Pub.L. 107-148 To authorize the establishment of Radio Free Afghanistan. <> ...

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Public Law 107-147
107th Congress

                                 An Act


 
    To provide tax incentives for economic recovery. <<NOTE: Mar. 9, 
                         2002 -  [H.R. 3090]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress <<NOTE: Job Creation and Worker 
Assistance Act of 2002. Inter-governmental relations.>> assembled,

SECTION 1. SHORT TITLE; ETC.

    (a) <<NOTE: 26 USC 1 note.>>  Short Title.--This Act may be cited as 
the ``Job Creation and Worker Assistance Act of 2002''.

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

Sec. 1. Short title; etc.

                      TITLE I--BUSINESS PROVISIONS

Sec. 101. Special depreciation allowance for certain property acquired 
           after 
           September 10, 2001, and before September 11, 2004.
Sec. 102. Carryback of certain net operating losses allowed for 5 years; 
           temporary suspension of 90 percent AMT limit.

                    TITLE II--UNEMPLOYMENT ASSISTANCE

Sec. 201. Short title.
Sec. 202. Federal-State agreements.
Sec. 203. Temporary extended unemployment compensation account.
Sec. 204. Payments to States having agreements for the payment of 
           temporary 
           extended unemployment compensation.
Sec. 205. Financing provisions.
Sec. 206. Fraud and overpayments.
Sec. 207. Definitions.
Sec. 208. Applicability.
Sec. 209. Special Reed Act transfer in fiscal year 2002.

    TITLE III--TAX INCENTIVES FOR NEW YORK CITY AND DISTRESSED AREAS

Sec. 301. Tax benefits for area of New York City damaged in terrorist 
           attacks on September 11, 2001.

            TITLE IV--MISCELLANEOUS AND TECHNICAL PROVISIONS

              Subtitle A--General Miscellaneous Provisions

Sec. 401. Allowance of electronic 1099's.
Sec. 402. Excluded cancellation of indebtedness income of S corporation 
           not to 
           result in adjustment to basis of stock of shareholders.
Sec. 403. Limitation on use of nonaccrual experience method of 
           accounting.
Sec. 404. Exclusion for foster care payments to apply to payments by 
           qualified placement agencies.
Sec. 405. Interest rate range for additional funding requirements.
Sec. 406. Adjusted gross income determined by taking into account 
           certain 
           expenses of elementary and secondary school teachers.

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                    Subtitle B--Technical Corrections

Sec. 411. Amendments related to Economic Growth and Tax Relief 
           Reconciliation Act of 2001.
Sec. 412. Amendments related to Community Renewal Tax Relief Act of 
           2000.
Sec. 413. Amendments related to the Tax Relief Extension Act of 1999.
Sec. 414. Amendments related to the Taxpayer Relief Act of 1997.
Sec. 415. Amendment related to the Balanced Budget Act of 1997.
Sec. 416. Other technical corrections.
Sec. 417. Clerical amendments.
Sec. 418. Additional corrections.

   TITLE V--SOCIAL SECURITY HELD HARMLESS; BUDGETARY TREATMENT OF ACT

Sec. 501. No impact on social security trust funds.
Sec. 502. Emergency designation.

           TITLE VI--EXTENSIONS OF CERTAIN EXPIRING PROVISIONS

Sec. 601. Allowance of nonrefundable personal credits against regular 
           and minimum tax liability.
Sec. 602. Credit for qualified electric vehicles.
Sec. 603. Credit for electricity produced from certain renewable 
           resources.
Sec. 604. Work opportunity credit.
Sec. 605. Welfare-to-work credit.
Sec. 606. Deduction for clean-fuel vehicles and certain refueling 
           property.
Sec. 607. Taxable income limit on percentage depletion for oil and 
           natural gas produced from marginal properties.
Sec. 608. Qualified zone academy bonds.
Sec. 609. Cover over of tax on distilled spirits.
Sec. 610. Parity in the application of certain limits to mental health 
           benefits.
Sec. 611. Temporary special rules for taxation of life insurance 
           companies.
Sec. 612. Availability of medical savings accounts.
Sec. 613. Incentives for Indian employment and property on Indian 
           reservations.
Sec. 614. Subpart F exemption for active financing.
Sec. 615. Repeal of requirement for approved diesel or kerosene 
           terminals.
Sec. 616. Reauthorization of TANF supplemental grants for population 
           increases for fiscal year 2002.
Sec. 617. 1-year extension of contingency fund under the TANF program.

                      TITLE I--BUSINESS PROVISIONS

SEC. 101. SPECIAL DEPRECIATION ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED 
            AFTER SEPTEMBER 10, 2001, AND BEFORE SEPTEMBER 11, 2004.

    (a) In General.--Section 168 <<NOTE: 26 USC 168.>> (relating to 
accelerated cost recovery system) is amended by adding at the end the 
following new subsection:

    ``(k) Special Allowance for Certain Property Acquired After 
September 10, 2001, and Before September 11, 2004.--
            ``(1) Additional allowance.--In the case of any qualified 
        property--
                    ``(A) the depreciation deduction provided by section 
                167(a) for the taxable year in which such property is 
                placed in service shall include an allowance equal to 30 
                percent of the adjusted basis of the qualified property, 
                and
                    ``(B) the adjusted basis of the qualified property 
                shall be reduced by the amount of such deduction before 
                computing the amount otherwise allowable as a 
                depreciation deduction under this chapter for such 
                taxable year and any subsequent taxable year.
            ``(2) Qualified property.--For purposes of this subsection--
                    ``(A) In general.--The term `qualified property' 
                means property--

[[Page 116 STAT. 23]]

                          ``(i)(I) to which this section applies which 
                      has a recovery period of 20 years or less,
                          ``(II) which is computer software (as defined 
                      in section 167(f)(1)(B)) for which a deduction is 
                      allowable under section 167(a) without regard to 
                      this subsection,
                          ``(III) which is water utility property, or
                          ``(IV) which is qualified leasehold 
                      improvement property,
                          ``(ii) the original use of which commences 
                      with the taxpayer after September 10, 2001,
                          ``(iii) which is--
                                    ``(I) acquired by the taxpayer after 
                                September 10, 2001, and before September 
                                11, 2004, but only if no written binding 
                                contract for the acquisition was in 
                                effect before September 11, 2001, or
                                    ``(II) acquired by the taxpayer 
                                pursuant to a written binding contract 
                                which was entered into after September 
                                10, 2001, and before September 11, 2004, 
                                and
                          ``(iv) which is placed in service by the 
                      taxpayer before January 1, 2005, or, in the case 
                      of property described in subparagraph (B), before 
                      January 1, 2006.
                    ``(B) Certain property having longer production 
                periods treated as qualified property.--
                          ``(i) In general.--The term `qualified 
                      property' includes property--
                                    ``(I) which meets the requirements 
                                of clauses (i), (ii), and (iii) of 
                                subparagraph (A),
                                    ``(II) which has a recovery period 
                                of at least 10 years or is 
                                transportation property, and
                                    ``(III) which is subject to section 
                                263A by reason of clause (ii) or (iii) 
                                of subsection (f)(1)(B) thereof.
                          ``(ii) <<NOTE: Applicability.>>  Only pre-
                      september 11, 2004, basis eligible for additional 
                      allowance.--In the case of property which is 
                      qualified property solely by reason of clause (i), 
                      paragraph (1) shall apply only to the extent of 
                      the adjusted basis thereof attributable to 
                      manufacture, construction, or production before 
                      September 11, 2004.
                          ``(iii) Transportation property.--For purposes 
                      of this subparagraph, the term `transportation 
                      property' means tangible personal property used in 
                      the trade or business of transporting persons or 
                      property.
                    ``(C) Exceptions.--
                          ``(i) Alternative depreciation property.--The 
                      term `qualified property' shall not include any 
                      property to which the alternative depreciation 
                      system under subsection (g) applies, determined--
                                    ``(I) without regard to paragraph 
                                (7) of subsection (g) (relating to 
                                election to have system apply), and
                                    ``(II) after application of section 
                                280F(b) (relating to listed property 
                                with limited business use).
                          ``(ii) Qualified new york liberty zone 
                      leasehold improvement property.--The term 
                      `qualified property' shall not include any 
                      qualified New York

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                      Liberty Zone leasehold improvement property (as 
                      defined in section 1400L(c)(2)).
                          ``(iii) Election out.--If a taxpayer makes an 
                      election under this clause with respect to any 
                      class of property for any taxable year, this 
                      subsection shall not apply to all property in such 
                      class placed in service during such taxable year.
                    ``(D) Special rules.--
                          ``(i) Self-constructed property.--In the case 
                      of a taxpayer manufacturing, constructing, or 
                      producing property for the taxpayer's own use, the 
                      requirements of clause (iii) of subparagraph (A) 
                      shall be treated as met if the taxpayer begins 
                      manufacturing, constructing, or producing the 
                      property after September 10, 2001, and before 
                      September 11, 2004.
                          ``(ii) Sale-leasebacks.--For purposes of 
                      subparagraph (A)(ii), if property--
                                    ``(I) is originally placed in 
                                service after September 10, 2001, by a 
                                person, and
                                    ``(II) sold and leased back by such 
                                person within 3 months after the date 
                                such property was originally placed in 
                                service,
                      such property shall be treated as originally 
                      placed in service not earlier than the date on 
                      which such property is used under the leaseback 
                      referred to in subclause (II).
                    ``(E) Coordination with section 280f.--For purposes 
                of section 280F--
                          ``(i) Automobiles.--In the case of a passenger 
                      automobile (as defined in section 280F(d)(5)) 
                      which is qualified property, the Secretary shall 
                      increase the limitation under section 
                      280F(a)(1)(A)(i) by $4,600.
                          ``(ii) Listed property.--The deduction 
                      allowable under paragraph (1) shall be taken into 
                      account in computing any recapture amount under 
                      section 280F(b)(2).
                    ``(F) Deduction allowed in computing miniumum tax.--
                For purposes of determining alternative minimum taxable 
                income under section 55, the deduction under subsection 
                (a) for qualified property shall be determined under 
                this section without regard to any adjustment under 
                section 56.
            ``(3) Qualified leasehold improvement property.--For 
        purposes of this subsection--
                    ``(A) In general.--The term `qualified leasehold 
                improvement property' means any improvement to an 
                interior portion of a building which is nonresidential 
                real property if--
                          ``(i) such improvement is made under or 
                      pursuant to a lease (as defined in subsection 
                      (h)(7))--
                                    ``(I) by the lessee (or any 
                                sublessee) of such portion, or
                                    ``(II) by the lessor of such 
                                portion,
                          ``(ii) such portion is to be occupied 
                      exclusively by the lessee (or any sublessee) of 
                      such portion, and

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                          ``(iii) such improvement is placed in service 
                      more than 3 years after the date the building was 
                      first placed in service.
                    ``(B) Certain improvements not included.--Such term 
                shall not include any improvement for which the 
                expenditure is attributable to--
                          ``(i) the enlargement of the building,
                          ``(ii) any elevator or escalator,
                          ``(iii) any structural component benefiting a 

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