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SEC. 1012. EXTENSION OF INCREASED ALTERNATIVE MIN-
IMUM TAX EXEMPTION AMOUNT. 
(a) IN GENERAL.—Paragraph (1) of section 55(d) (re-
lating 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 begin-
ning 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 begin-
ning in 2009)’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
Subtitle B—Energy Incentives 
PART I—RENEWABLE ENERGY INCENTIVES 
SEC. 1101. EXTENSION OF CREDIT FOR ELECTRICITY PRO-
DUCED 
FROM 
CERTAIN 
RENEWABLE 
RE-
SOURCES. 
(a) IN GENERAL.—Subsection (d) of section 45 is 
amended— 
(1) by striking ‘‘2010’’ in paragraph (1) and in-
serting ‘‘2013’’,
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HR 1 EAS 
(2) by striking ‘‘2011’’ each place it appears in 
paragraphs (2), (3), (4), (6), (7) and (9) and insert-
ing ‘‘2014’’, and 
(3) by striking ‘‘2012’’ in paragraph (11)(B) 
and inserting ‘‘2014’’. 
(b) TECHNICAL AMENDMENT.—Paragraph (5) of sec-
tion 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 serv-
ice 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 Exten-
sion 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—
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HR 1 EAS 
‘‘(i) such facility shall be treated as en-
ergy 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 invest-
ment credit facility. 
‘‘(C) QUALIFIED INVESTMENT CREDIT FA-
CILITY.—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 irrev-
ocable 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 fa-
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cility 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 De-
cember 31, 2008. 
SEC. 1103. REPEAL OF CERTAIN LIMITATIONS ON CREDIT 
FOR RENEWABLE ENERGY PROPERTY. 
(a) REPEAL OF LIMITATION ON CREDIT FOR QUALI-
FIED SMALL WIND ENERGY PROPERTY.—Paragraph (4) of 
section 48(c) is amended by striking subparagraph (B) and 
by redesignating subparagraphs (C) and (D) as subpara-
graphs (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 en-
actment of the Revenue Reconciliation Act of 
1990).’’. 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25C(e)(1) is amended by strik-
ing ‘‘(8), and (9)’’ and inserting ‘‘and (8)’’.
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(B) Section 25D(e) is amended by striking 
paragraph (9). 
(C) Section 48A(b)(2) is amended by insert-
ing ‘‘(without regard to subparagraph (D) there-
of)’’ after ‘‘section 48(a)(4)’’. 
(D) Section 48B(b)(2) is amended by in-
serting ‘‘(without regard to subparagraph (D) 
thereof)’’ after ‘‘section 48(a)(4)’’. 
(c) EFFECTIVE DATE.— 
(1) IN GENERAL.—Except as provided in para-
graph (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 Reconcili-
ation Act of 1990). 
(2) CONFORMING
AMENDMENTS.—The amend-
ments made by subsection (b)(2) shall apply to tax-
able years beginning after December 31, 2008.
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PART 
II—INCREASED 
ALLOCATIONS 
OF 
NEW 
CLEAN RENEWABLE ENERGY BONDS AND 
QUALIFIED ENERGY CONSERVATION BONDS 
SEC. 1111. INCREASED LIMITATION ON ISSUANCE OF NEW 
CLEAN RENEWABLE ENERGY BONDS. 
Subsection (c) of section 54C is amended by adding 
at the end the following new paragraph: 
‘‘(4) ADDITIONAL
LIMITATION.—The national 
new clean renewable energy bond limitation shall be 
increased by $1,600,000,000. Such increase shall be 
allocated by the Secretary consistent with the rules of 
paragraphs (2) and (3).’’. 
SEC. 1112. INCREASED LIMITATION ON ISSUANCE OF 
QUALIFIED ENERGY CONSERVATION BONDS. 
(a) IN GENERAL.—Section 54D(d) is amended by 
striking ‘‘800,000,000’’ and inserting ‘‘$3,200,000,000’’. 
(b) CLARIFICATION WITH RESPECT TO GREEN COM-
MUNITY PROGRAMS.—Clause (ii) of section 54D(f)(1)(A) is 
amended by inserting ‘‘(including the use of loans, grants, 
or other repayment mechanisms to implement such pro-
grams)’’ after ‘‘green community programs’’.
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HR 1 EAS 
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 sub-
sections: 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an indi-
vidual, 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 tax-
payer during such taxable year for qualified energy 
efficiency improvements, and 
‘‘(2) the amount of the residential energy prop-
erty expenditures paid or incurred by the taxpayer 
during such taxable year. 
‘‘(b) LIMITATION.—The aggregate amount of the cred-
its allowed under this section for taxable years beginning 
in 2009 and 2010 with respect to any taxpayer shall not 
exceed $1,500.’’. 
(b) MODIFICATIONS OF STANDARDS FOR ENERGY-EF-
FICIENT BUILDING PROPERTY.— 
(1) ELECTRIC HEAT PUMPS.—Subparagraph (B) 
of section 25C(d)(3) is amended to read as follows: 
‘‘(B) an electric heat pump which achieves 
the highest efficiency tier established by the Con-
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HR 1 EAS 
sortium for Energy Efficiency, as in effect on 
January 1, 2009.’’. 
(2) CENTRAL
AIR
CONDITIONERS.—Subpara-
graph (C) of section 25C(d)(3) is amended by striking 
‘‘2006’’ and inserting ‘‘2009’’. 
(3) WATER
HEATERS.—Subparagraph (D) of 
section 25C(d)(3) is amended to read as follows: 
‘‘(E) a natural gas, propane, or oil water 
heater which has either an energy factor of at 
least 0.82 or a thermal efficiency of at least 90 
percent.’’. 
(4) WOOD STOVES.—Subparagraph (E) of sec-
tion 25C(d)(3) is amended by inserting ‘‘, as meas-
ured using a lower heating value’’ after ‘‘75 percent’’. 
(c) MODIFICATIONS OF STANDARDS FOR OIL FUR-
NACES AND HOT WATER BOILERS.— 
(1) IN
GENERAL.—Paragraph (4) of section 
25C(d) is amended to read as follows: 
‘‘(4) QUALIFIED NATURAL GAS, PROPANE, AND 
OIL FURNACES AND HOT WATER BOILERS.— 
‘‘(A) QUALIFIED NATURAL GAS FURNACE.— 
The term ‘qualified natural gas furnace’ means 
any natural gas furnace which achieves an an-
nual fuel utilization efficiency rate of not less 
than 95.
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‘‘(B) QUALIFIED NATURAL GAS HOT WATER 
BOILER.—The term ‘qualified natural gas hot 
water boiler’ means any natural gas hot water 
boiler which achieves an annual fuel utilization 
efficiency rate of not less than 90. 
‘‘(C) QUALIFIED PROPANE FURNACE.—The 
term ‘qualified propane furnace’ means any pro-
pane furnace which achieves an annual fuel uti-
lization efficiency rate of not less than 95. 
‘‘(D) QUALIFIED
PROPANE
HOT
WATER 
BOILER.—The term ‘qualified propane hot water 
boiler’ means any propane hot water boiler 
which achieves an annual fuel utilization effi-
ciency rate of not less than 90. 
‘‘(E) QUALIFIED OIL FURNACES.—The term 
‘qualified oil furnace’ means any oil furnace 
which achieves an annual fuel utilization effi-
ciency rate of not less than 90. 
‘‘(F) QUALIFIED OIL HOT WATER BOILER.— 
The term ‘qualified oil hot water boiler’ means 
any oil hot water boiler which achieves an an-
nual fuel utilization efficiency rate of not less 
than 90.’’. 
(2) CONFORMING
AMENDMENT.—Clause (ii) of 
section 25C(d)(2)(A) is amended to read as follows:
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HR 1 EAS 
‘‘(ii) any qualified natural gas fur-
nace, qualified propane furnace, qualified 
oil furnace, qualified natural gas hot water 
boiler, qualified propane hot water boiler, or 
qualified oil hot water boiler, or’’. 
(d) MODIFICATIONS OF STANDARDS FOR QUALIFIED 
ENERGY EFFICIENCY IMPROVEMENTS.— 
(1) QUALIFICATIONS FOR EXTERIOR WINDOWS, 
DOORS, AND SKYLIGHTS.—Subsection (c) of section 
25C is amended by adding at the end the following 
new paragraph: 
‘‘(4) QUALIFICATIONS FOR EXTERIOR WINDOWS, 
DOORS, AND SKYLIGHTS.—Such term shall not in-
clude any component described in subparagraph (B) 
or (C) of paragraph (2) unless such component is 
equal to or below a U factor of 0.30 and SHGC of 
0.30.’’. 
(2) ADDITIONAL
QUALIFICATION
FOR
INSULA-
TION.—Subparagraph (A) of section 25C(c)(2) is 
amended by inserting ‘‘and meets the prescriptive cri-
teria for such material or system established by the 
2009 International Energy Conservation Code, as 
such Code (including supplements) is in effect on the 
date of the enactment of the American Recovery and
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HR 1 EAS 
Reinvestment Tax Act of 2009’’ after ‘‘such dwelling 
unit’’. 
(e) EXTENSION.—Section 25C(g)(2) is amended by 
striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 
2010’’. 
(f) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to taxable years beginning after December 31, 
2008. 
(2) EFFICIENCY STANDARDS.—The amendments 
made by paragraphs (1), (2), and (3) of subsection 
(b) and subsections (c) and (d) shall apply to prop-
erty placed in service after December 31, 2009. 
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 expendi-
ture, the credit allowed under subsection (a) (deter-
mined without regard to subsection (c)) for any tax-
able year shall not exceed $500 with respect to each
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HR 1 EAS 
CASE OF ELECTRICITY.—Section 179(d)(3) is amended by 
striking subparagraph (B) and inserting the following: 
‘‘(B) for the recharging of motor vehicles 
propelled by electricity, but only if— 
‘‘(i) the property complies with the So-
ciety of Automotive Engineers’ connection 
standards, 
‘‘(ii) the property provides for non-re-
strictive access for charging and for pay-
ment interoperability with other systems, 
and 
‘‘(iii) the property— 
‘‘(I) is located on property owned 
by the taxpayer, or 
‘‘(II) is located on property owned 
by another person, is placed in service 
with the permission of such other per-
son, and is fully maintained by the 
taxpayer.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 1124. RECOVERY PERIOD FOR DEPRECIATION OF 
SMART METERS. 
(a) TEMPORARY 5-YEAR RECOVERY PERIOD.—
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(1) IN GENERAL.—Subparagraph (B) of section 
168(e)(3) is amended by striking ‘‘and’’ at the end of 
clause (vi), by striking the period at the end of clause 
(vii) and inserting ‘‘, and’’, and by adding at the end 
the following new clause: 
‘‘(viii) any qualified smart electric 
meter which is placed in service before Jan-
uary 1, 2011.’’. 
(2) CONFORMING AMENDMENT.—Clause (iii) of 
section 168(e)(3)(D) is amended by inserting ‘‘which 
is placed in service after December 31, 2010’’ after 
‘‘electric meter’’. 
(b) 
TECHNICAL
AMENDMENTS.—Paragraphs 
(18)(A)(ii) and (19)(A)(ii) of section 168(i) are each 
amended by striking ‘‘16 years’’ and inserting ‘‘10 years’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (2), the amendments made by this section shall 
apply to property placed in service after the date of 
the enactment of this Act. 
(2) TECHNICAL AMENDMENT.—The amendments 
made by subsection (b) shall take effect as if included 
in section 306 of the Energy Improvement and Exten-
sion Act of 2008.
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PART IV—ENERGY RESEARCH INCENTIVES 
SEC. 1131. INCREASED RESEARCH CREDIT FOR ENERGY RE-
SEARCH. 
(a) IN GENERAL.—Section 41 is amended by redesig-
nating 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
EX-
PENSES.—For purposes of this subsection— 
‘‘(A) IN GENERAL.—The term ‘qualified en-
ergy research expenses’ means so much of the 
taxpayer’s qualified research expenses as are re-
lated to the fields of fuel cells and battery tech-
nology, renewable energy and renewable fuels, 
energy conservation technology, efficient trans-
mission and distribution of electricity, and car-
bon capture and sequestration. 
‘‘(B) COORDINATION WITH QUALIFYING AD-
VANCED ENERGY PROJECT CREDIT.—Such term 
shall not include expenditures taken into account
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HR 1 EAS 
in determining the amount of the credit under 
section 48 or 48C. 
‘‘(3) COORDINATION
WITH
OTHER
RESEARCH 
CREDITS.— 
‘‘(A) IN GENERAL.—The amount of quali-
fied 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 ac-
count 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
RE-
SEARCH CONSORTIUM PAYMENTS.—Any amount 
taken into account under paragraph (1) shall 
not be taken into account under paragraph (2) 
or (3) of subsection (a).’’.
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HR 1 EAS 
(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 Decem-
ber 31, 2008. 
PART V—MODIFICATION OF CREDIT FOR CARBON 
DIOXIDE SEQUESTRATION 
SEC. 1141. 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 sub-
paragraph: 
‘‘(C) disposed of by the taxpayer in secure 
geological storage.’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Section 45Q(d)(2) is amended— 
(A) by striking ‘‘subsection (a)(1)(B)’’ and 
inserting ‘‘paragraph (1)(B) or (2)(C) of sub-
section (a)’’,
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HR 1 EAS 
(B) by striking ‘‘and unminable coal seems’’ 
and inserting ‘‘, oil and gas reservoirs, and 
unminable coal seams’’, and 
(C) by inserting ‘‘the Secretary of Energy, 
and the Secretary of the Interior,’’ after ‘‘Envi-
ronmental Protection Agency’’. 
(2) Section 45Q(e) is amended by striking ‘‘cap-
tured and disposed of or used as a tertiary injectant’’ 
and inserting ‘‘taken into account in accordance with 
subsection (a)’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to carbon dioxide captured after the date 
of the enactment of this Act. 
PART VI—PLUG-IN ELECTRIC DRIVE MOTOR 
VEHICLES 
SEC. 1151. 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 VEHI-
CLES 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
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HR 1 EAS 
30(c)(2)), which is treated as a motor vehicle for pur-
poses 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 ve-
hicle, 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) In the case of a specified vehicle which 
is a 2-or 3-wheeled motor vehicle, subsection 
(c)(1) shall be applied by substituting ‘2.5 kilo-
watt hours’ for ‘4 kilowatt hours’.
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HR 1 EAS 
‘‘(D) In the case of a specified vehicle which 
is a low-speed motor vehicle, subsection (c)(3) 
shall not apply. 
‘‘(2) SPECIFIED VEHICLE.—For purposes of this 
subsection— 
‘‘(A) IN GENERAL.—The term ‘specified ve-
hicle’ 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 sec-
tion 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 de-
signed 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,
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HR 1 EAS 
‘‘(iv) which draws propulsion from 1 
or more traction batteries, and 
‘‘(v) which has been certified to the De-
partment of Transportation pursuant to 
section 567 of title 49, Code of Federal Reg-
ulations, 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 ve-
hicle (as defined in section 30(c)(2)) which— 
‘‘(i) is placed in service after December 
31, 2009, and 
‘‘(ii) meets the requirements of section 
571.500 of title 49, Code of Federal Regula-
tions.’’. 
(d) EFFECTIVE DATES.— 
(1) IN GENERAL.—The amendment made by sub-
sections (a) and (c) shall take effect on the date of the 
enactment of this Act. 
(2) OTHER
MODIFICATIONS.—The amendments 
made by subsection (b) shall apply to property placed 
in service after December 31, 2009, in taxable years 
beginning after such date.
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HR 1 EAS 
SEC. 1152. CONVERSION KITS. 
(a) IN GENERAL.—Section 30B (relating to alternative 
motor vehicle credit) is amended by redesignating sub-
sections (i) and (j) as subsections (j) and (k), respectively, 
and by inserting after subsection (h) the following new sub-
section: 
‘‘(i) PLUG-IN CONVERSION CREDIT.— 
‘‘(1) IN GENERAL.—For purposes of subsection 
(a), the plug-in conversion credit determined under 
this subsection with respect to any motor vehicle 
which is converted to a qualified plug-in electric drive 
motor vehicle is 10 percent of so much of the cost of 
the converting such vehicle as does not exceed $40,000. 
‘‘(2) DEFINITIONS
AND
SPECIAL
RULES.—For 
purposes of this subsection— 
‘‘(A) QUALIFIED PLUG-IN ELECTRIC DRIVE 
MOTOR VEHICLE.—The term ‘qualified plug-in 
electric drive motor vehicle’ means any new 
qualified plug-in electric drive motor vehicle (as 
defined in section 30D(c), determined without re-
gard to paragraphs (4) and (6) thereof). 
‘‘(B) PLUG-IN
TRACTION
BATTERY
MOD-
ULE.—The term ‘plug-in traction battery mod-
ule’ means an electro-chemical energy storage de-
vice which—
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HR 1 EAS 
‘‘(i) which has a traction battery ca-
pacity of not less than 2.5 kilowatt hours, 
‘‘(ii) which is equipped with an elec-
trical plug by means of which it can be en-
ergized and recharged when plugged into an 
external source of electric power, 
‘‘(iii) which consists of a standardized 
configuration and is mass produced, 
‘‘(iv) which has been tested and ap-
proved by the National Highway Transpor-
tation Safety Administration as compliant 
with applicable motor vehicle and motor ve-
hicle equipment safety standards when in-
stalled by a mechanic with standardized 
training in protocols established by the bat-
tery manufacturer as part of a nationwide 
distribution program, 
‘‘(v) which complies with the require-
ments of section 32918 of title 49, United 
States Code, and 
‘‘(vi) which is certified by a battery 
manufacturer as meeting the requirements 
of clauses (i) through (v). 
‘‘(C) CREDIT ALLOWED TO LESSOR OF BAT-
TERY MODULE.—In the case of a plug-in traction
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HR 1 EAS 
battery module which is leased to the taxpayer, 
the credit allowed under this subsection shall be 
allowed to the lessor of the plug-in traction bat-
tery module. 
‘‘(D) CREDIT
ALLOWED
IN
ADDITION
TO 
OTHER CREDITS.—The credit allowed under this 
subsection shall be allowed with respect to a 
motor vehicle notwithstanding whether a credit 
has been allowed with respect to such motor vehi-
cle under this section (other than this subsection) 
in any preceding taxable year. 
‘‘(3) TERMINATION.—This subsection shall not 
apply to conversions made after December 31, 2012.’’. 
(b) CREDIT TREATED
AS PART
OF ALTERNATIVE 
MOTOR VEHICLE CREDIT.—Section 30B(a) is amended by 
striking ‘‘and’’ at the end of paragraph (3), by striking the 
period at the end of paragraph (4) and inserting ‘‘, and’’, 
and by adding at the end the following new paragraph: 
‘‘(5) the plug-in conversion credit determined 
under subsection (i).’’. 
(c) NO RECAPTURE FOR VEHICLES CONVERTED TO 
QUALIFIED
PLUG-IN
ELECTRIC
DRIVE
MOTOR
VEHI-
CLES.—Paragraph (8) of section 30B(h) is amended by 
adding at the end the following: ‘‘, except that no benefit 
shall be recaptured if such property ceases to be eligible for
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HR 1 EAS 
ARY
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 fol-
lowing new clause: 
‘‘(ii) ‘April 1, 2008’ shall be sub-
stituted for ‘January 1, 2008’ in subpara-
graph (A)(iii)(I) thereof, and’’. 
(b) EXTENSION OF ELECTION TO ACCELERATE THE 
AMT AND RESEARCH CREDITS IN LIEU OF BONUS DEPRE-
CIATION.—Section 168(k)(4) (relating to election to accel-
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erate the AMT and research credits in lieu of bonus depre-
ciation) 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 sub-
paragraph: 
‘‘(H) SPECIAL
RULES
FOR
EXTENSION 
PROPERTY.— 
‘‘(i) TAXPAYERS
PREVIOUSLY
ELECT-
ING ACCELERATION.—In the case of a tax-
payer who made the election under subpara-
graph (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 tax-
payer a separate bonus depreciation 
amount, maximum amount, and max-
imum increase amount shall be com-
puted and applied to eligible qualified 
property which is extension property
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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 para-
graph shall only apply to eligible 
qualified property which is extension 
property. 
‘‘(iii) 
EXTENSION
PROPERTY.—For 
purposes of this subparagraph, the term ‘ex-
tension property’ means property which is 
eligible qualified property solely by reason 
of the extension of the application of the 
special allowance under paragraph (1) pur-
suant to the amendments made by section 
1201(a) of the American Recovery and Re-
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investment Tax Act of 2009 (and the appli-
cation of such extension to this paragraph 
pursuant to the amendment made by section 
1201(b)(1) of such Act).’’. 
(c) EFFECTIVE DATES.— 
(1) IN GENERAL.—Except as provided in para-
graph (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 EX-
PENSING OF CERTAIN DEPRECIABLE BUSI-
NESS 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 Decem-
ber 31, 2008.
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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 elect-
ed 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 sub-
clause (II) for ‘2’, and 
‘‘(III) subparagraph (F) shall not 
apply. 
‘‘(ii) APPLICABLE 2008 OR 2009 NET OP-
ERATING LOSS.—For purposes of this sub-
paragraph, the term ‘applicable 2008 or 
2009 net operating loss’ means—
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‘‘(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 sub-
clause (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 Sec-
retary, and shall be made by the due date 
(including extension of time) for filing the 
taxpayer’s return for the taxable year of the 
net operating loss. Any such election, once 
made, shall be irrevocable. 
‘‘(iv) COORDINATION
WITH
ALTER-
NATIVE TAX NET OPERATING LOSS DEDUC-
TION.—In the case of a taxpayer who elects 
to have clause (ii)(II) apply, section 
56(d)(1)(A)(ii) shall be applied by sub-
stituting ‘ending during 2001 or 2002 or 
beginning during 2008 or 2009’ for ‘ending 
during 2001, 2002, 2008, or 2009’.’’.
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(b) ALTERNATIVE TAX NET OPERATING LOSS DEDUC-
TION.—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 appli-
cable 2008 or 2009 loss from operations with re-
spect to which the taxpayer has elected the appli-
cation 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 oper-
ations’ means—
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‘‘(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 tax-
payer’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 subpara-
graph (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.—
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(1) IN GENERAL.—Except as otherwise provided 
in this subsection, the amendments made by this sec-
tion shall apply to net operating losses arising in tax-
able years ending after December 31, 2007. 
(2) ALTERNATIVE TAX NET OPERATING LOSS DE-
DUCTION.—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 tax-
able 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 com-
pany, a loss from operations) for a taxable year end-
ing 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 (not-
withstanding 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 treat-
ed as timely made if made before the applicable 
date, and
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HR 1 EAS 
(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 applica-
ble 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 Stabiliza-
tion Act of 2008, or 
(B) the Federal Government acquires, at 
any time, any warrant (or other right) to ac-
quire any equity interest with respect to the tax-
payer 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 de-
fined in section 1504 of the Internal Revenue Code of
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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 VET-
ERANS AND DISCONNECTED YOUTH HIRED IN 2009 OR 
2010.— 
‘‘(A) IN GENERAL.—Any unemployed vet-
eran or disconnected youth who begins work for 
the employer during 2009 or 2010 shall be treat-
ed 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 vet-
eran (as defined in paragraph (3)(B), deter-
mined without regard to clause (ii) thereof) 
who is certified by the designated local 
agency as—
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(I) having been discharged or re-
leased from active duty in the Armed 
Forces during the period beginning on 
September 1, 2001, and ending on De-
cember 31, 2010, and 
‘‘(II) being in receipt of unem-
ployment 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 indi-
vidual 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-sec-
ondary school during the 6-month pe-
riod 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 num-
ber of basic skills.’’.
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(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 INSTRU-
MENT. 
(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 RE-
PURCHASE OF A DEBT INSTRUMENT.— 
‘‘(1) IN GENERAL.—Notwithstanding section 61, 
income from the discharge of indebtedness in connec-
tion 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-tax-
able-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
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‘‘(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 sub-
section, the term ‘repurchase’ means, with respect to 
any debt instrument, a cash purchase of the debt in-
strument by— 
‘‘(A) the debtor which issued the debt in-
strument, 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.’’.
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(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 sub-
stituting ‘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 COM-
MUTER 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:
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‘‘In the case of any month beginning on or after the 
date of the enactment of this sentence and before Jan-
uary 1, 2011, subparagraph (A) shall be applied as 
if the dollar amount therein were the same as the dol-
lar 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 PE-
RIOD 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 un-
recognized built-in gain of an S corporation if 
the 7th taxable year in the recognition period
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preceded such taxable year. The preceding sen-
tence 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 Decem-
ber 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—
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‘‘(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 CRED-
IT.—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 sub-
scribers) of the qualified broadband expenditures in-
curred 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 equip-
ment providing next generation broadband services to 
qualified subscribers and taken into account with re-
spect to such taxable year. 
‘‘(c) WHEN EXPENDITURES TAKEN INTO ACCOUNT.— 
For purposes of this section—
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‘‘(1) IN GENERAL.—Qualified broadband expend-
itures 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 com-
mences 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
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HR 1 EAS 
‘‘(ii) sold and leased back by such per-
son 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 de-
termining 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 quali-
fied broadband expenditures shall be multiplied by a frac-
tion— 
‘‘(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 poten-
tial subscriber population of the area which the
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equipment is capable of serving with current genera-
tion 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 equip-
ment. 
‘‘(2) CABLE OPERATOR.—The term ‘cable oper-
ator’ 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 SERV-
ICE.—The term ‘current generation broadband serv-
ice’ 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 sub-
scriber in the case of service through radio trans-
mission of energy).
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‘‘(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 multi-
plexing 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 au-
thorized 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
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HR 1 EAS 
service carrier, cable operator, open video system op-
erator, or satellite carrier) providing current genera-
tion 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—
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‘‘(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 de-
liver current generation broadband services or 
next generation broadband services, as applica-
ble, to such a subscriber without making more 
than an insignificant investment with respect to 
such subscriber, 
‘‘(C) the provider has made reasonable ef-
forts to make such subscribers aware of the avail-
ability 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 pro-
vider 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 depre-
ciation) is allowable and which provides current
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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 serv-
ices, 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 subpara-
graph (C) or (D), equipment shall be taken into 
account under subparagraph (A) only to the ex-
tent it— 
‘‘(i) extends from the last point of 
switching to the outside of the unit, build-
ing, dwelling, or office owned or leased by 
a subscriber in the case of a telecommuni-
cations carrier or broadband-over-powerline 
operator, 
‘‘(ii) extends from the customer side of 
the mobile telephone switching office to a 
transmission/receive 
antenna 
(including
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HR 1 EAS 
such antenna) owned or leased by a sub-
scriber in the case of a commercial mobile 
service carrier, 
‘‘(iii) extends from the customer side of 
the headend to the outside of the unit, build-
ing, 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/re-
ceive antenna (including such antenna) 
which transmits and receives signals to or 
from multiple subscribers, to a trans-
mission/receive antenna (including such an-
tenna) on the outside of the unit, building, 
dwelling, or office owned or leased by a sub-
scriber in the case of a satellite carrier or 
other wireless carrier, unless such other 
wireless carrier is also a telecommuni-
cations carrier. 
‘‘(C) PACKET
SWITCHING
EQUIPMENT.— 
Packet switching equipment, regardless of loca-
tion, shall be taken into account under subpara-
graph (A) only if it is deployed in connection 
with equipment described in subparagraph (B) 
and is uniquely designed to perform the function
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HR 1 EAS 
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 sub-
scriber. 
‘‘(D) MULTIPLEXING AND DEMULTIPLEXING 
EQUIPMENT.—Multiplexing and demultiplexing 
equipment shall be taken into account under sub-
paragraph (A) only to the extent it is deployed 
in connection with equipment described in sub-
paragraph (B) and is uniquely designed to per-
form 
the 
function 
of 
multiplexing 
and 
demultiplexing packets or cells of data and mak-
ing associated application adaptions, but only if 
such multiplexing or demultiplexing equipment 
is located between packet switching equipment 
described in subparagraph (C) and the sub-
scriber’s premises. 
‘‘(14) QUALIFIED BROADBAND EXPENDITURE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
broadband expenditure’ means any amount—
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‘‘(i) chargeable to capital account with 
respect to the purchase and installation of 
qualified equipment (including any up-
grades thereto) for which depreciation is al-
lowable 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 de-
scribed 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
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in a rural area, an underserved area, or an 
unserved area, or 
‘‘(ii) any residential subscriber resid-
ing 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 incor-
porated 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 den-
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sity 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 nonresiden-
tial 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 commu-
nications 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 ‘satu-
rated 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
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residential subscribers residing in dwellings lo-
cated 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 serv-
ices. 
‘‘(22) 
TELECOMMUNICATIONS
CARRIER.—The 
term ‘telecommunications carrier’ has the meaning 
given such term by section 3(44) of the Communica-
tions 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 mo-
bile service carrier.
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‘‘(23) TOTAL
POTENTIAL
SUBSCRIBER
POPU-
LATION.—The term ‘total potential subscriber popu-
lation’ means, with respect to any area and based on 
the most recent census data, the total number of po-
tential residential subscribers residing in dwellings 
located in such area and potential nonresidential sub-
scribers maintaining permanent places of business lo-
cated in such area. 
‘‘(24) UNDERSERVED AREA.—The term ‘under-
served 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 sub-
scriber residing in a dwelling located in an under-
served area or nonresidential subscriber maintaining 
a permanent place of business located in an under-
served area.
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‘‘(26) UNSERVED
AREA.—The term ‘unserved 
area’ means any census tract in which no current 
generation broadband services are provided, as cer-
tified 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),
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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 coopera-
tive 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 quali-
fied 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 sec-
tion 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 en-
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actment of this Act, designate and publish those cen-
sus tracts meeting the criteria described in para-
graphs (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 depart-
ments and agencies as the Secretary determines ap-
propriate. 
(2) SATURATED MARKET.— 
(A) IN GENERAL.—For purposes of desig-
nating and publishing those census tracts meet-
ing 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 re-
spect to any census tract shall submit a list 
of such census tracts (and any other infor-
mation required by the Secretary) not later 
than 60 days after the date of the publica-
tion of such form, and 
(ii) the Secretary of the Treasury shall 
publish an aggregate list of such census
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tracts submitted and the applicable pro-
viders 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 re-
quired to publish any list of census tracts meet-
ing such criteria subsequent to the list described 
in subparagraph (A)(ii). 
(C) AUTHORITY TO DISREGARD FALSE SUB-
MISSIONS.—In addition to imposing any other 
applicable penalties, the Secretary of the Treas-
ury shall have the discretion to disregard any 
form described in subparagraph (A)(i) on which 
a provider knowingly submitted false informa-
tion. 
(f) OTHER REGULATORY MATTERS.— 
(1) PROHIBITION.—No Federal or State agency 
or instrumentality shall adopt regulations or rate-
making procedures that would have the effect of elimi-
nating or reducing any credit or portion thereof al-
lowed under section 48D of the Internal Revenue Code 
of 1986 (as added by this section) or otherwise sub-
verting the purpose of this section.
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(2) TREASURY REGULATORY AUTHORITY.—It is 
the intent of Congress in providing the broadband 
Internet access credit under section 48D of the Inter-
nal 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 ex-
penditures 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 pro-
vide the Secretary to substantiate compliance 
with the requirements of section 48D of such 
Code.
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(g) EFFECTIVE DATE.—The amendments made by this 
section shall apply to expenditures incurred after December 
31, 2008. 
PART IX—CLARIFICATION OF REGULATIONS RE-
LATED 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 Sec-
retary to provide exemptions or special rules that are 
restricted to particular industries or classes of tax-
payers. 
(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 Rev-
enue 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
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and effect of Internal Revenue Service Notice 2008– 
83 and restore the proper application under the Inter-
nal 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 IN-
TERNAL REVENUE SERVICE NOTICE 2008–83 EXEMPTING 
BANKS FROM LIMITATION ON CERTAIN BUILT–IN LOSSES 
FOLLOWING OWNERSHIP CHANGE.— 
(1) IN GENERAL.—Internal Revenue Service No-
tice 2008–83— 
(A) shall be deemed to have the force and ef-
fect of law with respect to any ownership change 
(as defined in section 382(g) of the Internal Rev-
enue Code of 1986) occurring on or before Janu-
ary 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 re-
spect to any ownership change (as so defined) which 
occurs after January 16, 2009, if such change— 
(A) is pursuant to a written binding con-
tract entered into on or before such date, or
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(B) is pursuant to a written agreement en-
tered into on or before such date and such agree-
ment was described on or before such date in a 
public announcement or in a filing with the Se-
curities and Exchange Commission required by 
reason of such ownership change. 
Subtitle D—Manufacturing 
Recovery Provisions 
SEC. 1301. TEMPORARY EXPANSION OF AVAILABILITY OF IN-
DUSTRIAL DEVELOPMENT BONDS TO FACILI-
TIES MANUFACTURING INTANGIBLE PROP-
ERTY. 
(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 para-
graph— 
‘‘(i) IN GENERAL.—The term’’, and 
(2) by striking the last sentence and inserting 
the following new clauses: 
‘‘(ii) 
CERTAIN
FACILITIES
IN-
CLUDED.—Such term includes facilities 
which are directly related and ancillary to 
a manufacturing facility (determined with-
out regard to this clause) if—
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‘‘(I) such facilities are located on 
the same site as the manufacturing fa-
cility, 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 pro-
ceeds 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 function-
ally related and subordinate to a man-
ufacturing facility (determined without 
regard to this subclause) if such facil-
ity is located on the same site as the 
manufacturing facility.’’.
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‘‘(1) 
QUALIFYING
ADVANCED
ENERGY 
PROJECT.— 
‘‘(A) IN
GENERAL.—The term ‘qualifying 
advanced energy project’ means a project— 
‘‘(i) which re-equips, expands, or estab-
lishes a manufacturing facility for the pro-
duction of property which is— 
‘‘(I) designed to be used to 
produce energy from the sun, wind, 
geothermal deposits (within the mean-
ing of section 613(e)(2)), or other re-
newable resources, 
‘‘(II) designed to manufacture fuel 
cells, microturbines, or an energy stor-
age system for use with electric or hy-
brid-electric motor vehicles, 
‘‘(III) designed to manufacture 
electric grids to support the trans-
mission of intermittent sources of re-
newable energy, including storage of 
such energy, 
‘‘(IV) designed to capture and se-
quester carbon dioxide emissions, 
‘‘(V) designed to refine or blend 
renewable fuels or to produce energy
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conservation 
technologies 
(including 
energy-conserving lighting technologies 
and smart grid technologies), or 
‘‘(VI) other advanced energy prop-
erty designed to reduce greenhouse gas 
emissions as may be determined by the 
Secretary, and 
‘‘(ii) any portion of the qualified in-
vestment of which is certified by the Sec-
retary under subsection (d) as eligible for a 
credit under this section. 
‘‘(B) EXCEPTION.—Such term shall not in-
clude 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 PRO-
GRAM.— 
‘‘(1) ESTABLISHMENT.—
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‘‘(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 ad-
vanced 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 appli-
cant for certification under this paragraph shall 
submit an application containing such informa-
tion 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 CER-
TIFICATION.—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 re-
quirements of the certification have been met.
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‘‘(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 pe-
riod then the certification shall no longer be 
valid. 
‘‘(3) SELECTION
CRITERIA.—In determining 
which qualifying advanced energy projects to certify 
under this section, the Secretary— 
‘‘(A) shall take into consideration only those 
projects where there is a reasonable expectation 
of commercial viability, and 
‘‘(B) shall take into consideration which 
projects— 
‘‘(i) will provide the greatest domestic 
job creation (both direct and indirect) dur-
ing the credit period, 
‘‘(ii) will provide the greatest net im-
pact in avoiding or reducing air pollutants 
or anthropogenic emissions of greenhouse 
gases, 
‘‘(iii) have the greatest readiness for 
commercial employment, replication, and
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further commercial use in the United 
States, 
‘‘(iv) will provide the greatest benefit 
in terms of newness in the commercial mar-
ket, 
‘‘(v) have the lowest levelized cost of 
generated or stored energy, or of measured 
reduction in energy consumption or green-
house gas emission (based on costs of the 
full supply chain), and 
‘‘(vi) have the shortest project time 
from certification to completion. 
‘‘(4) REVIEW AND REDISTRIBUTION.— 
‘‘(A) REVIEW.—Not later than 6 years after 
the date of enactment of this section, the Sec-
retary 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 sec-
tion if the Secretary determines that— 
‘‘(i) there is an insufficient quantity of 
qualifying applications for certification 
pending at the time of the review, or
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‘‘(ii) any certification made pursuant 
to paragraph (2) has been revoked pursuant 
to paragraph (2)(B) because the project sub-
ject to the certification has been delayed as 
a result of third party opposition or litiga-
tion to the proposed project. 
‘‘(C) REALLOCATION.—If the Secretary de-
termines that credits under this section are 
available for reallocation pursuant to the re-
quirements set forth in paragraph (2), the Sec-
retary is authorized to conduct an additional 
program for applications for certification. 
‘‘(5) DISCLOSURE OF ALLOCATIONS.—The Sec-
retary shall, upon making a certification under this 
subsection, publicly disclose the identity of the appli-
cant 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
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‘‘SEC. 179F. ELECTION TO EXPENSE MANUFACTURING FA-
CILITIES 
PRODUCING 
PLUG-IN 
ELECTRIC 
DRIVE MOTOR VEHICLES AND COMPONENTS. 
‘‘(a) TREATMENT AS EXPENSES.—A taxpayer may 
elect to treat the applicable percentage of the cost of any 
qualified plug-in electric drive motor vehicle manufacturing 
facility property as an expense which is not chargeable to 
a capital account. Any cost so treated shall be allowed as 
a deduction for the taxable year in which the qualified man-
ufacturing facility property is placed in service. 
‘‘(b) APPLICABLE PERCENTAGE.—For purposes of sub-
section (a), the applicable percentage is— 
‘‘(1) 100 percent, in the case of qualified plug- 
in electric drive motor vehicle manufacturing facility 
property which is placed in service before January 1, 
2012, and 
‘‘(2) 50 percent, in the case of qualified plug-in 
electric drive motor vehicle manufacturing facility 
property which is placed in service after December 31, 
2011, and before January 1, 2015. 
‘‘(c) ELECTION.— 
‘‘(1) IN GENERAL.—An election under this sec-
tion for any taxable year shall be made on the tax-
payer’s return of the tax imposed by this chapter for 
the taxable year. Such election shall be made in such
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manner as the Secretary may by regulations pre-
scribe. 
‘‘(2) ELECTION
IRREVOCABLE.—Any election 
made under this section may not be revoked except 
with the consent of the Secretary. 
‘‘(d) QUALIFIED PLUG-IN ELECTRIC DRIVE MOTOR 
VEHICLE
MANUFACTURING
FACILITY
PROPERTY.—For 
purposes of this section— 
‘‘(1) IN GENERAL.—The term ‘qualified plug-in 
electric drive motor vehicle manufacturing facility 
property’ means any qualified property— 
‘‘(A) the original use of which commences 
with the taxpayer, 
‘‘(B) which is placed in service by the tax-
payer after the date of the enactment of this sec-
tion and before January 1, 2015, and 
‘‘(C) no written binding contract for the 
construction of which was in effect on or before 
the date of the enactment of this section. 
‘‘(2) QUALIFIED PROPERTY.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
property’ means any property which is a facility 
or a portion of a facility used for the production 
of—
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HR 1 EAS 
‘‘(i) any new qualified plug-in electric 
drive motor vehicle (as defined by section 
30D(c)), or 
‘‘(ii) any eligible component. 
‘‘(B) ELIGIBLE COMPONENT.—The term ‘eli-
gible component’ means any battery, any electric 
motor or generator, or any power control unit 
which is designed specifically for use with a new 
qualified plug-in electric drive motor vehicle (as 
so defined). 
‘‘(e) SPECIAL RULE FOR DUAL USE PROPERTY.—In 
the case of any qualified plug-in electric drive motor vehicle 
manufacturing facility property which is used to produce 
both qualified property and other property which is not 
qualified property, the amount of costs taken into account 
under subsection (a) shall be reduced by an amount equal 
to— 
‘‘(1) the total amount of such costs (determined 
before the application of this subsection), multiplied 
by 
‘‘(2) the percentage of property expected to be 
produced which is not qualified property. 
‘‘(f) ELECTION TO RECEIVE LOAN IN LIEU OF DEDUC-
TION.—
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‘‘(1) IN GENERAL.—If a taxpayer elects to have 
this subsection apply for any taxable year— 
‘‘(A) subsection (a) shall not apply to any 
qualified plug-in electric drive motor vehicle 
manufacturing facility property placed in serv-
ice by the taxpayer, 
‘‘(B) such taxpayer shall receive a loan 
from the Secretary in an amount and under 
such terms as provided in section 1303(b) of the 
American Recovery and Reinvestment Tax Act of 
2009, and 
‘‘(C) in the taxable year in which such 
qualified loan is repaid, each of the limitations 
described in paragraph (2) shall be increased by 
the qualified plug-in electric drive motor vehicle 
manufacturing facility amount which is— 
‘‘(i) determined under paragraph (3), 
and 
‘‘(ii) allocated to such limitation under 
paragraph (4). 
‘‘(2) LIMITATIONS TO BE INCREASED.—The limi-
tations described in this paragraph are— 
‘‘(A) the limitation imposed by section 
38(c), and
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‘‘(B) the limitation imposed by section 
53(c). 
‘‘(3) 
QUALIFIED
PLUG-IN
ELECTRIC
DRIVE 
MOTOR
VEHICLE
MANUFACTURING
FACILITY 
AMOUNT.—For purposes of this paragraph— 
‘‘(A) IN GENERAL.—The qualified plug-in 
electric drive motor vehicle manufacturing facil-
ity amount is an amount equal to the applicable 
percentage of any qualified plug-in electric drive 
motor vehicle manufacturing facility which is 
placed in service during the taxable year. 
‘‘(B) APPLICABLE PERCENTAGE.—For pur-
poses of subparagraph (A), the applicable per-
centage is— 
‘‘(i) 35 percent, in the case of qualified 
plug-in electric drive motor vehicle manu-
facturing facility property which is placed 
in service before January 1, 2012, and 
‘‘(ii) 17.5 percent, in the case of quali-
fied plug-in electric drive motor vehicle 
manufacturing facility property which is 
placed in service after December 31, 2011, 
and before January 1, 2015. 
‘‘(C) SPECIAL RULE FOR DUAL USE PROP-
ERTY.—In the case of any qualified plug-in elec-
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tric drive motor vehicle manufacturing facility 
property which is used to produce both qualified 
property and other property which is not quali-
fied property, the amount of costs taken into ac-
count under subparagraph (A) shall be reduced 
by an amount equal to— 
‘‘(i) the total amount of such costs (de-
termined before the application of this sub-
paragraph), multiplied by 
‘‘(ii) the percentage of property ex-
pected to be produced which is not qualified 
property. 
‘‘(4) ALLOCATION OF QUALIFIED PLUG-IN ELEC-
TRIC DRIVE MOTOR VEHICLE MANUFACTURING FACIL-
ITY AMOUNT.—The taxpayer shall, at such time and 
in such manner as the Secretary may prescribe, speci-
fy the portion (if any) of the qualified plug-in electric 
drive motor vehicle manufacturing facility amount 
for the taxable year which is to be allocated to each 
of the limitations described in paragraph (2) for such 
taxable year. 
‘‘(5) ELECTION.— 
‘‘(A) IN GENERAL.—An election under this 
subsection for any taxable year shall be made on 
the taxpayer’s return of the tax imposed by this
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chapter for the taxable year. Such election shall 
be made in such manner as the Secretary may 
by regulations prescribe. 
‘‘(B) ELECTION
IRREVOCABLE.—Any elec-
tion made under this subsection may not be re-
voked except with the consent of the Secretary.’’. 
(b) LOAN PROGRAM.— 
(1) IN GENERAL.—The Secretary of the Treasury 
(or the Secretary’s delegate) shall provide a loan to 
any person who is allowed a deduction under section 
179F of the Internal Revenue Code and who makes an 
election under section 179F(f) of such Code in an 
amount equal to the qualified plug-in electric drive 
motor vehicle manufacturing facility amount (as de-
fined in such section 179F(f)). 
(2) TERM.—Such loan shall be in the form of a 
senior note issued by the taxpayer to the Secretary of 
the Treasury, secured by the qualified plug-in electric 
drive motor vehicle manufacturing facility property 
(as defined in section 179F of the Internal Revenue 
Code of 1986) of the taxpayer, and having a term of 
20 years and interest payable at the applicable Fed-
eral rate (as determined under section 1274(d) of the 
Internal Revenue Code of 1986).
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(3) APPROPRIATIONS.—There is hereby appro-
priated to the Secretary of the Treasury such sums as 
may be necessary to carry out this subsection. 
(c) CLERICAL AMENDMENT.—The table of sections for 
part VI of subchapter B of chapter 1 is amended by adding 
at the end the following new item: 
‘‘Sec. 179F. Election to expense manufacturing facilities producing plug-in elec-
tric drive motor vehicle and components.’’. 
(d) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after the date 
of the enactment of this Act. 
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—
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‘‘(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 propor-
tion that each State’s 2008 State employment de-
cline bears to the aggregate of the 2008 State em-
ployment declines for all of the States. 
‘‘(2) 2008 STATE EMPLOYMENT DECLINE.—For 
purposes of this subsection, the term ‘2008 State em-
ployment 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 mu-
nicipality’s 2008 employment decline bears to 
the aggregate of the 2008 employment declines 
for all the counties and municipalities in such 
State.
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‘‘(B) LARGE
MUNICIPALITIES.—For pur-
poses of subparagraph (A), the term ‘large mu-
nicipality’ means a municipality with a popu-
lation of more than 100,000. 
‘‘(C) DETERMINATION OF LOCAL EMPLOY-
MENT
DECLINES.—For purposes of this para-
graph, the employment decline of any munici-
pality or county shall be determined in the same 
manner as determining the State 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 coun-
ty. 
‘‘(4) NATIONAL LIMITATIONS.— 
‘‘(A) RECOVERY ZONE ECONOMIC DEVELOP-
MENT BONDS.—There is a national recovery zone 
economic 
development 
bond 
limitation 
of 
$5,000,000,000. 
‘‘(B) RECOVERY ZONE FACILITY BONDS.— 
There is a national recovery zone facility bond 
limitation of $10,000,000,000. 
‘‘(b) RECOVERY ZONE.—For purposes of this part, the 
term ‘recovery zone’ means—
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‘‘(1) any area designated by the issuer as having 
significant poverty, unemployment, rate of home fore-
closures, or general distress, and 
‘‘(2) any area for which a designation as an em-
powerment 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 eco-
nomic 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 ap-
plied 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
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‘‘(B) the issuer designates such bond for 
purposes of this section. 
‘‘(2) LIMITATION ON AMOUNT OF BONDS DES-
IGNATED.—The maximum aggregate face amount of 
bonds which may be designated by any issuer under 
paragraph (1) shall not exceed the amount of the re-
covery zone economic development bond limitation al-
located to such issuer under section 1400U–1. 
‘‘(c) QUALIFIED
ECONOMIC
DEVELOPMENT
PUR-
POSE.—For purposes of this section, the term ‘qualified eco-
nomic development purpose’ means expenditures for pur-
poses 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 edu-
cational programs. 
‘‘SEC. 1400U–3. RECOVERY ZONE FACILITY BONDS. 
‘‘(a) IN GENERAL.—For purposes of part IV of sub-
chapter 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.—
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‘‘(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 DES-
IGNATED.—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 tax-
payer by purchase (as defined in section 
179(d)(2)) after the date on which the designa-
tion of the recovery zone took effect,
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‘‘(B) the original use of which in the recov-
ery 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 lo-
cated in a recovery zone shall be treated as a 
qualified business only if the property is not res-
idential 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 fa-
cility described in section 144(c)(6)(B). 
‘‘(3) SPECIAL RULES FOR SUBSTANTIAL RENOVA-
TIONS 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 acqui-
sition of existing property not permitted) shall not apply 
to any recovery zone facility bond.’’.
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(b) CLERICAL AMENDMENT.—The table of parts for 
subchapter Y of chapter 1 of such Code is amended by add-
ing 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 al-
locate the national tribal economic development 
bond limitation among the Indian tribal govern-
ments in such manner as the Secretary, in con-
sultation with the Secretary of the Interior, de-
termines appropriate. 
‘‘(B) NATIONAL
LIMITATION.—There is a 
national tribal economic development bond limi-
tation 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
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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 In-
dian 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 trib-
al government— 
‘‘(i) the interest on which would be ex-
empt 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 de-
velopment bond for purposes of this sub-
section. 
‘‘(B) EXCEPTIONS.—The term tribal eco-
nomic 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 fi-
nance—
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‘‘(i) any portion of a building in 
which class II or class III gaming (as de-
fined in section 4 of the Indian Gaming 
Regulatory Act) is conducted or housed or 
any other property actually used in the con-
duct 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 subpara-
graph (A) shall not exceed the amount of na-
tional tribal economic development bond limita-
tion allocated to such government under para-
graph (1).’’. 
(b) STUDY.—The Secretary of the Treasury, or the Sec-
retary’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 re-
garding such amendment.
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(c) EFFECTIVE DATE.—The amendment made by sub-
section (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 amend-
ed— 
(A) by striking ‘‘and’’ at the end of sub-
paragraph (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
IN-
CREASED 2008 LIMITATION.—The amount of the in-
crease in the new markets tax credit limitation for 
calendar year 2008 by reason of the amendments 
made by subsection (a) shall be allocated in accord-
ance with section 45D(f)(2) of the Internal Revenue 
Code of 1986 to qualified community development en-
tities (as defined in section 45D(c) of such Code) 
which—
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(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 re-
quested in the allocation application. 
(b) ALTERNATIVE MINIMUM TAX RELIEF.— 
(1) IN GENERAL.—Section 38(c)(4)(B) is amend-
ed by redesignating clauses (v) through (viii) as 
clauses (vi) through (ix), respectively, and by insert-
ing after clause (iv) the following new clause: 
‘‘(v) the credit determined under sec-
tion 45D to the extent that such credit is at-
tributable 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 en-
actment of this Act, and to carrybacks of such credits.
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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-ex-
empt obligations not taken into account by rea-
son of subparagraph (A) shall not exceed 2 per-
cent 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).’’.
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(b) TREATMENT AS FINANCIAL INSTITUTION PREF-
ERENCE 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 ALLOCA-
TION 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 subpara-
graph: 
‘‘(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 sub-
stituting ‘$30,000,000’ for ‘$10,000,000’.
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‘‘(ii) 
QUALIFIED
501(C)(3)
BONDS 
TREATED AS ISSUED BY EXEMPT ORGANIZA-
TION.—In the case of a qualified 501(c)(3) 
bond (as defined in section 145) issued dur-
ing 2009 or 2010, this paragraph shall be 
applied by treating the 501(c)(3) organiza-
tion for whose benefit such bond was issued 
as the issuer. 
‘‘(iii) SPECIAL RULE FOR QUALIFIED 
FINANCINGS.—In the case of a qualified fi-
nancing issue issued during 2009 or 2010— 
‘‘(I) subparagraph (F) shall not 
apply, and 
‘‘(II) any obligation issued as a 
part of such issue shall be treated as a 
qualified tax-exempt obligation if the 
requirements of this paragraph are met 
with respect to each qualified portion 
of the issue (determined by treating 
each qualified portion as a 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
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‘qualified financing issue’ means any com-
posite, 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 pur-
poses of this subparagraph, the term ‘quali-
fied portion’ means that portion of the pro-
ceeds 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 sec-
tion 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.
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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 PREF-
ERENCE 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 re-
funding 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 EARN-
INGS FOR INTEREST ON TAX-EXEMPT BONDS ISSUED DUR-
ING 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,
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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 ex-
cess of’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to bonds issued after the date of the en-
actment of this Act.
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PART 
II—DELAY 
IN 
APPLICATION 
OF 
WITH-
HOLDING TAX ON GOVERNMENT CONTRAC-
TORS 
SEC. 1511. DELAY IN APPLICATION OF WITHHOLDING TAX 
ON GOVERNMENT CONTRACTORS. 
Subsection (b) of section 511 of the Tax Increase Pre-
vention and Reconciliation Act of 2005 is amended by strik-
ing ‘‘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 fol-
lowing new section: 
‘‘SEC. 54F. QUALIFIED SCHOOL CONSTRUCTION BONDS. 
‘‘(a) QUALIFIED SCHOOL CONSTRUCTION BOND.—For 
purposes of this subchapter, the term ‘qualified school con-
struction 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, reha-
bilitation, 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,
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‘‘(2) the bond is issued by a State or local gov-
ernment 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
DES-
IGNATED.—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 limi-
tation amount allocated under subsection (d) for such cal-
endar year to such issuer. 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified school con-
struction bond limitation for each calendar year. Such lim-
itation 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 al-
located by the Secretary among the States in propor-
tion to the respective numbers of children in each 
State who have attained age 5 but not age 18 for the
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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 ad-
just the allocations under this subsection for any 
calendar year for each State to the extent nec-
essary 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 cal-
endar 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 eligi-
ble to receive under section 1124(d) of 
the Elementary and Secondary Edu-
cation Act of 1965 (20 U.S.C. 6333(d)) 
for the most recent fiscal year ending 
before such calendar year, divided by
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‘‘(II) the amount all States are el-
igible to receive under section 1124 of 
such Act (20 U.S.C. 6333) for such fis-
cal 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 allo-
cated if all allocations under paragraph (1) were 
made on the basis of respective populations of indi-
viduals below the poverty line (as defined by the Of-
fice of Management and Budget). In making other al-
locations, 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 al-
located 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 sen-
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HR 1 EAS 
inserting ‘‘, and’’, and by adding at the end the fol-
lowing 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 sub-
part:
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‘‘Subpart J—Build America Bonds 
‘‘Sec. 54AA. Build America bonds. 
‘‘SEC. 54AA. BUILD AMERICA BONDS. 
‘‘(a) IN GENERAL.—If a taxpayer holds a build Amer-
ica 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 inter-
est payment date for a build America bond is 35 percent 
of the amount of interest payable by the issuer with respect 
to such date (40 percent in the case of an issuer described 
in section 148(f)(4)(D) (determined without regard to 
clauses (v), (vi), and (vii) thereof and by substituting 
‘$30,000,000’ for ‘$5,000,000’ each place it appears there-
in). 
‘‘(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
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HR 1 EAS 
‘‘(B) the sum of the credits allowable under 
this part (other than subpart C and this sub-
part). 
‘‘(2) CARRYOVER
OF
UNUSED
CREDIT.—If the 
credit allowable under subsection (a) exceeds the limi-
tation 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 be-
fore the application of paragraph (1) for such suc-
ceeding 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 in-
come under section 103, 
‘‘(B) such obligation is issued before Janu-
ary 1, 2011, and 
‘‘(C) the issuer makes an irrevocable elec-
tion to have this section apply. 
‘‘(2) APPLICABLE RULES.—For purposes of ap-
plying paragraph (1)—
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‘‘(A) for purposes of section 149(b), a build 
America bond shall not be treated as federally 
guaranteed by reason of the credit allowed under 
subsection (a) or section 6431, 
‘‘(B) for purposes of section 148, the yield 
on a build America bond shall be determined 
without regard to the credit allowed under sub-
section (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 pre-
mium 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 IN-
CLUDIBLE 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.
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‘‘(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 elec-
tion 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:
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‘‘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 (40 percent in the case of an issuer described in section 
148(f)(4)(D) (determined without regard to clauses (v), (vi), 
and (vii) thereof and by substituting ‘$30,000,000’ for 
‘$5,000,000’ each place it appears therein). 
‘‘(c) APPLICATION OF ARBITRAGE RULES.—For pur-
poses 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 sub-
section, the term ‘qualified bond’ has the meaning given 
such term in section 54AA(g).’’.
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(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 sub-
chapter 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 chap-
ter 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 in-
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come 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 SECU-
RITY INCOME, RAILROAD RETIREMENT BENE-
FITS, AND VETERANS DISABILITY COMPENSA-
TION 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 eligi-
ble for a SSI cash benefit described in subpara-
graph (C).
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(B) BENEFIT
PAYMENT
DESCRIBED.—For 
purposes of subparagraph (A): 
(i) TITLE II BENEFIT.—A benefit pay-
ment described in this clause is a monthly 
insurance benefit payable (without regard 
to sections 202(j)(1) and 223(b) of the So-
cial 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));
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(IX) section 223(a) of such Act 
(42 U.S.C. 423(a)); 
(X) section 227 of such Act (42 
U.S.C. 427); or 
(XI) section 228 of such Act (42 
U.S.C. 428). 
(ii) 
RAILROAD
RETIREMENT
BEN-
EFIT.—A benefit payment described in this 
clause is a monthly annuity or pension 
payment payable (without regard to section 
5(a)(ii) of the Railroad Retirement Act of 
1974 (45 U.S.C. 231d(a)(ii)) under— 
(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));
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(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 com-
pensation or pension payment payable 
under— 
(I) section 1110, 1117, 1121, 
1131, 1141, or 1151 of title 38, United 
States Code; 
(II) section 1310, 1312, 1313, 
1315, 1316, or 1318 of title 38, United 
States Code; 
(III) section 1513, 1521, 1533, 
1536, 1537, 1541, 1542, or 1562 of 
title 38, United States Code; or 
(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 ben-
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efit 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, Amer-
ican Samoa, or the Northern Mariana Islands. For 
purposes of the preceding sentence, the determination 
of the individual’s residence shall be based on the cur-
rent 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).
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(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 re-
duced, 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 rea-
son of subsection (e)(1)(A) or (e)(4) of section
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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 re-
ceive 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 electroni-
cally 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 para-
graph (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 Commis-
sioner of Social Security, the Railroad Retirement Board,
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and the Secretary of Veterans Affairs shall certify the indi-
viduals 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 in-
dividual shall be unaffected by any subsequent determina-
tion 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 PUR-
POSES 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 fol-
lowing 9 months, for purposes of determining the eli-
gibility 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 fi-
nanced in whole or in part with Federal funds. 
(2) PAYMENT
NOT
CONSIDERED
INCOME
FOR 
PURPOSES
OF
TAXATION.—A payment under sub-
section (a) shall not be considered as gross income for 
purposes of the Internal Revenue Code of 1986.
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(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)), sec-
tion 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 pay-
ment or cash benefit to such individual under the ap-
plicable program described in subparagraph (B) or 
(C) of subsection (a)(1). 
(4) PAYMENTS SUBJECT TO OFFSET.—Notwith-
standing 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 sub-
section (a)(1) and all amounts paid shall be subject 
to offset to collect delinquent debts. 
(d) PAYMENT TO REPRESENTATIVE PAYEES AND FI-
DUCIARIES.— 
(1) IN GENERAL.—In any case in which an indi-
vidual who is entitled to a payment under subsection 
(a) and whose benefit payment or cash benefit de-
scribed in paragraph (1) of that subsection is paid to 
a representative payee or fiduciary, the payment
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under subsection (a) shall be made to the individual’s 
representative payee or fiduciary and the entire pay-
ment shall be used only for the benefit of the indi-
vidual 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 So-
cial 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 para-
graph (1)(B)(i) or (1)(C) of subsection (a) in the 
same manner as such section applies to a pay-
ment under title II or XVI of such Act. 
(B) PAYMENT ON THE BASIS OF A RAIL-
ROAD 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
VET-
ERANS
BENEFIT.—Sections 5502, 6106, and 
6108 of title 38, United States Code, shall apply 
to any payment made on the basis of an entitle-
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ment 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 Treas-
ury 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 in-
curred 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 in-
curred in carrying out this section. 
(3) 
For 
the 
Railroad 
Retirement 
Board, 
$1,000,000 for administrative costs incurred in car-
rying out this section. 
(4) For the Secretary of Veterans Affairs, 
$100,000 for the Information Systems Technology ac-
count and $7,100,000 for the General Operating Ex-
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penses account for administrative costs incurred in 
carrying out this section. 
Subtitle H—Trade Adjustment 
Assistance 
SEC. 1701. TEMPORARY EXTENSION OF TRADE ADJUST-
MENT 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 strik-
ing ‘‘December 31, 2007’’ and inserting ‘‘December 
31, 2010’’. 
(2) ALTERNATIVE TRADE ADJUSTMENT ASSIST-
ANCE.—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 strik-
ing ‘‘2007, and $4,000,000 for the 3-month period begin-
ning 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.’’.
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(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 ap-
pears and inserting ‘‘December 31, 2010’’. 
(e) SENSE OF THE SENATE REGARDING ADJUSTMENT 
ASSISTANCE FOR COMMUNITIES.—It is the sense of the Sen-
ate that title II of the Trade Act of 1974 (19 U.S.C. 2271 
et seq.) should be amended to assist any community im-
pacted 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.
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Subtitle I—Prohibition on Collec-
tion of Certain Payments Made 
Under the Continued Dumping 
and Subsidy Offset Act of 2000 
SEC. 1801. PROHIBITION ON COLLECTION OF CERTAIN PAY-
MENTS MADE UNDER THE CONTINUED DUMP-
ING AND SUBSIDY OFFSET ACT OF 2000. 
(a) IN GENERAL.—Notwithstanding any other provi-
sion 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 sub-
section (b); or 
(2) offset any past, current, or future distribu-
tions of antidumping or countervailing duties as-
sessed with respect to imports from countries that are 
not parties to the North American Free Trade Agree-
ment in an attempt to recoup any payments de-
scribed in subsection (b). 
(b) PAYMENTS DESCRIBED.—Payments described in 
this subsection are payments of antidumping or counter-
vailing 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
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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 Secu-
rity shall— 
(1) refund any repayments, or any other 
recoupment, of payments described in subsection (b); 
and 
(2) fully distribute any antidumping or counter-
vailing duties that the U.S. Customs and Border Pro-
tection is withholding as an offset as described in sub-
section (a)(2). 
(d) LIMITATION.—Nothing in this section shall be con-
strued to prevent the Secretary of Homeland Security, or 
any other person, from requiring repayment of, or attempt-
ing to otherwise recoup, any payments described in sub-
section (b) as a result of— 
(1) a finding of false statements or other mis-
conduct by a recipient of such a payment; or
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(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 pro-
ceeds of— 
(1) any new clean renewable energy bond (as de-
fined 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
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(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 con-
tained 
in 
such 
subsection 
and 
inserting 
‘‘$12,140,000,000,000’’. 
SEC. 1903. ELECTION TO ACCELERATE THE LOW-INCOME 
HOUSING TAX CREDIT. 
(a) IN GENERAL.—At the election of the taxpayer, the 
credit determined under section 42 of the Internal Revenue 
Code of 1986 for the taxpayer’s first three taxable years be-
ginning after December 31, 2008, in which credits are al-
lowable for any non-federally subsidized low-income hous-
ing project initially placed in service after such date— 
(1) with respect to initial investments made pur-
suant to a binding agreement by such taxpayer after 
December 31, 2008, and before January 1, 2011, and 
(2) only from allocations of a State housing 
credit ceiling before 2011, 
shall be 200 percent of the amount which would (but for 
this subsection) be so allowable. 
(b) ELIGIBILITY FOR ELECTION.—The election under 
subsection (a) shall take effect with respect to the first tax-
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able year referred to in such subsection only when all rental 
requirements pursuant to section 42(g)(1) of the Internal 
Revenue Code of 1986 have been met with respect to such 
low-income housing project. 
(c) REDUCTION IN AGGREGATE CREDIT TO REFLECT 
ACCELERATED CREDIT.—The aggregate credit allowable to 
any taxpayer under section 42 of the Internal Revenue Code 
of 1986 with respect to any investment for taxable years 
after the first three taxable years referred to in subsection 
(a) shall be reduced on a pro rata basis by the amount of 
the increased credit allowable by reason of subsection (a) 
with respect to such first three taxable years. The preceding 
sentence shall not be construed to affect whether any taxable 
year is part of the credit, compliance, or extended use peri-
ods under such section 42. 
(d) ELECTION.—The election under subsection (a) 
shall be made at the time and in the manner prescribed 
by the Secretary of the Treasury or the Secretary’s delegate, 
and, once made, shall be irrevocable. In the case of a part-
nership, such election shall be made by the partnership.
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TITLE II—ASSISTANCE FOR UN-
EMPLOYED 
WORKERS 
AND 
STRUGGLING FAMILIES 
SEC. 2000. SHORT TITLE; TABLE OF CONTENTS. 
(a) SHORT TITLE.—This title may be cited as the ‘‘As-
sistance 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 pay-
ments. 
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
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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 strik-
ing ‘‘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 es-
timates 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 es-
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timates 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 Treas-
ury, 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 agree-
ment under this section with the Secretary of Labor (herein-
after 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 Sec-
retary, terminate such agreement. 
(b) PROVISIONS OF AGREEMENT.— 
(1) ADDITIONAL
COMPENSATION.—Any agree-
ment 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 reg-
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ular compensation, as if such State law had been 
modified in a manner such that the amount of reg-
ular compensation (including dependents’ allowances) 
payable for any week shall be equal to the amount de-
termined 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 reg-
ular 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 other-
wise 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
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of the agreement (determined disregarding any addi-
tional amounts attributable to the modification de-
scribed in subsection (b)(1)) will be less than 
(2) the average weekly benefit amount of regular 
compensation which would otherwise have been pay-
able during such period under the State law, as in ef-
fect 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 com-
pensation (as described in subsection (b)(1)) 
paid to individuals by the State pursuant 
to such agreement; and 
(ii) any additional administrative ex-
penses incurred by the State by reason of 
such agreement (as determined by the Sec-
retary). 
(B) TERMS OF PAYMENTS.—Sums payable 
to any State by reason of such State’s having an 
agreement under this section shall be payable, ei-
ther in advance or by way of reimbursement (as
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determined by the Secretary), in such amounts 
as the Secretary estimates the State will be enti-
tled to receive under this section for each cal-
endar 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 sta-
tistical, 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 unemploy-
ment—
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(A) beginning after the date on which such 
agreement is entered into; and 
(B) ending before January 1, 2010. 
(2) TRANSITION RULE FOR INDIVIDUALS REMAIN-
ING 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 ben-
efit year that began before such date, additional com-
pensation (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 in-
dividual is otherwise eligible for regular compensation 
with respect to such benefit year. 
(3) TERMINATION.—Notwithstanding any other 
provision of this subsection, no additional compensa-
tion (as described in subsection (b)(1)) shall be pay-
able 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 re-
spect 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.
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(g) APPLICATION TO OTHER UNEMPLOYMENT BENE-
FITS.— 
(1) IN GENERAL.—Each agreement under this 
section shall include provisions to provide that the 
purposes of the preceding provisions of this section 
shall be applied with respect to unemployment bene-
fits described in subsection (i)(3) to the same extent 
and in the same manner as if those benefits were reg-
ular compensation. 
(2) ELIGIBILITY AND TERMINATION RULES.—Ad-
ditional 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 in-
dividual who was eligible to receive additional 
compensation (as so described) in connection 
with any regular compensation or any unem-
ployment benefits described in subsection (i)(3) 
for any period of unemployment ending before 
such date; and
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(B) shall in no event be payable for any 
week beginning after the date specified in sub-
section (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 In-
surance Program under title XXI of such Act. 
(i) DEFINITIONS.—For purposes of this section— 
(1) the terms ‘‘compensation’’, ‘‘regular com-
pensation’’, ‘‘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 com-
pensation’’ means emergency unemployment com-
pensation under title IV of the Supplemental Appro-
priations Act, 2008 (Public Law 110–252; 122 Stat. 
2353); and
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(3) any reference to unemployment benefits de-
scribed in this paragraph shall be considered to refer 
to— 
(A) extended compensation (as defined by 
section 205 of the Federal-State Extended Unem-
ployment Compensation Act of 1970); and 
(B) unemployment compensation (as de-
fined by section 85(b) of the Internal Revenue 
Code of 1986) provided under any program ad-
ministered by a State under an agreement with 
the Secretary. 
SEC. 2003. UNEMPLOYMENT COMPENSATION MODERNIZA-
TION. 
(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 Sec-
retary of Labor shall provide for the making of unemploy-
ment 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 unemploy-
ment account, in accordance with succeeding provisions of 
this subsection.
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‘‘(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 re-
quirements of paragraph (2); and 
‘‘(ii) the remainder shall be transferred to the ac-
count of such State upon a certification under para-
graph (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
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‘‘(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 re-
cently 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 be-
cause such individual is seeking only part-time (and 
not full-time) work, except that the State law provi-
sions 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 sepa-
rating from employment if that separation is for any 
compelling family reason. For purposes of this sub-
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paragraph, the term ‘compelling family reason’ 
means the following: 
‘‘(i) Domestic violence, verified by such rea-
sonable and confidential documentation as the 
State law may require, which causes the indi-
vidual reasonably to believe that such individ-
ual’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 accom-
pany such individual’s spouse— 
‘‘(I) to a place from which it is im-
practical 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
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the State law, and is enrolled and making satisfac-
tory 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 invol-
untarily 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 unemploy-
ment 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 un-
employment compensation payable under this sub-
paragraph 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 reg-
ular 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
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to any aggregate limitation on such allowances which 
the State law may establish (but which aggregate lim-
itation 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 unemploy-
ment compensation program. The Secretary of Labor shall, 
within 30 days after receiving a complete application, no-
tify 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 require-
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ments of paragraph (2) or (3), as the case may be, the Sec-
retary of Labor shall thereupon make a certification to that 
effect to the Secretary of the Treasury, together with a cer-
tification 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 con-
sidered to be in effect as of the date of such certification. 
‘‘(C)(i) No certification of compliance with the require-
ments 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 require-
ments of paragraph (3) may be made with respect to any 
State whose State law is not in compliance with the re-
quirements 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 pay-
ments under this subsection are made before October 1,
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2010. In the case of a State in which the first day of the 
first regularly scheduled session of the State legislature be-
ginning after the date of enactment of this subsection begins 
after December 31, 2010, the preceding sentence shall be ap-
plied 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 sub-
section may be used by such State only in the payment of 
cash benefits to individuals with respect to their unemploy-
ment (including for dependents’ allowances and for unem-
ployment 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 unem-
ployment 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 pay-
ments 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 Fed-
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eral 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 Ex-
tended 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 Sec-
retary 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 para-
graph (2). 
‘‘(2) The amount to be transferred under this sub-
section to a State account shall (as determined by the Sec-
retary of Labor and certified by such Secretary to the Sec-
retary of the Treasury) be equal to the amount obtained 
by multiplying $500,000,000 by the same ratio as deter-
mined under subsection (f)(1)(B) with respect to such State.
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‘‘(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 compensa-
tion 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 respond-
ing to increased demand for unemployment com-
pensation; and 
‘‘(D) staff-assisted reemployment services for un-
employment compensation claimants.’’. 
(b) REGULATIONS.—The Secretary of Labor may pre-
scribe any regulations, operating instructions, or other 
guidance necessary to carry out the amendment made by 
subsection (a).
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SEC. 2004. TEMPORARY ASSISTANCE FOR STATES WITH AD-
VANCES. 
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 Decem-
ber 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 subpara-
graph 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 Se-
curity Act (42 U.S.C. 603) is amended by adding at 
the end the following:
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‘‘(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 Pro-
grams’ (in this subsection referred to as the ‘Emer-
gency 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 re-
quirements of paragraph (3). 
‘‘(C) LIMITATION.—In no case may the Sec-
retary make a grant from the Emergency Fund 
for a fiscal year after fiscal year 2010. 
‘‘(3) GRANTS.—
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‘‘(A) GRANT
RELATED
TO
CASELOAD
IN-
CREASES.— 
‘‘(i) IN GENERAL.—For each calendar 
quarter in fiscal year 2009 or 2010, the 
Secretary shall make a grant from the 
Emergency Fund to each State that— 
‘‘(I) requests a grant under this 
subparagraph for the quarter; and 
‘‘(II) meets the requirement of 
clause (ii) for the quarter. 
‘‘(ii) CASELOAD
INCREASE
REQUIRE-
MENT.—A State meets the requirement of 
this clause for a quarter if the average 
monthly assistance caseload of the State for 
the quarter exceeds the average monthly as-
sistance caseload of the State for the cor-
responding 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 expendi-
tures of the State for basic assistance (as de-
fined by the Secretary) in the quarter,
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whether under the State program funded 
under this part or as qualified State ex-
penditures, exceeds the total expenditures of 
the State for such assistance for the cor-
responding quarter in the emergency fund 
base year of the State. 
‘‘(B) GRANT RELATED TO INCREASED EX-
PENDITURES 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 expendi-
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tures 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 EX-
PENDITURES 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
EX-
PENDITURE REQUIREMENT.—A State meets 
the requirement of this clause for a quarter 
if the total expenditures of the State for sub-
sidized employment in the quarter, whether
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under the State program funded under this 
part or as qualified State expenditures, ex-
ceeds 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 ADJUST-
MENTS TO DATA AND COLLECT NEEDED DATA.—In de-
termining the size of the caseload of a State and the 
expenditures of a State for basic assistance, non-re-
current short-term benefits, and subsidized employ-
ment, during any period for which the State requests 
funds under this subsection, and during the emer-
gency 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 pro-
gram funded under this part and qualified State ex-
penditures. The Secretary may develop a mechanism 
for collecting expenditure data, including procedures
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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 Sec-
retary shall implement this subsection as quickly as 
reasonably possible, pursuant to appropriate guidance 
to States. 
‘‘(8) DEFINITIONS.—In this subsection: 
‘‘(A) AVERAGE MONTHLY ASSISTANCE CASE-
LOAD DEFINED.—The term ‘average monthly as-
sistance 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.—
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‘‘(i) IN
GENERAL.—The term ‘emer-
gency fund base year’ means, with respect 
to a State and a category described in 
clause (ii), whichever of fiscal year 2007 or 
2008 is the fiscal year in which the amount 
described by the category with respect to the 
State is the lesser. 
‘‘(ii) CATEGORIES
DESCRIBED.—The 
categories described in this clause are the 
following: 
‘‘(I) The average monthly assist-
ance caseload of the State. 
‘‘(II) The total expenditures of the 
State for non-recurrent short term ben-
efits, 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 fund-
ed 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).’’.
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(2) REPEAL.—Effective October 1, 2010, sub-
section (c) of section 403 of the Social Security Act 
(42 U.S.C. 603) (as added by paragraph (1)) is re-
pealed. 
(b) TEMPORARY MODIFICATION OF CASELOAD REDUC-
TION 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 sec-
tion 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 PAY-
MENTS TO TERRITORIES.—Section 1108(a)(2) of the Social 
Security Act (42 U.S.C. 1308(a)(2)) is amended by insert-
ing ‘‘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.—Sec-
tion 7101(a) of the Deficit Reduction Act of 2005 (Public
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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 ap-
plied as if ‘fiscal year 2010’ were sub-
stituted 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 CONTIN-
GENCIES.—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.’’.
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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 de-
terminations under Medicaid and CHIP, and protection of cer-
tain 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 pro-
viders and Indian managed care entities.
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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 CONTINU-
ATION 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 cov-
erage beginning after the date of the enactment 
of the Act for COBRA continuation coverage 
with respect to any assistance eligible indi-
vidual, such individual shall be treated for pur-
poses of any COBRA continuation provision as 
having paid the amount of such premium if such 
individual pays 50 percent of the amount of such 
premium (as determined without regard to this 
subsection). 
(B) PLAN ENROLLMENT OPTION.—
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(i) IN GENERAL.—Notwithstanding the 
COBRA continuation provisions, an assist-
ance eligible individual may, not later than 
90 days after the date of notice of the plan 
enrollment option described in this subpara-
graph, 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 cov-
erage shall be treated as COBRA continu-
ation 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 em-
ployer will permit assistance eligible 
individuals to enroll in different cov-
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erage as provided for this subpara-
graph; 
(II) the premium for such dif-
ferent coverage does not exceed the pre-
mium for coverage in which the indi-
vidual was enrolled at the time the 
qualifying event occurred; 
(III) the different coverage in 
which the individual elects to enroll is 
coverage that is also offered to the ac-
tive employees of the employer at the 
time at which such election is made; 
and 
(IV) the different coverage is 
not— 
(aa) coverage that provides 
only dental, vision, counseling, or 
referral services (or a combination 
of such services); 
(bb) a health flexible spend-
ing account or health reimburse-
ment arrangement; or 
(cc) coverage that provides 
coverage for services or treatments 
furnished in an on-site medical
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facility maintained by the em-
ployer 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 pro-
visions 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 ASSIST-
ANCE.— 
(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 con-
sisting of only dental, vision, counseling, or 
referral services (or a combination thereof), 
coverage under a health reimbursement ar-
rangement or a health flexible spending ar-
rangement, or coverage of treatment that is 
furnished in an on-site medical facility 
maintained by the employer and that con-
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sists primarily of first-aid services, preven-
tion and wellness care, or similar care (or 
a combination thereof)) or is eligible for 
benefits under title XVIII of the Social Se-
curity Act; or 
(ii) the earliest of— 
(I) the date which is 12 months 
after the first day of first month that 
paragraph (1)(A) applies with respect 
to such individual, 
(II) the date following the expira-
tion of the maximum period of con-
tinuation coverage required under the 
applicable COBRA continuation cov-
erage provision, or 
(III) the date following the expi-
ration of the period of continuation 
coverage 
allowed 
under 
paragraph 
(4)(B)(ii). 
(B) TIMING
OF
ELIGIBILITY
FOR
ADDI-
TIONAL
COVERAGE.—For purposes of subpara-
graph (A)(i), an individual shall not be treated 
as eligible for coverage under a group health 
plan before the first date on which such indi-
vidual could be covered under such plan.
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(C) NOTIFICATION REQUIREMENT.—An as-
sistance eligible individual shall notify in writ-
ing 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 be-
gins with September 1, 2008, and ends with De-
cember 31, 2009, such qualified beneficiary is el-
igible 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 in-
voluntary termination of the covered employee’s 
employment and occurred during such period. 
(4) EXTENSION OF ELECTION PERIOD AND EF-
FECT ON COVERAGE.— 
(A) IN GENERAL.—Notwithstanding section 
605(a) of the Employee Retirement Income Secu-
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rity 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 bene-
ficiary 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 con-
taining such sections during the 60-day period 
commencing with the date on which the notifica-
tion required under paragraph (7)(C) is pro-
vided to such individual. 
(B) COMMENCEMENT
OF
COVERAGE; NO 
REACH-BACK.—Any COBRA continuation cov-
erage elected by a qualified beneficiary during 
an extended election period under 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 applica-
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ble COBRA continuation coverage provision 
if the coverage had been elected as required 
under such provision. 
(C) PREEXISTING
CONDITIONS.—With re-
spect to a qualified beneficiary who elects 
COBRA continuation coverage pursuant to sub-
paragraph (A), the period— 
(i) beginning on the date of the quali-
fying event, and 
(ii) ending with the 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 Rev-
enue Code of 1986, and section 2701(c)(2) of the 
Public Health Service Act. 
(5) EXPEDITED REVIEW OF DENIALS OF PRE-
MIUM ASSISTANCE.—In any case in which an indi-
vidual requests treatment as an assistance eligible in-
dividual and is denied such treatment by the group 
health plan by reason of such individual’s ineligi-
bility for COBRA continuation coverage, the Sec-
retary of Labor (or the Secretary of Health and 
Human services in connection with COBRA continu-
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ation coverage which is provided other than pursuant 
to part 6 of subtitle B of title I of the Employee Re-
tirement Income Security Act of 1974), in consulta-
tion 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 eli-
gibility within 10 business days after receipt of such 
individual’s application for review under this para-
graph. 
(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 re-
sources 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 Em-
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ployee 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 para-
graph (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 dif-
ferent 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 sec-
tions does not apply, the Secretary of 
Labor, in consultation with the Secretary of
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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 ad-
minister the COBRA continuation coverage 
involved, provide rules requiring the provi-
sion of such notice. 
(iii) FORM.—The requirement of the 
additional notification under this subpara-
graph may be met by amendment of exist-
ing notice forms or by inclusion of a sepa-
rate document with the notice otherwise re-
quired. 
(B) SPECIFIC REQUIREMENTS.—Each addi-
tional 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 ad-
ministrator and any other person main-
taining relevant information in connection 
with such premium reduction,
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HR 1 EAS 
(iii) a description of the extended elec-
tion period provided for in paragraph 
(4)(A), 
(iv) a description of the obligation of 
the qualified beneficiary under paragraph 
(2)(C) to notify the plan providing continu-
ation coverage of eligibility for subsequent 
coverage under another group health plan 
or eligibility for benefits under title XVIII 
of the Social Security Act and the penalty 
provided for failure to so notify the plan, 
(v) a description, displayed in a 
prominent manner, of the qualified bene-
ficiary’s right to a reduced premium and 
any conditions on entitlement to the re-
duced premium; and 
(vi) a description of the option of the 
qualified beneficiary to enroll in different 
coverage if the employer permits such bene-
ficiary to elect to enroll in such different 
coverage under paragraph (1)(B). 
(C) NOTICE
RELATING
TO
RETROACTIVE 
COVERAGE.—In the case of an individual de-
scribed in paragraph (3)(A) who has elected 
COBRA continuation coverage as of the date of
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HR 1 EAS 
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 notifi-
cation required to be provided under subpara-
graph (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 Treas-
ury shall provide such rules, procedures, regulations, 
and other guidance as may be necessary and appro-
priate to prevent fraud and abuse under this sub-
section. 
(9) OUTREACH.—The Secretary of Labor, in con-
sultation with the Secretary of the Treasury and the 
Secretary of Health and Human Services, shall pro-
vide outreach consisting of public education and en-
rollment assistance relating to premium reduction 
provided under this subsection. Such outreach shall
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target employers, group health plan administrators, 
public assistance programs, States, insurers, and 
other entities as determined appropriate by such Sec-
retaries. 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 Depart-
ments of Labor, Treasury, and Health and Human 
Services. 
(10) DEFINITIONS.—For purposes of this sub-
section— 
(A) ADMINISTRATOR.—The term ‘‘adminis-
trator’’ has the meaning given such term in sec-
tion 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 pedi-
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ican 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 Com-
mittee on Ways and Means, and the Committee 
on Energy and Commerce of the House of Rep-
resentatives and the Committee on Health, Edu-
cation, Labor, and Pensions and the Committee 
on Finance of the Senate regarding the premium 
reduction provided under this subsection that in-
cludes— 
(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 cov-
erage for which premium reduction is provided 
under this section, the Secretary of the Treasury
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HR 1 EAS 
shall submit a final report to each Committee re-
ferred to in subparagraph (A) that includes— 
(i) the number of individuals provided 
premium reduction under this section; 
(ii) the average dollar amount (month-
ly 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 pre-
mium 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
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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 re-
quired 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 with-
held for the payroll period under section 3401 (relat-
ing 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 sec-
tion 1324(b)(2) of title 31, United States Code, any pay-
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HR 1 EAS 
ment 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 re-
imbursement under subsection (a) for any period 
shall submit such reports as the Secretary may re-
quire, including— 
‘‘(A) an attestation of involuntary termi-
nation 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 pe-
riod 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 para-
graph (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 appro-
priate to carry out this section, including the requirement
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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 trans-
ferred or appropriated to any fund under the So-
cial Security Act, section 6432 of the Internal 
Revenue Code of 1986 shall not be taken into ac-
count. 
(C) CLERICAL AMENDMENT.—The table of 
sections for subchapter B of chapter 65 of the In-
ternal Revenue Code of 1986 is amended by add-
ing at the end the following new item: 
‘‘Sec. 6432. COBRA premium assistance.’’. 
(D) EFFECTIVE
DATE.—The amendments 
made by this paragraph shall apply to pre-
miums to which subsection (a)(1)(A) applies. 
(E) SPECIAL RULE.— 
(i) IN GENERAL.—In the case of an as-
sistance 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 enact-
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HR 1 EAS 
ment of this Act, the person to whom such 
payment is made shall— 
(I) make a reimbursement pay-
ment to such individual for the 
amount of such premium paid in ex-
cess of the amount required to be paid 
under subsection (b)(1)(A); or 
(II) provide credit to the indi-
vidual for such amount in a manner 
that reduces one or more subsequent 
premium payments that the individual 
is required to pay under such sub-
section for the coverage involved. 
(ii) REIMBURSING EMPLOYER.—A per-
son to which clause (i) applies shall be re-
imbursed 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 pay-
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ment 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 out-
standing 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 fol-
lowing 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 Amer-
ican Recovery and Reinvestment Act of 2009 who fails to 
make such a notification at such time and in such manner
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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 sub-
section. 
‘‘(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
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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 tax-
able years ending after the date of the enactment 
of this Act. 
(15) EXCLUSION
OF
COBRA
PREMIUM
ASSIST-
ANCE 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 Rein-
vestment 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
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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 ASSIST-
ANCE (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 ‘‘Decem-
ber 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 ELIGI-
BILITY.—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’’;
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(2) by adding at the end of subsection (a) the fol-
lowing: 
‘‘(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 RE-
CEIPT OF MEDICAL ASSISTANCE.—Section 1925(a)(1) of 
such Act (42 U.S.C. 1396r–6(a)(1)), as amended by sub-
section (b)(1), is further amended— 
(1) by inserting ‘‘subparagraph (B) and’’ before 
‘‘paragraph (5)’’; 
(2) by redesignating the matter after ‘‘REQUIRE-
MENT.—’’ 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
REQUIRE-
MENT FOR 3 MONTHS BEFORE RECEIPT OF MED-
ICAL ASSISTANCE.—A State may, at its option,
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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 de-
scribed in such subparagraph.’’. 
(d) CMS REPORT ON ENROLLMENT AND PARTICIPA-
TION 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 participa-
tion rates for adults and children under this section 
and of the number and percentage of children who be-
come ineligible for medical assistance under this sec-
tion whose medical assistance is continued under an-
other 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
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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 de-
scribed in such paragraph.’’. 
(e) EFFECTIVE DATE.—The amendments made by sub-
sections (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 ‘‘De-
cember 2010’’. 
(b) EXTENDING TOTAL AMOUNT AVAILABLE FOR AL-
LOCATION.—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 sub-
paragraph (K); 
(B) in subparagraph (L), by striking the 
period at the end and inserting a semicolon; and
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(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 DETERMINA-
TIONS UNDER MEDICAID AND CHIP, AND PRO-
TECTION OF CERTAIN INDIAN PROPERTY 
FROM MEDICAID ESTATE RECOVERY. 
(a) PREMIUMS
AND COST SHARING PROTECTION 
UNDER MEDICAID.— 
(1) IN GENERAL.—Section 1916 of the Social Se-
curity Act (42 U.S.C. 1396o) is amended— 
(A) in subsection (a), in the matter pre-
ceding paragraph (1), by striking ‘‘and (i)’’ and 
inserting ‘‘, (i), and (j)’’; and
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(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 CON-
TRACT HEALTH SERVICES.— 
‘‘(1) NO COST SHARING FOR ITEMS OR SERVICES 
FURNISHED TO INDIANS THROUGH INDIAN HEALTH 
PROGRAMS.— 
‘‘(A) IN GENERAL.—No enrollment fee, pre-
mium, or similar charge, and no deduction, co-
payment, 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 refer-
ral under contract health services for which pay-
ment may be made under this title. 
‘‘(B) NO REDUCTION IN AMOUNT OF PAY-
MENT 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 In-
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dian 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 simi-
lar 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 appli-
cation of any other limitations on the imposition of 
premiums or cost sharing that may apply to an indi-
vidual 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 Or-
ganization 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:
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‘‘(ix) Items and services furnished to 
an Indian directly by the Indian Health 
Service, an Indian Tribe, Tribal Organiza-
tion or Urban Indian Organization or 
through referral under contract health serv-
ices.’’. 
(b) TREATMENT OF CERTAIN PROPERTY FROM RE-
SOURCES FOR MEDICAID AND CHIP ELIGIBILITY.— 
(1) MEDICAID.—Section 1902 of the Social Secu-
rity 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 im-
provements, that is held in trust, subject to Federal 
restrictions, or otherwise under the supervision of the 
Secretary of the Interior, located on a reservation, in-
cluding any federally recognized Indian Tribe’s res-
ervation, pueblo, or colony, including former reserva-
tions in Oklahoma, Alaska Native regions established 
by the Alaska Native Claims Settlement Act, and In-
dian allotments on or near a reservation as des-
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ignated and approved by the Bureau of Indian Af-
fairs of the Department of the Interior. 
‘‘(2) For any federally recognized Tribe not de-
scribed in paragraph (1), property located within the 
most recent boundaries of a prior Federal reservation. 
‘‘(3) Ownership interests in rents, leases, royal-
ties, or usage rights related to natural resources (in-
cluding extraction of natural resources or harvesting 
of timber, other plants and plant products, animals, 
fish, and shellfish) resulting from the exercise of feder-
ally 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 cul-
tural 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:
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‘‘(B) Section 1902(dd) (relating to dis-
regard of certain property for purposes of mak-
ing eligibility determinations).’’. 
(c) CONTINUATION OF CURRENT LAW PROTECTIONS OF 
CERTAIN INDIAN PROPERTY FROM MEDICAID ESTATE RE-
COVERY.—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 sub-
paragraph: 
‘‘(B) The standards specified by the Sec-
retary under subparagraph (A) shall require that 
the procedures established by the State agency 
under subparagraph (A) exempt income, re-
sources, 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) be-
cause of the Federal responsibility for Indian 
Tribes and Alaska Native Villages. Nothing in 
this subparagraph shall be construed as pre-
venting the Secretary from providing additional 
estate recovery exemptions under this title for In-
dians.’’.