) of such
Act (45 U.S.C. 231a(d)(1)(iv));
(VII) section 2(d)(1)(v) of such
Act (45 U.S.C. 231a(d)(1)(v)); or
(VIII) section 7(b)(2) of such Act
(45 U.S.C. 231f(b)(2)) with respect to
any of the benefit payments described
in clause (i) of this subparagraph.
(iii) Veterans benefit.--A benefit payment
described in this clause is a compensation or
pension payment payable under--
(I) section 1110, 1117, 1121, 1131,
1141, or 1151 of title 38, United
States Code;
(II) section 1310, 1312, 1313,
1315, 1316, or 1318 of title 38, United
States Code;
(III) section 1513, 1521, 1533,
1536, 1537, 1541, 1542, or 1562 of
title 38, United States Code; or
(IV) section 1805, 1815, or 1821 of
title 38, United States Code,
to a veteran, surviving spouse, child, or
parent as described in paragraph (2), (3),
(4)(A)(ii), or (5) of section 101, title 38,
United States Code, who received that benefit
during any month within the 3 month period
ending with the month which ends prior to the
month that includes the date of the enactment
of this Act.
(C) SSI cash benefit described.--A SSI cash benefit
described in this subparagraph is a cash benefit
payable under section 1611 (other than under subsection
(e)(1)(B) of such section) or 1619(a) of the Social
Security Act (42 U.S.C. 1382, 1382h).
(2) Requirement.--A payment shall be made under paragraph
(1) only to individuals who reside in 1 of the 50 States, the
District of Columbia, Puerto Rico, Guam, the United States
Virgin Islands, American Samoa, or the Northern Mariana
Islands. For purposes of the preceding sentence, the
determination of the individual's residence shall be based on
the current address of record under a program specified in
paragraph (1).
(3) No double payments.--An individual shall be paid only 1
payment under this section, regardless of whether the
individual is entitled to, or eligible for, more than 1 benefit
or cash payment described in paragraph (1).
(4) Limitation.--A payment under this section shall not be
made--
(A) in the case of an individual entitled to a
benefit specified in paragraph (1)(B)(i) or paragraph
(1)(B)(ii)(VIII) if, for the most recent month of such
individual's entitlement in the 3-month period
described in paragraph (1), such individual's benefit
under such paragraph was not payable by reason of
subsection (x) or (y) of section 202 the Social
Security Act (42 U.S.C. 402) or section 1129A of such
Act (42 U.S.C. 1320a-8a);
(B) in the case of an individual entitled to a
benefit specified in paragraph (1)(B)(iii) if, for the
most recent month of such individual's entitlement in
the 3-month period described in paragraph (1), such
individual's benefit under such paragraph was not
payable, or was reduced, by reason of section 1505,
5313, or 5313B of title 38, United States Code;
(C) in the case of an individual entitled to a
benefit specified in paragraph (1)(C) if, for such most
recent month, such individual's benefit under such
paragraph was not payable by reason of subsection
(e)(1)(A) or (e)(4) of section 1611 (42 U.S.C. 1382) or
section 1129A of such Act (42 U.S.C. 1320a-8a); or
(D) in the case of any individual whose date of
death occurs before the date on which the individual is
certified under subsection (b) to receive a payment
under this section.
(5) Timing and manner of payments.--
(A) In general.--The Secretary of the Treasury
shall commence making payments under this section at
the earliest practicable date but in no event later
than 120 days after the date of enactment of this Act.
The Secretary of the Treasury may make any payment
electronically to an individual in such manner as if
such payment was a benefit payment or cash benefit to
such individual under the applicable program described
in subparagraph (B) or (C) of paragraph (1).
(B) Deadline.--No payments shall be made under this
section after December 31, 2010, regardless of any
determinations of entitlement to, or eligibility for,
such payments made after such date.
(b) Identification of Recipients.--The Commissioner of Social
Security, the Railroad Retirement Board, and the Secretary of Veterans
Affairs shall certify the individuals entitled to receive payments
under this section and provide the Secretary of the Treasury with the
information needed to disburse such payments. A certification of an
individual shall be unaffected by any subsequent determination or
redetermination of the individual's entitlement to, or eligibility for,
a benefit specified in subparagraph (B) or (C) of subsection (a)(1).
(c) Treatment of Payments.--
(1) Payment to be disregarded for purposes of all federal
and federally assisted programs.--A payment under subsection
(a) shall not be regarded as income and shall not be regarded
as a resource for the month of receipt and the following 9
months, for purposes of determining the eligibility of the
recipient (or the recipient's spouse or family) for benefits or
assistance, or the amount or extent of benefits or assistance,
under any Federal program or under any State or local program
financed in whole or in part with Federal funds.
(2) Payment not considered income for purposes of
taxation.--A payment under subsection (a) shall not be
considered as gross income for purposes of the Internal Revenue
Code of 1986.
(3) Payments protected from assignment.--The provisions of
sections 207 and 1631(d)(1) of the Social Security Act (42
U.S.C. 407, 1383(d)(1)), section 14(a) of the Railroad
Retirement Act of 1974 (45 U.S.C. 231m(a)), and section 5301 of
title 38, United States Code, shall apply to any payment made
under subsection (a) as if such payment was a benefit payment
or cash benefit to such individual under the applicable program
described in subparagraph (B) or (C) of subsection (a)(1).
(4) Payments subject to offset.--Notwithstanding paragraph
(3), for purposes of section 3716 of title 31, United States
Code, any payment made under this section shall not be
considered a benefit payment or cash benefit made under the
applicable program described in subparagraph (B) or (C) of
subsection (a)(1) and all amounts paid shall be subject to
offset to collect delinquent debts.
(d) Payment to Representative Payees and Fiduciaries.--
(1) In general.--In any case in which an individual who is
entitled to a payment under subsection (a) and whose benefit
payment or cash benefit described in paragraph (1) of that
subsection is paid to a representative payee or fiduciary, the
payment under subsection (a) shall be made to the individual's
representative payee or fiduciary and the entire payment shall
be used only for the benefit of the individual who is entitled
to the payment.
(2) Applicability.--
(A) Payment on the basis of a title ii or ssi
benefit.--Section 1129(a)(3) of the Social Security Act
(42 U.S.C. 1320a-8(a)(3)) shall apply to any payment
made on the basis of an entitlement to a benefit
specified in paragraph (1)(B)(i) or (1)(C) of
subsection (a) in the same manner as such section
applies to a payment under title II or XVI of such Act.
(B) Payment on the basis of a railroad retirement
benefit.--Section 13 of the Railroad Retirement Act (45
U.S.C. 231l) shall apply to any payment made on the
basis of an entitlement to a benefit specified in
paragraph (1)(B)(ii) of subsection (a) in the same
manner as such section applies to a payment under such
Act.
(C) Payment on the basis of a veterans benefit.--
Sections 5502, 6106, and 6108 of title 38, United
States Code, shall apply to any payment made on the
basis of an entitlement to a benefit specified in
paragraph (1)(B)(iii) of subsection (a) in the same
manner as those sections apply to a payment under that
title.
(e) Appropriation.--Out of any sums in the Treasury of the United
States not otherwise appropriated, the following sums are appropriated
for the period of fiscal years 2009 and 2010 to carry out this section:
(1) For the Secretary of the Treasury--
(A) such sums as may be necessary to make payments
under this section; and
(B) $57,000,000 for administrative costs incurred
in carrying out this section and section 36A of the
Internal Revenue Code of 1986 (as added by this Act).
(2) For the Commissioner of Social Security, $90,000,000
for the Social Security Administration's Limitation on
Administrative Expenses for costs incurred in carrying out this
section.
(3) For the Railroad Retirement Board, $1,000,000 for
administrative costs incurred in carrying out this section.
(4) For the Secretary of Veterans Affairs, $100,000 for the
Information Systems Technology account and $7,100,000 for the
General Operating Expenses account for administrative costs
incurred in carrying out this section.
Subtitle H--Trade Adjustment Assistance
SEC. 1701. TEMPORARY EXTENSION OF TRADE ADJUSTMENT ASSISTANCE PROGRAM.
(a) Assistance for Workers.--
(1) In general.--Section 245(a) of the Trade Act of 1974
(19 U.S.C. 2317(a)) is amended by striking ``December 31,
2007'' and inserting ``December 31, 2010''.
(2) Alternative trade adjustment assistance.--Section
246(b)(1) of the Trade Act of 1974 (19 U.S.C. 2318(b)(1)) is
amended by striking ``5 years'' and inserting ``7 years''.
(b) Assistance for Firms.--Section 256(b) of the Trade Act of 1974
(19 U.S.C. 2346(b)) is amended by striking ``2007, and $4,000,000 for
the 3-month period beginning on October 1, 2007,'' and inserting
``December 31, 2010''.
(c) Assistance for Farmers.--Section 298(a) of the Trade Act of
1974 (19 U.S.C. 2401g(a)) is amended by striking ``through 2007'' and
all that follows through the end period and inserting ``through
December 31, 2010 to carry out the purposes of this chapter.''.
(d) Extension of Termination Dates.--Section 285 of the Trade Act
of 1974 (19 U.S.C. 2271 note) is amended by striking ``December 31,
2007'' each place it appears and inserting ``December 31, 2010''.
(e) Sense of the Senate Regarding Adjustment Assistance for
Communities.--It is the sense of the Senate that title II of the Trade
Act of 1974 (19 U.S.C. 2271 et seq.) should be amended to assist any
community impacted by trade with economic adjustment through--
(1) the coordination of efforts by State and local
governments and economic organizations;
(2) the coordination of Federal, State, and local
resources;
(3) the creation of community-based development strategies;
and
(4) the development and provision of training programs.
(f) Effective Date.--The amendments made by this section shall be
effective as of January 1, 2008.
Subtitle I--Prohibition on Collection of Certain Payments Made Under
the Continued Dumping and Subsidy Offset Act of 2000
SEC. 1801. PROHIBITION ON COLLECTION OF CERTAIN PAYMENTS MADE UNDER THE
CONTINUED DUMPING AND SUBSIDY OFFSET ACT OF 2000.
(a) In General.--Notwithstanding any other provision of law,
neither the Secretary of Homeland Security nor any other person may--
(1) require repayment of, or attempt in any other way to
recoup, any payments described in subsection (b); or
(2) offset any past, current, or future distributions of
antidumping or countervailing duties assessed with respect to
imports from countries that are not parties to the North
American Free Trade Agreement in an attempt to recoup any
payments described in subsection (b).
(b) Payments Described.--Payments described in this subsection are
payments of antidumping or countervailing duties made pursuant to the
Continued Dumping and Subsidy Offset Act of 2000 (section 754 of the
Tariff Act of 1930 (19 U.S.C. 1675c; repealed by subtitle F of title
VII of the Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat.
154))) that were--
(1) assessed and paid on imports of goods from countries
that are parties to the North American Free Trade Agreement;
and
(2) distributed on or after January 1, 2001, and before
January 1, 2006.
(c) Payment of Funds Collected or Withheld.--Not later than the
date that is 60 days after the date of the enactment of this Act, the
Secretary of Homeland Security shall--
(1) refund any repayments, or any other recoupment, of
payments described in subsection (b); and
(2) fully distribute any antidumping or countervailing
duties that the U.S. Customs and Border Protection is
withholding as an offset as described in subsection (a)(2).
(d) Limitation.--Nothing in this section shall be construed to
prevent the Secretary of Homeland Security, or any other person, from
requiring repayment of, or attempting to otherwise recoup, any payments
described in subsection (b) as a result of--
(1) a finding of false statements or other misconduct by a
recipient of such a payment; or
(2) the reliquidation of an entry with respect to which
such a payment was made.
Subtitle J--Other Provisions
SEC. 1901. APPLICATION OF CERTAIN LABOR STANDARDS TO PROJECTS FINANCED
WITH CERTAIN TAX-FAVORED BONDS.
Subchapter IV of chapter 31 of the title 40, United States Code,
shall apply to projects financed with the proceeds of--
(1) any new clean renewable energy bond (as defined in
section 54C of the Internal Revenue Code of 1986) issued after
the date of the enactment of this Act,
(2) any qualified energy conservation bond (as defined in
section 54D of the Internal Revenue Code of 1986) issued after
the date of the enactment of this Act,
(3) any qualified zone academy bond (as defined in section
54E of the Internal Revenue Code of 1986) issued after the date
of the enactment of this Act,
(4) any qualified school construction bond (as defined in
section 54F of the Internal Revenue Code of 1986), and
(5) any recovery zone economic development bond (as defined
in section 1400U-2 of the Internal Revenue Code of 1986).
SEC. 1902. INCREASE IN PUBLIC DEBT LIMIT.
Subsection (b) of section 3101 of title 31, United States Code, is
amended by striking out the dollar limitation contained in such
subsection and inserting ``$12,140,000,000,000''.
TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES
SEC. 2000. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This title may be cited as the ``Assistance for
Unemployed Workers and Struggling Families Act''.
(b) Table of Contents.--The table of contents for this title is as
follows:
TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS AND STRUGGLING FAMILIES
Sec. 2000. Short title; table of contents.
Subtitle A--Unemployment Insurance
Sec. 2001. Extension of emergency unemployment compensation program.
Sec. 2002. Increase in unemployment compensation benefits.
Sec. 2003. Unemployment compensation modernization.
Sec. 2004. Temporary assistance for States with advances.
Subtitle B--Assistance for Vulnerable Individuals
Sec. 2101. Emergency fund for TANF program.
Sec. 2102. Extension of TANF supplemental grants.
Sec. 2103. Clarification of authority of States to use TANF funds
carried over from prior years to provide
TANF benefits and services.
Sec. 2104. Temporary reinstatement of authority to provide Federal
matching payments for State spending of
child support incentive payments.
Subtitle A--Unemployment Insurance
SEC. 2001. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION PROGRAM.
(a) In General.--Section 4007 of the Supplemental Appropriations
Act, 2008 (Public Law 110-252; 26 U.S.C. 3304 note), as amended by
section 4 of the Unemployment Compensation Extension Act of 2008
(Public Law 110-449; 122 Stat. 5015), is amended--
(1) by striking ``March 31, 2009'' each place it appears
and inserting ``December 31, 2009'';
(2) in the heading for subsection (b)(2), by striking
``March 31, 2009'' and inserting ``December 31, 2009''; and
(3) in subsection (b)(3), by striking ``August 27, 2009''
and inserting ``May 31, 2010''.
(b) Financing Provisions.--Section 4004 of such Act is amended by
adding at the end the following:
``(e) Transfer of Funds.--Notwithstanding any other provision of
law, the Secretary of the Treasury shall transfer from the general fund
of the Treasury (from funds not otherwise appropriated)--
``(1) to the extended unemployment compensation account (as
established by section 905 of the Social Security Act) such
sums as the Secretary of Labor estimates to be necessary to
make payments to States under this title by reason of the
amendments made by section 2001(a) of the Assistance for
Unemployed Workers and Struggling Families Act; and
``(2) to the employment security administration account (as
established by section 901 of the Social Security Act) such
sums as the Secretary of Labor estimates to be necessary for
purposes of assisting States in meeting administrative costs by
reason of the amendments referred to in paragraph (1).
There are appropriated from the general fund of the Treasury, without
fiscal year limitation, the sums referred to in the preceding sentence
and such sums shall not be required to be repaid.''.
SEC. 2002. INCREASE IN UNEMPLOYMENT COMPENSATION BENEFITS.
(a) Federal-State Agreements.--Any State which desires to do so may
enter into and participate in an agreement under this section with the
Secretary of Labor (hereinafter in this section referred to as the
``Secretary''). Any State which is a party to an agreement under this
section may, upon providing 30 days' written notice to the Secretary,
terminate such agreement.
(b) Provisions of Agreement.--
(1) Additional compensation.--Any agreement under this
section shall provide that the State agency of the State will
make payments of regular compensation to individuals in amounts
and to the extent that they would be determined if the State
law of the State were applied, with respect to any week for
which the individual is (disregarding this section) otherwise
entitled under the State law to receive regular compensation,
as if such State law had been modified in a manner such that
the amount of regular compensation (including dependents'
allowances) payable for any week shall be equal to the amount
determined under the State law (before the application of this
paragraph) plus an additional $25.
(2) Allowable methods of payment.--Any additional
compensation provided for in accordance with paragraph (1)
shall be payable either--
(A) as an amount which is paid at the same time and
in the same manner as any regular compensation
otherwise payable for the week involved; or
(B) at the option of the State, by payments which
are made separately from, but on the same weekly basis
as, any regular compensation otherwise payable.
(c) Nonreduction Rule.--An agreement under this section shall not
apply (or shall cease to apply) with respect to a State upon a
determination by the Secretary that the method governing the
computation of regular compensation under the State law of that State
has been modified in a manner such that--
(1) the average weekly benefit amount of regular
compensation which will be payable during the period of the
agreement (determined disregarding any additional amounts
attributable to the modification described in subsection
(b)(1)) will be less than
(2) the average weekly benefit amount of regular
compensation which would otherwise have been payable during
such period under the State law, as in effect on December 31,
2008.
(d) Payments to States.--
(1) In general.--
(A) Full reimbursement.--There shall be paid to
each State which has entered into an agreement under
this section an amount equal to 100 percent of--
(i) the total amount of additional
compensation (as described in subsection
(b)(1)) paid to individuals by the State
pursuant to such agreement; and
(ii) any additional administrative expenses
incurred by the State by reason of such
agreement (as determined by the Secretary).
(B) Terms of payments.--Sums payable to any State
by reason of such State's having an agreement under
this section shall be payable, either in advance or by
way of reimbursement (as determined by the Secretary),
in such amounts as the Secretary estimates the State
will be entitled to receive under this section for each
calendar month, reduced or increased, as the case may
be, by any amount by which the Secretary finds that his
estimates for any prior calendar month were greater or
less than the amounts which should have been paid to
the State. Such estimates may be made on the basis of
such statistical, sampling, or other method as may be
agreed upon by the Secretary and the State agency of
the State involved.
(2) Certifications.--The Secretary shall from time to time
certify to the Secretary of the Treasury for payment to each
State the sums payable to such State under this section.
(3) Appropriation.--There are appropriated from the general
fund of the Treasury, without fiscal year limitation, such sums
as may be necessary for purposes of this subsection.
(e) Applicability.--
(1) In general.--An agreement entered into under this
section shall apply to weeks of unemployment--
(A) beginning after the date on which such
agreement is entered into; and
(B) ending before January 1, 2010.
(2) Transition rule for individuals remaining entitled to
regular compensation as of january 1, 2010.--In the case of any
individual who, as of the date specified in paragraph (1)(B),
has not yet exhausted all rights to regular compensation under
the State law of a State with respect to a benefit year that
began before such date, additional compensation (as described
in subsection (b)(1)) shall continue to be payable to such
individual for any week beginning on or after such date for
which the individual is otherwise eligible for regular
compensation with respect to such benefit year.
(3) Termination.--Notwithstanding any other provision of
this subsection, no additional compensation (as described in
subsection (b)(1)) shall be payable for any week beginning
after June 30, 2010.
(f) Fraud and Overpayments.--The provisions of section 4005 of the
Supplemental Appropriations Act, 2008 (Public Law 110-252; 122 Stat.
2356) shall apply with respect to additional compensation (as described
in subsection (b)(1)) to the same extent and in the same manner as in
the case of emergency unemployment compensation.
(g) Application to Other Unemployment Benefits.--
(1) In general.--Each agreement under this section shall
include provisions to provide that the purposes of the
preceding provisions of this section shall be applied with
respect to unemployment benefits described in subsection (i)(3)
to the same extent and in the same manner as if those benefits
were regular compensation.
(2) Eligibility and termination rules.--Additional
compensation (as described in subsection (b)(1))--
(A) shall not be payable, pursuant to this
subsection, with respect to any unemployment benefits
described in subsection (i)(3) for any week beginning
on or after the date specified in subsection (e)(1)(B),
except in the case of an individual who was eligible to
receive additional compensation (as so described) in
connection with any regular compensation or any
unemployment benefits described in subsection (i)(3)
for any period of unemployment ending before such date;
and
(B) shall in no event be payable for any week
beginning after the date specified in subsection
(e)(3).
(h) Disregard of Additional Compensation for Purposes of Medicaid
and SCHIP.--A State that enters into an agreement under this section
shall disregard the monthly equivalent of $25 per week for any
individual who receives additional compensation under subsection (b)(1)
in considering the amount of income of the individual for any purposes
under the Medicaid program under title XIX of the Social Security Act
and the State Children's Health Insurance Program under title XXI of
such Act.
(i) Definitions.--For purposes of this section--
(1) the terms ``compensation'', ``regular compensation'',
``benefit year'', ``State'', ``State agency'', ``State law'',
and ``week'' have the respective meanings given such terms
under section 205 of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note);
(2) the term ``emergency unemployment compensation'' means
emergency unemployment compensation under title IV of the
Supplemental Appropriations Act, 2008 (Public Law 110-252; 122
Stat. 2353); and
(3) any reference to unemployment benefits described in
this paragraph shall be considered to refer to--
(A) extended compensation (as defined by section
205 of the Federal-State Extended Unemployment
Compensation Act of 1970); and
(B) unemployment compensation (as defined by
section 85(b) of the Internal Revenue Code of 1986)
provided under any program administered by a State
under an agreement with the Secretary.
SEC. 2003. UNEMPLOYMENT COMPENSATION MODERNIZATION.
(a) In General.--Section 903 of the Social Security Act (42 U.S.C.
1103) is amended by adding at the end the following:
``Special Transfers for Modernization
``(f)(1)(A) In addition to any other amounts, the Secretary of
Labor shall provide for the making of unemployment compensation
modernization incentive payments (hereinafter `incentive payments') to
the accounts of the States in the Unemployment Trust Fund, by transfer
from amounts reserved for that purpose in the Federal unemployment
account, in accordance with succeeding provisions of this subsection.
``(B) The maximum incentive payment allowable under this subsection
with respect to any State shall, as determined by the Secretary of
Labor, be equal to the amount obtained by multiplying $7,000,000,000 by
the same ratio as would apply under subsection (a)(2)(B) for purposes
of determining such State's share of any excess amount (as described in
subsection (a)(1)) that would have been subject to transfer to State
accounts, as of October 1, 2008, under the provisions of subsection
(a).
``(C) Of the maximum incentive payment determined under
subparagraph (B) with respect to a State--
``(i) one-third shall be transferred to the account of such
State upon a certification under paragraph (4)(B) that the
State law of such State meets the requirements of paragraph
(2); and
``(ii) the remainder shall be transferred to the account of
such State upon a certification under paragraph (4)(B) that the
State law of such State meets the requirements of paragraph
(3).
``(2) The State law of a State meets the requirements of this
paragraph if such State law--
``(A) uses a base period that includes the most recently
completed calendar quarter before the start of the benefit year
for purposes of determining eligibility for unemployment
compensation; or
``(B) provides that, in the case of an individual who would
not otherwise be eligible for unemployment compensation under
the State law because of the use of a base period that does not
include the most recently completed calendar quarter before the
start of the benefit year, eligibility shall be determined
using a base period that includes such calendar quarter.
``(3) The State law of a State meets the requirements of this
paragraph if such State law includes provisions to carry out at least 2
of the following subparagraphs:
``(A) An individual shall not be denied regular
unemployment compensation under any State law provisions
relating to availability for work, active search for work, or
refusal to accept work, solely because such individual is
seeking only part-time (and not full-time) work, except that
the State law provisions carrying out this subparagraph may
exclude an individual if a majority of the weeks of work in
such individual's base period do not include part-time work.
``(B) An individual shall not be disqualified from regular
unemployment compensation for separating from employment if
that separation is for any compelling family reason. For
purposes of this subparagraph, the term `compelling family
reason' means the following:
``(i) Domestic violence, verified by such
reasonable and confidential documentation as the State
law may require, which causes the individual reasonably
to believe that such individual's continued employment
would jeopardize the safety of the individual or of any
member of the individual's immediate family (as defined
by the Secretary of Labor).
``(ii) The illness or disability of a member of the
individual's immediate family (as defined by the
Secretary of Labor).
``(iii) The need for the individual to accompany
such individual's spouse--
``(I) to a place from which it is
impractical for such individual to commute; and
``(II) due to a change in location of the
spouse's employment.
``(C) Weekly unemployment compensation is payable under
this subparagraph to any individual who is unemployed (as
determined under the State unemployment compensation law), has
exhausted all rights to regular unemployment compensation under
the State law, and is enrolled and making satisfactory progress
in a State-approved training program or in a job training
program authorized under the Workforce Investment Act of 1998.
Such programs shall prepare individuals who have been separated
from a declining occupation, or who have been involuntarily and
indefinitely separated from employment as a result of a
permanent reduction of operations at the individual's place of
employment, for entry into a high-demand occupation. The amount
of unemployment compensation payable under this subparagraph to
an individual for a week of unemployment shall be equal to the
individual's average weekly benefit amount (including
dependents' allowances) for the most recent benefit year, and
the total amount of unemployment compensation payable under
this subparagraph to any individual shall be equal to at least
26 times the individual's average weekly benefit amount
(including dependents' allowances) for the most recent benefit
year.
``(D) Dependents' allowances are provided, in the case of
any individual who is entitled to receive regular unemployment
compensation and who has any dependents (as defined by State
law), in an amount equal to at least $15 per dependent per
week, subject to any aggregate limitation on such allowances
which the State law may establish (but which aggregate
limitation on the total allowance for dependents paid to an
individual may not be less than $50 for each week of
unemployment or 50 percent of the individual's weekly benefit
amount for the benefit year, whichever is less).
``(4)(A) Any State seeking an incentive payment under this
subsection shall submit an application therefor at such time, in such
manner, and complete with such information as the Secretary of Labor
may within 60 days after the date of the enactment of this subsection
prescribe (whether by regulation or otherwise), including information
relating to compliance with the requirements of paragraph (2) or (3),
as well as how the State intends to use the incentive payment to
improve or strengthen the State's unemployment compensation program.
The Secretary of Labor shall, within 30 days after receiving a complete
application, notify the State agency of the State of the Secretary's
findings with respect to the requirements of paragraph (2) or (3) (or
both).
``(B)(i) If the Secretary of Labor finds that the State law
provisions (disregarding any State law provisions which are not then
currently in effect as permanent law or which are subject to
discontinuation) meet the requirements of paragraph (2) or (3), as the
case may be, the Secretary of Labor shall thereupon make a
certification to that effect to the Secretary of the Treasury, together
with a certification as to the amount of the incentive payment to be
transferred to the State account pursuant to that finding. The
Secretary of the Treasury shall make the appropriate transfer within 7
days after receiving such certification.
``(ii) For purposes of clause (i), State law provisions which are
to take effect within 12 months after the date of their certification
under this subparagraph shall be considered to be in effect as of the
date of such certification.
``(C)(i) No certification of compliance with the requirements of
paragraph (2) or (3) may be made with respect to any State whose State
law is not otherwise eligible for certification under section 303 or
approvable under section 3304 of the Federal Unemployment Tax Act.
``(ii) No certification of compliance with the requirements of
paragraph (3) may be made with respect to any State whose State law is
not in compliance with the requirements of paragraph (2).
``(iii) No application under subparagraph (A) may be considered if
submitted before the date of the enactment of this subsection or after
the latest date necessary (as specified by the Secretary of Labor) to
ensure that all incentive payments under this subsection are made
before October 1, 2010. In the case of a State in which the first day
of the first regularly scheduled session of the State legislature
beginning after the date of enactment of this subsection begins after
December 31, 2010, the preceding sentence shall be applied by
substituting `October 1, 2011' for `October 1, 2010' .
``(5)(A) Except as provided in subparagraph (B), any amount
transferred to the account of a State under this subsection may be used
by such State only in the payment of cash benefits to individuals with
respect to their unemployment (including for dependents' allowances and
for unemployment compensation under paragraph (3)(C)), exclusive of
expenses of administration.
``(B) A State may, subject to the same conditions as set forth in
subsection (c)(2) (excluding subparagraph (B) thereof, and deeming the
reference to `subsections (a) and (b)' in subparagraph (D) thereof to
include this subsection), use any amount transferred to the account of
such State under this subsection for the administration of its
unemployment compensation law and public employment offices.
``(6) Out of any money in the Federal unemployment account not
otherwise appropriated, the Secretary of the Treasury shall reserve
$7,000,000,000 for incentive payments under this subsection. Any amount
so reserved shall not be taken into account for purposes of any
determination under section 902, 910, or 1203 of the amount in the
Federal unemployment account as of any given time. Any amount so
reserved for which the Secretary of the Treasury has not received a
certification under paragraph (4)(B) by the deadline described in
paragraph (4)(C)(iii) shall, upon the close of fiscal year 2011, become
unrestricted as to use as part of the Federal unemployment account.
``(7) For purposes of this subsection, the terms `benefit year',
`base period', and `week' have the respective meanings given such terms
under section 205 of the Federal-State Extended Unemployment
Compensation Act of 1970 (26 U.S.C. 3304 note).
``Special Transfer in Fiscal Year 2009 for Administration
``(g)(1) In addition to any other amounts, the Secretary of the
Treasury shall transfer from the employment security administration
account to the account of each State in the Unemployment Trust Fund,
within 30 days after the date of the enactment of this subsection, the
amount determined with respect to such State under paragraph (2).
``(2) The amount to be transferred under this subsection to a State
account shall (as determined by the Secretary of Labor and certified by
such Secretary to the Secretary of the Treasury) be equal to the amount
obtained by multiplying $500,000,000 by the same ratio as determined
under subsection (f)(1)(B) with respect to such State.
``(3) Any amount transferred to the account of a State as a result
of the enactment of this subsection may be used by the State agency of
such State only in the payment of expenses incurred by it for--
``(A) the administration of the provisions of its State law
carrying out the purposes of subsection (f)(2) or any
subparagraph of subsection (f)(3);
``(B) improved outreach to individuals who might be
eligible for regular unemployment compensation by virtue of any
provisions of the State law which are described in subparagraph
(A);
``(C) the improvement of unemployment benefit and
unemployment tax operations, including responding to increased
demand for unemployment compensation; and
``(D) staff-assisted reemployment services for unemployment
compensation claimants.''.
(b) Regulations.--The Secretary of Labor may prescribe any
regulations, operating instructions, or other guidance necessary to
carry out the amendment made by subsection (a).
SEC. 2004. TEMPORARY ASSISTANCE FOR STATES WITH ADVANCES.
Section 1202(b) of the Social Security Act (42 U.S.C. 1322(b)) is
amended by adding at the end the following new paragraph:
``(10)(A) With respect to the period beginning on the date of
enactment of this paragraph and ending on December 31, 2010--
``(i) any interest payment otherwise due from a State under
this subsection during such period shall be deemed to have been
made by the State; and
``(ii) no interest shall accrue on any advance or advances
made under section 1201 to a State during such period.
``(B) The provisions of subparagraph (A) shall have no effect on
the requirement for interest payments under this subsection after the
period described in such subparagraph or on the accrual of interest
under this subsection after such period.''.
Subtitle B--Assistance for Vulnerable Individuals
SEC. 2101. EMERGENCY FUND FOR TANF PROGRAM.
(a) Temporary Fund.--
(1) In general.--Section 403 of the Social Security Act (42
U.S.C. 603) is amended by adding at the end the following:
``(c) Emergency Fund.--
``(1) Establishment.--There is established in the Treasury
of the United States a fund which shall be known as the
`Emergency Contingency Fund for State Temporary Assistance for
Needy Families Programs' (in this subsection referred to as the
`Emergency Fund').
``(2) Deposits into fund.--
``(A) In general.--Out of any money in the Treasury
of the United States not otherwise appropriated, there
are appropriated for fiscal year 2009, $3,000,000,000
for payment to the Emergency Fund.
``(B) Availability and use of funds.--The amounts
appropriated to the Emergency Fund under subparagraph
(A) shall remain available through fiscal year 2010 and
shall be used to make grants to States in each of
fiscal years 2009 and 2010 in accordance with the
requirements of paragraph (3).
``(C) Limitation.--In no case may the Secretary
make a grant from the Emergency Fund for a fiscal year
after fiscal year 2010.
``(3) Grants.--
``(A) Grant related to caseload increases.--
``(i) In general.--For each calendar
quarter in fiscal year 2009 or 2010, the
Secretary shall make a grant from the Emergency
Fund to each State that--
``(I) requests a grant under this
subparagraph for the quarter; and
``(II) meets the requirement of
clause (ii) for the quarter.
``(ii) Caseload increase requirement.--A
State meets the requirement of this clause for
a quarter if the average monthly assistance
caseload of the State for the quarter exceeds
the average monthly assistance caseload of the
State for the corresponding quarter in the
emergency fund base year of the State.
``(iii) Amount of grant.--Subject to
paragraph (5), the amount of the grant to be
made to a State under this subparagraph for a
quarter shall be 80 percent of the amount (if
any) by which the total expenditures of the
State for basic assistance (as defined by the
Secretary) in the quarter, whether under the
State program funded under this part or as
qualified State expenditures, exceeds the total
expenditures of the State for such assistance
for the corresponding quarter in the emergency
fund base year of the State.
``(B) Grant related to increased expenditures for
non-recurrent short term benefits.--
``(i) In general.--For each calendar
quarter in fiscal year 2009 or 2010, the
Secretary shall make a grant from the Emergency
Fund to each State that--
``(I) requests a grant under this
subparagraph for the quarter; and
``(II) meets the requirement of
clause (ii) for the quarter.
``(ii) Non-recurrent short-term expenditure
requirement.--A State meets the requirement of
this clause for a quarter if the total
expenditures of the State for non-recurrent
short-term benefits in the quarter, whether
under the State program funded under this part
or as qualified State expenditures, exceeds the
total such expenditures of the State for non-
recurrent short-term benefits in the
corresponding quarter in the emergency fund
base year of the State.
``(iii) Amount of grant.--Subject to
paragraph (5), the amount of the grant to be
made to a State under this subparagraph for a
quarter shall be an amount equal to 80 percent
of the excess described in clause (ii).
``(C) Grant related to increased expenditures for
subsidized employment.--
``(i) In general.--For each calendar
quarter in fiscal year 2009 or 2010, the
Secretary shall make a grant from the Emergency
Fund to each State that--
``(I) requests a grant under this
subparagraph for the quarter; and
``(II) meets the requirement of
clause (ii) for the quarter.
``(ii) Subsidized employment expenditure
requirement.--A State meets the requirement of
this clause for a quarter if the total
expenditures of the State for subsidized
employment in the quarter, whether under the
State program funded under this part or as
qualified State expenditures, exceeds the total
of such expenditures of the State in the
corresponding quarter in the emergency fund
base year of the State.
``(iii) Amount of grant.--Subject to
paragraph (5), the amount of the grant to be
made to a State under this subparagraph for a
quarter shall be an amount equal to 80 percent
of the excess described in clause (ii).
``(4) Authority to make necessary adjustments to data and
collect needed data.--In determining the size of the caseload
of a State and the expenditures of a State for basic
assistance, non-recurrent short-term benefits, and subsidized
employment, during any period for which the State requests
funds under this subsection, and during the emergency fund base
year of the State, the Secretary may make appropriate
adjustments to the data to ensure that the data reflect
expenditures under the State program funded under this part and
qualified State expenditures. The Secretary may develop a
mechanism for collecting expenditure data, including procedures
which allow States to make reasonable estimates, and may set
deadlines for making revisions to the data.
``(5) Limitation.--The total amount payable to a single
State under subsection (b) and this subsection for a fiscal
year shall not exceed 25 percent of the State family assistance
grant.
``(6) Limitations on use of funds.--A State to which an
amount is paid under this subsection may use the amount only as
authorized by section 404.
``(7) Timing of implementation.--The Secretary shall
implement this subsection as quickly as reasonably possible,
pursuant to appropriate guidance to States.
``(8) Definitions.--In this subsection:
``(A) Average monthly assistance caseload
defined.--The term `average monthly assistance
caseload' means, with respect to a State and a quarter,
the number of families receiving assistance during the
quarter under the State program funded under this part
or as qualified State expenditures, subject to
adjustment under paragraph (4).
``(B) Emergency fund base year.--
``(i) In general.--The term `emergency fund
base year' means, with respect to a State and a
category described in clause (ii), whichever of
fiscal year 2007 or 2008 is the fiscal year in
which the amount described by the category with
respect to the State is the lesser.
``(ii) Categories described.--The
categories described in this clause are the
following:
``(I) The average monthly
assistance caseload of the State.
``(II) The total expenditures of
the State for non-recurrent short-term
benefits, whether under the State
program funded under this part or as
qualified State expenditures.
``(III) The total expenditures of
the State for subsidized employment,
whether under the State program funded
under this part or as qualified State
expenditures.
``(C) Qualified state expenditures.--The term
`qualified State expenditures' has the meaning given
the term in section 409(a)(7).''.
(2) Repeal.--Effective October 1, 2010, subsection (c) of
section 403 of the Social Security Act (42 U.S.C. 603) (as
added by paragraph (1)) is repealed.
(b) Temporary Modification of Caseload Reduction Credit.--Section
407(b)(3)(A)(i) of such Act (42 U.S.C. 607(b)(3)(A)(i)) is amended by
inserting ``(or if the immediately preceding fiscal year is fiscal year
2008, 2009, or 2010, then, at State option, during the emergency fund
base year of the State with respect to the average monthly assistance
caseload of the State (within the meaning of section 403(c)(8)(B),
except that, if a State elects such option for fiscal year 2008, the
emergency fund base year of the State with respect to such caseload
shall be fiscal year 2007))'' before ``under the State''.
(c) Disregard From Limitation on Total Payments to Territories.--
Section 1108(a)(2) of the Social Security Act (42 U.S.C. 1308(a)(2)) is
amended by inserting ``403(c)(3),'' after ``403(a)(5),''.
(d) Effective Date.--The amendments made by this section shall take
effect on the date of the enactment of this Act.
SEC. 2102. EXTENSION OF TANF SUPPLEMENTAL GRANTS.
(a) Extension Through Fiscal Year 2010.--Section 7101(a) of the
Deficit Reduction Act of 2005 (Public Law 109-171; 120 Stat. 135), as
amended by section 301(a) of the Medicare Improvements for Patients and
Providers Act of 2008 (Public Law 110-275), is amended by striking
``fiscal year 2009'' and inserting ``fiscal year 2010''.
(b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the Social
Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended to read as
follows:
``(ii) subparagraph (G) shall be applied as
if `fiscal year 2010' were substituted for
`fiscal year 2001'; and''.
SEC. 2103. CLARIFICATION OF AUTHORITY OF STATES TO USE TANF FUNDS
CARRIED OVER FROM PRIOR YEARS TO PROVIDE TANF BENEFITS
AND SERVICES.
Section 404(e) of the Social Security Act (42 U.S.C. 604(e)) is
amended to read as follows:
``(e) Authority To Carry Over Certain Amounts for Benefits or
Services or for Future Contingencies.--A State or tribe may use a grant
made to the State or tribe under this part for any fiscal year to
provide, without fiscal year limitation, any benefit or service that
may be provided under the State or tribal program funded under this
part.''.
SEC. 2104. TEMPORARY REINSTATEMENT OF AUTHORITY TO PROVIDE FEDERAL
MATCHING PAYMENTS FOR STATE SPENDING OF CHILD SUPPORT
INCENTIVE PAYMENTS.
During the period that begins on October 1, 2008, and ends on
December 31, 2010, section 455(a)(1) of the Social Security Act (42
U.S.C. 655(a)(1)) shall be applied without regard to the amendment made
by section 7309(a) of the Deficit Reduction Act of 2005 (Public Law
109-171, 120 Stat. 147).
TITLE III--HEALTH INSURANCE ASSISTANCE
SEC. 3000. TABLE OF CONTENTS OF TITLE.
The table of contents for this title is as follows:
TITLE III--HEALTH INSURANCE ASSISTANCE
Sec. 3000. Table of contents of title.
Subtitle A--Premium Subsidies for COBRA Continuation Coverage for
Unemployed Workers
Sec. 3001. Premium assistance for COBRA benefits.
Subtitle B--Transitional Medical Assistance (TMA)
Sec. 3101. Extension of transitional medical assistance (TMA).
Subtitle C--Extension of the Qualified Individual (QI) Program
Sec. 3201. Extension of the qualifying individual (QI) program.
Subtitle D--Other Provisions
Sec. 3301. Premiums and cost sharing protections under Medicaid,
eligibility determinations under Medicaid
and CHIP, and protection of certain Indian
property from Medicaid estate recovery.
Sec. 3302. Rules applicable under Medicaid and CHIP to managed care
entities with respect to Indian enrollees
and Indian health care providers and Indian
managed care entities.
Sec. 3303. Consultation on Medicaid, CHIP, and other health care
programs funded under the Social Security
Act involving Indian Health Programs and
Urban Indian Organizations.
Sec. 3304. Application of prompt pay requirements to nursing
facilities.
Sec. 3305. Period of application; sunset.
Subtitle A--Premium Subsidies for COBRA Continuation Coverage for
Unemployed Workers
SEC. 3001. PREMIUM ASSISTANCE FOR COBRA BENEFITS.
(a) Table of Contents of Subtitle.--The table of contents of this
subtitle is as follows:
Sec. 3001. Premium assistance for COBRA benefits.
(b) Premium Assistance for COBRA Continuation Coverage for
Unemployed Workers and Their Families.--
(1) Provision of premium assistance.--
(A) Reduction of premiums payable.--In the case of
any premium for a month of coverage beginning after the
date of the enactment of the Act for COBRA continuation
coverage with respect to any assistance eligible
individual, such individual shall be treated for
purposes of any COBRA continuation provision as having
paid the amount of such premium if such individual pays
35 percent of the amount of such premium (as determined
without regard to this subsection).
(B) Plan enrollment option.--
(i) In general.--Notwithstanding the COBRA
continuation provisions, an assistance eligible
individual may, not later than 90 days after
the date of notice of the plan enrollment
option described in this subparagraph, elect to
enroll in coverage under a plan offered by the
employer involved, or the employee organization
involved (including, for this purpose, a joint
board of trustees of a multiemployer trust
affiliated with one or more multiemployer
plans), that is different than coverage under
the plan in which such individual was enrolled
at the time the qualifying event occurred, and
such coverage shall be treated as COBRA
continuation coverage for purposes of the
applicable COBRA continuation coverage
provision.
(ii) Requirements.--An assistance eligible
individual may elect to enroll in different
coverage as described in clause (i) only if--
(I) the employer involved has made
a determination that such employer will
permit assistance eligible individuals
to enroll in different coverage as
provided for this subparagraph;
(II) the premium for such different
coverage does not exceed the premium
for coverage in which the individual
was enrolled at the time the qualifying
event occurred;
(III) the different coverage in
which the individual elects to enroll
is coverage that is also offered to the
active employees of the employer at the
time at which such election is made;
and
(IV) the different coverage is
not--
(aa) coverage that provides
only dental, vision,
counseling, or referral
services (or a combination of
such services);
(bb) a health flexible
spending account or health
reimbursement arrangement; or
(cc) coverage that provides
coverage for services or
treatments furnished in an on-
site medical facility
maintained by the employer and
that consists primarily of
first-aid services, prevention
and wellness care, or similar
care (or a combination of such
care).
(C) Premium reimbursement.--For provisions
providing the balance of such premium, see section 6432
of the Internal Revenue Code of 1986, as added by
paragraph (12).
(2) Limitation of period of premium assistance.--
(A) In general.--Paragraph (1)(A) shall not apply
with respect to any assistance eligible individual for
months of coverage beginning on or after the earlier
of--
(i) the first date that such individual is
eligible for coverage under any other group
health plan (other than coverage consisting of
only dental, vision, counseling, or referral
services (or a combination thereof), coverage
under a health reimbursement arrangement or a
health flexible spending arrangement, or
coverage of treatment that is furnished in an
on-site medical facility maintained by the
employer and that consists primarily of first-
aid services, prevention and wellness care, or
similar care (or a combination thereof)) or is
eligible for benefits under title XVIII of the
Social Security Act; or
(ii) the earliest of--
(I) the date which is 9 months
after the first day of first month that
paragraph (1)(A) applies with respect
to such individual,
(II) the date following the
expiration of the maximum period of
continuation coverage required under
the applicable COBRA continuation
coverage provision, or
(III) the date following the
expiration of the period of
continuation coverage allowed under
paragraph (4)(B)(ii).
(B) Timing of eligibility for additional
coverage.--For purposes of subparagraph (A)(i), an
individual shall not be treated as eligible for
coverage under a group health plan before the first
date on which such individual could be covered under
such plan.
(C) Notification requirement.--An assistance
eligible individual shall notify in writing the group
health plan with respect to which paragraph (1)(A)
applies if such paragraph ceases to apply by reason of
subparagraph (A)(i). Such notice shall be provided to
the group health plan in such time and manner as may be
specified by the Secretary of Labor.
(3) Assistance eligible individual.--For purposes of this
section, the term ``assistance eligible individual'' means any
qualified beneficiary if--
(A) at any time during the period that begins with
September 1, 2008, and ends with December 31, 2009,
such qualified beneficiary is eligible for COBRA
continuation coverage,
(B) such qualified beneficiary elects such
coverage, and
(C) the qualifying event with respect to the COBRA
continuation coverage consists of the involuntary
termination of the covered employee's employment and
occurred during such period.
(4) Extension of election period and effect on coverage.--
(A) In general.--Notwithstanding section 605(a) of
the Employee Retirement Income Security Act of 1974,
section 4980B(f)(5)(A) of the Internal Revenue Code of
1986, section 2205(a) of the Public Health Service Act,
and section 8905a(c)(2) of title 5, United States Code,
in the case of an individual who is a qualified
beneficiary described in paragraph (3)(A) as of the
date of the enactment of this Act and has not made the
election referred to in paragraph (3)(B) as of such
date, such individual may elect the COBRA continuation
coverage under the COBRA continuation coverage
provisions containing such sections during the 60-day
period commencing with the date on which the
notification required under paragraph (7)(C) is
provided to such individual.
(B) Commencement of coverage; no reach-back.--Any
COBRA continuation coverage elected by a qualified
beneficiary during an extended election period under
subparagraph (A)--
(i) shall commence on the date of the
enactment of this Act, and
(ii) shall not extend beyond the period of
COBRA continuation coverage that would have
been required under the applicable COBRA
continuation coverage provision if the coverage
had been elected as required under such
provision.
(C) Preexisting conditions.--With respect to a
qualified beneficiary who elects COBRA continuation
coverage pursuant to subparagraph (A), the period--
(i) beginning on the date of the qualifying
event, and
(ii) ending with the day before the date of
the enactment of this Act,
shall be disregarded for purposes of determining the
63-day periods referred to in section 701)(2) of the
Employee Retirement Income Security Act of 1974,
section 9801(c)(2) of the Internal Revenue Code of
1986, and section 2701(c)(2) of the Public Health
Service Act.
(5) Expedited review of denials of premium assistance.--In
any case in which an individual requests treatment as an
assistance eligible individual and is denied such treatment by
the group health plan by reason of such individual's
ineligibility for COBRA continuation coverage, the Secretary of
Labor (or the Secretary of Health and Human services in
connection with COBRA continuation coverage which is provided
other than pursuant to part 6 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974), in
consultation with the Secretary of the Treasury, shall provide
for expedited review of such denial. An individual shall be
entitled to such review upon application to such Secretary in
such form and manner as shall be provided by such Secretary.
Such Secretary shall make a determination regarding such
individual's eligibility within 10 business days after receipt
of such individual's application for review under this
paragraph.
(6) Disregard of subsidies for purposes of federal and
state programs.--Notwithstanding any other provision of law,
any premium reduction with respect to an assistance eligible
individual under this subsection shall not be considered income
or resources in determining eligibility for, or the amount of
assistance or benefits provided under, any other public benefit
provided under Federal law or the law of any State or political
subdivision thereof.
(7) Notices to individuals.--
(A) General notice.--
(i) In general.--In the case of notices
provided under section 606(4) of the Employee
Retirement Income Security Act of 1974 (29
U.S.C. 1166(4)), section 4980B(f)(6)(D) of the
Internal Revenue Code of 1986, section 2206(4)
of the Public Health Service Act (42 U.S.C.
300bb-6(4)), or section 8905a(f)(2)(A) of title
5, United States Code, with respect to
individuals who, during the period described in
paragraph (3)(A), become entitled to elect
COBRA continuation coverage, such notices shall
include an additional notification to the
recipient of--
(I) the availability of premium
reduction with respect to such coverage
under this subsection; and
(II) the option to enroll in
different coverage if an employer that
permits assistance eligible individuals
to elect enrollment in different
coverage (as described in paragraph
(1)(B)).
(ii) Alternative notice.--In the case of
COBRA continuation coverage to which the notice
provision under such sections does not apply,
the Secretary of Labor, in consultation with
the Secretary of the Treasury and the Secretary
of Health and Human Services, shall, in
coordination with administrators of the group
health plans (or other entities) that provide
or administer the COBRA continuation coverage
involved, provide rules requiring the provision
of such notice.
(iii) Form.--The requirement of the
additional notification under this subparagraph
may be met by amendment of existing notice
forms or by inclusion of a separate document
with the notice otherwise required.
(B) Specific requirements.--Each additional
notification under subparagraph (A) shall include--
(i) the forms necessary for establishing
eligibility for premium reduction under this
subsection,
(ii) the name, address, and telephone
number necessary to contact the plan
administrator and any other person maintaining
relevant information in connection with such
premium reduction,
(iii) a description of the extended
election period provided for in paragraph
(4)(A),
(iv) a description of the obligation of the
qualified beneficiary under paragraph (2)(C) to
notify the plan providing continuation coverage
of eligibility for subsequent coverage under
another group health plan or eligibility for
benefits under title XVIII of the Social
Security Act and the penalty provided for
failure to so notify the plan,
(v) a description, displayed in a prominent
manner, of the qualified beneficiary's right to
a reduced premium and any conditions on
entitlement to the reduced premium; and
(vi) a description of the option of the
qualified beneficiary to enroll in different
coverage if the employer permits such
beneficiary to elect to enroll in such
different coverage under paragraph (1)(B).
(C) Notice relating to retroactive coverage.--In
the case of an individual described in paragraph (3)(A)
who has elected COBRA continuation coverage as of the
date of enactment of this Act or an individual
described in paragraph (4)(A), the administrator of the
group health plan (or other person) involved shall
provide (within 60 days after the date of enactment of
this Act) for the additional notification required to
be provided under subparagraph (A).
(D) Model notices.--Not later than 30 days after
the date of enactment of this Act, the Secretary of the
Labor, in consultation with the Secretary of the
Treasury and the Secretary of Health and Human
Services, shall prescribe models for the additional
notification required under this paragraph.
(8) Safeguards.--The Secretary of the Treasury shall
provide such rules, procedures, regulations, and other guidance
as may be necessary and appropriate to prevent fraud and abuse
under this subsection.
(9) Outreach.--The Secretary of Labor, in consultation with
the Secretary of the Treasury and the Secretary of Health and
Human Services, shall provide outreach consisting of public
education and enrollment assistance relating to premium
reduction provided under this subsection. Such outreach shall
target employers, group health plan administrators, public
assistance programs, States, insurers, and other entities as
determined appropriate by such Secretaries. Such outreach shall
include an initial focus on those individuals electing
continuation coverage who are referred to in paragraph (7)(C).
Information on such premium reduction, including enrollment,
shall also be made available on website of the Departments of
Labor, Treasury, and Health and Human Services.
(10) Definitions.--For purposes of this subsection--
(A) Administrator.--The term ``administrator'' has
the meaning given such term in section 3(16) of the
Employee Retirement Income Security Act of 1974.
(B) COBRA continuation coverage.--The term ``COBRA
continuation coverage'' means continuation coverage
provided pursuant to part 6 of subtitle B of title I of
the Employee Retirement Income Security Act of 1974
(other than under section 609), title XXII of the
Public Health Service Act, section 4980B of the
Internal Revenue Code of 1986 (other than subsection
(f)(1) of such section insofar as it relates to
pediatric vaccines), or section 8905a of title 5,
United States Code, or under a State program that
provides continuation coverage comparable to such
continuation coverage. Such term does not include
coverage under a health flexible spending arrangement.
(C) COBRA continuation provision.--The term ``COBRA
continuation provision'' means the provisions of law
described in subparagraph (B).
(D) Covered employee.--The term ``covered
employee'' has the meaning given such term in section
607(2) of the Employee Retirement Income Security Act
of 1974.
(E) Qualified beneficiary.--The term ``qualified
beneficiary'' has the meaning given such term in
section 607(3) of the Employee Retirement Income
Security Act of 1974.
(F) Group health plan.--The term ``group health
plan'' has the meaning given such term in section
607(1) of the Employee Retirement Income Security Act
of 1974.
(G) State.--The term ``State'' includes the
District of Columbia, the Commonwealth of Puerto Rico,
the Virgin Islands, Guam, American Samoa, and the
Commonwealth of the Northern Mariana Islands.
(11) Reports.--
(A) Interim report.--The Secretary of the Treasury
shall submit an interim report to the Committee on
Education and Labor, the Committee on Ways and Means,
and the Committee on Energy and Commerce of the House
of Representatives and the Committee on Health,
Education, Labor, and Pensions and the Committee on
Finance of the Senate regarding the premium reduction
provided under this subsection that includes--
(i) the number of individuals provided such
assistance as of the date of the report; and
(ii) the total amount of expenditures
incurred (with administrative expenditures
noted separately) in connection with such
assistance as of the date of the report.
(B) Final report.--As soon as practicable after the
last period of COBRA continuation coverage for which
premium reduction is provided under this section, the
Secretary of the Treasury shall submit a final report
to each Committee referred to in subparagraph (A) that
includes--
(i) the number of individuals provided
premium reduction under this section;
(ii) the average dollar amount (monthly and
annually) of premium reductions provided to
such individuals; and
(iii) the total amount of expenditures
incurred (with administrative expenditures
noted separately) in connection with premium
reduction under this section.
(12) COBRA premium assistance.--
(A) In general.--Subchapter B of chapter 65 of the
Internal Revenue Code of 1986 is amended by adding at
the end the following new section:
``SEC. 6432. COBRA PREMIUM ASSISTANCE.
``(a) In General.--The person to whom premiums are payable under
COBRA continuation coverage shall be reimbursed for the amount of
premiums not paid by plan beneficiaries by reason of section 3001(b) of
the American Recovery and Reinvestment Act of 2009. Such amount shall
be treated as a credit against the requirement of such person to make
deposits of payroll taxes and the liability of such person for payroll
taxes. To the extent that such amount exceeds the amount of such taxes,
the Secretary shall pay to such person the amount of such excess. No
payment may be made under this subsection to a person with respect to
any assistance eligible individual until after such person has received
the reduced premium from such individual required under section
3001(a)(1)(A) of such Act.
``(b) Payroll Taxes.--For purposes of this section, the term
`payroll taxes' means--
``(1) amounts required to be deducted and withheld for the
payroll period under section 3401 (relating to wage
withholding),
``(2) amounts required to be deducted for the payroll
period under section 3102 (relating to FICA employee taxes),
and
``(3) amounts of the taxes imposed for the payroll period
under section 3111 (relating to FICA employer taxes).
``(c) Treatment of Credit.--Except as otherwise provided by the
Secretary, the credit described in subsection (a) shall be applied as
though the employer had paid to the Secretary, on the day that the
qualified beneficiary's premium payment is received, an amount equal to
such credit.
``(d) Treatment of Payment.--For purposes of section 1324(b)(2) of
title 31, United States Code, any payment under this subsection shall
be treated in the same manner as a refund of the credit under section
35.
``(e) Reporting.--
``(1) In general.--Each person entitled to reimbursement
under subsection (a) for any period shall submit such reports
as the Secretary may require, including--
``(A) an attestation of involuntary termination of
employment for each covered employee on the basis of
whose termination entitlement to reimbursement is
claimed under subsection (a), and
``(B) a report of the amount of payroll taxes
offset under subsection (a) for the reporting period
and the estimated offsets of such taxes for the
subsequent reporting period in connection with
reimbursements under subsection (a).
``(2) Timing of reports relating to amount of payroll
taxes.--Reports required under paragraph (1)(B) shall be
submitted at the same time as deposits of taxes imposed by
chapters 21, 22, and 24 or at such time as is specified by the
Secretary.
``(f) Regulations.--The Secretary may issue such regulations or
other guidance as may be necessary or appropriate to carry out this
section, including the requirement to report information or the
establishment of other methods for verifying the correct amounts of
payments and credits under this section, and the application of this
section to group health plans which are multiemployer plans.''.
(B) Social security trust funds held harmless.--In
determining any amount transferred or appropriated to
any fund under the Social Security Act, section 6432 of
the Internal Revenue Code of 1986 shall not be taken
into account.
(C) Clerical amendment.--The table of sections for
subchapter B of chapter 65 of the Internal Revenue Code
of 1986 is amended by adding at the end the following
new item:
``Sec. 6432. COBRA premium assistance.''.
(D) Effective date.--The amendments made by this
paragraph shall apply to premiums to which subsection
(a)(1)(A) applies.
(E) Special rule.--
(i) In general.--In the case of an
assistance eligible individual who pays the
full premium amount required for COBRA
continuation coverage for any month during the
60-day period beginning on the first day of the
first month after the date of enactment of this
Act, the person to whom such payment is made
shall--
(I) make a reimbursement payment to
such individual for the amount of such
premium paid in excess of the amount
required to be paid under subsection
(b)(1)(A); or
(II) provide credit to the
individual for such amount in a manner
that reduces one or more subsequent
premium payments that the individual is
required to pay under such subsection
for the coverage involved.
(ii) Reimbursing employer.--A person to
which clause (i) applies shall be reimbursed as
provided for in section 6432 of the Internal
Revenue Code of 1986 for any payment made, or
credit provided, to the employee under such
clause.
(iii) Payment or credits.--Unless it is
reasonable to believe that the credit for the
excess payment in clause (i)(II) will be used
by the assistance eligible individual within
180 days of the date on which the person
receives from the individual the payment of the
full premium amount, a person to which clause
(i) applies shall make the payment required
under such clause to the individual within 60
days of such payment of the full premium
amount. If, as of any day within the 180-day
period, it is no longer reasonable to believe
that the credit will be used during that
period, payment equal to the remainder of the
credit outstanding shall be made to the
individual within 60 days of such day.
(13) Penalty for failure to notify health plan of cessation
of eligibility for premium assistance.--
(A) In general.--Part I of subchapter B of chapter
68 of the Internal Revenue Code of 1986 is amended by
adding at the end the following new section:
``SEC. 6720C. PENALTY FOR FAILURE TO NOTIFY HEALTH PLAN OF CESSATION OF
ELIGIBILITY FOR COBRA PREMIUM ASSISTANCE.
``(a) In General.--Any person required to notify a group health
plan under section 3001(a)(2)(C) of the American Recovery and
Reinvestment Act of 2009 who fails to make such a notification at such
time and in such manner as the Secretary of Labor may require shall pay
a penalty of 110 percent of the premium reduction provided under such
section after termination of eligibility under such subsection.
``(b) Reasonable Cause Exception.--No penalty shall be imposed
under subsection (a) with respect to any failure if it is shown that
such failure is due to reasonable cause and not to willful neglect.''.
(B) Clerical amendment.--The table of sections of
part I of subchapter B of chapter 68 of such Code is
amended by adding at the end the following new item:
``Sec. 6720C. Penalty for failure to notify health plan of cessation of
eligibility for COBRA premium
assistance.''.
(C) Effective date.--The amendments made by this
paragraph shall apply to failures occurring after the
date of the enactment of this Act.
(14) Coordination with hctc.--
(A) In general.--Subsection (g) of section 35 of
the Internal Revenue Code of 1986 is amended by
redesignating paragraph (9) as paragraph (10) and
inserting after paragraph (8) the following new
paragraph:
``(9) COBRA premium assistance.--In the case of an
assistance eligible individual who receives premium reduction
for COBRA continuation coverage under section 3001(a) of the
American Recovery and Reinvestment Act of 2009 for any month
during the taxable year, such individual shall not be treated
as an eligible individual, a certified individual, or a
qualifying family member for purposes of this section or
section 7527 with respect to such month.''.
(B) Effective date.--The amendment made by
subparagraph (A) shall apply to taxable years ending
after the date of the enactment of this Act.
(15) Exclusion of cobra premium assistance from gross
income.--
(A) In general.--Part III of subchapter B of
chapter 1 of the Internal Revenue Code of 1986 is
amended by inserting after section 139B the following
new section:
``SEC. 139C. COBRA PREMIUM ASSISTANCE.
``In the case of an assistance eligible individual (as defined in
section 3001 of the American Recovery and Reinvestment Act of 2009),
gross income does not include any premium reduction provided under
subsection (a) of such section.''.
(B) Clerical amendment.--The table of sections for
part III of subchapter B of chapter 1 of such Code is
amended by inserting after the item relating to section
139B the following new item:
``Sec. 139C. COBRA premium assistance.''.
(C) Effective date.--The amendments made by this
paragraph shall apply to taxable years ending after the
date of the enactment of this Act.
Subtitle B--Transitional Medical Assistance (TMA)
SEC. 3101. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA).
(a) 18-Month Extension.--
(1) In general.--Sections 1902(e)(1)(B) and 1925(f) of the
Social Security Act (42 U.S.C. 1396a(e)(1)(B), 1396r-6(f)) are
each amended by striking ``September 30, 2003'' and inserting
``December 31, 2010''.
(2) Effective date.--The amendments made by this subsection
shall take effect on July 1, 2009.
(b) State Option of Initial 12-Month Eligibility.--Section 1925 of
the Social Security Act (42 U.S.C. 1396r-6) is amended--
(1) in subsection (a)(1), by inserting ``but subject to
paragraph (5)'' after ``Notwithstanding any other provision of
this title'';
(2) by adding at the end of subsection (a) the following:
``(5) Option of 12-month initial eligibility period.--A
State may elect to treat any reference in this subsection to a
6-month period (or 6 months) as a reference to a 12-month
period (or 12 months). In the case of such an election,
subsection (b) shall not apply.''; and
(3) in subsection (b)(1), by inserting ``but subject to
subsection (a)(5)'' after ``Notwithstanding any other provision
of this title''.
(c) Removal of Requirement for Previous Receipt of Medical
Assistance.--Section 1925(a)(1) of such Act (42 U.S.C. 1396r-6(a)(1)),
as amended by subsection (b)(1), is further amended--
(1) by inserting ``subparagraph (B) and'' before
``paragraph (5)'';
(2) by redesignating the matter after ``Requirement.--'' as
a subparagraph (A) with the heading ``In general.--'' and with
the same indentation as subparagraph (B) (as added by paragraph
(3)); and
(3) by adding at the end the following:
``(B) State option to waive requirement for 3
months before receipt of medical assistance.--A State
may, at its option, elect also to apply subparagraph
(A) in the case of a family that was receiving such aid
for fewer than three months or that had applied for and
was eligible for such aid for fewer than 3 months
during the 6 immediately preceding months described in
such subparagraph.''.
(d) CMS Report on Enrollment and Participation Rates Under TMA.--
Section 1925 of such Act (42 U.S.C. 1396r-6), as amended by this
section, is further amended by adding at the end the following new
subsection:
``(g) Collection and Reporting of Participation Information.--
``(1) Collection of information from states.--Each State
shall collect and submit to the Secretary (and make publicly
available), in a format specified by the Secretary, information
on average monthly enrollment and average monthly participation
rates for adults and children under this section and of the
number and percentage of children who become ineligible for
medical assistance under this section whose medical assistance
is continued under another eligibility category or who are
enrolled under the State's child health plan under title XXI.
Such information shall be submitted at the same time and
frequency in which other enrollment information under this
title is submitted to the Secretary.
``(2) Annual reports to congress.--Using the information
submitted under paragraph (1), the Secretary shall submit to
Congress annual reports concerning enrollment and participation
rates described in such paragraph.''.
(e) Effective Date.--The amendments made by subsections (b) through
(d) shall take effect on July 1, 2009.
Subtitle C--Extension of the Qualified Individual (QI) Program
SEC. 3201. EXTENSION OF THE QUALIFYING INDIVIDUAL (QI) PROGRAM.
(a) Extension.--Section 1902(a)(10)(E)(iv) of the Social Security
Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by striking ``December
2009'' and inserting ``December 2010''.
(b) Extending Total Amount Available for Allocation.--Section
1933(g) of such Act (42 U.S.C. 1396u-3(g)) is amended--
(1) in paragraph (2)--
(A) by striking ``and'' at the end of subparagraph
(K);
(B) in subparagraph (L), by striking the period at
the end and inserting a semicolon; and
(C) by adding at the end the following new
subparagraphs:
``(M) for the period that begins on January 1,
2010, and ends on September 30, 2010, the total
allocation amount is $412,500,000; and
``(N) for the period that begins on October 1,
2010, and ends on December 31, 2010, the total
allocation amount is $150,000,000.''; and
(2) in paragraph (3), in the matter preceding subparagraph
(A), by striking ``or (L)'' and inserting ``(L), or (N)''.
Subtitle D--Other Provisions
SEC. 3301. PREMIUMS AND COST SHARING PROTECTIONS UNDER MEDICAID,
ELIGIBILITY DETERMINATIONS UNDER MEDICAID AND CHIP, AND
PROTECTION OF CERTAIN INDIAN PROPERTY FROM MEDICAID
ESTATE RECOVERY.
(a) Premiums and Cost Sharing Protection Under Medicaid.--
(1) In general.--Section 1916 of the Social Security Act
(42 U.S.C. 1396o) is amended--
(A) in subsection (a), in the matter preceding
paragraph (1), by striking ``and (i)'' and inserting
``, (i), and (j)''; and
(B) by adding at the end the following new
subsection:
``(j) No Premiums or Cost Sharing for Indians Furnished Items or
Services Directly by Indian Health Programs or Through Referral Under
Contract Health Services.--
``(1) No cost sharing for items or services furnished to
indians through indian health programs.--
``(A) In general.--No enrollment fee, premium, or
similar charge, and no deduction, copayment, cost
sharing, or similar charge shall be imposed against an
Indian who is furnished an item or service directly by
the Indian Health Service, an Indian Tribe, Tribal
Organization, or Urban Indian Organization or through
referral under contract health services for which
payment may be made under this title.
``(B) No reduction in amount of payment to indian
health providers.--Payment due under this title to the
Indian Health Service, an Indian Tribe, Tribal
Organization, or Urban Indian Organization, or a health
care provider through referral under contract health
services for the furnishing of an item or service to an
Indian who is eligible for assistance under such title,
may not be reduced by the amount of any enrollment fee,
premium, or similar charge, or any deduction,
copayment, cost sharing, or similar charge that would
be due from the Indian but for the operation of
subparagraph (A).
``(2) Rule of construction.--Nothing in this subsection
shall be construed as restricting the application of any other
limitations on the imposition of premiums or cost sharing that
may apply to an individual receiving medical assistance under
this title who is an Indian.''.
(2) Conforming amendment.--Section 1916A(b)(3) of such Act
(42 U.S.C. 1396o-1(b)(3)) is amended--
(A) in subparagraph (A), by adding at the end the
following new clause:
``(vi) An Indian who is furnished an item
or service directly by the Indian Health
Service, an Indian Tribe, Tribal Organization
or Urban Indian Organization or through
referral under contract health services.''; and
(B) in subparagraph (B), by adding at the end the
following new clause:
``(ix) Items and services furnished to an
Indian directly by the Indian Health Service,
an Indian Tribe, Tribal Organization or Urban
Indian Organization or through referral under
contract health services.''.
(b) Treatment of Certain Property From Resources for Medicaid and
CHIP Eligibility.--
(1) Medicaid.--Section 1902 of the Social Security Act (42
U.S.C. 1396a) is amended by adding at the end the following new
subsection:
``(dd) Notwithstanding any other requirement of this title or any
other provision of Federal or State law, a State shall disregard the
following property from resources for purposes of determining the
eligibility of an individual who is an Indian for medical assistance
under this title:
``(1) Property, including real property and improvements,
that is held in trust, subject to Federal restrictions, or
otherwise under the supervision of the Secretary of the
Interior, located on a reservation, including any federally
recognized Indian Tribe's reservation, pueblo, or colony,
including former reservations in Oklahoma, Alaska Native
regions established by the Alaska Native Claims Settlement Act,
and Indian allotments on or near a reservation as designated
and approved by the Bureau of Indian Affairs of the Department
of the Interior.
``(2) For any federally recognized Tribe not described in
paragraph (1), property located within the most recent
boundaries of a prior Federal reservation.
``(3) Ownership interests in rents, leases, royalties, or
usage rights related to natural resources (including extraction
of natural resources or harvesting of timber, other plants and
plant products, animals, fish, and shellfish) resulting from
the exercise of federally protected rights.
``(4) Ownership interests in or usage rights to items not
covered by paragraphs (1) through (3) that have unique
religious, spiritual, traditional, or cultural significance or
rights that support subsistence or a traditional lifestyle
according to applicable tribal law or custom.''.
(2) Application to chip.--Section 2107(e)(1) of such Act
(42 U.S.C. 1397gg(e)(1)) is amended--
(A) by redesignating subparagraphs (B) through (E),
as subparagraphs (C) through (F), respectively; and
(B) by inserting after subparagraph (A), the
following new subparagraph:
``(B) Section 1902(dd) (relating to disregard of
certain property for purposes of making eligibility
determinations).''.
(c) Continuation of Current Law Protections of Certain Indian
Property From Medicaid Estate Recovery.--Section 1917(b)(3) of the
Social Security Act (42 U.S.C. 1396p(b)(3)) is amended--
(1) by inserting ``(A)'' after ``(3)''; and
(2) by adding at the end the following new subparagraph:
``(B) The standards specified by the Secretary
under subparagraph (A) shall require that the
procedures established by the State agency under
subparagraph (A) exempt income, resources, and property
that are exempt from the application of this subsection
as of April 1, 2003, under manual instructions issued
to carry out this subsection (as in effect on such
date) because of the Federal responsibility for Indian
Tribes and Alaska Native Villages. Nothing in this
subparagraph shall be construed as preventing the
Secretary from providing additional estate recovery
exemptions under this title for Indians.''.
SEC. 3302. RULES APPLICABLE UNDER MEDICAID AND CHIP TO MANAGED CARE
ENTITIES WITH RESPECT TO INDIAN ENROLLEES AND INDIAN
HEALTH CARE PROVIDERS AND INDIAN MANAGED CARE ENTITIES.
(a) In General.--Section 1932 of the Social Security Act (42 U.S.C.
1396u-2) is amended by adding at the end the following new subsection:
``(h) Special Rules With Respect to Indian Enrollees, Indian Health
Care Providers, and Indian Managed Care Entities.--
``(1) Enrollee option to select an indian health care
provider as primary care provider.--In the case of a non-Indian
Medicaid managed care entity that--
``(A) has an Indian enrolled with the entity; and
``(B) has an Indian health care provider that is
participating as a primary care provider within the
network of the entity,
insofar as the Indian is otherwise eligible to receive services
from such Indian health care provider and the Indian health
care provider has the capacity to provide primary care services
to such Indian, the contract with the entity under section
1903(m) or under section 1905(t)(3) shall require, as a
condition of receiving payment under such contract, that the
Indian shall be allowed to choose such Indian health care
provider as the Indian's primary care provider under the
entity.
``(2) Assurance of payment to indian health care providers
for provision of covered services.--Each contract with a
managed care entity under section 1903(m) or under section
1905(t)(3) shall require any such entity, as a condition of
receiving payment under such contract, to satisfy the following
requirements:
``(A) Demonstration of access to indian health care
providers and application of alternative payment
arrangements.--Subject to subparagraph (C), to--
``(i) demonstrate that the number of Indian
health care providers that are participating
providers with respect to such entity are
sufficient to ensure timely access to covered
Medicaid managed care services for those Indian
enrollees who are eligible to receive services
from such providers; and
``(ii) agree to pay Indian health care
providers, whether such providers are
participating or nonparticipating providers
with respect to the entity, for covered
Medicaid managed care services provided to
those Indian enrollees who are eligible to
receive services from such providers at a rate
equal to the rate negotiated between such
entity and the provider involved or, if such a
rate has not been negotiated, at a rate that is
not less than the level and amount of payment
which the entity would make for the services if
the services were furnished by a participating
provider which is not an Indian health care
provider.
``(B) Prompt payment.--To agree to make prompt
payment (consistent with rule for prompt payment of
providers under section 1932(f)) to Indian health care
providers that are participating providers with respect
to such entity or, in the case of an entity to which
subparagraph (A)(ii) or (C) applies, that the entity is
required to pay in accordance with that subparagraph.
``(C) Application of special payment requirements
for federally-qualified health centers and for services
provided by certain indian health care providers.--
``(i) Federally-qualified health centers.--
``(I) Managed care entity payment
requirement.--To agree to pay any
Indian health care provider that is a
federally-qualified health center under
this title but not a participating
provider with respect to the entity,
for the provision of covered Medicaid
managed care services by such provider
to an Indian enrollee of the entity at
a rate equal to the amount of payment
that the entity would pay a federally-
qualified health center that is a
participating provider with respect to
the entity but is not an Indian health
care provider for such services.
``(II) Continued application of
state requirement to make supplemental
payment.--Nothing in subclause (I) or
subparagraph (A) or (B) shall be
construed as waiving the application of
section 1902(bb)(5) regarding the State
plan requirement to make any
supplemental payment due under such
section to a federally-qualified health
center for services furnished by such
center to an enrollee of a managed care
entity (regardless of whether the
federally-qualified health center is or
is not a participating provider with
the entity).
``(ii) Payment rate for services provided
by certain indian health care providers.--If
the amount paid by a managed care entity to an
Indian health care provider that is not a
federally-qualified health center for services
provided by the provider to an Indian enrollee
with the managed care entity is less than the
rate that applies to the provision of such
services by the provider under the State plan,
the plan shall provide for payment to the
Indian health care provider, whether the
provider is a participating or nonparticipating
provider with respect to the entity, of the
difference between such applicable rate and the
amount paid by the managed care entity to the
provider for such services.
``(D) Construction.--Nothing in this paragraph
shall be construed as waiving the application of
section 1902(a)(30)(A) (relating to application of
standards to assure that payments are consistent with
efficiency, economy, and quality of care).
``(3) Special rule for enrollment for indian managed care
entities.--Regarding the application of a Medicaid managed care
program to Indian Medicaid managed care entities, an Indian
Medicaid managed care entity may restrict enrollment under such
program to Indians and to members of specific Tribes in the
same manner as Indian Health Programs may restrict the delivery
of services to such Indians and tribal members.
``(4) Definitions.--For purposes of this subsection:
``(A) Indian health care provider.--The term
`Indian health care provider' means an Indian Health
Program or an Urban Indian Organization.
``(B) Indian medicaid managed care entity.--The
term `Indian Medicaid managed care entity' means a
managed care entity that is controlled (within the
meaning of the last sentence of section 1903(m)(1)(C))
by the Indian Health Service, a Tribe, Tribal
Organization, or Urban Indian Organization, or a
consortium, which may be composed of 1 or more Tribes,
Tribal Organizations, or Urban Indian Organizations,
and which also may include the Service.
``(C) Non-indian medicaid managed care entity.--The
term `non-Indian Medicaid managed care entity' means a
managed care entity that is not an Indian Medicaid
managed care entity.
``(D) Covered medicaid managed care services.--The
term `covered Medicaid managed care services' means,
with respect to an individual enrolled with a managed
care entity, items and services for which benefits are
available with respect to the individual under the
contract between the entity and the State involved.
``(E) Medicaid managed care program.--The term
`Medicaid managed care program' means a program under
sections 1903(m), 1905(t), and 1932 and includes a
managed care program operating under a waiver under
section 1915(b) or 1115 or otherwise.''.
(b) Application to CHIP.--Subject to section _013(d), section
2107(e)(1) of such Act (42 U.S.C. 1397gg(1)) is amended by adding at
the end the following new subparagraph:
``(E) Subsections (a)(2)(C) and (h) of section
1932.''.
SEC. 3303. CONSULTATION ON MEDICAID, CHIP, AND OTHER HEALTH CARE
PROGRAMS FUNDED UNDER THE SOCIAL SECURITY ACT INVOLVING
INDIAN HEALTH PROGRAMS AND URBAN INDIAN ORGANIZATIONS.
(a) Consultation With Tribal Technical Advisory Group (TTAG).--The
Secretary of Health and Human Services shall maintain within the
Centers for Medicaid & Medicare Services (CMS) a Tribal Technical
Advisory Group (TTAG), which was first established in accordance with
requirements of the charter dated September 30, 2003, and the Secretary
of Health and Human Services shall include in such Group a
representative of a national urban Indian health organization and a
representative of the Indian Health Service. The inclusion of a
representative of a national urban Indian health organization in such
Group shall not affect the nonapplication of the Federal Advisory
Committee Act (5 U.S.C. App.) to such Group.
(b) Solicitation of Advice Under Medicaid and CHIP.--
(1) Medicaid state plan amendment.--Subject to subsection
(d), section 1902(a) of the Social Security Act (42 U.S.C.
1396a(a)) is amended--
(A) in paragraph (70), by striking ``and'' at the
end;
(B) in paragraph (71), by striking the period at
the end and inserting ``; and''; and
(C) by inserting after paragraph (71), the
following new paragraph:
``(72) in the case of any State in which 1 or more Indian
Health Programs or Urban Indian Organizations furnishes health
care services, provide for a process under which the State
seeks advice on a regular, ongoing basis from designees of such
Indian Health Programs and Urban Indian Organizations on
matters relating to the application of this title that are
likely to have a direct effect on such Indian Health Programs
and Urban Indian Organizations and that--
``(A) shall include solicitation of advice prior to
submission of any plan amendments, waiver requests, and
proposals for demonstration projects likely to have a
direct effect on Indians, Indian Health Programs, or
Urban Indian Organizations; and
``(B) may include appointment of an advisory
committee and of a designee of such Indian Health
Programs and Urban Indian Organizations to the medical
care advisory committee advising the State on its State
plan under this title.''.
(2) Application to chip.--Subject to subsection (d),
section 2107(e)(1) of such Act (42 U.S.C. 1397gg(e)(1)), as
amended by section 3302(b)(2), is amended--
(A) by redesignating subparagraphs (B) through (E)
as subparagraphs (C) through (F), respectively; and
(B) by inserting after subparagraph (A), the
following new subparagraph:
``(B) Section 1902(a)(72) (relating to requiring
certain States to seek advice from designees of Indian
Health Programs and Urban Indian Organizations).''.
(c) Rule of Construction.--Nothing in the amendments made by this
section shall be construed as superseding existing advisory committees,
working groups, guidance, or other advisory procedures established by
the Secretary of Health and Human Services or by any State with respect
to the provision of health care to Indians.
(d) Contingency Rule.--If the Children's Health Insurance Program
Reauthorization Act of 2009 (in this subsection referred to as
``CHIPRA'') has been enacted as of the date of enactment of this Act,
the following shall apply:
(1) Subparagraph (I) of section 2107(e) of the Social
Security Act (as redesignated by CHIPRA) is redesignated as
subparagraph (K) and the subparagraph (E) added to section
2107(e) of the Social Security Act by section _013(b) is
redesignated as subparagraph (J).
(2) Subparagraphs (D) through (H) of section 2107(e) of the
Social Security Act (as added and redesignated by CHIPRA) are
redesignated as subparagraphs (E) through (I), respectively and
the subparagraph (B) of section 2107(e) of the Social Security
Act added by subsection (b)(2) of this section is redesignated
as subparagraph (D) and amended by striking ``1902(a)(72)'' and
inserting ``1902(a)(73)''.
(3) Section 1902(a) of the Social Security Act (as amended
by CHIPRA) is amended by striking ``and'' at the end of
paragraph (71), by striking the period at the end of the
paragraph (72) added by CHIPRA and inserting ``; and'' and by
redesignated the paragraph (72) added to such section by
subsection (b)(1) of this section as paragraph (73).
SEC. 3304. APPLICATION OF PROMPT PAY REQUIREMENTS TO NURSING
FACILITIES.
Section 1902(a)(37)(A) of the Social Security Act (42 U.S.C.
1396a(a)(37)(A)) is amended by inserting ``, or by nursing
facilities,'' after ``health facilities''
SEC. 3305. PERIOD OF APPLICATION; SUNSET.
This subtitle and the amendments made by this subtitle shall be in
effect only during the period that begins on April 1, 2009, and ends on
December 31, 2010. On and after January 1, 2011, the Social Security
Act shall be applied as if this subtitle and the amendments made by
this subtitle had not been enacted.
TITLE IV--HEALTH INFORMATION TECHNOLOGY
SEC. 4001. SHORT TITLE; TABLE OF CONTENTS OF TITLE.
(a) Short Title.--This title may be cited as the ``Health
Information Technology for Economic and Clinical Health Act'' or the
``HITECH Act''.
(b) Table of Contents of Title.--The table of contents for this
title is as follows:
TITLE IV--HEALTH INFORMATION TECHNOLOGY
Sec. 4001. Short title; table of contents of title.
Subtitle A--Promotion of Health Information Technology
Sec. 4101. ONCHIT; standards development and adoption.
``Sec. 3000. Definitions.
``Sec. 3001. Office of the National Coordinator for Health
Information Technology.
``Sec. 3002. HIT Policy Committee.
``Sec. 3003. HIT Standards Committee.
``Sec. 3004. Process for adoption of endorsed recommendations;
adoption of initial set of standards,
implementation specifications, and
certification criteria.
``Sec. 3005. Transitions.
Subtitle B--Incentives for the Use of Health Information Technology
PART I--Medicare Program
Sec. 4201. Incentives for eligible professionals.
Sec. 4202. Incentives for hospitals.
Sec. 4203. Premium hold harmless and implementation funding.
Sec. 4204. Non-application of phased-out indirect medical education
(IME) adjustment factor for fiscal year
2009.
Sec. 4205. Study on application of EHR payment incentives for providers
not receiving other incentive payments.
Sec. 4206. Study on availability of open source health information
technology systems.
PART II--Medicaid Funding
Sec. 4211. Medicaid provider EHR adoption and operation payments;
implementation funding.
Subtitle A--Promotion of Health Information Technology
SEC. 4101. ONCHIT; STANDARDS DEVELOPMENT AND ADOPTION.
The Public Health Service Act (42 U.S.C. 201 et seq.) is amended by
adding at the end the following:
``TITLE XXX--HEALTH INFORMATION TECHNOLOGY AND QUALITY
``SEC. 3000. DEFINITIONS.
``In this title:
``(1) Certified ehr technology.--The term `certified EHR
technology' means a qualified electronic health record that is
certified pursuant to section 3001(c)(5) as meeting standards
adopted under section 3004 that are applicable to the type of
record involved (as determined by the Secretary, such as an
ambulatory electronic health record for office-based physicians
or an inpatient hospital electronic health record for
hospitals).
``(2) Enterprise integration.--The term `enterprise
integration' means the electronic linkage of health care
providers, health plans, the government, and other interested
parties, to enable the electronic exchange and use of health
information among all the components in the health care
infrastructure in accordance with applicable law, and such term
includes related application protocols and other related
standards.
``(3) Health care provider.--The term `health care
provider' means a hospital, skilled nursing facility, nursing
facility, home health entity or other long term care facility,
health care clinic, Federally qualified health center, group
practice (as defined in section 1877(h)(4) of the Social
Security Act), a pharmacist, a pharmacy, a laboratory, a
physician (as defined in section 1861(r) of the Social Security
Act), a practitioner (as described in section 1842(b)(18)(C) of
the Social Security Act), a provider operated by, or under
contract with, the Indian Health Service or by an Indian tribe
(as defined in the Indian Self-Determination and Education
Assistance Act), tribal organization, or urban Indian
organization (as defined in section 4 of the Indian Health Care
Improvement Act), a rural health clinic, a covered entity under
section 340B, and any other category of facility or clinician
determined appropriate by the Secretary.
``(4) Health information.--The term `health information'
has the meaning given such term in section 1171(4) of the
Social Security Act.
``(5) Health information technology.--The term `health
information technology' means hardware, software, integrated
technologies and related licenses, intellectual property,
upgrades, and packaged solutions sold as services that are
specifically designed for use by health care entities for the
electronic creation, maintenance, or exchange of health
information.
``(6) Health plan.--The term `health plan' has the meaning
given such term in section 1171(5) of the Social Security Act.
``(7) HIT policy committee.--The term `HIT Policy
Committee' means such Committee established under section
3002(a).
``(8) HIT standards committee.--The term `HIT Standards
Committee' means such Committee established under section
3003(a).
``(9) Individually identifiable health information.--The
term `individually identifiable health information' has the
meaning given such term in section 1171(6) of the Social
Security Act.
``(10) Laboratory.--The term `laboratory' has the meaning
given such term in section 353(a).
``(11) National coordinator.--The term `National
Coordinator' means the head of the Office of the National
Coordinator for Health Information Technology established under
section 3001(a).
``(12) Pharmacist.--The term `pharmacist' has the meaning
given such term in section 804(2) of the Federal Food, Drug,
and Cosmetic Act.
``(13) Qualified electronic health record.--The term
`qualified electronic health record' means an electronic record
of health-related information on an individual that--
``(A) includes patient demographic and clinical
health information, such as medical history and problem
lists; and
``(B) has the capacity--
``(i) to provide clinical decision support;
``(ii) to support physician order entry;
``(iii) to capture and query information
relevant to health care quality; and
``(iv) to exchange electronic health
information with, and integrate such
information from other sources.
``(14) State.--The term `State' means each of the several
States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and the Northern Mariana
Islands.
``SEC. 3001. OFFICE OF THE NATIONAL COORDINATOR FOR HEALTH INFORMATION
TECHNOLOGY.
``(a) Establishment.--There is established within the Department of
Health and Human Services an Office of the National Coordinator for
Health Information Technology (referred to in this section as the
`Office'). The Office shall be headed by a National Coordinator who
shall be appointed by the Secretary and shall report directly to the
Secretary.
``(b) Purpose.--The National Coordinator shall perform the duties
under subsection (c) in a manner consistent with the development of a
nationwide health information technology infrastructure that allows for
the electronic use and exchange of information and that--
``(1) ensures that each patient's health information is
secure and protected, in accordance with applicable law;
``(2) improves health care quality, reduces medical errors,
and advances the delivery of patient-centered medical care;
``(3) reduces health care costs resulting from
inefficiency, medical errors, inappropriate care, duplicative
care, and incomplete information;
``(4) provides appropriate information to help guide
medical decisions at the time and place of care;
``(5) ensures the inclusion of meaningful public input in
such development of such infrastructure;
``(6) improves the coordination of care and information
among hospitals, laboratories, physician offices, and other
entities through an effective infrastructure for the secure and
authorized exchange of health care information;
``(7) improves public health activities and facilitates the
early identification and rapid response to public health
threats and emergencies, including bioterror events and
infectious disease outbreaks;
``(8) facilitates health and clinical research and health
care quality;
``(9) promotes prevention of chronic diseases;
``(10) promotes a more effective marketplace, greater
competition, greater systems analysis, increased consumer
choice, and improved outcomes in health care services; and
``(11) improves efforts to reduce health disparities.
``(c) Duties of the National Coordinator.--
``(1) Standards.--The National Coordinator shall review and
determine whether to endorse each standard, implementation
specification, and certification criterion for the electronic
exchange and use of health information that is recommended by
the HIT Standards Committee under section 3003 for purposes of
adoption under section 3004. The Coordinator shall make such
determination, and report to the Secretary such determination,
not later than 45 days after the date the recommendation is
received by the Coordinator.
``(2) HIT policy coordination.--
``(A) In general.--The National Coordinator shall
coordinate health information technology policy and
programs of the Department with those of other relevant
executive branch agencies with a goal of avoiding
duplication of efforts and of helping to ensure that
each agency undertakes health information technology
activities primarily within the areas of its greatest
expertise and technical capability and in a manner
towards a coordinated national goal.
``(B) HIT policy and standards committees.--The
National Coordinator shall be a leading member in the
establishment and operations of the HIT Policy
Committee and the HIT Standards Committee and shall
serve as a liaison among those two Committees and the
Federal Government.
``(3) Strategic plan.--
``(A) In general.--The National Coordinator shall,
in consultation with other appropriate Federal agencies
(including the National Institute of Standards and
Technology), update the Federal Health IT Strategic
Plan (developed as of June 3, 2008) to include specific
objectives, milestones, and metrics with respect to the
following:
``(i) The electronic exchange and use of
health information and the enterprise
integration of such information.
``(ii) The utilization of an electronic
health record for each person in the United
States by 2014.
``(iii) The incorporation of privacy and
security protections for the electronic
exchange of an individual's individually
identifiable health information.
``(iv) Ensuring security methods to ensure
appropriate authorization and electronic
authentication of health information and
specifying technologies or methodologies for
rendering health information unusable,
unreadable, or indecipherable.
``(v) Specifying a framework for
coordination and flow of recommendations and
policies under this title among the Secretary,
the National Coordinator, the HIT Policy
Committee, the HIT Standards Committee, and
other health information exchanges and other
relevant entities.
``(vi) Methods to foster the public
understanding of health information technology.
``(vii) Strategies to enhance the use of
health information technology in improving the
quality of health care, reducing medical
errors, reducing health disparities, improving
public health, and improving the continuity of
care among health care settings.
``(B) Collaboration.--The strategic plan shall be
updated through collaboration of public and private
entities.
``(C) Measurable outcome goals.--The strategic plan
update shall include measurable outcome goals.
``(D) Publication.--The National Coordinator shall
republish the strategic plan, including all updates.
``(4) Website.--The National Coordinator shall maintain and
frequently update an Internet website on which there is posted
information on the work, schedules, reports, recommendations,
and other information to ensure transparency in promotion of a
nationwide health information technology infrastructure.
``(5) Certification.--
``(A) In general.--The National Coordinator, in
consultation with the Director of the National
Institute of Standards and Technology, shall develop a
program (either directly or by contract) for the
voluntary certification of health information
technology as being in compliance with applicable
certification criteria adopted under this title.
``(B) Certification criteria described.--In this
title, the term `certification criteria' means, with
respect to standards and implementation specifications
for health information technology, criteria to
establish that the technology meets such standards and
implementation specifications.
``(6) Reports and publications.--
``(A) Report on additional funding or authority
needed.--Not later than 12 months after the date of the
enactment of this title, the National Coordinator shall
submit to the appropriate committees of jurisdiction of
the House of Representatives and the Senate a report on
any additional funding or authority the Coordinator or
the HIT Policy Committee or HIT Standards Committee
requires to evaluate and develop standards,
implementation specifications, and certification
criteria, or to achieve full participation of
stakeholders in the adoption of a nationwide health
information technology infrastructure that allows for
the electronic use and exchange of health information.
``(B) Implementation report.--The National
Coordinator shall prepare a report that identifies
lessons learned from major public and private health
care systems in their implementation of health
information technology, including information on
whether the technologies and practices developed by
such systems may be applicable to and usable in whole
or in part by other health care providers.
``(C) Assessment of impact of hit on communities
with health disparities and uninsured, underinsured,
and medically underserved areas.--The National
Coordinator shall assess and publish the impact of
health information technology in communities with
health disparities and in areas with a high proportion
of individuals who are uninsured, underinsured, and
medically underserved individuals (including urban and
rural areas) and identify practices to increase the
adoption of such technology by health care providers in
such communities.
``(D) Evaluation of benefits and costs of the
electronic use and exchange of health information.--The
National Coordinator shall evaluate and publish
evidence on the benefits and costs of the electronic
use and exchange of health information and assess to
whom these benefits and costs accrue.
``(E) Resource requirements.--The National
Coordinator shall estimate and publish resources
required annually to reach the goal of utilization of
an electronic health record for each person in the
United States by 2014, including the required level of
Federal funding, expectations for regional, State, and
private investment, and the expected contributions by
volunteers to activities for the utilization of such
records.
``(7) Assistance.--The National Coordinator may provide
financial assistance to consumer advocacy groups and not-for-
profit entities that work in the public interest for purposes
of defraying the cost to such groups and entities to
participate under, whether in whole or in part, the National
Technology Transfer Act of 1995 (15 U.S.C. 272 note).
``(8) Governance for nationwide health information
network.--The National Coordinator shall establish a governance
mechanism for the nationwide health information network.
``(d) Detail of Federal Employees.--
``(1) In general.--Upon the request of the National
Coordinator, the head of any Federal agency is authorized to
detail, with or without reimbursement from the Office, any of
the personnel of such agency to the Office to assist it in
carrying out its duties under this section.
``(2) Effect of detail.--Any detail of personnel under
paragraph (1) shall--
``(A) not interrupt or otherwise affect the civil
service status or privileges of the Federal employee;
and
``(B) be in addition to any other staff of the
Department employed by the National Coordinator.
``(3) Acceptance of detailees.--Notwithstanding any other
provision of law, the Office may accept detailed personnel from
other Federal agencies without regard to whether the agency
described under paragraph (1) is reimbursed.
``(e) Chief Privacy Officer of the Office of the National
Coordinator.--Not later than 12 months after the date of the enactment
of this title, the Secretary shall appoint a Chief Privacy Officer of
the Office of the National Coordinator, whose duty it shall be to
advise the National Coordinator on privacy, security, and data
stewardship of electronic health information and to coordinate with
other Federal agencies (and similar privacy officers in such agencies),
with State and regional efforts, and with foreign countries with regard
to the privacy, security, and data stewardship of electronic
individually identifiable health information.
``SEC. 3002. HIT POLICY COMMITTEE.
``(a) Establishment.--There is established a HIT Policy Committee
to make policy recommendations to the National Coordinator relating to
the implementation of a nationwide health information technology
infrastructure, including implementation of the strategic plan
described in section 3001(c)(3).
``(b) Duties.--
``(1) Recommendations on health information technology
infrastructure.--The HIT Policy Committee shall recommend a
policy framework for the development and adoption of a
nationwide health information technology infrastructure that
permits the electronic exchange and use of health information
as is consistent with the strategic plan under section
3001(c)(3) and that includes the recommendations under
paragraph (2). The Committee shall update such recommendations
and make new recommendations as appropriate.
``(2) Specific areas of standard development.--
``(A) In general.--The HIT Policy Committee shall
recommend the areas in which standards, implementation
specifications, and certification criteria are needed
for the electronic exchange and use of health
information for purposes of adoption under section 3004
and shall recommend an order of priority for the
development, harmonization, and recognition of such
standards, specifications, and certification criteria
among the areas so recommended. Such standards and
implementation specifications shall include named
standards, architectures, and software schemes for the
authentication and security of individually
identifiable health information and other information
as needed to ensure the reproducible development of
common solutions across disparate entities.
``(B) Areas required for consideration.--For
purposes of subparagraph (A), the HIT Policy Committee
shall make recommendations for at least the following
areas:
``(i) Technologies that protect the privacy
of health information and promote security in a
qualified electronic health record, including
for the segmentation and protection from
disclosure of specific and sensitive
individually identifiable health information
with the goal of minimizing the reluctance of
patients to seek care (or disclose information
about a condition) because of privacy concerns,
in accordance with applicable law, and for the
use and disclosure of limited data sets of such
information.
``(ii) A nationwide health information
technology infrastructure that allows for the
electronic use and accurate exchange of health
information.
``(iii) The utilization of a certified
electronic health record for each person in the
United States by 2014.
``(iv) Technologies that as a part of a
qualified electronic health record allow for an
accounting of disclosures made by a covered
entity (as defined for purposes of regulations
promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act of
1996) for purposes of treatment, payment, and
health care operations (as such terms are
defined for purposes of such regulations).
``(v) The use of certified electronic
health records to improve the quality of health
care, such as by promoting the coordination of
health care and improving continuity of health
care among health care providers, by reducing
medical errors, by improving population health,
and by advancing research and education.
``(C) Other areas for consideration.--In making
recommendations under subparagraph (A), the HIT Policy
Committee may consider the following additional areas:
``(i) The appropriate uses of a nationwide
health information infrastructure, including
for purposes of--
``(I) the collection of quality
data and public reporting;
``(II) biosurveillance and public
health;
``(III) medical and clinical
research; and
``(IV) drug safety.
``(ii) Self-service technologies that
facilitate the use and exchange of patient
information and reduce wait times.
``(iii) Telemedicine technologies, in order
to reduce travel requirements for patients in
remote areas.
``(iv) Technologies that facilitate home
health care and the monitoring of patients
recuperating at home.
``(v) Technologies that help reduce medical
errors.
``(vi) Technologies that facilitate the
continuity of care among health settings.
``(vii) Technologies that meet the needs of
diverse populations.
``(viii) Any other technology that the HIT
Policy Committee finds to be among the
technologies with the greatest potential to
improve the quality and efficiency of health
care.
``(3) Forum.--The HIT Policy Committee shall serve as a
forum for broad stakeholder input with specific expertise in
policies relating to the matters described in paragraphs (1)
and (2).
``(c) Membership and Operations.--
``(1) In general.--The National Coordinator shall provide
leadership in the establishment and operations of the HIT
Policy Committee.
``(2) Membership.--The membership of the HIT Policy
Committee shall at least reflect providers, ancillary health
care workers, consumers, purchasers, health plans, technology
vendors, researchers, relevant Federal agencies, and
individuals with technical expertise on health care quality,
privacy and security, and on the electronic exchange and use of
health information.
``(3) Consideration.--The National Coordinator shall ensure
that the relevant recommendations and comments from the
National Committee on Vital and Health Statistics are
considered in the development of policies.
``(d) Application of FACA.--The Federal Advisory Committee Act (5
U.S.C. App.), other than section 14 of such Act, shall apply to the HIT
Policy Committee.
``(e) Publication.--The Secretary shall provide for publication in
the Federal Register and the posting on the Internet website of the
Office of the National Coordinator for Health Information Technology of
all policy recommendations made by the HIT Policy Committee under this
section.
``SEC. 3003. HIT STANDARDS COMMITTEE.
``(a) Establishment.--There is established a committee to be known
as the HIT Standards Committee to recommend to the National Coordinator
standards, implementation specifications, and certification criteria
for the electronic exchange and use of health information for purposes
of adoption under section 3004, consistent with the implementation of
the strategic plan described in section 3001(c)(3) and beginning with
the areas listed in section 3002(b)(2)(B) in accordance with policies
developed by the HIT Policy Committee.
``(b) Duties.--
``(1) Standard development.--
``(A) In general.--The HIT Standards Committee
shall recommend to the National Coordinator standards,
implementation specifications, and certification
criteria described in subsection (a) that have been
developed, harmonized, or recognized by the HIT
Standards Committee. The HIT Standards Committee shall
update such recommendations and make new
recommendations as appropriate, including in response
to a notification sent under section 3004(b)(2). Such
recommendations shall be consistent with the latest
recommendations made by the HIT Policy Committee.
``(B) Pilot testing of standards and implementation
specifications.--In the development, harmonization, or
recognition of standards and implementation
specifications, the HIT Standards Committee shall, as
appropriate, provide for the testing of such standards
and specifications.
``(C) Consistency.--The standards, implementation
specifications, and certification criteria recommended
under this subsection shall be consistent with the
standards for information transactions and data
elements adopted pursuant to section 1173 of the Social
Security Act.
``(2) Forum.--The HIT Standards Committee shall serve as a
forum for the participation of a broad range of stakeholders to
provide input on the development, harmonization, and
recognition of standards, implementation specifications, and
certification criteria necessary for the development and
adoption of a nationwide health information technology
infrastructure that allows for the electronic use and exchange
of health information.
``(3) Schedule.--Not later than 90 days after the date of
the enactment of this title, the HIT Standards Committee shall
develop a schedule for the assessment of policy recommendations
developed by the HIT Policy Committee under section 3002. The
HIT Standards Committee shall update such schedule annually.
The Secretary shall publish such schedule in the Federal
Register.
``(4) Public input.--The HIT Standards Committee shall
conduct open public meetings and develop a process to allow for
public comment on the schedule described in paragraph (3) and
recommendations described in this subsection. Under such
process comments shall be submitted in a timely manner after
the date of publication of a recommendation under this
subsection.
``(c) Membership and Operations.--
``(1) In general.--The National Coordinator shall provide
leadership in the establishment and operations of the HIT
Standards Committee.
``(2) Membership.--The membership of the HIT Standards
Committee shall at least reflect providers, ancillary
healthcare workers, consumers, purchasers, health plans,
technology vendors, researchers, relevant Federal agencies, and
individuals with technical expertise on health care quality,
privacy and security, and on the electronic exchange and use of
health information.
``(3) Consideration.--The National Coordinator shall ensure
that the relevant recommendations and comments from the
National Committee on Vital and Health Statistics are
considered in the development of standards.
``(4) Assistance.--For the purposes of carrying out this
section, the Secretary may provide or ensure that financial
assistance is provided by the HIT Standards Committee to defray
in whole or in part any membership fees or dues charged by such
Committee to those consumer advocacy groups and not for profit
entities that work in the public interest as a part of their
mission.
``(d) Application of FACA.--The Federal Advisory Committee Act (5
U.S.C. App.), other than section 14, shall apply to the HIT Standards
Committee.
``(e) Publication.--The Secretary shall provide for publication in
the Federal Register and the posting on the Internet website of the
Office of the National Coordinator for Health Information Technology of
all recommendations made by the HIT Standards Committee under this
section.
``SEC. 3004. PROCESS FOR ADOPTION OF ENDORSED RECOMMENDATIONS; ADOPTION
OF INITIAL SET OF STANDARDS, IMPLEMENTATION
SPECIFICATIONS, AND CERTIFICATION CRITERIA.
``(a) Process for Adoption of Endorsed Recommendations.--
``(1) Review of endorsed standards, implementation
specifications, and certification criteria.--Not later than 90
days after the date of receipt of standards, implementation
specifications, or certification criteria endorsed under
section 3001(c), the Secretary, in consultation with
representatives of other relevant Federal agencies, shall
jointly review such standards, implementation specifications,
or certification criteria and shall determine whether or not to
propose adoption of such standards, implementation
specifications, or certification criteria.
``(2) Determination to adopt standards, implementation
specifications, and certification criteria.--If the Secretary
determines--
``(A) to propose adoption of any grouping of such
standards, implementation specifications, or
certification criteria, the Secretary shall, by
regulation, determine whether or not to adopt such
grouping of standards, implementation specifications,
or certification criteria; or
``(B) not to propose adoption of any grouping of
standards, implementation specifications, or
certification criteria, the Secretary shall notify the
National Coordinator and the HIT Standards Committee in
writing of such determination and the reasons for not
proposing the adoption of such recommendation.
``(3) Publication.--The Secretary shall provide for
publication in the Federal Register of all determinations made
by the Secretary under paragraph (1).
``(b) Adoption of Initial Set of Standards, Implementation
Specifications, and Certification Criteria.--
``(1) In general.--Not later than December 31, 2009, the
Secretary shall, through the rulemaking process described in
section 3003, adopt an initial set of standards, implementation
specifications, and certification criteria for the areas
required for consideration under section 3002(b)(2)(B).
``(2) Application of current standards, implementation
specifications, and certification criteria.--The standards,
implementation specifications, and certification criteria
adopted before the date of the enactment of this title through
the process existing through the Office of the National
Coordinator for Health Information Technology may be applied
towards meeting the requirement of paragraph (1).
``SEC. 3005. TRANSITIONS.
``(a) ONCHIT.--To the extent consistent with section 3001, all
functions, personnel, assets, liabilities, and administrative actions
applicable to the National Coordinator for Health Information
Technology appointed under Executive Order 13335 or the Office of such
National Coordinator on the date before the date of the enactment of
this title shall be transferred to the National Coordinator appointed
under section 3001(a) and the Office of such National Coordinator as of
the date of the enactment of this title.
``(b) AHIC.--
``(1) To the extent consistent with sections 3002 and 3003,
all functions, personnel, assets, and liabilities applicable to
the AHIC Successor, Inc. doing business as the National eHealth
Collaborative as of the day before the date of the enactment of
this title shall be transferred to the HIT Policy Committee or
the HIT Standards Committee, established under section 3002(a)
or 3003(a), as appropriate, as of the date of the enactment of
this title.
``(2) In carrying out section 3003(b)(1)(A), until
recommendations are made by the HIT Policy Committee,
recommendations of the HIT Standards Committee shall be
consistent with the most recent recommendations made by such
AHIC Successor, Inc.
``(c) Rules of Construction.--
``(1) ONCHIT.--Nothing in section 3001 or subsection (a)
shall be construed as requiring the creation of a new entity to
the extent that the Office of the National Coordinator for
Health Information Technology established pursuant to Executive
Order 13335 is consistent with the provisions of section 3001.
``(2) AHIC.--Nothing in sections 3002 or 3003 or subsection
(b) shall be construed as prohibiting the AHIC Successor, Inc.
doing business as the National eHealth Collaborative from
modifying its charter, duties, membership, and any other
structure or function required to be consistent with section
3002 and 3003 in a manner that would permit the Secretary to
choose to recognize such Community as the HIT Policy Committee
or the HIT Standards Committee.''.
Subtitle B--Incentives for the Use of Health Information Technology
PART I--MEDICARE PROGRAM
SEC. 4201. INCENTIVES FOR ELIGIBLE PROFESSIONALS.
(a) Incentive Payments.--Section 1848 of the Social Security Act
(42 U.S.C. 1395w-4) is amended by adding at the end the following new
subsection:
``(o) Incentives for Adoption and Meaningful Use of Certified EHR
Technology.--
``(1) Incentive payments.--
``(A) In general.--
``(i) In general.--Subject to clause (ii)
and the succeeding subparagraphs of this
paragraph, with respect to covered professional
services furnished by an eligible professional
during a payment year (as defined in
subparagraph (E)), if the eligible professional
is a meaningful EHR user (as determined under
paragraph (2)) for the reporting period with
respect to such year, in addition to the amount
otherwise paid under this part, there also
shall be paid to the eligible professional (or
to an employer or facility in the cases
described in clause (A) of section 1842(b)(6)),
from the Federal Supplementary Medical
Insurance Trust Fund established under section
1841 an amount equal to 75 percent of the
Secretary's estimate (based on claims submitted
not later than 2 months after the end of the
payment year) of the allowed charges under this
part for all such covered professional services
furnished by the eligible professional during
such year.
``(ii) No incentive payments with respect
to years after 2015.--No incentive payments may
be made under this subsection with respect to a
year after 2015.
``(B) Limitations on amounts of incentive
payments.--
``(i) In general.--In no case shall the
amount of the incentive payment provided under
this paragraph for an eligible professional for
a payment year exceed the applicable amount
specified under this subparagraph with respect
to such eligible professional and such year.
``(ii) Amount.--Subject to clauses (iii)
through (v), the applicable amount specified in
this subparagraph for an eligible professional
is as follows:
``(I) For the first payment year
for such professional, $15,000 (or, if
the first payment year for such
eligible professional is 2011 or 2012,
$18,000).
``(II) For the second payment year
for such professional, $12,000.
``(III) For the third payment year
for such professional, $8,000.
``(IV) For the fourth payment year
for such professional, $4,000.
``(V) For the fifth payment year
for such professional, $2,000.
``(VI) For any succeeding payment
year for such professional, $0.
``(iii) Phase down for eligible
professionals first adopting ehr in 2014.--If
the first payment year for an eligible
professional is 2014, then the amount specified
in this subparagraph for a payment year for
such professional is the same as the amount
specified in clause (ii) for such payment year
for an eligible professional whose first
payment year is 2013.
``(iv) Increase for certain rural eligible
professionals.--In the case of an eligible
professional who predominantly furnishes
services under this part in a rural area that
is designated by the Secretary (under section
332(a)(1)(A) of the Public Health Service Act)
as a health professional shortage area, the
amount that would otherwise apply for a payment
year for such professional under subclauses (I)
through (V) of clause (ii) shall be increased
by 25 percent. In implementing the preceding
sentence, the Secretary may, as determined
appropriate, apply provisions of subsections
(m) and (u) of section 1833 in a similar manner
as such provisions apply under such subsection.
``(v) No incentive payment if first
adopting after 2014.--If the first payment year
for an eligible professional is after 2014 then
the applicable amount specified in this
subparagraph for such professional for such
year and any subsequent year shall be $0.
``(C) Non-application to hospital-based eligible
professionals.--
``(i) In general.--No incentive payment may
be made under this paragraph in the case of a
hospital-based eligible professional.
``(ii) Hospital-based eligible
professional.--For purposes of clause (i), the
term `hospital-based eligible professional'
means, with respect to covered professional
services furnished by an eligible professional
during the reporting period for a payment year,
an eligible professional, such as a
pathologist, anesthesiologist, or emergency
physician, who furnishes substantially all of
such services in a hospital setting (whether
inpatient or outpatient) and through the use of
the facilities and equipment, including
qualified electronic health records, of the
hospital.
``(D) Payment.--
``(i) Form of payment.--The payment under
this paragraph may be in the form of a single
consolidated payment or in the form of such
periodic installments as the Secretary may
specify.
``(ii) Coordination of application of
limitation for professionals in different
practices.--In the case of an eligible
professional furnishing covered professional
services in more than one practice (as
specified by the Secretary), the Secretary
shall establish rules to coordinate the
incentive payments, including the application
of the limitation on amounts of such incentive
payments under this paragraph, among such
practices.
``(iii) Coordination with medicaid.--The
Secretary shall seek, to the maximum extent
practicable, to avoid duplicative requirements
from Federal and State Governments to
demonstrate meaningful use of certified EHR
technology under this title and title XIX. In
doing so, the Secretary may deem satisfaction
of State requirements for such meaningful use
for a payment year under title XIX to be
sufficient to qualify as meaningful use under
this subsection and subsection (a)(7) and vice
versa. The Secretary may also adjust the
reporting periods under such title and such
subsections in order to carry out this clause.
``(E) Payment year defined.--
``(i) In general.--For purposes of this
subsection, the term `payment year' means a
year beginning with 2011.
``(ii) First, second, etc. payment year.--
The term `first payment year' means, with
respect to covered professional services
furnished by an eligible professional, the
first year for which an incentive payment is
made for such services under this subsection.
The terms `second payment year', `third payment
year', `fourth payment year', and `fifth
payment year' mean, with respect to covered
professional services furnished by such
eligible professional, each successive year
immediately following the first payment year
for such professional.
``(2) Meaningful ehr user.--
``(A) In general.--For purposes of paragraph (1),
an eligible professional shall be treated as a
meaningful EHR user for a reporting period for a
payment year (or, for purposes of subsection (a)(7),
for a reporting period under such subsection for a
year) if each of the following requirements is met:
``(i) Meaningful use of certified ehr
technology.--The eligible professional
demonstrates to the satisfaction of the
Secretary, in accordance with subparagraph
(C)(i), that during such period the
professional is using certified EHR technology
in a meaningful manner, which shall include the
use of electronic prescribing as determined to
be appropriate by the Secretary.
``(ii) Information exchange.--The eligible
professional demonstrates to the satisfaction
of the Secretary, in accordance with
subparagraph (C)(i), that during such period
such certified EHR technology is connected in a
manner that provides, in accordance with law
and standards applicable to the exchange of
information, for the electronic exchange of
health information to improve the quality of
health care, such as promoting care
coordination.
``(iii) Reporting on measures using ehr.--
Subject to subparagraph (B)(ii) and using such
certified EHR technology, the eligible
professional submits information for such
period, in a form and manner specified by the
Secretary, on such clinical quality measures
and such other measures as selected by the
Secretary under subparagraph (B)(i).
The Secretary may provide for the use of alternative
means for meeting the requirements of clauses (i),
(ii), and (iii) in the case of an eligible professional
furnishing covered professional services in a group
practice (as defined by the Secretary). The Secretary
shall seek to improve the use of electronic health
records and health care quality over time by requiring
more stringent measures of meaningful use selected
under this paragraph.
``(B) Reporting on measures.--
``(i) Selection.--The Secretary shall
select measures for purposes of subparagraph
(A)(iii) but only consistent with the
following:
``(I) The Secretary shall provide
preference to clinical quality measures
that have been endorsed by the entity
with a contract with the Secretary
under section 1890(a).
``(II) Prior to any measure being
selected under this subparagraph, the
Secretary shall publish in the Federal
Register such measure and provide for a
period of public comment on such
measure.
``(ii) Limitation.--The Secretary may not
require the electronic reporting of information
on clinical quality measures under subparagraph
(A)(iii) unless the Secretary has the capacity
to accept the information electronically, which
may be on a pilot basis.
``(iii) Coordination of reporting of
information.--In selecting such measures, and
in establishing the form and manner for
reporting measures under subparagraph (A)(iii),
the Secretary shall seek to avoid redundant or
duplicative reporting otherwise required,
including reporting under subsection (k)(2)(C).
``(C) Demonstration of meaningful use of certified
ehr technology and information exchange.--
``(i) In general.--A professional may
satisfy the demonstration requirement of
clauses (i) and (ii) of subparagraph (A)
through means specified by the Secretary, which
may include--
``(I) an attestation;
``(II) the submission of claims
with appropriate coding (such as a code
indicating that a patient encounter was
documented using certified EHR
technology);
``(III) a survey response;
``(IV) reporting under subparagraph
(A)(iii); and
``(V) other means specified by the
Secretary.
``(ii) Use of part d data.--Notwithstanding
sections 1860D-15(d)(2)(B) and 1860D-15(f)(2),
the Secretary may use data regarding drug
claims submitted for purposes of section 1860D-
15 that are necessary for purposes of
subparagraph (A).
``(3) Application.--
``(A) Physician reporting system rules.--Paragraphs
(5), (6), and (8) of subsection (k) shall apply for
purposes of this subsection in the same manner as they
apply for purposes of such subsection.
``(B) Coordination with other payments.--The
provisions of this subsection shall not be taken into
account in applying the provisions of subsection (m) of
this section and of section 1833(m) and any payment
under such provisions shall not be taken into account
in computing allowable charges under this subsection.
``(C) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the determination of any
incentive payment under this subsection and the payment
adjustment under subsection (a)(7), including the
determination of a meaningful EHR user under paragraph
(2), a limitation under paragraph (1)(B), and the
exception under subsection (a)(7)(B).
``(D) Posting on website.--The Secretary shall post
on the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format,
a list of the names, business addresses, and business
phone numbers of the eligible professionals who are
meaningful EHR users and, as determined appropriate by
the Secretary, of group practices receiving incentive
payments under paragraph (1).
``(4) Certified ehr technology defined.--For purposes of
this section, the term `certified EHR technology' means a
qualified electronic health record (as defined in 3000(13) of
the Public Health Service Act) that is certified pursuant to
section 3001(c)(5) of such Act as meeting standards adopted
under section 3004 of such Act that are applicable to the type
of record involved (as determined by the Secretary, such as an
ambulatory electronic health record for office-based physicians
or an inpatient hospital electronic health record for
hospitals).
``(5) Definitions.--For purposes of this subsection:
``(A) Covered professional services.--The term
`covered professional services' has the meaning given
such term in subsection (k)(3).
``(B) Eligible professional.--The term `eligible
professional' means a physician, as defined in section
1861(r).
``(C) Reporting period.--The term `reporting
period' means any period (or periods), with respect to
a payment year, as specified by the Secretary.''.
(b) Incentive Payment Adjustment.--Section 1848(a) of the Social
Security Act (42 U.S.C. 1395w-4(a)) is amended by adding at the end the
following new paragraph:
``(7) Incentives for meaningful use of certified ehr
technology.--
``(A) Adjustment.--
``(i) In general.--Subject to subparagraphs
(B) and (D), with respect to covered
professional services furnished by an eligible
professional during 2015 or any subsequent
payment year, if the eligible professional is
not a meaningful EHR user (as determined under
subsection (o)(2)) for a reporting period for
the year, the fee schedule amount for such
services furnished by such professional during
the year (including the fee schedule amount for
purposes of determining a payment based on such
amount) shall be equal to the applicable
percent of the fee schedule amount that would
otherwise apply to such services under this
subsection (determined after application of
paragraph (3) but without regard to this
paragraph).
``(ii) Applicable percent.--Subject to
clause (iii), for purposes of clause (i), the
term `applicable percent' means--
``(I) for 2015, 99 percent (or, in
the case of an eligible professional
who was subject to the application of
the payment adjustment under section
1848(a)(5) for 2014, 98 percent);
``(II) for 2016, 98 percent; and
``(III) for 2017 and each
subsequent year, 97 percent.
``(iii) Authority to decrease applicable
percentage for 2018 and subsequent years.--For
2018 and each subsequent year, if the Secretary
finds that the proportion of eligible
professionals who are meaningful EHR users (as
determined under subsection (o)(2)) is less
than 75 percent, the applicable percent shall
be decreased by 1 percentage point from the
applicable percent in the preceding year, but
in no case shall the applicable percent be less
than 95 percent.
``(B) Significant hardship exception.--The
Secretary may, on a case-by-case basis, exempt an
eligible professional from the application of the
payment adjustment under subparagraph (A) if the
Secretary determines, subject to annual renewal, that
compliance with the requirement for being a meaningful
EHR user would result in a significant hardship, such
as in the case of an eligible professional who
practices in a rural area without sufficient Internet
access. In no case may an eligible professional be
granted an exemption under this subparagraph for more
than 5 years.
``(C) Application of physician reporting system
rules.--Paragraphs (5), (6), and (8) of subsection (k)
shall apply for purposes of this paragraph in the same
manner as they apply for purposes of such subsection.
``(D) Non-application to hospital-based eligible
professionals.--No payment adjustment may be made under
subparagraph (A) in the case of hospital-based eligible
professionals (as defined in subsection (o)(1)(C)(ii)).
``(E) Definitions.--For purposes of this paragraph:
``(i) Covered professional services.--The
term `covered professional services' has the
meaning given such term in subsection (k)(3).
``(ii) Eligible professional.--The term
`eligible professional' means a physician, as
defined in section 1861(r).
``(iii) Reporting period.--The term
`reporting period' means, with respect to a
year, a period specified by the Secretary.''.
(c) Application to Certain MA-Affiliated Eligible Professionals.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is amended
by adding at the end the following new subsection:
``(l) Application of Eligible Professional Incentives for Certain
MA Organizations for Adoption and Meaningful Use of Certified EHR
Technology.--
``(1) In general.--Subject to paragraphs (3) and (4), in
the case of a qualifying MA organization, the provisions of
sections 1848(o) and 1848(a)(7) shall apply with respect to
eligible professionals described in paragraph (2) of the
organization who the organization attests under paragraph (6)
to be meaningful EHR users in a similar manner as they apply to
eligible professionals under such sections. Incentive payments
under paragraph (3) shall be made to and payment adjustments
under paragraph (4) shall apply to such qualifying
organizations.
``(2) Eligible professional described.--With respect to a
qualifying MA organization, an eligible professional described
in this paragraph is an eligible professional (as defined for
purposes of section 1848(o)) who--
``(A)(i) is employed by the organization; or
``(ii)(I) is employed by, or is a partner of, an
entity that through contract with the organization
furnishes at least 80 percent of the entity's patient
care services to enrollees of such organization; and
``(II) furnishes at least 75 percent of the
professional services of the eligible professional to
enrollees of the organization; and
``(B) furnishes, on average, at least 20 hours per
week of patient care services.
``(3) Eligible professional incentive payments.--
``(A) In general.--In applying section 1848(o)
under paragraph (1), instead of the additional payment
amount under section 1848(o)(1)(A) and subject to
subparagraph (B), the Secretary may substitute an
amount determined by the Secretary to the extent
feasible and practical to be similar to the estimated
amount in the aggregate that would be payable if
payment for services furnished by such professionals
was payable under part B instead of this part.
``(B) Avoiding duplication of payments.--
``(i) In general.--If an eligible
professional described in paragraph (2) is
eligible for the maximum incentive payment
under section 1848(o)(1)(A) for the same
payment period, the payment incentive shall be
made only under such section and not under this
subsection.
``(ii) Methods.--In the case of an eligible
professional described in paragraph (2) who is
eligible for an incentive payment under section
1848(o)(1)(A) but is not described in clause
(i) for the same payment period, the Secretary
shall develop a process--
``(I) to ensure that duplicate
payments are not made with respect to
an eligible professional both under
this subsection and under section
1848(o)(1)(A); and
``(II) to collect data from
Medicare Advantage organizations to
ensure against such duplicate payments.
``(C) Fixed schedule for application of limitation
on incentive payments for all eligible professionals.--
In applying section 1848(o)(1)(B)(ii) under
subparagraph (A), in accordance with rules specified by
the Secretary, a qualifying MA organization shall
specify a year (not earlier than 2011) that shall be
treated as the first payment year for all eligible
professionals with respect to such organization.
``(D) Cap for economies of scale.--In no case may
an incentive payment be made under this subsection,
including under subparagraph (A), to a qualifying MA
organization with respect to more than 5,000 eligible
professionals of the organization.
``(4) Payment adjustment.--
``(A) In general.--In applying section 1848(a)(7)
under paragraph (1), instead of the payment adjustment
being an applicable percent of the fee schedule amount
for a year under such section, subject to subparagraph
(D), the payment adjustment under paragraph (1) shall
be equal to the percent specified in subparagraph (B)
for such year of the payment amount otherwise provided
under this section for such year.
``(B) Specified percent.--The percent specified
under this subparagraph for a year is 100 percent minus
a number of percentage points equal to the product of--
``(i) a percentage equal to 100 percent
reduced by the applicable percent (under
section 1848(a)(7)(A)(ii)) for the year; and
``(ii) a percentage equal to the
Secretary's estimate of the proportion for the
year, of the expenditures under parts A and B
that are not attributable to this part, that
are attributable to expenditures for
physicians' services.
``(C) Application of payment adjustment.--In the
case that a qualifying MA organization attests that not
all eligible professionals of the organization are
meaningful EHR users with respect to a year, the
Secretary shall apply the payment adjustment under this
paragraph based on the proportion of all eligible
professionals of the organization that are not
meaningful EHR users for such year. If the number of
eligible professionals of the organization that are not
meaningful EHR users for such year exceeds 5,000, such
number shall be reduced to 5,000 for purposes of
determining the proportion under the preceding
sentence.
``(5) Qualifying ma organization defined.--In this
subsection and subsection (m), the term `qualifying MA
organization' means a Medicare Advantage organization that is
organized as a health maintenance organization (as defined in
section 2791(b)(3) of the Public Health Service Act).
``(6) Meaningful ehr user attestation.--For purposes of
this subsection and subsection (m), a qualifying MA
organization shall submit an attestation, in a form and manner
specified by the Secretary which may include the submission of
such attestation as part of submission of the initial bid under
section 1854(a)(1)(A)(iv), identifying--
``(A) whether each eligible professional described
in paragraph (2), with respect to such organization is
a meaningful EHR user (as defined in section
1848(o)(2)) for a year specified by the Secretary; and
``(B) whether each eligible hospital described in
subsection (m)(1), with respect to such organization,
is a meaningful EHR user (as defined in section
1886(n)(3)) for an applicable period specified by the
Secretary.
``(7) Posting on website.--The Secretary shall post on the
Internet website of the Centers for Medicare & Medicaid
Services, in an easily understandable format, a list of the
names, business addresses, and business phone numbers of--
``(A) each qualifying MA organization receiving an
incentive payment under this subsection for eligible
professionals of the organization; and
``(B) the eligible professionals of such
organization for which such incentive payment is
based.''.
(d) Conforming Amendments.--Section 1853 of the Social Security Act
(42 U.S.C. 1395w-23) is amended--
(1) in subsection (a)(1)(A), by striking ``and (i)'' and
inserting ``(i), and (l)'';
(2) in subsection (c)--
(A) in paragraph (1)(D)(i), by striking ``section
1886(h)'' and inserting ``sections 1848(o) and
1886(h)''; and
(B) in paragraph (6)(A), by inserting after ``under
part B,'' the following: ``excluding expenditures
attributable to subsections (a)(7) and (o) of section
1848,''; and
(3) in subsection (f), by inserting ``and for payments
under subsection (l)'' after ``with the organization''.
(e) Conforming Amendments to e-Prescribing.--
(1) Section 1848(a)(5)(A) of the Social Security Act (42
U.S.C. 1395w-4(a)(5)(A)) is amended--
(A) in clause (i), by striking ``or any subsequent
year'' and inserting ``, 2013, or 2014''; and
(B) in clause (ii), by striking ``and each
subsequent year''.
(2) Section 1848(m)(2) of such Act (42 U.S.C. 1395w-
4(m)(2)) is amended--
(A) in subparagraph (A), by striking ``For 2009''
and inserting ``Subject to subparagraph (D), for
2009''; and
(B) by adding at the end the following new
subparagraph:
``(D) Limitation with respect to ehr incentive
payments.--The provisions of this paragraph shall not
apply to an eligible professional (or, in the case of a
group practice under paragraph (3)(C), to the group
practice) if, for the reporting period the eligible
professional (or group practice) receives an incentive
payment under subsection (o)(1)(A) with respect to a
certified EHR technology (as defined in subsection
(o)(4)) that has the capability of electronic
prescribing.''.
(f) Providing Assistance to Eligible Professionals and Certain
Hospitals.--
(1) In general.--The Secretary of Health and Human Services
shall provide assistance to eligible professionals (as defined
in section 1848(o)(5), as added by subsection (a)), Medicaid
providers (as defined in section 1903(t)(2) of such Act, as
added by section 4211(a)), and eligible hospitals (as defined
in section 1886(n)(6)(A) of such Act, as added by section
4202(a)) located in rural or other medically underserved areas
to successfully choose, implement, and use certified EHR
technology (as defined in section 1848(o)(4) of the Social
Security Act, as added by section 4201(a)).
(2) Use of entities with expertise.--To the extent
practicable, the Secretary shall provide such assistance
through entities that have expertise in the choice,
implementation, and use of such certified EHR technology.
SEC. 4202. INCENTIVES FOR HOSPITALS.
(a) Incentive Payment.--Section 1886 of the Social Security Act (42
U.S.C. 1395ww) is amended by adding at the end the following new
subsection:
``(n) Incentives for Adoption and Meaningful Use of Certified EHR
Technology.--
``(1) In general.--Subject to the succeeding provisions of
this subsection, with respect to inpatient hospital services
furnished by an eligible hospital during a payment year (as
defined in paragraph (2)(G)), if the eligible hospital is a
meaningful EHR user (as determined under paragraph (3)) for the
reporting period with respect to such year, in addition to the
amount otherwise paid under this section, there also shall be
paid to the eligible hospital, from the Federal Hospital
Insurance Trust Fund established under section 1817, an amount
equal to the applicable amount specified in paragraph (2)(A)
for the hospital for such payment year.
``(2) Payment amount.--
``(A) In general.--Subject to the succeeding
subparagraphs of this paragraph, the applicable amount
specified in this subparagraph for an eligible hospital
for a payment year is equal to the product of the
following:
``(i) Initial amount.--The sum of--
``(I) the base amount specified in
subparagraph (B); plus
``(II) the discharge related amount
specified in subparagraph (C) for a 12-
month period selected by the Secretary
with respect to such payment year.
``(ii) Medicare share.--The Medicare share
as specified in subparagraph (D) for the
hospital for a period selected by the Secretary
with respect to such payment year.
``(iii) Transition factor.--The transition
factor specified in subparagraph (E) for the
hospital for the payment year.
``(B) Base amount.--The base amount specified in
this subparagraph is $2,000,000.
``(C) Discharge related amount.--The discharge
related amount specified in this subparagraph for a 12-
month period selected by the Secretary shall be
determined as the sum of the amount, based upon total
discharges (regardless of any source of payment) for
the period, for each discharge up to the 23,000th
discharge as follows:
``(i) For the 1,150th through the 9,200th
discharge, $200.
``(ii) For the 9,201st through the 13,800th
discharge, 50 percent of the amount specified
in clause (i).
``(iii) For the 13,801st through the
23,000th discharge, 30 percent of the amount
specified in clause (i).
``(D) Medicare share.--The Medicare share specified
under this subparagraph for a hospital for a period
selected by the Secretary for a payment year is equal
to the fraction--
``(i) the numerator of which is the sum
(for such period and with respect to the
hospital) of--
``(I) the number of inpatient-bed-
days (as established by the Secretary)
which are attributable to individuals
with respect to whom payment may be
made under part A; and
``(II) the number of inpatient-bed-
days (as so established) which are
attributable to individuals who are
enrolled with a Medicare Advantage
organization under part C; and
``(ii) the denominator of which is the
product of--
``(I) the total number of
inpatient-bed-days with respect to the
hospital during such period; and
``(II) the total amount of the
hospital's charges during such period,
not including any charges that are
attributable to charity care (as such
term is used for purposes of hospital
cost reporting under this title),
divided by the total amount of the
hospital's charges during such period.
Insofar as the Secretary determines that data are not
available on charity care necessary to calculate the
portion of the formula specified in clause (ii)(II),
the Secretary shall use data on uncompensated care and
may adjust such data so as to be an appropriate proxy
for charity care including a downward adjustment to
eliminate bad debt data from uncompensated care data.
In the absence of the data necessary, with respect to a
hospital, for the Secretary to compute the amount
described in clause (ii)(II), the amount under such
clause shall be deemed to be 1. In the absence of data,
with respect to a hospital, necessary to compute the
amount described in clause (i)(II), the amount under
such clause shall be deemed to be 0.
``(E) Transition factor specified.--
``(i) In general.--Subject to clause (ii),
the transition factor specified in this
subparagraph for an eligible hospital for a
payment year is as follows:
``(I) For the first payment year
for such hospital, 1.
``(II) For the second payment year
for such hospital, \3/4\.
``(III) For the third payment year
for such hospital, \1/2\.
``(IV) For the fourth payment year
for such hospital, \1/4\.
``(V) For any succeeding payment
year for such hospital, 0.
``(ii) Phase down for eligible hospitals
first adopting ehr after 2013.--If the first
payment year for an eligible hospital is after
2013, then the transition factor specified in
this subparagraph for a payment year for such
hospital is the same as the amount specified in
clause (i) for such payment year for an
eligible hospital for which the first payment
year is 2013. If the first payment year for an
eligible hospital is after 2015 then the
transition factor specified in this
subparagraph for such hospital and for such
year and any subsequent year shall be 0.
``(F) Form of payment.--The payment under this
subsection for a payment year may be in the form of a
single consolidated payment or in the form of such
periodic installments as the Secretary may specify.
``(G) Payment year defined.--
``(i) In general.--For purposes of this
subsection, the term `payment year' means a
fiscal year beginning with fiscal year 2011.
``(ii) First, second, etc. payment year.--
The term `first payment year' means, with
respect to inpatient hospital services
furnished by an eligible hospital, the first
fiscal year for which an incentive payment is
made for such services under this subsection.
The terms `second payment year', `third payment
year', and `fourth payment year' mean, with
respect to an eligible hospital, each
successive year immediately following the first
payment year for that hospital.
``(3) Meaningful ehr user.--
``(A) In general.--For purposes of paragraph (1),
an eligible hospital shall be treated as a meaningful
EHR user for a reporting period for a payment year (or,
for purposes of subsection (b)(3)(B)(ix), for a
reporting period under such subsection for a fiscal
year) if each of the following requirements are met:
``(i) Meaningful use of certified ehr
technology.--The eligible hospital demonstrates
to the satisfaction of the Secretary, in
accordance with subparagraph (C)(i), that
during such period the hospital is using
certified EHR technology in a meaningful
manner.
``(ii) Information exchange.--The eligible
hospital demonstrates to the satisfaction of
the Secretary, in accordance with subparagraph
(C)(i), that during such period such certified
EHR technology is connected in a manner that
provides, in accordance with law and standards
applicable to the exchange of information, for
the electronic exchange of health information
to improve the quality of health care, such as
promoting care coordination.
``(iii) Reporting on measures using ehr.--
Subject to subparagraph (B)(ii) and using such
certified EHR technology, the eligible hospital
submits information for such period, in a form
and manner specified by the Secretary, on such
clinical quality measures and such other
measures as selected by the Secretary under
subparagraph (B)(i).
The Secretary shall seek to improve the use of
electronic health records and health care quality over
time by requiring more stringent measures of meaningful
use selected under this paragraph.
``(B) Reporting on measures.--
``(i) Selection.--The Secretary shall
select measures for purposes of subparagraph
(A)(iii) but only consistent with the
following:
``(I) The Secretary shall provide
preference to clinical quality measures
that have been selected for purposes of
applying subsection (b)(3)(B)(viii) or
that have been endorsed by the entity
with a contract with the Secretary
under section 1890(a).
``(II) Prior to any measure (other
than a clinical quality measure that
has been selected for purposes of
applying subsection (b)(3)(B)(viii))
being selected under this subparagraph,
the Secretary shall publish in the
Federal Register such measure and
provide for a period of public comment
on such measure.
``(ii) Limitations.--The Secretary may not
require the electronic reporting of information
on clinical quality measures under subparagraph
(A)(iii) unless the Secretary has the capacity
to accept the information electronically, which
may be on a pilot basis.
``(iii) Coordination of reporting of
information.--In selecting such measures, and
in establishing the form and manner for
reporting measures under subparagraph (A)(iii),
the Secretary shall seek to avoid redundant or
duplicative reporting with reporting otherwise
required, including reporting under subsection
(b)(3)(B)(viii).
``(C) Demonstration of meaningful use of certified
ehr technology and information exchange.--
``(i) In general.--A hospital may satisfy
the demonstration requirement of clauses (i)
and (ii) of subparagraph (A) through means
specified by the Secretary, which may include--
``(I) an attestation;
``(II) the submission of claims
with appropriate coding (such as a code
indicating that inpatient care was
documented using certified EHR
technology);
``(III) a survey response;
``(IV) reporting under subparagraph
(A)(iii); and
``(V) other means specified by the
Secretary.
``(ii) Use of part d data.--Notwithstanding
sections 1860D-15(d)(2)(B) and 1860D-15(f)(2),
the Secretary may use data regarding drug
claims submitted for purposes of section 1860D-
15 that are necessary for purposes of
subparagraph (A).
``(4) Application.--
``(A) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise of the determination of any
incentive payment under this subsection and the payment
adjustment under subsection (b)(3)(B)(ix), including
the determination of a meaningful EHR user under
paragraph (3), determination of measures applicable to
services furnished by eligible hospitals under this
subsection, and the exception under subsection
(b)(3)(B)(ix)(II).
``(B) Posting on website.--The Secretary shall post
on the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format,
a list of the names of the eligible hospitals that are
meaningful EHR users under this subsection or
subsection (b)(3)(B)(ix) and other relevant data as
determined appropriate by the Secretary. The Secretary
shall ensure that a hospital has the opportunity to
review the other relevant data that are to be made
public with respect to the hospital prior to such data
being made public.
``(5) Certified ehr technology defined.--The term
`certified EHR technology' has the meaning given such term in
section 1848(o)(4).
``(6) Definitions.--For purposes of this subsection:
``(A) Eligible hospital.--The term `eligible
hospital' means--
``(i) a subsection (d) hospital; and
``(ii) a critical access hospital (as
defined in section 1861(mm)(1)).
``(B) Reporting period.--The term `reporting
period' means any period (or periods), with respect to
a payment year, as specified by the Secretary.''.
(b) Incentive Market Basket Adjustment.--
(1) In general.--Section 1886(b)(3)(B) of the Social
Security Act (42 U.S.C. 1395ww(b)(3)(B)) is amended--
(A) in clause (viii)(I), by inserting ``(or,
beginning with fiscal year 2016, by one-quarter)''
after ``2.0 percentage points''; and
(B) by adding at the end the following new clause:
``(ix)(I) For purposes of clause (i) for fiscal year 2015 and each
subsequent fiscal year, in the case of an eligible hospital (as defined
in subsection (n)(6)(A)) that is not a meaningful EHR user (as defined
in subsection (n)(3)) for the reporting period for such fiscal year,
three-quarters of the applicable percentage increase otherwise
applicable under clause (i) for such fiscal year shall be reduced by
33\1/3\ percent for fiscal year 2015, 66\2/3\ percent for fiscal year
2016, and 100 percent for fiscal year 2017 and each subsequent fiscal
year. Such reduction shall apply only with respect to the fiscal year
involved and the Secretary shall not take into account such reduction
in computing the applicable percentage increase under clause (i) for a
subsequent fiscal year.
``(II) The Secretary may, on a case-by-case basis, exempt a
subsection (d) hospital from the application of subclause (I) with
respect to a fiscal year if the Secretary determines, subject to annual
renewal, that requiring such hospital to be a meaningful EHR user
during such fiscal year would result in a significant hardship, such as
in the case of a hospital in a rural area without sufficient Internet
access. In no case may a hospital be granted an exemption under this
subclause for more than 5 years.
``(III) For fiscal year 2015 and each subsequent fiscal year, a
State in which hospitals are paid for services under section 1814(b)(3)
shall adjust the payments to each subsection (d) hospital in the State
that is not a meaningful EHR user (as defined in subsection (n)(3)) in
a manner that is designed to result in an aggregate reduction in
payments to hospitals in the State that is equivalent to the aggregate
reduction that would have occurred if payments had been reduced to each
subsection (d) hospital in the State in a manner comparable to the
reduction under the previous provisions of this clause. The State shall
report to the Secretary the methodology it will use to make the payment
adjustment under the previous sentence.
``(IV) For purposes of this clause, the term `reporting period'
means, with respect to a fiscal year, any period (or periods), with
respect to the fiscal year, as specified by the Secretary.''.
(2) Critical access hospitals.--Section 1814(l) of the
Social Security Act (42 U.S.C. 1395f(l)) is amended--
(A) in subparagraph (1), by striking ``paragraph
(2)'' and inserting ``paragraphs (2) and (3)''; and
(B) by adding at the end the following new
paragraph:
``(3)(A) Subject to subparagraph (B), for fiscal year 2015 and each
subsequent fiscal year, in the case of a critical access hospital that
is not a meaningful EHR user (as defined in section 1886(n)(3)) for the
reporting period for such fiscal year, paragraph (1) shall be applied
by substituting the applicable percent under subparagraph (C) for the
percent described in such paragraph (1).
``(B) The Secretary may, on a case-by-case basis, exempt a critical
access hospital from the application of subparagraph (A) with respect
to a fiscal year if the Secretary determines, subject to annual
renewal, that requiring such hospital to be a meaningful EHR user
during such fiscal year would result in a significant hardship, such as
in the case of a hospital in a rural area without sufficient Internet
access. In no case may a hospital be granted an exemption under this
subparagraph for more than 5 years.
``(C) The percent described in this subparagraph is--
``(i) for fiscal year 2015, 100.66 percent;
``(ii) for fiscal year 2016, 100.33 percent; and
``(iii) for fiscal year 2017 and each subsequent fiscal
year, 100 percent.''.
(c) Application to Certain MA-Affiliated Eligible Hospitals.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as
amended by section 4201(c), is further amended by adding at the end the
following new subsection:
``(m) Application of Eligible Hospital Incentives for Certain MA
Organizations for Adoption and Meaningful Use of Certified EHR
Technology.--
``(1) Application.--Subject to paragraphs (3) and (4), in
the case of a qualifying MA organization, the provisions of
sections 1814(l)(3), 1886(n), and 1886(b)(3)(B)(ix) shall apply
with respect to eligible hospitals described in paragraph (2)
of the organization which the organization attests under
subsection (l)(6) to be meaningful EHR users in a similar
manner as they apply to eligible hospitals under such sections.
Incentive payments under paragraph (3) shall be made to and
payment adjustments under paragraph (4) shall apply to such
qualifying organizations.
``(2) Eligible hospital described.--With respect to a
qualifying MA organization, an eligible hospital described in
this paragraph is an eligible hospital (as defined in section
1886(n)(6)(A)) that is under common corporate governance with
such organization and serves individuals enrolled under an MA
plan offered by such organization.
``(3) Eligible hospital incentive payments.--
``(A) In general.--In applying section 1886(n)(2)
under paragraph (1), instead of the additional payment
amount under section 1886(n)(2), there shall be
substituted an amount determined by the Secretary to be
similar to the estimated amount in the aggregate that
would be payable if payment for services furnished by
such hospitals was payable under part A instead of this
part. In implementing the previous sentence, the
Secretary--
``(i) shall, insofar as data to determine
the discharge related amount under section
1886(n)(2)(C) for an eligible hospital are not
available to the Secretary, use such
alternative data and methodology to estimate
such discharge related amount as the Secretary
determines appropriate; and
``(ii) shall, insofar as data to determine
the medicare share described in section
1886(n)(2)(D) for an eligible hospital are not
available to the Secretary, use such
alternative data and methodology to estimate
such share, which data and methodology may
include use of the inpatient bed days (or
discharges) with respect to an eligible
hospital during the appropriate period which
are attributable to both individuals for whom
payment may be made under part A or individuals
enrolled in an MA plan under a Medicare
Advantage organization under this part as a
proportion of the total number of patient-bed-
days (or discharges) with respect to such
hospital during such period.
``(B) Avoiding duplication of payments.--
``(i) In general.--In the case of a
hospital that for a payment year is an eligible
hospital described in paragraph (2) and for
which at least one-third of their discharges
(or bed-days) of Medicare patients for the year
are covered under part A, payment for the
payment year shall be made only under section
1886(n) and not under this subsection.
``(ii) Methods.--In the case of a hospital
that is an eligible hospital described in
paragraph (2) and also is eligible for an
incentive payment under section 1886(n) but is
not described in clause (i) for the same
payment period, the Secretary shall develop a
process--
``(I) to ensure that duplicate
payments are not made with respect to
an eligible hospital both under this
subsection and under section 1886(n);
and
``(II) to collect data from
Medicare Advantage organizations to
ensure against such duplicate payments.
``(4) Payment adjustment.--
``(A) Subject to paragraph (3), in the case of a
qualifying MA organization (as defined in section
1853(l)(5)), if, according to the attestation of the
organization submitted under subsection (l)(6) for an
applicable period, one or more eligible hospitals (as
defined in section 1886(n)(6)(A)) that are under common
corporate governance with such organization and that
serve individuals enrolled under a plan offered by such
organization are not meaningful EHR users (as defined
in section 1886(n)(3)) with respect to a period, the
payment amount payable under this section for such
organization for such period shall be the percent
specified in subparagraph (B) for such period of the
payment amount otherwise provided under this section
for such period.
``(B) Specified percent.--The percent specified
under this subparagraph for a year is 100 percent minus
a number of percentage points equal to the product of--
``(i) the number of the percentage point
reduction effected under section
1886(b)(3)(B)(ix)(I) for the period; and
``(ii) the Medicare hospital expenditure
proportion specified in subparagraph (C) for
the year.
``(C) Medicare hospital expenditure proportion.--
The Medicare hospital expenditure proportion under this
subparagraph for a year is the Secretary's estimate of
the proportion, of the expenditures under parts A and B
that are not attributable to this part, that are
attributable to expenditures for inpatient hospital
services.
``(D) Application of payment adjustment.--In the
case that a qualifying MA organization attests that not
all eligible hospitals are meaningful EHR users with
respect to an applicable period, the Secretary shall
apply the payment adjustment under this paragraph based
on a methodology specified by the Secretary, taking
into account the proportion of such eligible hospitals,
or discharges from such hospitals, that are not
meaningful EHR users for such period.
``(5) Posting on website.--The Secretary shall post on the
Internet website of the Centers for Medicare & Medicaid
Services, in an easily understandable format, --
``(A) a list of the names, business addresses, and
business phone numbers of each qualifying MA
organization receiving an incentive payment under this
subsection for eligible hospitals described in
paragraph (2); and
``(B) a list of the names of the eligible hospitals
for which such incentive payment is based.''.
(d) Conforming Amendments.--
(1) Section 1814(b) of the Social Security Act (42 U.S.C.
1395f(b)) is amended--
(A) in paragraph (3), in the matter preceding
subparagraph (A), by inserting ``, subject to section
1886(d)(3)(B)(ix)(III),'' after ``then''; and
(B) by adding at the end the following: ``For
purposes of applying paragraph (3), there shall be
taken into account incentive payments, and payment
adjustments under subsection (b)(3)(B)(ix) or (n) of
section 1886.''.
(2) Section 1851(i)(1) of the Social Security Act (42
U.S.C. 1395w-21(i)(1)) is amended by striking ``and
1886(h)(3)(D)'' and inserting ``1886(h)(3)(D), and 1853(m)''.
(3) Section 1853 of the Social Security Act (42 U.S.C.
1395w-23), as amended by section 4311(d)(1), is amended--
(A) in subsection (c)--
(i) in paragraph (1)(D)(i), by striking
``1848(o)'' and inserting ``, 1848(o), and
1886(n)''; and
(ii) in paragraph (6)(A), by inserting
``and subsections (b)(3)(B)(ix) and (n) of
section 1886'' after ``section 1848''; and
(B) in subsection (f), by inserting ``and
subsection (m)'' after ``under subsection (l)''.
SEC. 4203. PREMIUM HOLD HARMLESS AND IMPLEMENTATION FUNDING.
(a) Premium Hold Harmless.--
(1) In general.--Section 1839(a)(1) of the Social Security
Act (42 U.S.C. 1395r(a)(1)) is amended by adding at the end the
following: ``In applying this paragraph there shall not be
taken into account additional payments under section 1848(o)
and section 1853(l)(3) and the Government contribution under
section 1844(a)(3).''.
(2) Payment.--Section 1844(a) of such Act (42 U.S.C.
1395w(a)) is amended--
(A) in paragraph (2), by striking the period at the
end and inserting ``; plus''; and
(B) by adding at the end the following new
paragraph:
``(3) a Government contribution equal to the amount of
payment incentives payable under sections 1848(o) and
1853(l)(3).''.
(b) Implementation Funding.--In addition to funds otherwise
available, out of any funds in the Treasury not otherwise appropriated,
there are appropriated to the Secretary of Health and Human Services
for the Center for Medicare & Medicaid Services Program Management
Account, $100,000,000 for each of fiscal years 2009 through 2015 and
$45,000,000 for each succeeding fiscal year through fiscal year 2018,
which shall be available for purposes of carrying out the provisions of
(and amendments made by) this part. Amounts appropriated under this
subsection for a fiscal year shall be available until expended.
SEC. 4204. NON-APPLICATION OF PHASED-OUT INDIRECT MEDICAL EDUCATION
(IME) ADJUSTMENT FACTOR FOR FISCAL YEAR 2009.
(a) In General.--Section 412.322 of title 42, Code of Federal
Regulations, shall be applied without regard to paragraph (c) of such
section, and the Secretary of Health and Human Services shall recompute
payments for discharges occurring on or after October 1, 2008, as if
such paragraph had never been in effect.
(b) No Effect on Subsequent Years.--Nothing in subsection (a) shall
be construed as having any effect on the application of paragraph (d)
of section 412.322 of title 42, Code of Federal Regulations.
SEC. 4205. STUDY ON APPLICATION OF EHR PAYMENT INCENTIVES FOR PROVIDERS
NOT RECEIVING OTHER INCENTIVE PAYMENTS.
(a) Study.--
(1) In general.--The Secretary of Health and Human Services
shall conduct a study to determine the extent to which and
manner in which payment incentives (such as under title XVIII
or XIX of the Social Security Act) and other funding for
purposes of implementing and using certified EHR technology (as
defined in section 1848(o)(4) of the Social Security Act, as
added by section 4311(a)) should be made available to health
care providers who are receiving minimal or no payment
incentives or other funding under this Act, under title XVIII
or XIX of such Act, or otherwise, for such purposes.
(2) Details of study.--Such study shall include an
examination of--
(A) the adoption rates of certified EHR technology
(as so defined) by such health care providers;
(B) the clinical utility of such technology by such
health care providers;
(C) whether the services furnished by such health
care providers are appropriate for or would benefit
from the use of such technology;
(D) the extent to which such health care providers
work in settings that might otherwise receive an
incentive payment or other funding under this Act,
title XVIII or XIX of the Social Security Act, or
otherwise;
(E) the potential costs and the potential benefits
of making payment incentives and other funding
available to such health care providers; and
(F) any other issues the Secretary deems to be
appropriate.
(b) Report.--Not later than June 30, 2010, the Secretary shall
submit to Congress a report on the findings and conclusions of the
study conducted under subsection (a).
SEC. 4206. STUDY ON AVAILABILITY OF OPEN SOURCE HEALTH INFORMATION
TECHNOLOGY SYSTEMS.
(a) In General.--
(1) Study.--The Secretary of Health and Human Services
shall, in consultation with the Under Secretary for Health of
the Veterans Health Administration, the Director of the Indian
Health Service, the Secretary of Defense, the Director of the
Agency for Healthcare Research and Quality, the Administrator
of the Health Resources and Services Administration, and the
Chairman of the Federal Communications Commission, conduct a
study on--
(A) the current availability of open source health
information technology systems to Federal safety net
providers (including small, rural providers);
(B) the total cost of ownership of such systems in
comparison to the cost of proprietary commercial
products available;
(C) the ability of such systems to respond to the
needs of, and be applied to, various populations
(including children and disabled individuals); and
(D) the capacity of such systems to facilitate
interoperability.
(2) Considerations.--In conducting the study under
paragraph (1), the Secretary of Health and Human Services shall
take into account the circumstances of smaller health care
providers, health care providers located in rural or other
medically underserved areas, and safety net providers that
deliver a significant level of health care to uninsured
individuals, Medicaid beneficiaries, SCHIP beneficiaries, and
other vulnerable individuals.
(b) Report.--Not later than October 1, 2010, the Secretary of
Health and Human Services shall submit to Congress a report on the
findings and the conclusions of the study conducted under subsection
(a), together with recommendations for such legislation and
administrative action as the Secretary determines appropriate.
PART II--MEDICAID FUNDING
SEC. 4211. MEDICAID PROVIDER EHR ADOPTION AND OPERATION PAYMENTS;
IMPLEMENTATION FUNDING.
(a) In General.--Section 1903 of the Social Security Act (42 U.S.C.
1396b) is amended--
(1) in subsection (a)(3)--
(A) by striking ``and'' at the end of subparagraph
(D);
(B) by striking ``plus'' at the end of subparagraph
(E) and inserting ``and''; and
(C) by adding at the end the following new
subparagraph:
``(F)(i) 100 percent of so much of the sums
expended during such quarter as are attributable to
payments for certified EHR technology (and support
services including maintenance and training that is
for, or is necessary for the adoption and operation of,
such technology) by Medicaid providers described in
subsection (t)(1); and
``(ii) 90 percent of so much of the sums expended
during such quarter as are attributable to payments for
reasonable administrative expenses related to the
administration of payments described in clause (i) if
the State meets the condition described in subsection
(t)(9); plus''; and
(2) by inserting after subsection (s) the following new
subsection:
``(t)(1)(A) For purposes of subsection (a)(3)(F), the payments for
certified EHR technology (and support services including maintenance
that is for, or is necessary for the operation of, such technology) by
Medicaid providers described in this paragraph are payments made by the
State in accordance with this subsection of the applicable percent of
the net allowable costs of Medicaid providers (as defined in paragraph
(2)) for such technology (and support services).
``(B) For purposes of subparagraph (A), the term `applicable
percent' means--
``(i) in the case of a Medicaid provider described in
paragraph (2)(A), 85 percent;
``(ii) in the case of a Medicaid provider described in
clause (i) or (ii) of paragraph (2)(B), 100 percent; and
``(iii) in the case of a Medicaid provider described in
clause (iii) of paragraph (2)(B), a percent specified by the
Secretary, but not less than 85 percent.
``(2) In this subsection and subsection (a)(3)(F), the term
`Medicaid provider' means--
``(A) an eligible professional (as defined in paragraph
(3)(B)) who is not hospital-based and has at least 30 percent
of the professional's patient volume (as estimated in
accordance with standards established by the Secretary)
attributable to individuals who are receiving medical
assistance under this title; and
``(B)(i) a children's hospital,
``(ii) an acute-care hospital that is not described in clause (i)
and that has at least 10 percent of the hospital's patient volume (as
estimated in accordance with standards established by the Secretary)
attributable to individuals who are receiving medical assistance under
this title, or
``(iii) Federally-qualified health center or rural health clinic
that has at least 30 percent of the center's or clinic's patient volume
(as estimated in accordance with standards established by the
Secretary) attributable to individuals who are receiving medical
assistance under this title.
An eligible professional shall not qualify as a Medicaid provider under
this subsection unless the professional has waived, in a manner
specified by the Secretary, any right to payment under section 1848(o)
with respect to the adoption or support of certified EHR technology by
the eligible professional. In applying clauses (ii) and (iii) of
subparagraph (B), the standards established by the Secretary for
patient volume shall include individuals enrolled in a Medicaid managed
care plan (under section 1903(m) or section 1932).
``(3) In this subsection and subsection (a)(3)(F):
``(A) The term `certified EHR technology' means a qualified
electronic health record (as defined in 3000(13) of the Public
Health Service Act) that is certified pursuant to section
3001(c)(5) of such Act as meeting standards adopted under
section 3004 of such Act that are applicable to the type of
record involved (as determined by the Secretary, such as an
ambulatory electronic health record for office-based physicians
or an inpatient hospital electronic health record for
hospitals).
``(B) The term `eligible professional' means a physician as
defined in paragraphs (1) and (2) of section 1861(r), and
includes a nurse mid-wife and a nurse practitioner.
``(C) The term `hospital-based' means, with respect to an
eligible professional, a professional (such as a pathologist,
anesthesiologist, or emergency physician) who furnishes
substantially all of the individual's professional services in
a hospital setting (whether inpatient or outpatient) and
through the use of the facilities and equipment, including
qualified electronic health records, of the hospital.
``(4)(A) The term `allowable costs' means, with respect to
certified EHR technology of a Medicaid provider, costs of such
technology (and support services including maintenance and training
that is for, or is necessary for the adoption and operation of, such
technology) as determined by the Secretary to be reasonable.
``(B) The term `net allowable costs' means allowable costs reduced
by any payment that is made to the Medicaid provider involved from any
other source that is directly attributable to payment for certified EHR
technology or services described in subparagraph (A).
``(C) In no case shall--
``(i) the aggregate allowable costs under this subsection
(covering one or more years) with respect to a Medicaid
provider described in paragraph (2)(A) for purchase and initial
implementation of certified EHR technology (and services
described in subparagraph (A)) exceed $25,000 or include costs
over a period of longer than 5 years;
``(ii) for costs not described in clause (i) relating to
the operation, maintenance, or use of certified EHR technology,
the annual allowable costs under this subsection with respect
to such a Medicaid provider for costs not described in clause
(i) for any year exceed $10,000;
``(iii) payment described in paragraph (1) for costs
described in clause (ii) be made with respect to such a
Medicaid provider over a period of more than 5 years;
``(iv) the aggregate allowable costs under this subsection
with respect to such a Medicaid provider for all costs exceed
$75,000; or
``(v) the allowable costs, whether for purchase and initial
implementation, maintenance, or otherwise, for a Medicaid
provider described in paragraph (2)(B)(iii) exceed such
aggregate or annual limitation as the Secretary shall
establish, based on an amount determined by the Secretary as
being adequate to adopt and maintain certified EHR technology,
consistent with paragraph (6).
``(5) Payments described in paragraph (1) are not in accordance
with this subsection unless the following requirements are met:
``(A) The State provides assurances satisfactory to the
Secretary that amounts received under subsection (a)(3)(F) with
respect to costs of a Medicaid provider are paid directly to
such provider without any deduction or rebate.
``(B) Such Medicaid provider is responsible for payment of
the costs described in such paragraph that are not provided
under this title.
``(C) With respect to payments to such Medicaid provider
for costs other than costs related to the initial adoption of
certified EHR technology, the Medicaid provider demonstrates
meaningful use of certified EHR technology through a means that
is approved by the State and acceptable to the Secretary, and
that may be based upon the methodologies applied under section
1848(o) or 1886(n). In establishing such means, which may
include the reporting of clinical quality measures to the
State, the State shall ensure that populations with unique
needs, such as children, are appropriately addressed.
``(D) To the extent specified by the Secretary, the
certified EHR technology is compatible with State or Federal
administrative management systems.
``(6)(A) In no case shall the payments described in paragraph (1),
with respect to a hospital, exceed in the aggregate the product of--
``(i) the overall hospital EHR amount for the hospital
computed under subparagraph (B); and
``(ii) the Medicaid share for such hospital computed under
subparagraph (C).
``(B) For purposes of this paragraph, the overall hospital EHR
amount, with respect to a hospital, is the sum of the applicable
amounts specified in section 1886(n)(2)(A) for such hospital for the
first 4 payment years (as estimated by the Secretary) determined as if
the Medicare share specified in clause (ii) of such section were 1. The
Secretary shall publish in the Federal Register the overall hospital
EHR amount for each hospital eligible for payments under this
subsection. In computing amounts under clause (ii) for payment years
after the first payment year, the Secretary shall assume that in
subsequent payment years discharges increase at the average annual rate
of growth of the most recent three years for which discharge data are
available.
``(C) The Medicaid share computed under this subparagraph, for a
hospital for a period specified by the Secretary, shall be calculated
in the same manner as the Medicare share under section 1886(n)(2)(D)
for such a hospital and period, except that there shall be substituted
for the numerator under clause (i) of such section the amount that is
equal to the number of inpatient-bed-days (as established by the
Secretary) which are attributable to individuals who are receiving
medical assistance under this title and who are not described in
section 1886(n)(2)(D)(i). In computing inpatient-bed-days under the
previous sentence, the Secretary shall take into account inpatient-bed-
days attributable to inpatient-bed-days that are paid for individuals
enrolled in a Medicaid managed care plan (under section 1903(m) or
section 1932).
``(7) With respect to health care providers other than hospitals,
the Secretary shall establish and implement a detailed process to
ensure coordination of the different programs for payment of such
health care providers for adoption or use of health information
technology (including certified EHR technology), as well as payments
for such health care providers provided under this title or title
XVIII, to assure no duplication of funding. The Secretary shall
promulgate regulations to carry out the preceding sentence.
``(8) In carrying out paragraph (5)(C), the State and Secretary
shall seek, to the maximum extent practicable, to avoid duplicative
requirements from Federal and State Governments to demonstrate
meaningful use of certified EHR technology under this title and title
XVIII. In doing so, the Secretary may deem satisfaction of requirements
for such meaningful use for a payment year under title XVIII to be
sufficient to qualify as meaningful use under this subsection. The
Secretary may also specify the reporting periods under this subsection
in order to carry out this paragraph.
``(9) In order to be provided Federal financial participation under
subsection (a)(3)(F)(ii), a State must demonstrate to the satisfaction
of the Secretary, that the State--
``(A) is using the funds provided for the purposes of
administering payments under this subsection, including
tracking of meaningful use by Medicaid providers;
``(B) is conducting adequate oversight of the program under
this subsection, including routine tracking of meaningful use
attestations and reporting mechanisms; and
``(C) is pursuing initiatives to encourage the adoption of
certified EHR technology to promote health care quality and the
exchange of health care information under this title, subject
to applicable laws and regulations governing such exchange.
``(10) The Secretary shall periodically submit reports to the
Committee on Energy and Commerce of the House of Representatives and
the Committee on Finance of the Senate on status, progress, and
oversight of payments under paragraph (1).''.
(b) Implementation Funding.--In addition to funds otherwise
available, out of any funds in the Treasury not otherwise appropriated,
there are appropriated to the Secretary of Health and Human Services
for the Center for Medicare & Medicaid Services Program Management
Account, $40,000,000 for each of fiscal years 2009 through 2015 and
$20,000,000 for each succeeding fiscal year through fiscal year 2018,
which shall be available for purposes of carrying out the provisions of
(and the amendments made by) this part. Amounts appropriated under this
subsection for a fiscal year shall be available until expended.
(c) HHS Report on Implementation of Detailed Process To Assure No
Duplication of Funding.--Not later than July 1, 2012, the Secretary of
Health and Human Services shall submit to Congress a report on the
establishment and implementation of the detailed process under section
1903(t)(7) of the Social Security Act, as added by subsection (a),
together with recommendations for such legislation and administrative
action as the Secretary determines appropriate.
TITLE V--STATE FISCAL RELIEF
SEC. 5000. PURPOSES; TABLE OF CONTENTS.
(a) Purposes.--The purposes of this title are as follows:
(1) To provide fiscal relief to States in a period of
economic downturn.
(2) To protect and maintain State Medicaid programs during
a period of economic downturn, including by helping to avert
cuts to provider payment rates and benefits or services, and to
prevent constrictions of income eligibility requirements for
such programs, but not to promote increases in such
requirements.
(b) Table of Contents.--The table of contents for this title is as
follows:
TITLE V--STATE FISCAL RELIEF
Sec. 5000. Purposes; table of contents.
Sec. 5001. Temporary increase of Medicaid FMAP.
Sec. 5002. Extension and update of special rule for increase of
Medicaid DSH allotments for low DSH States.
Sec. 5003. Payment of Medicare liability to States as a result of the
Special Disability Workload Project.
Sec. 5004. Funding for the Department of Health and Human Services
Office of the Inspector General.
Sec. 5005. GAO study and report regarding State needs during periods of
national economic downturn.
SEC. 5001. TEMPORARY INCREASE OF MEDICAID FMAP.
(a) Permitting Maintenance of Fmap.--Subject to subsections (e),
(f), and (g), if the FMAP determined without regard to this section for
a State for--
(1) fiscal year 2009 is less than the FMAP as so determined
for fiscal year 2008, the FMAP for the State for fiscal year
2008 shall be substituted for the State's FMAP for fiscal year
2009, before the application of this section;
(2) fiscal year 2010 is less than the FMAP as so determined
for fiscal year 2008 or fiscal year 2009 (after the application
of paragraph (1)), the greater of such FMAP for the State for
fiscal year 2008 or fiscal year 2009 shall be substituted for
the State's FMAP for fiscal year 2010, before the application
of this section; and
(3) fiscal year 2011 is less than the FMAP as so determined
for fiscal year 2008, fiscal year 2009 (after the application
of paragraph (1)), or fiscal year 2010 (after the application
of paragraph (2)), the greatest of such FMAP for the State for
fiscal year 2008, fiscal year 2009, or fiscal year 2010 shall
be substituted for the State's FMAP for fiscal year 2011,
before the application of this section, but only for the first
calendar quarter in fiscal year 2011.
(b) General 7.6 Percentage Point Increase.--Subject to subsections
(e), (f), and (g), for each State for calendar quarters during the
recession adjustment period (as defined in subsection (h)(2)), the FMAP
(after the application of subsection (a)) shall be increased (without
regard to any limitation otherwise specified in section 1905(b) of the
Social Security Act) by 7.6 percentage points.
(c) Additional Relief Based on Increase in Unemployment.--
(1) In general.--Subject to subsections (e), (f), and (g),
if a State is a qualifying State under paragraph (2) for a
calendar quarter occurring during the recession adjustment
period, the FMAP for the State shall be further increased by
the number of percentage points equal to the product of the
State percentage applicable for the State under section 1905(b)
of the Social Security Act (42 U.S.C. 1396d(b)) after the
application of subsections (a) and (b) and the applicable
percent determined in paragraph (3) for the calendar quarter
(or, if greater, for a previous such calendar quarter, subject
to paragraph (4)) .
(2) Qualifying criteria.--
(A) In general.--For purposes of paragraph (1), a
State qualifies for additional relief under this
subsection for a calendar quarter occurring during the
recession adjustment period if the State is 1 of the 50
States or the District of Columbia and the State
satisfies any of the following criteria for the
quarter:
(i) An increase of at least 1.5 percentage
points, but less than 2.5 percentage points, in
the average monthly unemployment rate,
seasonally adjusted, for the State or District,
as determined by comparing months in the most
recent previous 3-consecutive-month period for
which data are available for the State or
District to the lowest average monthly
unemployment rate, seasonally adjusted, for the
State or District for any 3-consecutive-month
period preceding that period and beginning on
or after January 1, 2006 (based on the most
recently available monthly publications of the
Bureau of Labor Statistics of the Department of
Labor).
(ii) An increase of at least 2.5 percentage
points, but less than 3.5 percentage points, in
the average monthly unemployment rate,
seasonally adjusted, for the State or District
(as so determined).
(iii) An increase of at least 3.5
percentage points for the State or District, in
the average monthly unemployment rate,
seasonally adjusted, for the State or District
(as so determined).
(B) Maintenance of status.--If a State qualifies
for additional relief under this subsection for a
calendar quarter, it shall be deemed to have qualified
for such relief for each subsequent calendar quarter
ending before July 1, 2010.
(3) Applicable percent.--For purposes of paragraph (1), the
applicable percent is--
(A) 2.5 percent, if the State satisfies the
criteria described in paragraph (2)(A)(i) for the
calendar quarter;
(B) 4.5 percent if the State satisfies the criteria
described in paragraph (2)(A)(ii) for the calendar
quarter; and
(C) 6.5 percent if the State satisfies the criteria
described in paragraph (2)(A)(iii) for the calendar
quarter.
(4) Maintenance of higher percentage reduction for period
after lower percentage deduction would otherwise take effect.--
(A) Hold harmless period.--If the percentage
reduction applied to a State under paragraph (3) for
any calendar quarter in the recession adjustment period
beginning on or after January 1, 2009, and ending
before July 1, 2010, (determined without regard to this
paragraph) is less than the percentage reduction
applied for the preceding quarter (as so determined),
the higher percentage reduction shall continue in
effect for each subsequent calendar quarter ending
before July 1, 2010.
(B) Notice of decrease in percentage reduction.--
The Secretary shall notify a State at least 3 months
prior to applying any lower percentage reduction to the
State under paragraph (3).
(d) Increase in Cap on Medicaid Payments to Territories.--Subject
to subsections (f) and (g), with respect to entire fiscal years
occurring during the recession adjustment period and with respect to
fiscal years only a portion of which occurs during such period (and in
proportion to the portion of the fiscal year that occurs during such
period), the amounts otherwise determined for Puerto Rico, the Virgin
Islands, Guam, the Northern Mariana Islands, and American Samoa under
subsections (f) and (g) of section 1108 of the Social Security Act (42
6 U.S.C. 1308) shall each be increased by 15.2 percent.
(e) Scope of Application.--The increases in the FMAP for a State
under this section shall apply for purposes of title XIX of the Social
Security Act and shall not apply with respect to--
(1) disproportionate share hospital payments described in
section 1923 of such Act (42 U.S.C. 1396r-4);
(2) payments under title IV of such Act (42 U.S.C. 601 et
seq.) (except that the increases under subsections (a) and (b)
shall apply to payments under part E of title IV of such Act
(42 U.S.C. 670 et seq.));
(3) payments under title XXI of such Act (42 U.S.C. 1397aa
et seq.);
(4) any payments under title XIX of such Act that are based
on the enhanced FMAP described in section 2105(b) of such Act
(42 U.S.C. 1397ee(b)); or
(5) any payments under title XIX of such Act that are
attributable to expenditures for medical assistance provided to
individuals made eligible under a State plan under title XIX of
the Social Security Act (including under any waiver under such
title or under section 1115 of such Act (42 U.S.C. 1315))
because of income standards (expressed as a percentage of the
poverty line) for eligibility for medical assistance that are
higher than the income standards (as so expressed) for such
eligibility as in effect on July 1, 2008.
(f) State Ineligibility.--
(1) Maintenance of eligibility requirements.--
(A) In general.--Subject to subparagraphs (B) and
(C), a State is not eligible for an increase in its
FMAP under subsection (a), (b), or (c), or an increase
in a cap amount under subsection (d), if eligibility
standards, methodologies, or procedures under its State
plan under title XIX of the Social Security Act
(including any waiver under such title or under section
1115 of such Act (42 U.S.C. 1315)) are more restrictive
than the eligibility standards, methodologies, or
procedures, respectively, under such plan (or waiver)
as in effect on July 1, 2008.
(B) State reinstatement of eligibility permitted.--
Subject to subparagraph (C), a State that has
restricted eligibility standards, methodologies, or
procedures under its State plan under title XIX of the
Social Security Act (including any waiver under such
title or under section 1115 of such Act (42 U.S.C.
1315)) after July 1, 2008, is no longer ineligible
under subparagraph (A) beginning with the first
calendar quarter in which the State has reinstated
eligibility standards, methodologies, or procedures
that are no more restrictive than the eligibility
standards, methodologies, or procedures, respectively,
under such plan (or waiver) as in effect on July 1,
2008.
(C) Special rules.--A State shall not be ineligible
under subparagraph (A)--
(i) for the calendar quarters before July
1, 2009, on the basis of a restriction that was
applied after July 1, 2008, and before the date
of the enactment of this Act, if the State
prior to July 1, 2009, has reinstated
eligibility standards, methodologies, or
procedures that are no more restrictive than
the eligibility standards, methodologies, or
procedures, respectively, under such plan (or
waiver) as in effect on July 1, 2008; or
(ii) on the basis of a restriction that was
directed to be made under State law as of July
1, 2008, and would have been in effect as of
such date, but for a delay in the request for,
and approval of, a waiver under section 1115 of
such Act with respect to such restriction.
(2) Compliance with prompt pay requirements.--No State
shall be eligible for an increased FMAP rate as provided under
this section for any claim submitted by a provider subject to
the terms of section 1902(a)(37)(A) of the Social Security Act
(42 U.S.C. 1396a(a)(37)(A)) during any period in which that
State has failed to pay claims in accordance with section
1902(a)(37)(A) of such Act. Each State shall report to the
Secretary, no later than 30 days following the 1st day of the
month, its compliance with the requirements of section
1902(a)(37)(A) of the Social Security Act as they pertain to
claims made for covered services during the preceding month.
(3) No waiver authority.--The Secretary may not waive the
application of this subsection or subsection (g) under section
1115 of the Social Security Act or otherwise.
(g) Requirements.--
(1) In general.--A State may not deposit or credit the
additional Federal funds paid to the State as a result of this
section to any reserve or rainy day fund maintained by the
State.
(2) State reports.--Each State that is paid additional
Federal funds as a result of this section shall, not later than
September 30, 2011, submit a report to the Secretary, in such
form and such manner as the Secretary shall determine,
regarding how the additional Federal funds were expended.
(3) Additional requirement for certain states.--In the case
of a State that requires political subdivisions within the
State to contribute toward the non-Federal share of
expenditures under the State Medicaid plan required under
section 1902(a)(2) of the Social Security Act (42 U.S.C.
1396a(a)(2)), the State is not eligible for an increase in its
FMAP under subsection (b) or (c), or an increase in a cap
amount under subsection (d), if it requires that such political
subdivisions pay for quarters during the recession adjustment
period a greater percentage of the non-Federal share of such
expenditures, or a greater percentage of the non-Federal share
of payments under section 1923, than the respective percentage
that would have been required by the State under such plan on
September 30, 2008, prior to application of this section.
(h) Definitions.--In this section, except as otherwise provided:
(1) FMAP.--The term ``FMAP'' means the Federal medical
assistance percentage, as defined in section 1905(b) of the
Social Security Act (42 U.S.C. 1396d(b)), as determined without
regard to this section except as otherwise specified.
(2) Poverty line.--The term ``poverty line'' has the
meaning given such term in section 673(2) of the Community
Services Block Grant Act (42 U.S.C. 9902(2)), including any
revision required by such section.
(3) Recession adjustment period.--The term ``recession
adjustment period'' means the period beginning on October 1,
2008, and ending on December 31, 2010.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(5) State.--The term ``State'' has the meaning given such
term for purposes of title XIX of the Social Security Act (42
U.S.C. 1396 et seq.).
(i) Sunset.--This section shall not apply to items and services
furnished after the end of the recession adjustment period.
SEC. 5002. EXTENSION AND UPDATE OF SPECIAL RULE FOR INCREASE OF
MEDICAID DSH ALLOTMENTS FOR LOW DSH STATES.
Section 1923(f)(5) of the Social Security Act (42 U.S.C. 1396r-
4(f)(5)) is amended--
(1) in subparagraph (B)--
(A) in the subparagraph heading, by striking ``year
2004 and subsequent fiscal years'' and inserting
``years 2004 through 2008'';
(B) in clause (i), by inserting ``and'' after the
semicolon;
(C) in clause (ii), by striking ``; and'' and
inserting a period; and
(D) by striking clause (iii); and
(2) by adding at the end the following subparagraph:
``(C) For fiscal year 2009 and subsequent fiscal
years.--In the case of a State in which the total
expenditures under the State plan (including Federal
and State shares) for disproportionate share hospital
adjustments under this section for fiscal year 2006, as
reported to the Administrator of the Centers for
Medicare & Medicaid Services as of August 31, 2009, is
greater than 0 but less than 3 percent of the State's
total amount of expenditures under the State plan for
medical assistance during the fiscal year, the DSH
allotment for the State with respect to--
``(i) fiscal year 2009, shall be the DSH
allotment for the State for fiscal year 2008
increased by 16 percent;
``(ii) fiscal year 2010, shall be the DSH
allotment for the State for fiscal year 2009
increased by 16 percent;
``(iii) fiscal year 2011 for the period
ending on December 31, 2010, shall be \1/4\ of
the DSH allotment for the State for fiscal year
2010 increased by 16 percent;
``(iv) fiscal year 2011 for the period
beginning on January 1, 2011, and ending on
September 30, 2011, shall be \3/4\ of the DSH
allotment that would have been determined under
this subsection for the State for fiscal year
2010 if this subparagraph had not been enacted;
``(v) fiscal year 2012, shall be the DSH
allotment that would have been determined under
this subsection for the State for fiscal year
2010 if this subparagraph had not been enacted;
and
``(vi) fiscal year 2013 and any subsequent
fiscal year, shall be the DSH allotment for the
State for the previous fiscal year subject to
an increase for inflation as provided in
paragraph (3)(A).''.
SEC. 5003. PAYMENT OF MEDICARE LIABILITY TO STATES AS A RESULT OF THE
SPECIAL DISABILITY WORKLOAD PROJECT.
(a) In General.--The Secretary, in consultation with the
Commissioner, shall work with each State to reach an agreement, not
later than 3 months after the date of enactment of this Act, on the
amount of a payment for the State related to the Medicare program
liability as a result of the Special Disability Workload project,
subject to the requirements of subsection (c).
(b) Payments.--
(1) Deadline for making payments.--Not later than 30 days
after reaching an agreement with a State under subsection (a),
the Secretary shall pay the State, from the amounts
appropriated under paragraph (2), the payment agreed to for the
State.
(2) Appropriation.--Out of any money in the Treasury not
otherwise appropriated, there is appropriated $3,000,000,000
for fiscal year 2009 for making payments to States under
paragraph (1).
(3) Limitations.--In no case may--
(A) the aggregate amount of payments made by the
Secretary to States under paragraph (1) exceed
$3,000,000,000; or
(B) any payments be provided by the Secretary under
this section after the first day of the first month
that begins 4 months after the date of enactment of
this Act.
(c) Requirements.--The requirements of this subsection are the
following:
(1) Federal data used to determine amount of payments.--The
amount of the payment under subsection (a) for each State is
determined on the basis of the most recent Federal data
available, including the use of proxies and reasonable
estimates as necessary, for determining expeditiously the
amount of the payment that shall be made to each State that
enters into an agreement under this section. The payment
methodology shall consider the following factors:
(A) The number of SDW cases found to have been
eligible for benefits under the Medicare program and
the month of the initial Medicare program eligibility
for such cases.
(B) The applicable non-Federal share of
expenditures made by a State under the Medicaid program
during the time period for SDW cases.
(C) Such other factors as the Secretary and the
Commissioner, in consultation with the States,
determine appropriate.
(2) Conditions for payments.--A State shall not receive a
payment under this section unless the State--
(A) waives the right to file a civil action (or to
be a party to any action) in any Federal or State court
in which the relief sought includes a payment from the
United States to the State related to the Medicare
liability under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.) as a result of the Special
Disability Workload project; and
(B) releases the United States from any further
claims for reimbursement of State expenditures as a
result of the Special Disability Workload project.
(3) No individual state claims data required.--No State
shall be required to submit individual claims evidencing
payment under the Medicaid program as a condition for receiving
a payment under this section.
(4) Ineligible states.--No State that is a party to a civil
action in any Federal or State court in which the relief sought
includes a payment from the United States to the State related
to the Medicare liability under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.) as a result of the
Special Disability Workload project shall be eligible to
receive a payment under this section while such an action is
pending or if such an action is resolved in favor of the State.
(d) Definitions.--In this section:
(1) Commissioner.--The term ``Commissioner'' means the
Commissioner of Social Security.
(2) Medicaid program.--The term ``Medicaid program'' means
the program of medical assistance established under title XIX
of the Social Security Act (42 U.S.C. 1396a et seq.) and
includes medical assistance provided under any waiver of that
program approved under section 1115 or 1915 of such Act (42
U.S.C. 1315, 1396n) or otherwise.
(3) Medicare program.--The term ``Medicare program'' means
the program established under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.).
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(5) SDW case.--The term ``SDW case'' means a case in the
Special Disability Workload project involving an individual
determined by the Commissioner to have been eligible for
benefits under title II of the Social Security Act (42 U.S.C.
401 et seq.) for a period during which such benefits were not
provided to the individual and who was, during all or part of
such period, enrolled in a State Medicaid program.
(6) Special disability workload project.--The term
``Special Disability Workload project'' means the project
described in the 2008 Annual Report of the Board of Trustees of
the Federal Old-Age and Survivors Insurance and Federal
Disability Insurance Trust Funds, H.R. Doc. No. 110-104, 110th
Cong. (2008).
(7) State.--The term ``State'' means each of the 50 States
and the District of Columbia.
SEC. 5004. FUNDING FOR THE DEPARTMENT OF HEALTH AND HUMAN SERVICES
OFFICE OF THE INSPECTOR GENERAL.
For purposes of ensuring the proper expenditure of Federal funds
under title XIX of the Social Security Act (42 U.S.C. 1396 et seq.),
there is appropriated to the Office of the Inspector General of the
Department of Health and Human Services, out of any money in the
Treasury not otherwise appropriated and without further appropriation,
$31,250,000 for the recession adjustment period (as defined in section
5001(h)(3)). Amounts appropriated under this section shall remain
available for expenditure until expended and shall be in addition to
any other amounts appropriated or made available to such Office for
such purposes.
SEC. 5005. GAO STUDY AND REPORT REGARDING STATE NEEDS DURING PERIODS OF
NATIONAL ECONOMIC DOWNTURN.
(a) In General.--The Comptroller General of the United States shall
study the period of national economic downturn in effect on the date of
enactment of this Act, as well as previous periods of national economic
downturn since 1974, for the purpose of developing recommendations for
addressing the needs of States during such periods. As part of such
analysis, the Comptroller General shall study the past and projected
effects of temporary increases in the Federal medical assistance
percentage under the Medicaid program with respect to such periods.
(b) Report.--Not later than April 1, 2011, the Comptroller General
of the United States shall submit a report to the appropriate
committees of Congress on the results of the study conducted under
paragraph (1). Such report shall include the following:
(1) Such recommendations as the Comptroller General
determines appropriate for modifying the national economic
downturn assistance formula for temporary adjustment of the
Federal medical assistance percentage under Medicaid (also
referred to as a ``countercyclical FMAP'') described in GAO
report number GAO-07-97 to improve the effectiveness of the
application of such percentage in addressing the needs of
States during periods of national economic downturn, including
recommendations for--
(A) improvements to the factors that would begin
and end the application of such percentage;
(B) how the determination of the amount of such
percentage could be adjusted to address State and
regional economic variations during such periods; and
(C) how the determination of the amount of such
percentage could be adjusted to be more responsive to
actual Medicaid costs incurred by States during such
periods.
(2) An analysis of the impact on States during such periods
of--
(A) declines in private health benefits coverage;
(B) declines in State revenues; and
(C) caseload maintenance and growth under Medicaid,
the State Children's Health Insurance Program, or any
other publicly funded programs to provide health
benefits coverage for State residents.
(3) Identification of, and recommendations for addressing,
the effects on States of any other specific economic indicators
that the Comptroller General determines appropriate.
Calendar No. 20
111th CONGRESS
1st Session
S. 350
_______________________________________________________________________
A BILL
To provide for a portion of the economic recovery package relating to
revenue measures, unemployment, and health.
_______________________________________________________________________
January 29, 2009
Read twice and placed on the calendar
Committee on Finance ordered to be reported an original measure.
Introduced in Senate
Committee on Finance. Original measure reported to Senate by Senator Baucus. Without written report.
Committee on Finance. Original measure reported to Senate by Senator Baucus. Without written report.
Placed on Senate Legislative Calendar under General Orders. Calendar No. 20.
Star Print ordered on the bill.
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