In the nature of a substitute.

SA 197. Mr. THUNE submitted an amendment intended to be proposed to
amendment SA 98 proposed by Mr. Inouye (for himself and Mr. Baucus) to
the bill H.R. 1, making supplemental appropriations for job
preservation and creation, infrastructure investment, energy efficiency
and science, assistance to the unemployed, and State and local fiscal
stabilization, for fiscal year ending September 30, 2009, and for other
purposes; which was ordered to lie on the table; as follows:

In lieu of the matter proposed to be inserted, insert the
following:

SECTION 1. SHORT TITLE, ETC.

(a) Short Title.--This Act may be cited as the ``Economic
Recovery Act of 2009''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title, etc.

TITLE I--TAX PROVISIONS

Sec. 100. References.

Subtitle A--Reduction in Individual Tax Rates For 2009 and 2010

Sec. 101. 10 percent rate bracket for individuals reduced to 5 percent
for 2009 and 2010.
Sec. 102. 15 percent rate bracket for individuals reduced to 10 percent
for 2009 and 2010.

Subtitle B--Alternative Minimum Tax Relief For Individuals

Sec. 111. Extension of alternative minimum tax relief for nonrefundable
personal credits.
Sec. 112. Increase in alternative minimum tax exemption amounts for
2009 and 2010.

Subtitle C--First-Time Homebuyer Credit

Sec. 121. Extension and modification of first-time homebuyer credit.

Subtitle D--Tax Incentives For Business

Part 1--Temporary Investment Incentives

Sec. 131. Special allowance for certain property acquired during 2009.
Sec. 132. Temporary increase in limitations on expensing of certain
depreciable business assets.

Part 2--5-Year Carryback of Operating Losses

Sec. 136. 5-year carryback of operating losses.
Sec. 137. Exception for TARP recipients.

[[Page S1467]]

Part 3--Deduction For Qualified Small Business Income

Sec. 141. Deduction for qualified small business income.

Part 4--Repeal of Withholding Tax on Government Contractors

Sec. 146. Repeal of withholding tax on government contractors.

Subtitle E--Deduction For Qualified Health Insurance Costs of
Individuals

Sec. 151. Above-the-line deduction for qualified health insurance costs
of individuals.

Subtitle F--Temporary Exclusion of Unemployment Compensation From Gross
Income

Sec. 161. Temporary exclusion of unemployment compensation from gross
income.

Subtitle G--No Impact on Social Security Trust Funds

Sec. 171. No impact on social security trust funds.

TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS

Sec. 200. Short title.
Sec. 201. Extension of emergency unemployment compensation program.
Sec. 202. Additional eligibility requirements for emergency
unemployment compensation.
Sec. 203. Special transfers.

TITLE III--NO TAX INCREASES TO PAY FOR SPENDING

Sec. 301. No Tax Increases to Pay for Spending.

TITLE I--TAX PROVISIONS

SEC. 100. REFERENCES.

Except as otherwise expressly provided, whenever in this
title an amendment or repeal is expressed in terms of an
amendment to, or repeal of, a section or other provision, the
reference shall be considered to be made to a section or
other provision of the Internal Revenue Code of 1986.

Subtitle A--Reduction in Individual Tax Rates For 2009 and 2010

SEC. 101. 10 PERCENT RATE BRACKET FOR INDIVIDUALS REDUCED TO
5 PERCENT FOR 2009 AND 2010.

(a) In General.--Clause (i) of section 1(i)(1)(A) is
amended by inserting ``(5 percent in the case of any taxable
year beginning in 2009 or 2010)'' after ``10 percent''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2008.

SEC. 102. 15 PERCENT RATE BRACKET FOR INDIVIDUALS REDUCED TO
10 PERCENT FOR 2009 AND 2010.

(a) In General.--Subsection (i) of section 1 is amended by
redesignating paragraph (3) as paragraph (4) and by inserting
after paragraph (2) the following new paragraph:
``(3) Reduction in 15 percent rate for 2009 and 2010.--In
the case of any taxable year beginning in 2009 or 2010, `10
percent' shall be substituted for `15 percent' in the tables
under subsections (a), (b), (c), (d), and (e). The preceding
sentence shall be applied after application of paragraph
(1).''.
(b) Effective Date.--The amendment made by this section
shall apply to taxable years beginning after December 31,
2008.

Subtitle B--Alternative Minimum Tax Relief For Individuals

SEC. 111. EXTENSION OF ALTERNATIVE MINIMUM TAX RELIEF FOR
NONREFUNDABLE PERSONAL CREDITS.

(a) In General.--Paragraph (2) of section 26(a) (relating
to special rule for taxable years 2000 through 2008) is
amended--
(1) by striking ``or 2008'' and inserting ``2008, 2009, or
2010'', and
(2) by striking ``2008'' in the heading thereof and
inserting ``2010''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

SEC. 112. INCREASE IN ALTERNATIVE MINIMUM TAX EXEMPTION
AMOUNTS FOR 2009 AND 2010.

(a) In General.--Paragraph (1) of section 55(d) (relating
to exemption amount) is amended--
(1) by striking ``($69,950 in the case of taxable years
beginning in 2008)'' in subparagraph (A) and inserting
``($55,000 in the case of taxable years beginning in 2009 or
2010)'', and
(2) by striking ``($46,200 in the case of taxable years
beginning in 2008)'' in subparagraph (B) and inserting
``($38,750 in the case of taxable years beginning in 2009 or
2010)''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

Subtitle C--First-Time Homebuyer Credit

SEC. 121. EXTENSION AND MODIFICATION OF FIRST-TIME HOMEBUYER
CREDIT.

(a) Extension of Credit.--Subsection (i) of section 36 (as
redesignated by subsection (d)) is amended by striking ``July
1, 2009'' and inserting ``January 1, 2010''.
(b) Repeal of First-Time Homebuyer Requirement.--
(1) In general.--Subsection (a) of section 36 is amended by
striking ``an individual who is a first-time homebuyer of a
principal residence'' and inserting ``an individual who
purchases a principal residence''.
(2) Conforming amendments.--
(A) Section 36(b)(1)(A) is amended by inserting ``with
respect to any taxpayer for any taxable year'' after
``subsection (a)''.
(B) Section 36(c) is amended by striking paragraph (1) and
by redesignating paragraphs (2) through (5) as paragraphs (1)
through (4), respectively.
(C) The heading of section 36 (and the item relating to
such section in the table of sections for subpart C of part
IV of subchapter A of chapter 1) are amended by striking
``first-time homebuyer'' and inserting ``homebuyer''.
(c) Repeal of Recapture Rules.--
(1) In general.--Paragraph (4) of section 36(f) is amended
by adding at the end the following new subparagraph:
``(D) Waiver of recapture for purchases in 2009.--In the
case of any credit allowed with respect to the purchase of a
principal residence after December 31, 2008--
``(i) paragraph (1) shall not apply, and
``(ii) paragraph (2) shall apply only if the disposition or
cessation described in paragraph (2) with respect to such
residence occurs during the 36-month period beginning on the
date of the purchase of such residence by the taxpayer.''.
(2) Conforming amendment.--Subsection (g) of section 36 is
amended by striking ``subsection (c)'' and inserting
``subsections (c) and (f)(4)(D)''.
(d) Downpayment Requirement.--Section 36 is amended by
redesignating subsection (h) as subsection (i) and by
inserting after subsection (g) the following new subsection:
``(h) Downpayment Requirement.--No credit shall be allowed
under subsection (a) to any taxpayer with respect to the
purchase of any residence unless such taxpayer makes a
downpayment of not less 5 percent of the purchase price of
such residence. For purposes of the preceding sentence, an
amount shall not be treated as a downpayment if such amount
is repayable by the taxpayer to any other person.''.
(e) Effective Date.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to residences
purchased after December 31, 2008.
(2) Downpayment requirement.--The amendment made by
subsection (d) shall apply to residences purchased after the
date of the enactment of this Act.

Subtitle D--Tax Incentives For Business

PART 1--TEMPORARY INVESTMENT INCENTIVES

SEC. 131. SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED
DURING 2009.

(a) In General.--Paragraph (2) of section 168(k) is
amended--
(1) by striking ``January 1, 2010'' and inserting ``January
1, 2011'', and
(2) by striking ``January 1, 2009'' each place it appears
and inserting ``January 1, 2010''.
(b) Conforming Amendments.--
(1) The heading for subsection (k) of section 168 is
amended by striking ``January 1, 2009'' and inserting
``January 1, 2010''.
(2) The heading for clause (ii) of section 168(k)(2)(B) is
amended by striking ``pre-january 1, 2009'' and inserting
``pre-january 1, 2010''.
(3) Subparagraph (D) of section 168(k)(4) is amended--
(A) by striking ``and'' at the end of clause (i),
(B) by redesignating clause (ii) as clause (v), and
(C) by inserting after clause (i) the following new
clauses:
``(ii) `April 1, 2008' shall be substituted for `January 1,
2008' in subparagraph (A)(iii)(I) thereof,
``(iii) `January 1, 2009' shall be substituted for `January
1, 2010' each place it appears,
``(iv) `January 1, 2010' shall be substituted for `January
1, 2011' in subparagraph (A)(iv) thereof, and''.
(4) Subparagraph (B) of section 168(l)(5) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2010''.
(5) Subparagraph (B) of section 1400N(d)(3) is amended by
striking ``January 1, 2009'' and inserting ``January 1,
2010''.
(c) Effective Dates.--
(1) In general.--Except as provided in paragraph (2), the
amendments made by this section shall apply to property
placed in service after December 31, 2008, in taxable years
ending after such date.
(2) Technical amendment.--Section 168(k)(4)(D)(ii) of the
Internal Revenue Code of 1986, as added by subsection
(b)(3)(C), shall apply to taxable years ending after March
31, 2008.

SEC. 132. TEMPORARY INCREASE IN LIMITATIONS ON EXPENSING OF
CERTAIN DEPRECIABLE BUSINESS ASSETS.

(a) In General.--Paragraph (7) of section 179(b) is
amended--
(1) by striking ``2008'' and inserting ``2008, or 2009'',
and
(2) by striking ``2008'' in the heading thereof and
inserting ``2008, and 2009''.
(b) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

PART 2--5-YEAR CARRYBACK OF OPERATING LOSSES

SEC. 136. 5-YEAR CARRYBACK OF OPERATING LOSSES.

(a) In General.--Subparagraph (H) of section 172(b)(1) is
amended to read as follows:
``(H) Carryback for 2008 and 2009 net operating losses.--
``(i) In general.--In the case of an applicable 2008 or
2009 net operating loss with respect to which the taxpayer
has elected the application of this subparagraph--

``(I) subparagraph (A)(i) shall be applied by substituting
any whole number elected by the taxpayer which is more than 2
and less than 6 for `2',
``(II) subparagraph (E)(ii) shall be applied by
substituting the whole number which is

[[Page S1468]]

one less than the whole number substituted under subclause
(II) for `2', and
``(III) subparagraph (F) shall not apply.

``(ii) Applicable 2008 or 2009 net operating loss.--For
purposes of this subparagraph, the term `applicable 2008 or
2009 net operating loss' means--

``(I) the taxpayer's net operating loss for any taxable
year ending in 2008 or 2009, or
``(II) if the taxpayer elects to have this subclause apply
in lieu of subclause (I), the taxpayer's net operating loss
for any taxable year beginning in 2008 or 2009.

``(iii) Election.--Any election under this subparagraph
shall be made in such manner as may be prescribed by the
Secretary, and shall be made by the due date (including
extension of time) for filing the taxpayer's return for the
taxable year of the net operating loss. Any such election,
once made, shall be irrevocable.
``(iv) Coordination with alternative tax net operating loss
deduction.--In the case of a taxpayer who elects to have
clause (ii)(II) apply, section 56(d)(1)(A)(ii) shall be
applied by substituting `ending during 2001 or 2002 or
beginning during 2008 or 2009' for `ending during 2001, 2002,
2008, or 2009'.''.
(b) Alternative Tax Net Operating Loss Deduction.--
Subclause (I) of section 56(d)(1)(A)(ii) is amended to read
as follows:

``(I) the amount of such deduction attributable to the sum
of carrybacks of net operating losses from taxable years
ending during 2001, 2002, 2008, or 2009 and carryovers of net
operating losses to such taxable years, or''.

(c) Loss From Operations of Life Insurance Companies.--
Subsection (b) of section 810 is amended by adding at the end
the following new paragraph:
``(4) Carryback for 2008 and 2009 losses.--
``(A) In general.--In the case of an applicable 2008 or
2009 loss from operations with respect to which the taxpayer
has elected the application of this paragraph, paragraph
(1)(A) shall be applied, at the election of the taxpayer, by
substituting `5' or `4' for `3'.
``(B) Applicable 2008 or 2009 loss from operations.--For
purposes of this paragraph, the term `applicable 2008 or 2009
loss from operations' means--
``(i) the taxpayer's loss from operations for any taxable
year ending in 2008 or 2009, or
``(ii) if the taxpayer elects to have this clause apply in
lieu of clause (i), the taxpayer's loss from operations for
any taxable year beginning in 2008 or 2009.
``(C) Election.--Any election under this paragraph shall be
made in such manner as may be prescribed by the Secretary,
and shall be made by the due date (including extension of
time) for filing the taxpayer's return for the taxable year
of the loss from operations. Any such election, once made,
shall be irrevocable.
``(D) Coordination with alternative tax net operating loss
deduction.--In the case of a taxpayer who elects to have
subparagraph (B)(ii) apply, section 56(d)(1)(A)(ii) shall be
applied by substituting `ending during 2001 or 2002 or
beginning during 2008 or 2009' for `ending during 2001, 2002,
2008, or 2009'.''.
(d) Conforming Amendment.--Section 172 is amended by
striking subsection (k).
(e) Effective Date.--
(1) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall apply
to net operating losses arising in taxable years ending after
December 31, 2007.
(2) Alternative tax net operating loss deduction.--The
amendment made by subsection (b) shall apply to taxable years
ending after 1997.
(3) Loss from operations of life insurance companies.--The
amendment made by subsection (d) shall apply to losses from
operations arising in taxable years ending after December 31,
2007.
(4) Transitional rule.--In the case of a net operating loss
(or, in the case of a life insurance company, a loss from
operations) for a taxable year ending before the date of the
enactment of this Act--
(A) any election made under section 172(b)(3) or 810(b)(3)
of the Internal Revenue Code of 1986 with respect to such
loss may (notwithstanding such section) be revoked before the
applicable date,
(B) any election made under section 172(b)(1)(H) or
810(b)(4) of such Code with respect to such loss shall
(notwithstanding such section) be treated as timely made if
made before the applicable date, and
(C) any application under section 6411(a) of such Code with
respect to such loss shall be treated as timely filed if
filed before the applicable date.
For purposes of this paragraph, the term ``applicable date''
means the date which is 60 days after the date of the
enactment of this Act.

SEC. 137. EXCEPTION FOR TARP RECIPIENTS.

The amendments made by this part shall not apply to--
(1) any taxpayer if--
(A) the Federal Government acquires, at any time, an equity
interest in the taxpayer pursuant to the Emergency Economic
Stabilization Act of 2008, or
(B) the Federal Government acquires, at any time, any
warrant (or other right) to acquire any equity interest with
respect to the taxpayer pursuant to such Act,
(2) the Federal National Mortgage Association and the
Federal Home Loan Mortgage Corporation, and
(3) any taxpayer which at any time in 2008 or 2009 is a
member of the same affiliated group (as defined in section
1504 of the Internal Revenue Code of 1986, determined without
regard to subsection (b) thereof) as a taxpayer described in
paragraph (1) or (2).

PART 3--DEDUCTION FOR QUALIFIED SMALL BUSINESS INCOME

SEC. 141. DEDUCTION FOR QUALIFIED SMALL BUSINESS INCOME.

(a) In General.--Paragraph (1) of section 199(a) is amended
to read as follows:
``(1) In general.--There shall be allowed as a deduction an
amount equal to the sum of--
``(A) 9 percent of the lesser of--
``(i) the qualified production activities income of the
taxpayer for the taxable year, or
``(ii) taxable income (determined without regard to this
section) for the taxable year, and
``(B) in the case of a qualified small business for a
taxable year beginning in 2009 or 2010, 20 percent of the
lesser of--
``(i) the qualified small business income of the taxpayer
for the taxable year, or
``(ii) taxable income (determined without regard to this
section) for the taxable year.''.
(b) Qualified Small Business; Qualified Small Business
Income.--Section 199 is amended by adding at the end the
following new subsection:
``(e) Qualified Small Business; Qualified Small Business
Income.--
``(1) Qualified small business.--
``(A) In general.--For purposes of this section, the term
`qualified small business' means any taxpayer for any taxable
year if the annual average number of employees employed by
such taxpayer during such taxable year was 500 or fewer.
``(B) Aggregation rule.--For purposes of subparagraph (A),
any person treated as a single employer under subsection (a)
or (b) of section 52 (applied without regard to section
1563(b)) or subsection (m) or (o) of section 414 shall be
treated as 1 taxpayer for purposes of this subsection.
``(C) Special rule.--If a taxpayer is treated as a
qualified small business for any taxable year, the taxpayer
shall not fail to be treated as a qualified small business
for any subsequent taxable year solely because the number of
employees employed by such taxpayer during such subsequent
taxable year exceeds 500. The preceding sentence shall cease
to apply to such taxpayer in the first taxable year in which
there is an ownership change (as defined by section 382(g) in
respect of a corporation, or by applying principles analogous
to such ownership change in the case of a taxpayer that is a
partnership) with respect to the stock (or partnership
interests) of the taxpayer.
``(2) Qualified small business income.--
``(A) In general.--For purposes of this section, the term
`qualified small business income' means the excess of--
``(i) the income of the qualified small business which--

``(I) is attributable to the actual conduct of a trade or
business,
``(II) is income from sources within the United States
(within the meaning of section 861), and
``(III) is not passive income (as defined in section
904(d)(2)(B)), over

``(ii) the sum of--

``(I) the cost of goods sold that are allocable to such
income, and
``(II) other expenses, losses, or deductions (other than
the deduction allowed under this section), which are properly
allocable to such income.

``(B) Exceptions.--The following shall not be treated as
income of a qualified small business for purposes of
subparagraph (A):
``(i) Any income which is attributable to any property
described in section 1400N(p)(3).
``(ii) Any income which is attributable to the ownership or
management of any professional sports team.
``(iii) Any income which is attributable to a trade or
business described in subparagraph (B) of section 1202(e)(3).
``(iv) Any income which is attributable to any property
with respect to which records are required to be maintained
under section 2257 of title 18, United States Code.
``(C) Allocation rules, etc.--Rules similar to the rules of
paragraphs (2), (3), (4)(D), and (7) of subsection (c) shall
apply for purposes of this paragraph.
``(3) Special rules.--Except as otherwise provided by the
Secretary, rules similar to the rules of subsection (d) shall
apply for purposes of this subsection.''.
(c) Conforming Amendment.--Section 199(a)(2) is amended by
striking ``paragraph (1)'' and inserting ``paragraph
(1)(A)''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

PART 4--REPEAL OF WITHHOLDING TAX ON GOVERNMENT CONTRACTORS

SEC. 146. REPEAL OF WITHHOLDING TAX ON GOVERNMENT
CONTRACTORS.

Section 3402 is amended by striking subsection (t).

Subtitle E--Deduction For Qualified Health Insurance Costs of
Individuals

SEC. 151. ABOVE-THE-LINE DEDUCTION FOR QUALIFIED HEALTH
INSURANCE COSTS OF INDIVIDUALS.

(a) In General.--Part VII of subchapter B of chapter 1 of
the Internal Revenue Code of 1986 (relating to additional
itemized deductions) is amended by redesignating section 224
as section 225 and by inserting after section 223 the
following new section:

``SEC. 224. COSTS OF QUALIFIED HEALTH INSURANCE.

``(a) In General.--In the case of an individual, there
shall be allowed as a deduction an amount equal to the amount
paid during

[[Page S1469]]

the taxable year for coverage for the taxpayer, his spouse,
and dependents under qualified health insurance.
``(b) Qualified Health Insurance.--For purposes of this
section, the term `qualified health insurance' means
insurance which constitutes medical care; except that such
term shall not include any insurance if substantially all of
its coverage is of excepted benefits described in section
9832(c).
``(c) Special Rules.--
``(1) Coordination with medical deduction, etc.--Any amount
paid by a taxpayer for insurance to which subsection (a)
applies shall not be taken into account in computing the
amount allowable to the taxpayer as a deduction under section
162(l) or 213(a). Any amount taken into account in
determining the credit allowed under section 35 shall not be
taken into account for purposes of this section.
``(2) Deduction not allowed for self-employment tax
purposes.--The deduction allowable by reason of this section
shall not be taken into account in determining an
individual's net earnings from self-employment (within the
meaning of section 1402(a)) for purposes of chapter 2.''.
(b) Deduction Allowed in Computing Adjusted Gross Income.--
Subsection (a) of section 62 of such Code is amended by
inserting before the last sentence the following new
paragraph:
``(22) Costs of qualified health insurance.--The deduction
allowed by section 224.''.
(c) Clerical Amendment.--The table of sections for part VII
of subchapter B of chapter 1 of such Code is amended by
redesignating the item relating to section 224 as an item
relating to section 225 and inserting before such item the
following new item:

``Sec. 224. Costs of qualified health insurance.''.
(d) Effective Date.--The amendments made by this section
shall apply to taxable years beginning after December 31,
2008.

Subtitle F--Temporary Exclusion of Unemployment Compensation From Gross
Income

SEC. 161. TEMPORARY EXCLUSION OF UNEMPLOYMENT COMPENSATION
FROM GROSS INCOME.

(a) In General.--Section 85 is amended by adding at the end
the following new subsection:
``(c) Exclusion of Amounts Received in 2008 and 2009.--
Subsection (a) shall not apply to any unemployment
compensation received in 2008 or 2009.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to amounts received after December 31, 2007.

Subtitle G--No Impact on Social Security Trust Funds

SEC. 171. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.

(a) Estimate by Secretary of the Treasury.--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 or 1817 of the
Social Security Act (42 U.S.C. 401, 1395i).
(b) Transfer of Funds.--If, under subsection (a), 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 established under section 201 or 1817 of the
Social Security Act (42 U.S.C. 401, 1395i), the Secretary
shall transfer, not less frequently than quarterly, from the
general revenues of the Federal Government an amount
sufficient so as to ensure that the income and balances of
such trust funds are not reduced as a result of the enactment
of this Act.

TITLE II--ASSISTANCE FOR UNEMPLOYED WORKERS

SEC. 200. SHORT TITLE.

This title may be cited as the ``Assistance for Unemployed
Workers Act''.

SEC. 201. EXTENSION OF EMERGENCY UNEMPLOYMENT COMPENSATION
PROGRAM.

(a) In General.--Section 4007 of the Supplemental
Appropriations Act, 2008 (Public Law 110-252; 26 U.S.C. 3304
note), as amended by section 4 of the Unemployment
Compensation Extension Act of 2008 (Public Law 110-449; 122
Stat. 5015), is amended--
(1) by striking ``March 31, 2009'' each place it appears
and inserting ``December 31, 2009'';
(2) in the heading for subsection (b)(2), by striking
``march 31, 2009'' and inserting ``december 31, 2009''; and
(3) in subsection (b)(3), by striking ``August 27, 2009''
and inserting ``May 31, 2010''.
(b) Financing Provisions.--Section 4004 of such Act is
amended by adding at the end the following:
``(e) Transfer of Funds.--Notwithstanding any other
provision of law, the Secretary of the Treasury shall
transfer from the general fund of the Treasury (from funds
not otherwise appropriated)--
``(1) to the extended unemployment compensation account (as
established by section 905 of the Social Security Act) such
sums as the Secretary of Labor estimates to be necessary to
make payments to States under this title by reason of the
amendments made by section 201(a) of the Assistance for
Unemployed Workers Act; and
``(2) to the employment security administration account (as
established by section 901 of the Social Security Act) such
sums as the Secretary of Labor estimates to be necessary for
purposes of assisting States in meeting administrative costs
by reason of the amendments referred to in paragraph (1).
There are appropriated from the general fund of the Treasury,
without fiscal year limitation, the sums referred to in the
preceding sentence and such sums shall not be required to be
repaid.''.

SEC. 202. ADDITIONAL ELIGIBILITY REQUIREMENTS FOR EMERGENCY
UNEMPLOYMENT COMPENSATION.

Section 4001 of the Supplemental Appropriations Act, 2008
(Public Law 110-252; 26 U.S.C. 3304 note) is amended by
adding at the end the following:

``Additional Eligibility Requirements

``(g)(1) In General.--A State shall require as a condition
of eligibility for emergency unemployment compensation under
this Act for any week--
``(A) in the case of any individual described in paragraph
(2), that such individual--
``(i) have a secondary school diploma or its recognized
equivalent; or
``(ii) be making satisfactory progress in a program that
leads to a secondary school diploma or its recognized
equivalent; and
``(B) in the case of any individual described in paragraph
(3), that such individual participate in reemployment
services or in similar services (or, if such services were
ongoing as of when such individual most recently exhausted
regular compensation before seeking emergency unemployment
compensation, that such individual continue to participate in
such services), unless the State agency charged with the
administration of the State law determines that--
``(i) such individual has completed such services as of a
date subsequent to the commencement of emergency unemployment
compensation; or
``(ii) there is justifiable cause for such individual's
failure to participate in such services.
``(2) Individuals to Whom Paragraph (1)(A) Applies.--The
requirements of paragraph (1)(A) shall apply in the case of
any individual who was under age 30 at the time of filing an
initial claim for the regular compensation that such
individual most recently exhausted before seeking emergency
unemployment compensation.
``(3) Individuals to Whom Paragraph (1)(B) Applies.--The
requirements of paragraph (1)(B) shall apply in the case of
any individual who, as of the time of filing an initial claim
for the regular compensation that such individual most
recently exhausted before seeking emergency unemployment
compensation, was identified under the State profiling system
(described in section 303(j) of the Social Security Act) as
being a claimant who--
``(A) was likely to exhaust regular compensation; and
``(B) would need job search assistance services to make a
successful transition to new employment.
``(4) Effective Date.--This subsection shall apply in the
case of any individual filing an initial application for
emergency unemployment compensation after the end of the 3-
month period beginning on the date of the enactment of this
subsection.''.

SEC. 203. SPECIAL TRANSFERS.

(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 Transfer in Fiscal Year 2009 for Benefits

``(f)(1) In addition to any other amounts, the Secretary of
the Treasury shall transfer from the Federal unemployment
account to the account of each State in the Unemployment
Trust Fund, within 30 days after the date of the enactment of
this subsection, the amount determined with respect to such
State under paragraph (2).
``(2) The amount to be transferred under this subsection to
a State account shall (as determined by the Secretary of
Labor and certified by such Secretary to the Secretary of the
Treasury) be equal to the amount obtained by multiplying
$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).
``(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 cash
benefits to individuals with respect to their unemployment,
exclusive of expenses of administration.

``Special Transfer in Fiscal Year 2009 for Administration

``(g)(1) In addition to any other amounts, the Secretary of
the Treasury shall transfer from the employment security
administration account to the account of each State in the
Unemployment Trust Fund, within 30 days after the date of the
enactment of this subsection, the amount determined with
respect to such State under paragraph (2).
``(2) The amount to be transferred under this subsection to
a State account shall (as determined by the Secretary of
Labor and certified by such Secretary to the Secretary of the
Treasury) be equal to the amount obtained by multiplying
$500,000,000 by the same ratio as determined under subsection
(f)(2) 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 improvement of unemployment benefit and
unemployment tax operations,

[[Page S1470]]

including responding to increased demand for unemployment
compensation; and
``(B) staff-assisted reemployment services for unemployment
compensation claimants.''.
(b) Regulations.--The Secretary of Labor may prescribe any
regulations, operating instructions, or other guidance
necessary to carry out the amendment made by subsection (a).

TITLE III--NO TAX INCREASES TO PAY FOR SPENDING

SEC. 301. NO TAX INCREASES TO PAY FOR SPENDING.

(a) Findings.--The Congress finds that--
(1) according to the economic forecast released by the non-
partisan Congressional Budget Office on January 7, 2009,
unemployment in the United States is expected to be above the
level estimated for calendar year 2008 until the year 2015,
and
(2) raising taxes on families and employers during times of
high unemployment delays economic recovery and the creation
of new jobs.
(b) Declaration of Policy.--It is the policy of the United
States that--
(1) outlays from the Treasury of the United States that
occur as a result of any provision of this Act shall not be
offset through the enactment of new legislation that results
in increases in revenues to the Treasury of the United
States, but, if such outlays are offset, such offsets shall
be through the enactment of legislation that results in a
reduction in other outlays, and
(2) the effective rate of tax imposed on individuals or
businesses shall not be increased, whether by operation of a
provision of existing law or the enactment of new
legislation, during any year in which unemployment is
projected to exceed the level of unemployment for calendar
year 2008.
______