‘‘(IV) as not readily employable 
by reason of lacking a sufficient num-
ber of basic skills.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to individuals who begin work for the 
employer after December 31, 2008. 
PART IV—CLARIFICATION OF REGULATIONS RE-
LATED TO LIMITATIONS ON CERTAIN BUILT- 
IN 
LOSSES 
FOLLOWING 
AN 
OWNERSHIP 
CHANGE 
SEC. 1431. 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. 
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(4) However, as taxpayers should generally be 
able to rely on guidance issued by the Secretary of the 
Treasury legislation is necessary to clarify the force 
and effect of Internal Revenue Service Notice 2008– 
83 and restore the proper application under the 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— 
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(A) is pursuant to a written binding con-
tract entered into on or before such date, or 
(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 F—Fiscal Relief for State 
and Local Governments 
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-
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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).’’. 
(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: 
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‘‘(G) SPECIAL
RULES
FOR
OBLIGATIONS 
ISSUED DURING 2009 AND 2010.— 
‘‘(i) INCREASE IN LIMITATION.—In the 
case of obligations issued during 2009 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’. 
‘‘(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 
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of the issue (determined by treating 
each qualified portion as a separate 
issue issued by the qualified borrower 
with respect to which such portion re-
lates). 
‘‘(iv) QUALIFIED FINANCING ISSUE.— 
For purposes of this subparagraph, the term 
‘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 
one 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).’’. 
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(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after December 31, 
2008. 
SEC. 1503. TEMPORARY MODIFICATION OF ALTERNATIVE 
MINIMUM TAX LIMITATIONS ON TAX-EXEMPT 
BONDS. 
(a) INTEREST ON PRIVATE ACTIVITY BONDS ISSUED 
DURING 2009 AND 2010 NOT TREATED AS TAX 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 
AFTER 2008.—Subparagraph (B) of section 56(g)(4) is 
amended by adding at the end the following new clause: 
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‘‘(iv) 
TAX
EXEMPT
INTEREST
ON 
BONDS ISSUED IN 2009 AND 2010.—Clause (i) 
shall not apply in the case of any interest 
on a bond issued after December 31, 2008, 
and before January 1, 2011. For purposes 
of the preceding sentence, a refunding bond 
(whether a current or advance refunding) 
shall be treated as issued on the date of the 
issuance of the refunded bond (or in the case 
of a series of refundings, the original 
bond).’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after December 31, 
2008. 
PART II—TAX CREDIT BONDS FOR SCHOOLS 
SEC. 1511. 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— 
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‘‘(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, 
‘‘(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 sum 
of— 
‘‘(1) the limitation amount allocated under sub-
section (d) for such calendar year to such issuer, and 
‘‘(2) if such issuer is a large local educational 
agency (as defined in subsection (e)(4)) or is issuing 
on behalf of such an agency, the limitation amount 
allocated under subsection (e) for such calendar year 
to such agency. 
‘‘(c) NATIONAL LIMITATION ON AMOUNT OF BONDS 
DESIGNATED.—There is a national qualified school con-
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struction bond limitation for each calendar year. Such lim-
itation is— 
‘‘(1) $11,000,000,000 for 2009, 
‘‘(2) $11,000,000,000 for 2010, and 
‘‘(3) except as provided in subsection (f), zero 
after 2010. 
‘‘(d) 60 PERCENT OF LIMITATION ALLOCATED AMONG 
STATES.— 
‘‘(1) IN GENERAL.—60 percent of the limitation 
applicable under subsection (c) for any calendar year 
shall be allocated by the Secretary among the States 
in proportion to the respective numbers of children in 
each State who have attained age 5 but not age 18 
for the most recent fiscal year ending before such cal-
endar 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 sum of— 
‘‘(i) the amount allocated to such State 
under this subsection for such year, and 
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‘‘(ii) the aggregate amounts allocated 
under subsection (e) to large local edu-
cational agencies in such State 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) ADJUSTED MINIMUM PERCENTAGE.—A 
State’s adjusted minimum percentage for any 
calendar year is the product of— 
‘‘(i) the minimum percentage described 
in section 1124(d) of the Elementary and 
Secondary Education Act of 1965 (20 
U.S.C. 6334(d)) for such State for the most 
recent fiscal year ending before such cal-
endar year, multiplied by 
‘‘(ii) 1.68. 
‘‘(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-
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SMARTINEZ on PROD1PC64 with BILLS
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-
tence, Indian tribal governments (as defined in sec-
tion 7701(a)(40)) shall be treated as qualified issuers 
for purposes of this subchapter. 
‘‘(e) 40 PERCENT OF LIMITATION ALLOCATED AMONG 
LARGEST SCHOOL DISTRICTS.— 
‘‘(1) IN GENERAL.—40 percent of the limitation 
applicable under subsection (c) for any calendar year 
shall be allocated under paragraph (2) by the Sec-
retary among local educational agencies which are 
large local educational agencies for such year. 
‘‘(2) ALLOCATION FORMULA.—The amount to be 
allocated under paragraph (1) for any calendar year 
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shall be allocated among large local educational agen-
cies in proportion to the respective amounts each such 
agency received for Basic Grants under subpart 2 of 
part A of title I of the Elementary and Secondary 
Education Act of 1965 (20 U.S.C. 6331 et seq.) for 
the most recent fiscal year ending before such cal-
endar year. 
‘‘(3) ALLOCATION
OF
UNUSED
LIMITATION
TO 
STATE.—The amount allocated under this subsection 
to a large local educational agency for any calendar 
year may be reallocated by such agency to the State 
in which such agency is located for such calendar 
year. Any amount reallocated to a State under the 
preceding sentence may be allocated as provided in 
subsection (d)(1). 
‘‘(4) LARGE LOCAL EDUCATIONAL AGENCY.—For 
purposes of this section, the term ‘large local edu-
cational agency’ means, with respect to a calendar 
year, any local educational agency if such agency 
is— 
‘‘(A) among the 100 local educational agen-
cies with the largest numbers of children aged 5 
through 17 from families living below the pov-
erty level, as determined by the Secretary using 
the most recent data available from the Depart-
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ment of Commerce that are satisfactory to the 
Secretary, or 
‘‘(B) 1 of not more than 25 local edu-
cational agencies (other than those described in 
subparagraph (A)) that the Secretary of Edu-
cation determines (based on the most recent data 
available satisfactory to the Secretary) are in 
particular need of assistance, based on a low 
level of resources for school construction, a high 
level of enrollment growth, or such other factors 
as the Secretary deems appropriate. 
‘‘(f) CARRYOVER OF UNUSED LIMITATION.—If for any 
calendar year— 
‘‘(1) the amount allocated under subsection (d) to 
any State, exceeds 
‘‘(2) the amount of bonds issued during such 
year which are designated under subsection (a) pur-
suant to such allocation, 
the limitation amount under such subsection for such State 
for the following calendar year shall be increased by the 
amount of such excess. A similar rule shall apply to the 
amounts allocated under subsection (d)(4) or (e).’’. 
(b) CONFORMING AMENDMENTS.— 
(1) Paragraph (1) of section 54A(d) is amended 
by striking ‘‘or’’ at the end of subparagraph (C), by 
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inserting ‘‘or’’ at the end of subparagraph (D), and 
by inserting after subparagraph (D) the following 
new subparagraph: 
‘‘(E) a qualified school construction bond,’’. 
(2) Subparagraph (C) of section 54A(d)(2) is 
amended by striking ‘‘and’’ at the end of clause (iii), 
by striking the period at the end of clause (iv) and 
inserting ‘‘, and’’, and by adding at the end the 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 December 31, 
2008. 
SEC. 1512. 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’’. 
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(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to obligations issued after December 31, 
2008. 
PART III—TAXABLE BOND OPTION FOR 
GOVERNMENTAL BONDS 
SEC. 1521. TAXABLE BOND OPTION FOR GOVERNMENTAL 
BONDS. 
(a) IN GENERAL.—Part IV of subchapter A of chapter 
1 is amended by adding at the end the following new sub-
part: 
‘‘Subpart J—Taxable Bond Option for Governmental 
Bonds 
‘‘Sec. 54AA. Taxable bond option for governmental bonds. 
‘‘SEC. 54AA. TAXABLE BOND OPTION FOR GOVERNMENTAL 
BONDS. 
‘‘(a) IN GENERAL.—If a taxpayer holds a taxable gov-
ernmental 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 de-
termined 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 taxable governmental bond is 35 
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percent of the amount of interest payable by the issuer with 
respect to such date. 
‘‘(c) LIMITATION BASED ON AMOUNT OF TAX.— 
‘‘(1) IN
GENERAL.—The credit allowed under 
subsection (a) for any taxable year shall not exceed 
the excess of— 
‘‘(A) the sum of the regular tax liability (as 
defined in section 26(b)) plus the tax imposed by 
section 55, over 
‘‘(B) the sum of the credits allowable under 
this part (other than subpart C and this 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) TAXABLE GOVERNMENTAL BOND.— 
‘‘(1) IN GENERAL.—For purposes of this section, 
the term ‘taxable governmental bond’ means any obli-
gation (other than a private activity bond) if— 
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‘‘(A) the interest on such obligation would 
(but for this section) be excludable from gross in-
come under section 103, and 
‘‘(B) the issuer makes an irrevocable elec-
tion to have this section apply. 
‘‘(2) APPLICABLE RULES.—For purposes of ap-
plying paragraph (1)— 
‘‘(A) a taxable governmental bond shall not 
be treated as federally guaranteed by reason of 
the credit allowed under subsection (a) or section 
6432, 
‘‘(B) the yield on a taxable governmental 
bond shall be determined without regard to the 
credit allowed under subsection (a), and 
‘‘(C) a bond shall not be treated as a tax-
able governmental bond if the issue price has 
more than a de minimis amount (determined 
under rules similar to the rules of section 
1273(a)(3)) of premium over the stated principal 
amount of the bond. 
‘‘(e) INTEREST PAYMENT DATE.—For purposes of this 
section, the term ‘interest payment date’ means any date 
on which the holder of record of the taxable governmental 
bond is entitled to a payment of interest under such bond. 
‘‘(f) SPECIAL RULES.— 
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‘‘(1) INTEREST
ON
TAXABLE
GOVERNMENTAL 
BONDS INCLUDIBLE IN GROSS INCOME FOR FEDERAL 
INCOME TAX PURPOSES.—For purposes of this title, 
interest on any taxable governmental bond shall be 
includible in gross income. 
‘‘(2) APPLICATION OF CERTAIN RULES.—Rules 
similar to the rules of subsections (f), (g), (h), and (i) 
of section 54A shall apply for purposes of the credit 
allowed under subsection (a). 
‘‘(g) SPECIAL RULE FOR QUALIFIED BONDS ISSUED 
BEFORE 2011.—In the case of a qualified bond issued before 
January 1, 2011— 
‘‘(1) ISSUER ALLOWED REFUNDABLE CREDIT.— 
In lieu of any credit allowed under this section with 
respect to such bond, the issuer of such bond shall be 
allowed a credit as provided in section 6432. 
‘‘(2) QUALIFIED
BOND.—For purposes of this 
subsection, the term ‘qualified bond’ means any tax-
able governmental 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. 
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‘‘(h) REGULATIONS.—The Secretary may prescribe 
such regulations and other guidance as may be necessary 
or appropriate to carry out this section and section 6432.’’. 
(b) CREDIT FOR QUALIFIED BONDS ISSUED BEFORE 
2011.—Subchapter B of chapter 65, as amended by this 
Act, is amended by adding at the end the following new 
section: 
‘‘SEC. 6432. CREDIT FOR QUALIFIED BONDS ALLOWED TO 
ISSUER. 
‘‘(a) IN GENERAL.—In the case of a qualified bond 
issued before January 1, 2011, the issuer of such bond shall 
be allowed a credit with respect to each interest payment 
under such bond which shall be payable by the Secretary 
as provided in subsection (b). 
‘‘(b) PAYMENT OF CREDIT.—The Secretary shall pay 
(contemporaneously with each interest payment date under 
such bond) to the issuer of such bond (or to any person 
who makes such interest payments on behalf of the issuer) 
35 percent of the interest payable under such bond on such 
date. 
‘‘(c) APPLICATION OF ARBITRAGE RULES.—For 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 
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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).’’. 
(c) CONFORMING AMENDMENTS.— 
(1) Section 1324(b)(2) of title 31, United States 
Code, is amended by striking ‘‘or 6428’’ and inserting 
‘‘6428, or 6432,’’. 
(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. Taxable bond option for governmental bonds.’’. 
(6) The table of sections for subchapter B of 
chapter 65, as amended by this Act, is amended by 
adding at the end the following new item: 
‘‘Sec. 6432. Credit for qualified bonds allowed to issuer.’’. 
(d) TRANSITIONAL
COORDINATION
WITH
STATE 
LAW.—Except as otherwise provided by a State after the 
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date of the enactment of this Act, the interest on any taxable 
governmental bond (as defined in section 54AA of the Inter-
nal Revenue Code of 1986, as added by this section) and 
the amount of any credit determined under such section 
with respect to such bond shall be treated for purposes of 
the income tax laws of such State as being exempt from 
Federal income tax. 
(e) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after the date of 
the enactment of this Act. 
PART IV—RECOVERY ZONE BONDS 
SEC. 1531. 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 in the proportion 
that each such State’s 2008 State employment decline 
bears to the aggregate of the 2008 State employment 
declines for all of the States. 
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‘‘(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. 
‘‘(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-
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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 
$10,000,000,000. 
‘‘(B) RECOVERY ZONE FACILITY BONDS.— 
There is a national recovery zone facility bond 
limitation of $15,000,000,000. 
‘‘(b) RECOVERY ZONE.—For purposes of this part, the 
term ‘recovery zone’ means— 
‘‘(1) any area designated by the issuer as having 
significant poverty, unemployment, home foreclosures, 
or general distress, and 
‘‘(2) any area for which a designation as an em-
powerment zone or renewal community is in effect. 
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‘‘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 6432, and 
‘‘(2) subsection (b) of such section shall be ap-
plied by substituting ‘55 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 taxable governmental bond (as defined in 
section 54AA(d)) issued before January 1, 2011, as 
part of issue if— 
‘‘(A) 100 percent of the available project 
proceeds (as defined in section 54A) of such issue 
are to be used for one or more qualified economic 
development purposes, and 
‘‘(B) the issuer designates such bond for 
purposes of this section. 
‘‘(2) LIMITATION ON AMOUNT OF BONDS 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-
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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.— 
‘‘(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, 
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‘‘(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, 
‘‘(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. 
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‘‘(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.’’. 
(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. 
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SEC. 1532. 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 
the same manner as if such bond were issued by 
a State, and 
‘‘(B) 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— 
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‘‘(i) the interest on which is not ex-
empt from tax under section 103 by reason 
of subsection (c) (determined without regard 
to this subsection) but would be so exempt 
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— 
‘‘(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)). 
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‘‘(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 studies conducted under this 
paragraph, including the Secretary’s recommendations re-
garding such amendment. 
(c) EFFECTIVE DATE.—The amendment made by sub-
section (a) shall apply to obligations issued after the date 
of the enactment of this Act. 
PART V—REPEAL OF WITHHOLDING TAX ON 
GOVERNMENT CONTRACTORS 
SEC. 1541. REPEAL OF WITHHOLDING TAX ON GOVERN-
MENT CONTRACTORS. 
Section 3402 is amended by striking subsection (t). 
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Subtitle G—Energy Incentives 
PART I—RENEWABLE ENERGY INCENTIVES 
SEC. 1601. 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’’, 
(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. 
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SEC. 1602. 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 placed in 
service in 2009 or 2010— 
‘‘(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 facility described in paragraph (1), (2), (3), 
(4), (6), (7), (9), or (11) of section 45(d) if no 
credit has been allowed under section 45 with re-
spect to such facility and the taxpayer makes an 
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irrevocable election to have this paragraph apply 
to such facility.’’. 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to facilities placed in service after De-
cember 31, 2008. 
SEC. 1603. 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.—Subsection (a) of section 48, 
as amended by section 1602, is amended by striking 
paragraph (4) and by redesignating paragraph (5) as 
paragraph (4). 
(2) CONFORMING AMENDMENTS.— 
(A) Section 25C(e)(1) is amended by strik-
ing ‘‘(8), and (9)’’ and inserting ‘‘and (8)’’. 
(B) Section 25D(e) is amended by striking 
paragraph (9). 
(c) EFFECTIVE DATE.— 
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(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. 
SEC. 1604. COORDINATION WITH RENEWABLE ENERGY 
GRANTS. 
Section 48 is amended by adding at the end the fol-
lowing new subsection: 
‘‘(d) COORDINATION WITH DEPARTMENT OF ENERGY 
GRANTS.—In the case of any property with respect to which 
the Secretary of Energy makes a grant under section 1721 
of the American Recovery and Reinvestment Tax Act of 
2009— 
‘‘(1) DENIAL OF PRODUCTION AND INVESTMENT 
CREDITS.—No credit shall be determined under this 
section or section 45 with respect to such property for 
the taxable year in which such grant is made or any 
subsequent taxable year. 
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‘‘(2) RECAPTURE
OF
CREDITS
FOR
PROGRESS 
EXPENDITURES MADE BEFORE GRANT.—If a credit 
was determined under this section with respect to 
such property for any taxable year ending before such 
grant is made— 
‘‘(A) the tax imposed under subtitle A on 
the taxpayer for the taxable year in which such 
grant is made shall be increased by so much of 
such credit as was allowed under section 38, 
‘‘(B) the general business carryforwards 
under section 39 shall be adjusted so as to recap-
ture the portion of such credit which was not so 
allowed, and 
‘‘(C) the amount of such grant shall be de-
termined without regard to any reduction in the 
basis of such property by reason of such credit. 
‘‘(3) TREATMENT OF GRANTS.—Any such grant 
shall— 
‘‘(A) not be includible in the gross income 
of the taxpayer, but 
‘‘(B) shall be taken into account in deter-
mining the basis of the property to which such 
grant relates, except that the basis of such prop-
erty shall be reduced under section 50(c) in the 
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same manner as a credit allowed under sub-
section (a).’’. 
PART 
II—INCREASED 
ALLOCATIONS 
OF 
NEW 
CLEAN RENEWABLE ENERGY BONDS AND 
QUALIFIED ENERGY CONSERVATION BONDS 
SEC. 1611. 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. 1612. INCREASED LIMITATION AND EXPANSION OF 
QUALIFIED ENERGY CONSERVATION BONDS. 
(a) INCREASED LIMITATION.—Subsection (e) of section 
54D is amended by adding at the end the following new 
paragraph: 
‘‘(4) ADDITIONAL
LIMITATION.—The national 
qualified energy conservation bond limitation shall be 
increased by $2,400,000,000. Such increase shall be 
allocated by the Secretary consistent with the rules of 
paragraphs (1), (2), and (3).’’. 
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(b) LOANS AND GRANTS TO IMPLEMENT GREEN COM-
MUNITY PROGRAMS.— 
(1) IN GENERAL.—Subparagraph (A) of section 
54D(f)(1) is amended by inserting ‘‘(or loans or 
grants for capital expenditures to implement any 
green community program)’’ after ‘‘Capital expendi-
tures’’. 
(2) BONDS TO IMPLEMENT GREEN COMMUNITY 
PROGRAMS
NOT
TREATED
AS
PRIVATE
ACTIVITY 
BONDS FOR PURPOSES OF LIMITATIONS ON QUALIFIED 
ENERGY
CONSERVATION
BONDS.—Subsection (e) of 
section 54D, as amended by subsection (a), is amend-
ed by adding at the end the following new paragraph: 
‘‘(5) BONDS TO IMPLEMENT GREEN COMMUNITY 
PROGRAMS
NOT
TREATED
AS
PRIVATE
ACTIVITY 
BONDS.—For purposes of paragraph (3) and sub-
section (f)(2), a bond shall not be treated as a private 
activity bond solely because proceeds of the issue of 
which such bond is a part are to be used for loans 
or grants for capital expenditures to implement any 
green community program.’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to obligations issued after the date of 
the enactment of this Act. 
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PART III—ENERGY CONSERVATION INCENTIVES 
SEC. 1621. 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) EXTENSION.—Section 25C(g)(2) is amended by 
striking ‘‘December 31, 2009’’ and inserting ‘‘December 31, 
2010’’. 
(c) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
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SEC. 1622. 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 
half kilowatt of capacity of the qualified fuel cell 
property (as defined in section 48(c)(1)) to which 
such expenditure relates.’’. 
(2) CONFORMING AMENDMENT.—Paragraph (4) 
of section 25D(e) is amended— 
(A) by striking all that precedes subpara-
graph (B) and inserting the following: 
‘‘(4) FUEL CELL EXPENDITURE LIMITATIONS IN 
CASE
OF
JOINT
OCCUPANCY.—In the case of any 
dwelling unit with respect to which qualified fuel cell 
property expenditures are made and which is jointly 
occupied and used during any calendar year as a res-
idence by two or more individuals the following rules 
shall apply: 
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‘‘(A) MAXIMUM EXPENDITURES FOR FUEL 
CELLS.—The maximum amount of such expendi-
tures which may be taken into account under 
subsection (a) by all such individuals with re-
spect to such dwelling unit during such calendar 
year shall be $1,667 in the case of each half kilo-
watt of capacity of qualified fuel cell property 
(as defined in section 48(c)(1)) with respect to 
which such expenditures relate.’’, and 
(B) by striking subparagraph (C). 
(b) EFFECTIVE DATE.—The amendments made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
SEC. 1623. TEMPORARY INCREASE IN CREDIT FOR ALTER-
NATIVE FUEL VEHICLE REFUELING PROP-
ERTY. 
(a) IN GENERAL.—Section 30C(e) is amended by add-
ing at the end the following new paragraph: 
‘‘(6) SPECIAL RULE FOR PROPERTY PLACED IN 
SERVICE DURING 2009 AND 2010.—In the case of prop-
erty placed in service in taxable years beginning after 
December 31, 2008, and before January 1, 2011— 
‘‘(A) in the case of any such property which 
does not relate to hydrogen— 
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‘‘(i) subsection (a) shall be applied by 
substituting ‘50 percent’ for ‘30 percent’, 
‘‘(ii) subsection (b)(1) shall be applied 
by substituting ‘$50,000’ for ‘$30,000’, and 
‘‘(iii) subsection (b)(2) shall be applied 
by substituting ‘$2,000’ for ‘$1,000’, and 
‘‘(B) in the case of any such property which 
relates to hydrogen, subsection (b) shall be ap-
plied by substituting ‘$200,000’ for ‘$30,000’.’’. 
(b) EFFECTIVE DATE.—The amendment made by this 
section shall apply to taxable years beginning after Decem-
ber 31, 2008. 
PART IV—ENERGY RESEARCH INCENTIVES 
SEC. 1631. 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. 
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‘‘(2) 
QUALIFIED
ENERGY
RESEARCH
EX-
PENSES.—For purposes of this subsection, the term 
‘qualified energy research expenses’ means so much of 
the taxpayer’s qualified research expenses as are re-
lated to the fields of fuel cells and battery technology, 
renewable energy, energy conservation technology, effi-
cient transmission and distribution of electricity, and 
carbon capture and sequestration. 
‘‘(3) COORDINATION
WITH
OTHER
RESEARCH 
CREDITS.— 
‘‘(A) INCREMENTAL CREDIT.—The amount 
of qualified energy research expenses taken into 
account under subsection (a)(1)(A) shall not ex-
ceed 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 
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‘‘(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).’’. 
(b) CONFORMING AMENDMENT.—Subparagraph (B) of 
section 41(i)(1), 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. 
Subtitle H—Other Provisions 
PART 
I—APPLICATION 
OF 
CERTAIN 
LABOR 
STANDARDS TO PROJECTS FINANCED WITH 
CERTAIN TAX-FAVORED BONDS 
SEC. 1701. 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— 
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(1) any qualified clean renewable energy bond 
(as defined in section 54C of the Internal Revenue 
Code of 1986) issued after the date of the enactment 
of this Act, 
(2) any qualified energy conservation bond (as 
defined in section 54D of the Internal Revenue Code 
of 1986) issued after the date of the enactment of this 
Act, 
(3) any qualified zone academy bond (as defined 
in section 54E of the Internal Revenue Code of 1986) 
issued after the date of the enactment of this Act, 
(4) any qualified school construction bond (as 
defined in section 54F of the Internal Revenue Code 
of 1986), and 
(5) any recovery zone economic development 
bond (as defined in section 1400U–2 of the Internal 
Revenue Code of 1986). 
PART II—GRANTS TO PROVIDE FINANCING FOR 
LOW-INCOME HOUSING 
SEC. 1711. GRANTS TO STATES FOR LOW-INCOME HOUSING 
PROJECTS IN LIEU OF LOW-INCOME HOUSING 
CREDIT ALLOCATIONS FOR 2009. 
(a) IN GENERAL.—The Secretary of the Treasury shall 
make a grant to the housing credit agency of each State 
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in an amount equal to such State’s low-income housing 
grant election amount. 
(b) 
LOW-INCOME
HOUSING
GRANT
ELECTION 
AMOUNT.—For purposes of this section, the term ‘‘low-in-
come housing grant election amount’’ means, with respect 
to any State, such amount as the State may elect which 
does not exceed 85 percent of the product of— 
(1) the sum of— 
(A) 100 percent of the State housing credit 
ceiling for 2009 which is attributable to amounts 
described in clauses (i) and (iii) of section 
42(h)(3)(C) of the Internal Revenue Code of 
1986, and 
(B) 40 percent of the State housing credit 
ceiling for 2009 which is attributable to amounts 
described in clauses (ii) and (iv) of such section, 
multiplied by 
(2) 10. 
(c) SUBAWARDS FOR LOW-INCOME BUILDINGS.— 
(1) IN GENERAL.—A State housing credit agency 
receiving a grant under this section shall use such 
grant to make subawards to finance the construction 
or acquisition and rehabilitation of qualified low-in-
come buildings. A subaward under this section may 
be made to finance a qualified low-income building 
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with or without an allocation under section 42 of the 
Internal Revenue Code of 1986, except that a State 
housing credit agency may make subawards to fi-
nance qualified low-income buildings without an allo-
cation only if it makes a determination that such use 
will increase the total funds available to the State to 
build and rehabilitate affordable housing. In com-
plying with such determination requirement, a State 
housing credit agency shall establish a process in 
which applicants that are allocated credits are re-
quired to demonstrate good faith efforts to obtain in-
vestment commitments for such credits before the 
agency makes such subawards. 
(2) SUBAWARDS
SUBJECT
TO
SAME
REQUIRE-
MENTS
AS
LOW-INCOME
HOUSING
CREDIT
ALLOCA-
TIONS.—Any such subaward with respect to any 
qualified low-income building shall be made in the 
same manner and shall be subject to the same limita-
tions (including rent, income, and use restrictions on 
such building) as an allocation of housing credit dol-
lar amount allocated by such State housing credit 
agency under section 42 of the Internal Revenue Code 
of 1986, except that such subawards shall not be lim-
ited by, or otherwise affect (except as provided in sub-
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section (h)(3)(J) of such section), the State housing 
credit ceiling applicable to such agency. 
(3) COMPLIANCE AND ASSET MANAGEMENT.—The 
State housing credit agency shall perform asset man-
agement functions to ensure compliance with section 
42 of the Internal Revenue Code of 1986 and the long- 
term viability of buildings funded by any subaward 
under this section. The State housing credit agency 
may collect reasonable fees from a subaward recipient 
to cover expenses associated with the performance of 
its duties under this paragraph. The State housing 
credit agency may retain an agent or other private 
contractor to satisfy the requirements of this para-
graph. 
(4) RECAPTURE.—The State housing credit 
agency shall impose conditions or restrictions, includ-
ing a requirement providing for recapture, on any 
subaward under this section so as to assure that the 
building with respect to which such subaward is made 
remains a qualified low-income building during the 
compliance period. Any such recapture shall be pay-
able to the Secretary of the Treasury for deposit in 
the general fund of the Treasury and may be enforced 
by means of liens or such other methods as the Sec-
retary of the Treasury determines appropriate. 
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(d) RETURN OF UNUSED GRANT FUNDS.—Any grant 
funds not used to make subawards under this section before 
January 1, 2011, shall be returned to the Secretary of the 
Treasury on such date. Any subawards returned to the 
State housing credit agency on or after such date shall be 
promptly returned to the Secretary of the Treasury. Any 
amounts returned to the Secretary of the Treasury under 
this subsection shall be deposited in the general fund of the 
Treasury. 
(e) DEFINITIONS.—Any term used in this section 
which is also used in section 42 of the Internal Revenue 
Code of 1986 shall have the same meaning for purposes of 
this section as when used in such section 42. Any reference 
in this section to the Secretary of the Treasury shall be 
treated as including the Secretary’s delegate. 
(f) APPROPRIATIONS.—There is hereby appropriated to 
the Secretary of the Treasury such sums as may be nec-
essary to carry out this section. 
PART III—GRANTS FOR SPECIFIED ENERGY 
PROPERTY IN LIEU OF TAX CREDITS 
SEC. 1721. GRANTS FOR SPECIFIED ENERGY PROPERTY IN 
LIEU OF TAX CREDITS. 
(a) IN GENERAL.—Upon application, the Secretary of 
Energy shall, within 60 days of the application and subject 
to the requirements of this section, provide a grant to each 
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person who places in service specified energy property dur-
ing 2009 or 2010 to reimburse such person for a portion 
of the expense of such facility as provided in subsection (b). 
(b) GRANT AMOUNT.— 
(1) IN
GENERAL.—The amount of the grant 
under subsection (a) with respect to any specified en-
ergy property shall be the applicable percentage of the 
basis of such facility. 
(2) APPLICABLE PERCENTAGE.—For purposes of 
paragraph (1), the term ‘‘applicable percentage’’ 
means— 
(A) 30 percent in the case of any property 
described in paragraphs (1) through (4) of sub-
section (c), and 
(B) 10 percent in the case of any other 
property. 
(3) DOLLAR LIMITATIONS.—In the case of prop-
erty described in paragraph (2), (6), or (7) of sub-
section (c), the amount of any grant under this sec-
tion with respect to such property shall not exceed the 
limitation 
described 
in 
section 
48(c)(1)(B), 
48(c)(2)(B), or 48(c)(3)(B) of the Internal Revenue 
Code of 1986, respectively, with respect to such prop-
erty. 
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(c) SPECIFIED ENERGY PROPERTY.—For purposes of 
this section, the term ‘‘specified energy property’’ means 
any of the following: 
(1) QUALIFIED
FACILITIES.—Any facility de-
scribed in paragraph (1), (2), (3), (4), (6), (7), (9), 
or (11) of section 45(d) of the Internal Revenue Code 
of 1986. 
(2) QUALIFIED
FUEL
CELL
PROPERTY.—Any 
qualified fuel cell property (as defined in section 
48(c)(1) of such Code). 
(3) SOLAR PROPERTY.—Any property described 
in clause (i) or (ii) of section 48(a)(3)(A) of such 
Code. 
(4) QUALIFIED
SMALL
WIND
ENERGY
PROP-
ERTY.—Any qualified small wind energy property (as 
defined in section 48(c)(4) of such Code). 
(5) GEOTHERMAL PROPERTY.—Any property de-
scribed in clause (iii) of section 48(a)(3)(A) of such 
Code. 
(6) QUALIFIED MICROTURBINE PROPERTY.—Any 
qualified microturbine property (as defined in section 
48(c)(2) of such Code). 
(7) COMBINED HEAT AND POWER SYSTEM PROP-
ERTY.—Any combined heat and power system prop-
erty (as defined in section 48(c)(3) of such Code). 
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(8) GEOTHERMAL HEATPUMP PROPERTY.—Any 
property 
described 
in 
clause 
(vii) 
of 
section 
48(a)(3)(A) of such Code. 
(d) APPLICATION OF CERTAIN RULES.—In making 
grants under this section, the Secretary of Energy shall 
apply rules similar to the rules of section 50 of the Internal 
Revenue Code of 1986. In applying such rules, if the facility 
is disposed of, or otherwise ceases to be a qualified renewable 
energy facility, the Secretary of Energy shall provide for 
the recapture of the appropriate percentage of the grant 
amount in such manner as the Secretary of Energy deter-
mines appropriate. 
(e) EXCEPTION FOR CERTAIN NON-TAXPAYERS.—The 
Secretary of Energy shall not make any grant under this 
section to any Federal, State, or local government (or any 
political subdivision, agency, or instrumentality thereof) or 
any organization described in section 501(c) of the Internal 
Revenue Code of 1986 and exempt from tax under section 
501(a) of such Code. 
(f) DEFINITIONS.—Terms used in this section which 
are also used in section 45 or 48 of the Internal Revenue 
Code of 1986 shall have the same meaning for purposes of 
this section as when used in such section 45 or 48. Any 
reference in this section to the Secretary of the Treasury 
shall be treated as including the Secretary’s delegate. 
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(g) COORDINATION
BETWEEN
DEPARTMENTS
OF 
TREASURY AND ENERGY.—The Secretary of the Treasury 
shall provide the Secretary of Energy with such technical 
assistance as the Secretary of Energy may require in car-
rying out this section. The Secretary of Energy shall pro-
vide the Secretary of the Treasury with such information 
as the Secretary of the Treasury may require in carrying 
out the amendment made by section 1604. 
(h) APPROPRIATIONS.—There is hereby appropriated 
to the Secretary of Energy such sums as may be necessary 
to carry out this section. 
(i) TERMINATION.—The Secretary of Energy shall not 
make any grant to any person under this section unless 
the application of such person for such grant is received 
before October 1, 2011. 
PART IV—STUDY OF ECONOMIC, EMPLOYMENT, 
AND RELATED EFFECTS OF THIS ACT 
SEC. 1731. STUDY OF ECONOMIC, EMPLOYMENT, AND RE-
LATED EFFECTS OF THIS ACT. 
On February 1, 2010, and every 3 months thereafter 
in calendar year 2010, the Comptroller General of the 
United States shall submit to the Committee on Ways and 
Means a written report on the most recent national (and, 
where available, State-by-State) information on— 
(1) the economic effects of this Act; 
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(2) the employment effects of this Act, includ-
ing— 
(A) a comparison of the number of jobs pre-
served and the number of jobs created as a result 
of this Act; and 
(B) a comparison of the numbers of jobs 
preserved and the number of jobs created in each 
of the public and private sectors; 
(3) the share of tax and non-tax expenditures 
provided under this Act that were spent or saved, by 
group and income class; 
(4) how the funds provided to States under this 
Act have been spent, including a breakdown of— 
(A) funds used for services provided to citi-
zens; and 
(B) wages and other compensation for pub-
lic employees; and 
(5) a description of any funds made available 
under this Act that remain unspent, and the reasons 
why. 
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TITLE II—ASSISTANCE FOR UN-
EMPLOYED 
WORKERS 
AND 
STRUGGLING FAMILIES 
SEC. 2000. SHORT TITLE, ETC. 
(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: 
Sec. 2000. Short title, etc. 
Subtitle A—Unemployment Insurance 
Sec. 2001. Extension of emergency unemployment compensation program. 
Sec. 2002. Increase in unemployment compensation benefits. 
Sec. 2003. Special transfers for unemployment compensation modernization. 
Subtitle B—Assistance for Vulnerable Individuals 
Sec. 2101. Emergency fund for TANF program. 
Sec. 2102. One-time emergency payment to SSI recipients. 
Sec. 2103. Temporary resumption of prior child support law. 
Subtitle A—Unemployment 
Insurance 
SEC. 2001. EXTENSION OF EMERGENCY UNEMPLOYMENT 
COMPENSATION PROGRAM. 
(a) IN GENERAL.—Section 4007 of the Supplemental 
Appropriations Act, 2008 (Public Law 110–252; 26 U.S.C. 
3304 note), as amended by section 4 of the Unemployment 
Compensation Extension Act of 2008 (Public Law 110–449; 
122 Stat. 5015), is amended— 
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(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-
timates to be necessary for purposes of assisting 
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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-
ular compensation, as if such State law had been 
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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 
of the agreement (determined disregarding any addi-
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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 
determined by the Secretary), in such amounts 
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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— 
(A) beginning after the date on which such 
agreement is entered into; and 
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(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. 
(g) APPLICATION TO OTHER UNEMPLOYMENT BENE-
FITS.— 
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(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 (h)(3) to the same extent 
and in the same manner as if those benefits were reg-
ular compensation. 
(2) ELIGIBILITY
AND
TERMINATION
RULES.— 
Additional compensation (as described in subsection 
(b)(1))— 
(A) shall not be payable, pursuant to this 
subsection, with respect to any unemployment 
benefits described in subsection (h)(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 (h)(3) 
for any period of unemployment ending before 
such date; and 
(B) shall in no event be payable for any 
week beginning after the date specified in sub-
section (e)(3). 
(h) DEFINITIONS.—For purposes of this section— 
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(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 
(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. 
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SEC. 2003. SPECIAL TRANSFERS FOR UNEMPLOYMENT COM-
PENSATION MODERNIZATION. 
(a) IN GENERAL.—Section 903 of the Social Security 
Act (42 U.S.C. 1103) is amended by adding at the end the 
following: 
‘‘Special Transfers in Fiscal Years 2009, 2010, and 2011 
for Modernization 
‘‘(f)(1)(A) In addition to any other amounts, the 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. 
‘‘(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— 
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‘‘(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 
‘‘(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: 
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‘‘(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 work 
(as defined by the Secretary of Labor), except that the 
State law provisions carrying out this subparagraph 
may exclude an individual if a majority of the weeks 
of work in such individual’s base period do not in-
clude part-time work (as so defined). 
‘‘(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-
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). 
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‘‘(ii) The illness or disability of a member 
of the individual’s immediate family (as those 
terms are defined by the Secretary of Labor). 
‘‘(iii) The need for the individual to 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 
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-
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SMARTINEZ on PROD1PC64 with BILLS
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 
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 
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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-
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 
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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, 
2011. 
‘‘(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. 
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100 
‘‘(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-
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). 
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101 
‘‘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. 
‘‘(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); 
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102 
‘‘(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). 
Subtitle B—Assistance for 
Vulnerable Individuals 
SEC. 2101. EMERGENCY FUND FOR TANF PROGRAM. 
(a) IN GENERAL.—Section 403 of the Social Security 
Act (42 U.S.C. 603) is amended by adding at the end the 
following: 
‘‘(c) EMERGENCY FUND.— 
‘‘(1) ESTABLISHMENT.—There is established in 
the Treasury of the United States a fund which shall 
be known as the ‘Emergency Contingency Fund for 
State Temporary Assistance for Needy Families Pro-
grams’ (in this subsection referred to as the ‘Emer-
gency Fund’). 
‘‘(2) DEPOSITS INTO FUND.—Out of any money 
in the Treasury of the United States not otherwise 
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103 
appropriated, there are appropriated such sums as 
are necessary for payment to the Emergency Fund. 
‘‘(3) GRANTS.— 
‘‘(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 
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104 
amount (if any) by which the total expendi-
tures of the State for basic assistance (as de-
fined by the Secretary) in the quarter, 
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 
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