156
‘‘(d) QUALIFIED HEALTH INSURANCE.—For pur-
poses of this section, the term ‘qualified health insurance’
means insurance which constitutes medical care; except
that such term shall not include any insurance if substan-
tially all of its coverage is of excepted benefits described
in section 9832(c).
‘‘(e) COORDINATION WITH ADVANCE PAYMENTS OF
CREDIT.—
‘‘(1) RECAPTURE
OF
EXCESS
ADVANCE
PAY-
MENTS.—If any payment is made by the Secretary
under section 7527 during any calendar year to a
provider of qualified health insurance for an indi-
vidual, then the tax imposed by this chapter for the
individual’s last taxable year beginning in such cal-
endar year shall be increased by the aggregate
amount of such payments.
‘‘(2) 
RECONCILIATION
OF
PAYMENTS
AD-
VANCED AND CREDIT ALLOWED.—Any increase in
tax under paragraph (1) shall not be treated as tax
imposed by this chapter for purposes of determining
the amount of any credit (other than the credit al-
lowed by subsection (a)) allowable under part IV of
subchapter A of chapter 1.
‘‘(f) SPECIAL RULES.—
157
‘‘(1) COORDINATION
WITH
OTHER
DEDUC-
TIONS.—Amounts taken into account under sub-
section (a) shall not be taken into account in deter-
mining any deduction allowed under section 162(l)
or 213.
‘‘(2) MSA DISTRIBUTIONS.—Amounts distrib-
uted from an Archer MSA (as defined in section
220(d)) shall not be taken into account under sub-
section (a).
‘‘(3) DENIAL OF CREDIT TO DEPENDENTS.—No
credit shall be allowed under this section to any indi-
vidual with respect to whom a deduction under sec-
tion 151 is allowable to another taxpayer for a tax-
able year beginning in the calendar year in which
such individual’s taxable year begins.
‘‘(4) CREDIT TREATED AS REFUNDABLE CRED-
IT.—For purposes of this title, the credit allowed
under this section shall be treated as a credit allow-
able under subpart C of part IV of subchapter A of
chapter 1.
‘‘(5) REGULATIONS.—The Secretary may pre-
scribe such regulations and other guidance as may
be necessary or appropriate to carry out this section
and section 7527.’’.
158
(b) INCREASED ACCESS TO HEALTH INSURANCE FOR
INDIVIDUALS ELIGIBLE
FOR TAX CREDIT.—Notwith-
standing any other provision of law, in applying section
2741 of the Public Health Service Act (42 U.S.C. 300gg–
41)) and any alternative State mechanism under section
2744 of such Act (42 U.S.C.300gg–44)), in determining
who is an eligible individual (as defined in section 2741(b)
of such Act) in the case of an individual who may be cov-
ered by insurance for which credit is allowable under sec-
tion 6429 of the Internal Revenue Code of 1986 for an
eligible coverage month, if the individual seeks to obtain
health insurance coverage under such section during an
eligible coverage month under such section—
(1) paragraph (1) of such section 2741(b) shall
be applied as if any reference to 18 months is
deemed a reference to 12 months, and
(2) paragraphs (4) and (5) of such section
2741(b) shall not apply.
(c) INFORMATION REPORTING.—
(1) IN GENERAL.—Subpart B of part III of
subchapter A of chapter 61 (relating to information
concerning transactions with other persons) is
amended by inserting after section 6050S the fol-
lowing new section:
159
‘‘SEC. 6050T. RETURNS RELATING TO DISPLACED WORKER
HEALTH INSURANCE CREDIT.
‘‘(a) 
REQUIREMENT
OF
REPORTING.—Every
person—
‘‘(1) who, in connection with a trade or busi-
ness conducted by such person, receives payments
during any calendar year from any individual for
coverage of such individual or any other individual
under qualified health insurance (as defined in sec-
tion 6429(d)), and
‘‘(2) who claims a reimbursement for an ad-
vance credit amount,
shall, at such time as the Secretary may prescribe, make
the return described in subsection (b) with respect to each
individual from whom such payments were received or for
whom such a reimbursement is claimed.
‘‘(b) FORM AND MANNER OF RETURNS.—A return
is described in this subsection if such return—
‘‘(1) is in such form as the Secretary may pre-
scribe, and
‘‘(2) contains—
‘‘(A) the name, address, and TIN of each
individual referred to in subsection (a),
‘‘(B) the aggregate of the advance credit
amounts provided to such individual and for
which reimbursement is claimed,
160
‘‘(C) the number of months for which such
advance credit amounts are so provided, and
‘‘(D) such other information as the Sec-
retary may prescribe.
‘‘(c) STATEMENTS TO BE FURNISHED TO INDIVID-
UALS WITH RESPECT TO WHOM INFORMATION IS RE-
QUIRED.—Every person required to make a return under
subsection (a) shall furnish to each individual whose name
is required to be set forth in such return a written state-
ment showing—
‘‘(1) the name and address of the person re-
quired to make such return and the phone number
of the information contact for such person, and
‘‘(2) the information required to be shown on
the return with respect to such individual.
The written statement required under the preceding sen-
tence shall be furnished on or before January 31 of the
year following the calendar year for which the return
under subsection (a) is required to be made.
‘‘(d) ADVANCE CREDIT AMOUNT.—For purposes of
this section, the term ‘advance credit amount’ means an
amount for which the person can claim a reimbursement
pursuant to a program established by the Secretary under
section 7527.’’
(2) ASSESSABLE PENALTIES.—
161
(A) 
Subparagraph 
(B) 
of 
section
6724(d)(1) (relating to definitions) is amended
by redesignating clauses (xi) through (xvii) as
clauses (xii) through (xviii), respectively, and by
inserting after clause (x) the following new
clause:
‘‘(xi) section 6050T (relating to re-
turns relating to displaced worker health
insurance credit),’’.
(B) Paragraph (2) of section 6724(d) is
amended by striking ‘‘or’’ at the end of sub-
paragraph (Z), by striking the period at the end
of subparagraph (AA) and inserting ‘‘, or’’, and
by adding after subparagraph (AA) the fol-
lowing new subparagraph:
‘‘(BB) section 6050T (relating to returns
relating to displaced worker health insurance
credit).’’returns relating to payments for quali-
fied health insurance).’’
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart B of part III of subchapter A of
chapter 61 is amended by inserting after the item
relating to section 6050S the following new item:
‘‘Sec. 6050T. Returns relating to displaced worker health insur-
ance credit.’’
(d) CONFORMING AMENDMENTS.—
162
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting be-
fore the period ‘‘, or from section 6429 of such
Code’’.
(2) The table of sections for subchapter B of
chapter 65 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 6429. Displaced worker health insurance credit.’’
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2001.
SEC. 802. ADVANCE PAYMENT OF DISPLACED WORKER
HEALTH INSURANCE CREDIT.
(a) IN GENERAL.—Chapter 77 (relating to miscella-
neous provisions) is amended by adding at the end the
following new section:
‘‘SEC. 7527. ADVANCE PAYMENT OF DISPLACED WORKER
HEALTH INSURANCE CREDIT.
‘‘(a) GENERAL RULE.—The Secretary shall establish
a program for making payments on behalf of eligible indi-
viduals to providers of health insurance for such individ-
uals.
‘‘(b) ELIGIBLE INDIVIDUAL.—For purposes of this
section, the term ‘eligible individual’ means any individual
for whom a qualified health insurance credit eligibility cer-
tificate is in effect.
163
‘‘(c) QUALIFIED HEALTH INSURANCE CREDIT ELIGI-
BILITY CERTIFICATE.—For purposes of this section, a
qualified health insurance credit eligibility certificate is a
statement certified by a State agency (or by any other en-
tity designated by the Secretary) which—
‘‘(1) certifies that the individual was unem-
ployed (within the meaning of section 6429) as of
the first day of any month, and
‘‘(2) provides such other information as the
Secretary may require for purposes of this section.’’
(c) CLERICAL AMENDMENT.—The table of sections
for chapter 77 is amended by adding at the end the fol-
lowing new item:
‘‘Sec. 7527. Advance payment of displaced worker health insur-
ance credit.’’
(c) EFFECTIVE DATE.—The amendments made by
this section shall take effect on the date of the enactment
of this Act.
164
TITLE 
IX—EMPLOYMENT 
AND
TRAINING ASSISTANCE AND
TEMPORARY HEALTH CARE
COVERAGE ASSISTANCE
SEC. 901. EMPLOYMENT AND TRAINING ASSISTANCE AND
TEMPORARY HEALTH CARE COVERAGE AS-
SISTANCE.
(a) IN GENERAL.—Section 173(a) of the Workforce
Investment Act of 1998 (29 U.S.C. 2918(a)) is
amended—
(1) in paragraph (2), by striking ‘‘and’’ at the
end;
(2) in paragraph (3), by striking the period at
the end and inserting ‘‘; and’’; and
(3) by adding at the end the following:
‘‘(4) to the Governor of any State or outlying
area who applies for assistance under subsection (f)
to provide employment and training assistance and
temporary health care coverage assistance to work-
ers affected by major economic dislocations, such as
plant closures, mass layoffs, or multiple layoffs, in-
cluding those dislocations caused by the terrorist at-
tacks of September 11, 2001.’’.
165
(b) REQUIREMENTS.—Section 173 of the Workforce
Investment Act of 1998 (29 U.S.C. 2918) is amended by
adding at the end the following:
‘‘(f) ADDITIONAL RELIEF
FOR MAJOR ECONOMIC
DISLOCATIONS.—
‘‘(1) GRANT RECIPIENT ELIGIBILITY.—
‘‘(A) IN GENERAL.—To be eligible to re-
ceive a grant under subsection (a)(4), a Gov-
ernor shall submit an application, for assistance
described in subparagraph (B), to the Secretary
at such time, in such manner, and containing
such information as the Secretary may require.
‘‘(B) TYPES OF ASSISTANCE.—
‘‘(i) IN
GENERAL.—Assistance de-
scribed in this subparagraph is—
‘‘(I) employment and training as-
sistance, including employment and
training activities described in section
134; and
‘‘(II) temporary health care cov-
erage assistance described in para-
graph (4).
‘‘(ii) MINIMUM ALLOCATION TO TEM-
PORARY HEALTH CARE COVERAGE ASSIST-
ANCE.—Not less than 30 percent of the
166
cost of assistance requested in any applica-
tion submitted under this subsection shall
consist of the cost for temporary health
care coverage assistance described in para-
graph (4).
‘‘(iii) ENCOURAGEMENT OF CERTAIN
TYPES OF HEALTH CARE COVERAGE.—In
publishing requirements for applications
under this subsection, the Secretary shall
encourage the use of private health cov-
erage alternatives.
‘‘(C) MINIMUM AWARD REQUIREMENT FOR
ELIGIBLE STATES AND OUTLYING AREAS.—
‘‘(i) REQUIREMENTS.—In any case in
which the requirements of this section are
met in connection with one or more appli-
cations of the Governor of any State or
outlying area for assistance described in
subparagraph (B), the Governor—
‘‘(I) shall be awarded at least 1
grant under subsection (a)(4) pursu-
ant to such applications, and
‘‘(II) except as provided in clause
(ii), shall be awarded not less than
167
$5,000,000 in total grants awarded
under (a)(4).
‘‘(ii) EXCEPTION TO MINIMUM GRANT
REQUIREMENTS.—The 
Secretary 
may
award to a Governor a total amount less
than the minimum total amount specified
in clause (i)(II), as appropriate, if the
Governor—
‘‘(I) requests less than such min-
imum total amount, or
‘‘(II) fails to demonstrate to the
Secretary that there are a sufficient
number of eligible recipients to justify
the awarding of grants in such min-
imum total amount.
‘‘(2) STATE ADMINISTRATION.—The Governor
may designate one or more local workforce invest-
ment boards or other entities with the capability to
respond to the circumstances relating to the par-
ticular closure, layoff, or other dislocation to admin-
ister the grant under subsection (a)(4).
‘‘(3) PARTICIPANT ELIGIBILITY.—An individual
shall be eligible to receive assistance described in
paragraph (1)(B) under a grant awarded under sub-
section (a)(4) if such individual is a dislocated work-
168
er and the Governor has certified that a major eco-
nomic dislocation, such as a plant closure, mass lay-
off, or multiple layoff, including a dislocation caused
by the terrorist attacks of September 11, 2001, con-
tributed importantly to the dislocation.
‘‘(4) TEMPORARY HEALTH CARE COVERAGE AS-
SISTANCE.—
‘‘(A) IN
GENERAL.—Temporary health
care coverage assistance described in this para-
graph consists of health care coverage premium
assistance provided to qualified individuals
under this paragraph with respect to premiums
for coverage for themselves, for their spouses,
for their dependents, or for any combination
thereof, other than premiums for excluded
health insurance coverage.
‘‘(B) QUALIFIED INDIVIDUALS.—For pur-
poses of this paragraph—
‘‘(i) IN GENERAL.—Subject to clause
(ii), a qualified individual is an individual
who—
‘‘(I) is a dislocated worker re-
ferred to in paragraph (3) with re-
spect to whom the Governor has made
the certification regarding the disloca-
169
tion as required under such para-
graph, and
‘‘(II) is receiving or has received
employment and training assistance
as 
described 
in 
paragraph
(1)(B)(i)(I).
‘‘(ii) 
LIMITATION.—An 
individual
shall not be treated as a qualified indi-
vidual if—
‘‘(I) such individual is eligible for
coverage under the program under
title XIX of the Social Security Act
applicable in the State or outlying
area, or
‘‘(II) such individual is eligible
for coverage under the program under
title XXI of such Act applicable in the
State or outlying area,
unless such eligibility is effective solely in
connection with eligibility for health care
coverage premium assistance under a pro-
gram established by the Governor in con-
nection with temporary health care cov-
erage assistance received under this sub-
section.
170
‘‘(iii) CONSTRUCTION.—
‘‘(I) 
PERMITTING
COVERAGE
THROUGH ENROLLMENT IN MEDICAID
OR SCHIP.—Nothing in this subsection
shall be construed as preventing a
State from using funds made available
by reason of subsection (a)(4) to pro-
vide health care coverage through en-
rollment in the program under title
XIX (relating to medicaid) or in the
program under title XXI (relating to
SCHIP) of the Social Security Act,
but only in the case of individuals who
are not otherwise eligible for coverage
under either such program.
‘‘(II) NOT
AFFECTING
ELIGI-
BILITY
FOR
ASSISTANCE.—An indi-
vidual shall not be treated for pur-
poses of this subsection as being eligi-
ble for coverage under either such
program (and thereby not eligible for
assistance 
under 
this 
subsection)
merely on the basis that the State
provides assistance under this sub-
171
section through coverage under either
such program.
‘‘(C) LIMITATION
ON
ENTITLEMENT.—
Nothing in this subsection shall be construed as
establishing any entitlement of qualified individ-
uals to premium assistance under this sub-
section.
‘‘(D) 
CONCURRENCE
AND
CONSULTA-
TION.—In connection with any temporary
health care coverage assistance provided pursu-
ant to this paragraph—
‘‘(i) if the Secretary determines that
health care coverage premium assistance
provided through title XIX or XXI of the
Social Security Act is a substantial compo-
nent of the assistance provided, the Sec-
retary shall act in concurrence with the
Secretary of Health and Human Services,
and
‘‘(ii) in any other case, the Secretary
shall consult with the Secretary of Health
and Human Services to the extent that
such assistance affects programs adminis-
tered by or under the Secretary of Health
and Human Services.
172
‘‘(E) USE OF FUNDS.—Temporary health
care coverage assistance provided pursuant to
this subsection shall supplement and may not
supplant any other State or local funds used to
provide health care coverage and may not be in-
cluded in determining the amount of non-Fed-
eral contributions required under any program.
‘‘(F) DEFINITIONS.—For purposes of this
paragraph—
‘‘(i) EXCLUDED HEALTH CARE COV-
ERAGE.—The term ‘excluded health care
coverage’ means coverage under—
‘‘(I) title XVIII of the Social Se-
curity Act,
‘‘(II) chapter 55 of title 10,
United States Code,
‘‘(III) chapter 17 of title 38,
United States Code,
‘‘(IV) chapter 89 of title 5,
United States Code (other than cov-
erage which is comparable to continu-
ation coverage under section 4980B of
the Internal Revenue Code of 1986),
or
173
‘‘(V) the Indian Health Care Im-
provement Act.
Such term also includes coverage under a
qualified long-term care insurance contract
and excepted benefits described in section
733(c) of the Employee Retirement Income
Security Act of 1974.
‘‘(ii) PREMIUM.—The term ‘premium’
means, in connection with health care cov-
erage, the premium which would (but for
this section) be charged for the cost of cov-
erage.
‘‘(5) APPROPRIATIONS.—
‘‘(A) IN GENERAL.—There is hereby ap-
propriated, from any amounts in the Treasury
not otherwise appropriated, $4,000,000,000 for
the period consisting of fiscal years 2002, 2003,
and 2004 for the award of grants under sub-
section (a)(4) in accordance with this section.
‘‘(B) 
AVAILABILITY.—Amounts 
appro-
priated pursuant to subparagraph (A) for each
fiscal year—
‘‘(i) are in addition to amounts made
available under section 132(a)(2)(A) or
174
any other provision of law to carry out this
section; and
‘‘(ii) 
notwithstanding 
section
189(g)(1), shall remain available for obli-
gation by the Secretary from the date of
the enactment of this subsection through
each succeeding fiscal year, except that,
notwithstanding 
section 
189(g)(2), 
no
funds are hereby available for expenditure
after June 30, 2004.’’.
TITLE X—TEMPORARY STATE
HEALTH CARE ASSISTANCE
SEC. 1001. TEMPORARY STATE HEALTH CARE ASSISTANCE.
(a) IN GENERAL.—Title XXI of the Social Security
Act is amended by adding at the end the following new
section:
‘‘SEC. 2111. TEMPORARY STATE HEALTH CARE ASSISTANCE.
‘‘(a) IN GENERAL.—For the purpose of providing al-
lotments to States under this section, there are hereby ap-
propriated, out of any funds in the Treasury not otherwise
appropriated, $4,599,667,448. Such funds shall be avail-
able for expenditure by the State through the end of 2002.
This section constitutes budget authority in advance of ap-
propriations Acts and represents the obligation of the Fed-
175
eral Government to provide for the payment to States of
amounts provided under this section.
‘‘(b) ALLOTMENT.—Funds appropriated under sub-
section (a) shall be allotted by the Secretary among the
States in accordance with the following table:
‘‘State
Allotment (in
dollars)
Alabama
50,746,770
Alaska
31,934,026
Arizona
68,594,677
Arkansas
38,203,601
California
482,591,746
Colorado
37,469,775
Connecticut
60,039,005
Delaware
10,355,807
District of Columbia
18,321,834
Florida
164,619,369
Georgia
118,754,564
Hawaii
12,827,163
Idaho
13,031,700
Illinois
175,505,956
Indiana
66,067,368
Iowa
31,521,201
Kansas
27,288,967
Kentucky
82,759,133
Louisiana
83,907,301
Maine
22,650,838
Maryland
60,347,066
Massachusetts
121,971,140
Michigan
156,479,213
Minnesota
113,966,453
Mississippi
55,335,225
Missouri
74,675,436
Montana
10,224,652
Nebraska
31,582,786
Nevada
14,695,973
New Hampshire
15,482,962
New Jersey
115,880,093
New Mexico
39,204,714
New York
573,999,663
North Carolina
189,333,723
North Dakota
8,915,675
Ohio
166,006,936
Oklahoma
48,914,626
Oregon
71,160,353
Pennsylvania
227,183,255
Rhode Island
45,001,680
South Carolina
94,789,740
South Dakota
19,951,788
Tennessee
102,845,128
Texas
289,526,532
Utah
30,860,915
Vermont
10,291,090
Virginia
67,232,217
Washington
110,377,264
West Virginia
31,120,804
Wisconsin
93,089,086
Wyoming
12,030,459
‘‘(c) USE OF FUNDS.—
‘‘(1) IN GENERAL.—Funds appropriated under
this section may be used by a State only to provide
176
health care items and services (other than types of
items and services for which Federal financial par-
ticipation is prohibited under this title or title XIX).
‘‘(2) LIMITATION.—Funds so appropriated may
not be used to match other Federal expenditures or
in any other manner that results in the expenditure
of Federal funds in excess of the amounts provided
under this section.
‘‘(d) PAYMENT TO STATES.—Funds made available
under this section shall be paid to the States in a form
and manner and time specified by the Secretary, based
upon the submission of such information as the Secretary
may require. There is no requirement for the expenditure
of any State funds in order to qualify for receipt of funds
under this section. The previous sections of this title shall
not apply with respect to funds provided under this sec-
tion.
‘‘(e) DEFINITION.—For purposes of this section, the
term ‘State’ means the 50 States and the District of Co-
lumbia.’’.
(b) REPEAL.—Effective as of January 1, 2003, sec-
tion 2111 of the Social Security Act, as inserted by sub-
section (a), is repealed.
177
TITLE 
XI—SOCIAL 
SECURITY
HELD 
HARMLESS; 
BUDG-
ETARY TREATMENT OF ACT
SEC. 1101. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.
(a) IN GENERAL.—Nothing in this Act (or an amend-
ment made by this Act) shall be construed to alter or
amend title II of the Social Security Act (or any regulation
promulgated under that Act).
(b) TRANSFERS.—
(1) ESTIMATE OF SECRETARY.—The Secretary
of the Treasury shall annually estimate the impact
that the enactment of this Act has on the income
and balances of the trust funds established under
section 201 of the Social Security Act (42 U.S.C.
401).
(2) TRANSFER
OF
FUNDS.—If, under para-
graph (1), the Secretary of the Treasury estimates
that the enactment of this Act has a negative impact
on the income and balances of the trust funds estab-
lished under section 201 of the Social Security Act
(42 U.S.C. 401), the Secretary shall transfer, not
less frequently than quarterly, from the general reve-
nues of the Federal Government an amount suffi-
cient so as to ensure that the income and balances
178
of such trust funds are not reduced as a result of
the enactment of this Act.
SEC. 1102. EMERGENCY DESIGNATION.
Congress designates as emergency requirements pur-
suant to section 252(e) of the Balanced Budget and Emer-
gency Deficit Control Act of 1985 the following amounts:
(1) An amount equal to the amount by which
revenues are reduced by this Act below the rec-
ommended levels of Federal revenues for fiscal year
2002, the total of fiscal years 2002 through 2006,
and the total of fiscal years 2002 through 2011, pro-
vided in the conference report accompanying H.
Con. Res. 83, the concurrent resolution on the budg-
et for fiscal year 2002.
(2) Amounts equal to the amounts of new budg-
et authority and outlays provided in this Act in ex-
cess of the allocations under section 302(a) of the
Congressional Budget Act of 1974 to the Committee
on Finance of the Senate for fiscal year 2002, the
179
total of fiscal years 2002 through 2006, and the
total of fiscal years 2002 through 2011.
Passed the House of Representatives December 20
(legislative day, December 19), 2001.
Attest:
Clerk.
107TH CONGRESS
1ST SESSION
H. R. 3529
AN ACT
To provide tax incentives for economic recovery and
assistance to displaced workers.