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Reauthorization of WOTC and welfare-to-work tax credits
Summary ETA announced that Congress had extended the Work Opportunity and Welfare-to-Work tax credits retroactively for hires from January 2002 through December 2003. It described the new New York Liberty Zone target group, state administration, funding and continued use of reporting and certification forms. ETA now labels the advisory Canceled.
Document
Federal guidance
Agency
U.S. Department of Labor, Employment and Training Administration (ETA)
Document number
TEGL No. 27-01
Date issued
May 15, 2002
Status
Rescinded
ETA labels this advisory Canceled as of October 25, 2026.
Status last verified October 25, 2026
Is this still the rule?
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About this page: The full text below is the official document from U.S. Department of Labor, Employment and Training Administration (ETA). Ezel adds the plain-English summary and tracks the document's status. The official source linked on this page is authoritative for any reliance.
Employment and Training Administration
Advisory System
U.S. Department of Labor
Washington, D.C. 20210
CLASSIFICATION: WOTC/WtWTC
CORRESPONDENCE SYMBOL: OWS
DATE: May 15, 2002
ADVISORY: TRAINING AND EMPLOYMENT GUIDANCE LETTER NO. 27-01
TO:
ALL STATE WORKFORCE AGENCIES
ALL STATE WORKER ADJUSTMENT LIAISONS
ALL ONE-STOP CENTER SYSTEM LEADS
/S/
FROM:
EMILY STOVER DeROCCO
Assistant Secretary
SUBJECT:
Reauthorization of the Work Opportunity Tax Credit (WOTC) and the Welfare-to-Work Tax Credit (WtWTC)
- Purpose. To announce the reauthorization of the Work Opportunity Tax Credit Program and the Welfare-to-Work Tax Credit under the Job Creation and Worker Assistance Act of 2002 (P.L. 107-147).
- References. The Job Creation and Worker Assistance Act of 2002 (P.L. 107-147); the Ticket to Work and Work Incentives Improvement Act of 1999 (P.L. 106-170); TEGL No. 09-01, dated January 7, 2002, Internal Revenue Code of 1986, Sections 51 and 51A, as amended; and ETA Handbook No. 408, Second Edition, November 1998.
- Background. The current legislative authority for the WOTC program and the WtW Tax Credit expired December 31, 2001.
- Authorization. The Job Creation and Worker Assistance Act of 2002 (P.L. 107-147), was signed into law on March 9, 2002. This legislation extends the WOTC program and the WtW Tax Credit for a 24-month period beginning January 1, 2002, and ending December 31, 2003, and makes the program's authority retroactive to its expiration date, December 31, 2001. The reauthorization applies to new hires who begin work for an employer on January 1, 2002, and before January 1, 2004. Also, this law created a new target group category under the WOTC program, the "New York Liberty Zone Business Employee." This targeted group applies only to those workers and employers (located in the New York City Liberty Zone, South of Canal Street in the Borough of Manhattan) affected by the September 11, 2001, terrorist attack.
- Program Administration. Under the reauthorizing legislation, State Workforce Agencies' (SWAs) certification and program operation responsibilities for these two tax credits remain the same as those described in the November 1998, Second Edition of ETA Handbook No. 408. These include procedures for: a) determining target group eligibility and issuing certifications, b) establishing working partnerships with different participating agencies at the state and local levels for resolving technical issues and issuing Conditional Certifications, c) conducting verification activities, d) complying with quarterly reporting responsibilities, and e), conducting record retention.
RESCISSIONS: [blank in source]
EXPIRATION DATE: Continuing - Funding. Twenty-one million dollars were appropriated for administration of the WOTC and WtW tax credits in FY 2002. Of this total, $456,000 has been withheld to pay estimated WOTC and WtWTC postage costs. During the time the Congress deliberated over the nation's budget, several Continuing Resolutions were passed to support program administration. The national office issued advanced funds to the SWAs for program implementation activities through December 31, 2001, and elimination of existing backlogs. An additional advanced allocation was recently issued to the states to cover program activities for the period that ended on March 31, 2002. The remaining balance of funds, $10,255,024, will be issued to the SWAs on a quarterly basis. Attached for your information is a copy of the table illustrating "FY 2002 Funding Balance for April - September" allocations by states. Planning guidance instructions will be issued under separate cover. States may continue to use penalty mail.
- Reporting Authority. Pursuant to the Paperwork Reduction Act of 1995, the Office of Management and Budget (OMB) has approved the information collection requested for the WOTC/WtWTC administrative and reporting forms. ETA Reporting Forms 9057 - 9059 and ETA Administrative Forms 9061, 9062, 9063, and 9065 are approved under OMB No. 1205-0371, through June 30, 2002. State Workforce Agencies should continue to use the current certification and reporting forms until further notice. An OMB extension of this reporting authority is being requested.
- Action Required. State Workforce Agency Administrators are requested to:
a) provide this information to appropriate program staff, employers and their contractors, participating agencies, and other interested partners. They are to ensure that the SWAs and participating agencies administer the WOTC and WtW tax credits in accordance with the guidance provided in the November 1998, Second Edition of ETA Handbook No. 408, and the Internal Revenue Code of 1986, as amended; and b) ensure the States' WOTC/WtWTC Coordinators receive a copy of the new legislation and the newly reauthorized forms. - Inquiries. Direct all questions to the appropriate Regional WOTC/WtWTC Coordinator.
- Attachments.
Copy of the "Job Creation and Worker Assistance Act of 2002" (P.L. 107-147), Sections 604, 605 and 1400L FY 2002 Funding Balance for April-September Allocation Table ETA Quarterly Reporting Forms 9057 ETA Quarterly Reporting Forms 9058 ETA Quarterly Reporting Forms 9059 ETA Administrative Forms 9061 ETA Administrative Forms 9062 ETA Administrative Forms 9063 ETA Administrative Forms 9065
Copy of Public Law 107-147 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_at1.pdf)
PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 21
Public Law 107–147
107th Congress
An Act
Mar. 9, 2002
To provide tax incentives for economic recovery.
[H.R. 3090]
Be it enacted by the Senate and House of Representatives of
the United States of America in Congress assembled, Job Creation and
Worker
SECTION 1. SHORT TITLE; ETC. Assistance Act of
2002.
(a) SHORT TITLE.—This Act may be cited as the ‘‘Job Creation Inter-
and Worker Assistance Act of 2002’’. governmental
(b) REFERENCES TO INTERNAL REVENUE CODE OF 1986.—Except relations.
as otherwise expressly provided, whenever in this Act an amend- 26 USC 1 note.
ment or repeal is expressed in terms of an amendment to, or
repeal of, a section or other provision, the reference shall be consid-
ered 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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116 STAT. 22 PUBLIC LAW 107–147—MAR. 9, 2002
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 min-
imum 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 pro-
duced 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 PROP-
ERTY ACQUIRED AFTER SEPTEMBER 10, 2001, AND
BEFORE SEPTEMBER 11, 2004.
26 USC 168. (a) IN GENERAL.—Section 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 com-
puting 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—
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PUBLIC LAW 107–147—MAR. 9, 2002 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 rea-
son of clause (ii) or (iii) of subsection (f)(1)(B)
thereof.
‘‘(ii) ONLY PRE-SEPTEMBER 11, 2004, BASIS ELIGIBLE Applicability.
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 sub-
section (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 LEASE-
HOLD IMPROVEMENT PROPERTY.—The term ‘qualified
property’ shall not include any qualified New York
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116 STAT. 24 PUBLIC LAW 107–147—MAR. 9, 2002
Liberty Zone leasehold improvement property (as
defined in section 1400L(c)(2)).
‘‘(iii) ELECTION OUT.—If a taxpayer makes an elec-
tion 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, con-
structing, or producing the property after September
10, 2001, and before September 11, 2004.
‘‘(ii) SALE-LEASEBACKS.—For purposes of subpara-
graph (A)(ii), if property—
‘‘(I) is originally placed in service after Sep-
tember 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 sub-
section (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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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 25
‘‘(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
common area, and
‘‘(iv) the internal structural framework of the
building.
‘‘(C) DEFINITIONS AND SPECIAL RULES.—For purposes
of this paragraph—
‘‘(i) COMMITMENT TO LEASE TREATED AS LEASE.—
A commitment to enter into a lease shall be treated
as a lease, and the parties to such commitment shall
be treated as lessor and lessee, respectively.
‘‘(ii) RELATED PERSONS.—A lease between related
persons shall not be considered a lease. For purposes
of the preceding sentence, the term ‘related persons’
means—
‘‘(I) members of an affiliated group (as defined
in section 1504), and
‘‘(II) persons having a relationship described
in subsection (b) of section 267; except that, for
purposes of this clause, the phrase ‘80 percent
or more’ shall be substituted for the phrase ‘more
than 50 percent’ each place it appears in such
subsection.’’.
(b) EFFECTIVE DATE.—The amendments made by this section Applicability.
shall apply to property placed in service after September 10, 2001, 26 USC 168 note.
in taxable years ending after such date.
SEC. 102. CARRYBACK OF CERTAIN NET OPERATING LOSSES ALLOWED
FOR 5 YEARS; TEMPORARY SUSPENSION OF 90 PERCENT
AMT LIMIT.
(a) IN GENERAL.—Paragraph (1) of section 172(b) (relating to 26 USC 172.
years to which loss may be carried) is amended by adding at
the end the following new subparagraph:
‘‘(H) In the case of a taxpayer which has a net operating
loss for any taxable year ending during 2001 or 2002,
subparagraph (A)(i) shall be applied by substituting ‘5’
for ‘2’ and subparagraph (F) shall not apply.’’.
(b) ELECTION TO DISREGARD 5-YEAR CARRYBACK.—Section 172
(relating to net operating loss deduction) is amended by redesig-
nating subsection (j) as subsection (k) and by inserting after subjec-
tion (i) the following new subsection:
‘‘(j) ELECTION TO DISREGARD 5-YEAR CARRYBACK FOR CERTAIN
NET OPERATING LOSSES.—Any taxpayer entitled to a 5-year
carryback under subsection (b)(1)(H) from any loss year may elect
to have the carryback period with respect to such loss year deter-
mined without regard to subsection (b)(1)(H). Such election shall
be made in such manner as may be prescribed by the Secretary
and shall be made by the due date (including extensions of time)
for filing the taxpayer’s return for the taxable year of the net
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116 STAT. 26 PUBLIC LAW 107–147—MAR. 9, 2002
operating loss. Such election, once made for any taxable year,
shall be irrevocable for such taxable year.’’.
(c) TEMPORARY SUSPENSION OF 90 PERCENT LIMIT ON CERTAIN
NOL CARRYOVERS.—
26 USC 56. (1) IN GENERAL.—Subparagraph (A) of section 56(d)(1)
(relating to general rule defining alternative tax net operating
loss deduction) is amended to read as follows:
‘‘(A) the amount of such deduction shall not exceed
the sum of—
‘‘(i) the lesser of—
‘‘(I) the amount of such deduction attributable
to net operating losses (other than the deduction
attributable to carryovers described in clause
(ii)(I)), or
‘‘(II) 90 percent of alternative minimum tax-
able income determined without regard to such
deduction, plus
‘‘(ii) the lesser of—
‘‘(I) the amount of such deduction attributable
to the sum of carrybacks of net operating losses
for taxable years ending during 2001 or 2002 and
carryforwards of net operating losses to taxable
years ending during 2001 and 2002, or
‘‘(II) alternative minimum taxable income
determined without regard to such deduction
reduced by the amount determined under clause
(i), and’’.
Applicability. (2) EFFECTIVE DATE.—The amendment made by this sub-
26 USC 56 note. section shall apply to taxable years ending before January
1, 2003.
Applicability. (d) EFFECTIVE DATE.—Except as provided in subsection (c),
26 USC 172 note. the amendments made by this section shall apply to net operating
losses for taxable years ending after December 31, 2000.
Temporary TITLE II—UNEMPLOYMENT ASSISTANCE
Extended
Unemployment
Compensation SEC. 201. SHORT TITLE.
Act of 2002.
Inter- This title may be cited as the ‘‘Temporary Extended Unemploy-
governmental ment Compensation Act of 2002’’.
relations.
26 USC 3304 SEC. 202. FEDERAL-STATE AGREEMENTS.
note.
(a) IN GENERAL.—Any State which desires to do so may enter
into and participate in an agreement under this title with the
Secretary of Labor (in this title referred to as the ‘‘Secretary’’).
Any State which is a party to an agreement under this title may,
upon providing 30 days’ written notice to the Secretary, terminate
such agreement.
(b) PROVISIONS OF AGREEMENT.—Any agreement under sub-
section (a) shall provide that the State agency of the State will
make payments of temporary extended unemployment compensa-
tion to individuals who—
(1) have exhausted all rights to regular compensation under
the State law or under Federal law with respect to a benefit
year (excluding any benefit year that ended before March 15,
2001);
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 27
(2) have no rights to regular compensation or extended
compensation with respect to a week under such law or any
other State unemployment compensation law or to compensa-
tion under any other Federal law;
(3) are not receiving compensation with respect to such
week under the unemployment compensation law of Canada;
and
(4) filed an initial claim for regular compensation on or
after March 15, 2001.
(c) EXHAUSTION OF BENEFITS.—For purposes of subsection
(b)(1), an individual shall be deemed to have exhausted such individ-
ual’s rights to regular compensation under a State law when—
(1) no payments of regular compensation can be made
under such law because such individual has received all regular
compensation available to such individual based on employment
or wages during such individual’s base period; or
(2) such individual’s rights to such compensation have been
terminated by reason of the expiration of the benefit year
with respect to which such rights existed.
(d) WEEKLY BENEFIT AMOUNT, ETC.—For purposes of any agree-
ment under this title—
(1) the amount of temporary extended unemployment com-
pensation which shall be payable to any individual for any
week of total unemployment shall be equal to the amount
of the regular compensation (including dependents’ allowances)
payable to such individual during such individual’s benefit year
under the State law for a week of total unemployment;
(2) the terms and conditions of the State law which apply
to claims for regular compensation and to the payment thereof
shall apply to claims for temporary extended unemployment
compensation and the payment thereof, except—
(A) that an individual shall not be eligible for tem-
porary extended unemployment compensation under this
title unless, in the base period with respect to which the
individual exhausted all rights to regular compensation
under the State law, the individual had 20 weeks of full-
time insured employment or the equivalent in insured
wages, as determined under the provisions of the State
law implementing section 202(a)(5) of the Federal-State
Extended Unemployment Compensation Act of 1970 (26
U.S.C. 3304 note); and
(B) where otherwise inconsistent with the provisions
of this title or with the regulations or operating instructions
of the Secretary promulgated to carry out this title; and
(3) the maximum amount of temporary extended unemploy-
ment compensation payable to any individual for whom a tem-
porary extended unemployment compensation account is estab-
lished under section 203 shall not exceed the amount estab-
lished in such account for such individual.
(e) ELECTION BY STATES.—Notwithstanding any other provision
of Federal law (and if State law permits), the Governor of a State
that is in an extended benefit period may provide for the payment
of temporary extended unemployment compensation in lieu of
extended compensation to individuals who otherwise meet the
requirements of this section. Such an election shall not require
a State to trigger off an extended benefit period.
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116 STAT. 28 PUBLIC LAW 107–147—MAR. 9, 2002
SEC. 203. TEMPORARY EXTENDED UNEMPLOYMENT COMPENSATION
ACCOUNT.
(a) IN GENERAL.—Any agreement under this title shall provide
that the State will establish, for each eligible individual who files
an application for temporary extended unemployment compensa-
tion, a temporary extended unemployment compensation account
with respect to such individual’s benefit year.
(b) AMOUNT IN ACCOUNT.—
(1) IN GENERAL.—The amount established in an account
under subsection (a) shall be equal to the lesser of—
(A) 50 percent of the total amount of regular compensa-
tion (including dependents’ allowances) payable to the indi-
vidual during the individual’s benefit year under such law,
or
(B) 13 times the individual’s average weekly benefit
amount for the benefit year.
(2) WEEKLY BENEFIT AMOUNT.—For purposes of this sub-
section, an individual’s weekly benefit amount for any week
is the amount of regular compensation (including dependents’
allowances) under the State law payable to such individual
for such week for total unemployment.
(c) SPECIAL RULE.—
(1) IN GENERAL.—Notwithstanding any other provision of
this section, if, at the time that the individual’s account is
exhausted, such individual’s State is in an extended benefit
period (as determined under paragraph (2)), then, such account
shall be augmented by an amount equal to the amount origi-
nally established in such account (as determined under sub-
section (b)(1)).
(2) EXTENDED BENEFIT PERIOD.—For purposes of paragraph
(1), a State shall be considered to be in an extended benefit
period if, at the time of exhaustion (as described in paragraph
(1))—
(A) such a period is then in effect for such State under
the Federal-State Extended Unemployment Compensation
Act of 1970; or
(B) such a period would then be in effect for such
State under such Act if section 203(d) of such Act were
applied as if it had been amended by striking ‘‘5’’ each
place it appears and inserting ‘‘4’’.
SEC. 204. PAYMENTS TO STATES HAVING AGREEMENTS FOR THE PAY-
MENT OF TEMPORARY EXTENDED UNEMPLOYMENT COM-
PENSATION.
(a) GENERAL RULE.—There shall be paid to each State that
has entered into an agreement under this title an amount equal
to 100 percent of the temporary extended unemployment compensa-
tion paid to individuals by the State pursuant to such agreement.
(b) TREATMENT OF REIMBURSABLE COMPENSATION.—No pay-
ment shall be made to any State under this section in respect
of any compensation to the extent the State is entitled to reimburse-
ment in respect of such compensation under the provisions of any
Federal law other than this title or chapter 85 of title 5, United
States Code. A State shall not be entitled to any reimbursement
under such chapter 85 in respect of any compensation to the extent
the State is entitled to reimbursement under this title in respect
of such compensation.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 29
(c) DETERMINATION OF AMOUNT.—Sums payable to any State
by reason of such State having an agreement under this title
shall be payable, either in advance or by way of reimbursement
(as may be determined by the Secretary), in such amounts as
the Secretary estimates the State will be entitled to receive under
this title for each calendar month, reduced or increased, as the
case may be, by any amount by which the Secretary finds that
the Secretary’s 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 statistical,
sampling, or other method as may be agreed upon by the Secretary
and the State agency of the State involved.
SEC. 205. FINANCING PROVISIONS.
(a) IN GENERAL.—Funds in the extended unemployment com-
pensation account (as established by section 905(a) of the Social
Security Act (42 U.S.C. 1105(a)) of the Unemployment Trust Fund
(as established by section 904(a) of such Act (42 U.S.C. 1104(a))
shall be used for the making of payments to States having agree-
ments entered into under this title.
(b) CERTIFICATION.—The Secretary shall from time to time cer-
tify to the Secretary of the Treasury for payment to each State
the sums payable to such State under this title. The Secretary
of the Treasury, prior to audit or settlement by the General
Accounting Office, shall make payments to the State in accordance
with such certification, by transfers from the extended unemploy-
ment compensation account (as so established) to the account of
such State in the Unemployment Trust Fund (as so established).
(c) ASSISTANCE TO STATES.—There are appropriated out of the
employment security administration account (as established by sec-
tion 901(a) of the Social Security Act (42 U.S.C. 1101(a)) of the
Unemployment Trust Fund, without fiscal year limitation, such
funds as may be necessary for purposes of assisting States (as
provided in title III of the Social Security Act (42 U.S.C. 501
et seq.)) in meeting the costs of administration of agreements under
this title.
(d) APPROPRIATIONS FOR CERTAIN PAYMENTS.—There are appro-
priated from the general fund of the Treasury, without fiscal year
limitation, to the extended unemployment compensation account
(as so established) of the Unemployment Trust Fund (as so estab-
lished) such sums as the Secretary estimates to be necessary to
make the payments under this section in respect of—
(1) compensation payable under chapter 85 of title 5, United
States Code; and
(2) compensation payable on the basis of services to which
section 3309(a)(1) of the Internal Revenue Code of 1986 applies.
Amounts appropriated pursuant to the preceding sentence shall
not be required to be repaid.
SEC. 206. FRAUD AND OVERPAYMENTS.
(a) IN GENERAL.—If an individual knowingly has made, or
caused to be made by another, a false statement or representation
of a material fact, or knowingly has failed, or caused another
to fail, to disclose a material fact, and as a result of such false
statement or representation or of such nondisclosure such individual
has received an amount of temporary extended unemployment com-
pensation under this title to which he was not entitled, such
individual—
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116 STAT. 30 PUBLIC LAW 107–147—MAR. 9, 2002
(1) shall be ineligible for further temporary extended
unemployment compensation under this title in accordance with
the provisions of the applicable State unemployment compensa-
tion law relating to fraud in connection with a claim for
unemployment compensation; and
(2) shall be subject to prosecution under section 1001 of
title 18, United States Code.
(b) REPAYMENT.—In the case of individuals who have received
amounts of temporary extended unemployment compensation under
this title to which they were not entitled, the State shall require
such individuals to repay the amounts of such temporary extended
unemployment compensation to the State agency, except that the
State agency may waive such repayment if it determines that—
(1) the payment of such temporary extended unemployment
compensation was without fault on the part of any such indi-
vidual; and
(2) such repayment would be contrary to equity and good
conscience.
(c) RECOVERY BY STATE AGENCY.—
(1) IN GENERAL.—The State agency may recover the amount
to be repaid, or any part thereof, by deductions from any
temporary extended unemployment compensation payable to
such individual under this title or from any unemployment
compensation payable to such individual under any Federal
unemployment compensation law administered by the State
agency or under any other Federal law administered by the
State agency which provides for the payment of any assistance
or allowance with respect to any week of unemployment, during
the 3-year period after the date such individuals received the
payment of the temporary extended unemployment compensa-
tion to which they were not entitled, except that no single
deduction may exceed 50 percent of the weekly benefit amount
from which such deduction is made.
(2) OPPORTUNITY FOR HEARING.—No repayment shall be
required, and no deduction shall be made, until a determination
has been made, notice thereof and an opportunity for a fair
hearing has been given to the individual, and the determination
has become final.
(d) REVIEW.—Any determination by a State agency under this
section shall be subject to review in the same manner and to
the same extent as determinations under the State unemployment
compensation law, and only in that manner and to that extent.
SEC. 207. DEFINITIONS.
In this title, the terms ‘‘compensation’’, ‘‘regular compensation’’,
‘‘extended compensation’’, ‘‘additional compensation’’, ‘‘benefit year’’,
‘‘base period’’, ‘‘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).
SEC. 208. APPLICABILITY.
An agreement entered into under this title shall apply to weeks
of unemployment—
(1) beginning after the date on which such agreement is
entered into; and
(2) ending before January 1, 2003.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 31
SEC. 209. SPECIAL REED ACT TRANSFER IN FISCAL YEAR 2002.
(a) REPEAL OF CERTAIN PROVISIONS ADDED BY THE BALANCED
BUDGET ACT OF 1997.—
(1) IN GENERAL.—The following provisions of section 903
of the Social Security Act (42 U.S.C. 1103) are repealed:
(A) Paragraph (3) of subsection (a).
(B) The last sentence of subsection (c)(2).
(2) SAVINGS PROVISION.—Any amounts transferred before
the date of enactment of this Act under the provision repealed
by paragraph (1)(A) shall remain subject to section 903 of
the Social Security Act, as last in effect before such date of
enactment.
(b) SPECIAL TRANSFER IN FISCAL YEAR 2002.—Section 903 of
the Social Security Act is amended by adding at the end the
following:
‘‘Special Transfer in Fiscal Year 2002
‘‘(d)(1) The Secretary of the Treasury shall transfer (as of the
date determined under paragraph (5)) from the Federal unemploy-
ment account to the account of each State in the Unemployment
Trust Fund the amount determined with respect to such State
under paragraph (2).
‘‘(2)(A) 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—
‘‘(i) the amount which would have been required to have
been transferred under this section to such account at the
beginning of fiscal year 2002 if—
‘‘(I) section 209(a)(1) of the Temporary Extended
Unemployment Compensation Act of 2002 had been enacted
before the close of fiscal year 2001, and
‘‘(II) section 5402 of Public Law 105–33 (relating to
increase in Federal unemployment account ceiling) had
not been enacted,
minus
‘‘(ii) the amount which was in fact transferred under this
section to such account at the beginning of fiscal year 2002.
‘‘(B) Notwithstanding the provisions of subparagraph (A)—
‘‘(i) the aggregate amount transferred to the States under
this subsection may not exceed a total of $8,000,000,000; and
‘‘(ii) all amounts determined under subparagraph (A) shall
be reduced ratably, if and to the extent necessary in order
to comply with the limitation under clause (i).
‘‘(3)(A) Except as provided in paragraph (4), amounts trans-
ferred to a State account pursuant to this subsection may be used
only in the payment of cash benefits—
‘‘(i) to individuals with respect to their unemployment,
and
‘‘(ii) which are allowable under subparagraph (B) or (C).
‘‘(B)(i) At the option of the State, cash benefits under this
paragraph may include amounts which shall be payable as—
‘‘(I) regular compensation, or
‘‘(II) additional compensation, upon the exhaustion of any
temporary extended unemployment compensation (if such State
has entered into an agreement under the Temporary Extended
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116 STAT. 32 PUBLIC LAW 107–147—MAR. 9, 2002
Unemployment Compensation Act of 2002), for individuals
eligible for regular compensation under the unemployment com-
pensation law of such State.
‘‘(ii) Any additional compensation under clause (i) may not
be taken into account for purposes of any determination relating
to the amount of any extended compensation for which an individual
might be eligible.
‘‘(C)(i) At the option of the State, cash benefits under this
paragraph may include amounts which shall be payable to 1 or
more categories of individuals not otherwise eligible for regular
compensation under the unemployment compensation law of such
State, including those described in clause (iii).
‘‘(ii) The benefits paid under this subparagraph to any indi-
vidual may not, for any period of unemployment, exceed the max-
imum amount of regular compensation authorized under the
unemployment compensation law of such State for that same period,
plus any additional compensation (described in subparagraph (B)(i))
which could have been paid with respect to that amount.
‘‘(iii) The categories of individuals described in this clause
include the following:
‘‘(I) Individuals who are seeking, or available for, only
part-time (and not full-time) work.
‘‘(II) Individuals who would be eligible for regular com-
pensation under the unemployment compensation law of such
State under an alternative base period.
‘‘(D) Amounts transferred to a State account under this sub-
section may be used in the payment of cash benefits to individuals
only for weeks of unemployment beginning after the date of enact-
ment of this subsection.
‘‘(4) Amounts transferred to a State account under this sub-
section may be used for the administration of its unemployment
compensation law and public employment offices (including in
connection with benefits described in paragraph (3) and any recipi-
ents thereof), subject to the same conditions as set forth in sub-
section (c)(2) (excluding subparagraph (B) thereof, and deeming
the reference to ‘subsections (a) and (b)’ in subparagraph (D) thereof
to include this subsection).
Deadline. ‘‘(5) Transfers under this subsection shall be made within 10
days after the date of enactment of this paragraph.’’.
Applicability. (c) LIMITATIONS ON TRANSFERS.—Section 903(b) of the Social
Security Act shall apply to transfers under section 903(d) of such
Act (as amended by this section). For purposes of the preceding
42 USC 1103. sentence, such section 903(b) shall be deemed to be amended as
follows:
(1) By substituting ‘‘the transfer date described in sub-
section (d)(5)’’ for ‘‘October 1 of any fiscal year’’.
(2) By substituting ‘‘remain in the Federal unemployment
account’’ for ‘‘be transferred to the Federal unemployment
account as of the beginning of such October 1’’.
(3) By substituting ‘‘fiscal year 2002 (after the transfer
date described in subsection (d)(5))’’ for ‘‘the fiscal year begin-
ning on such October 1’’.
(4) By substituting ‘‘under subsection (d)’’ for ‘‘as of October
1 of such fiscal year’’.
(5) By substituting ‘‘(as of the close of fiscal year 2002)’’
for ‘‘(as of the close of such fiscal year)’’.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 33
(d) TECHNICAL AMENDMENTS.—(1) Sections 3304(a)(4)(B) and
3306(f)(2) of the Internal Revenue Code of 1986 are amended by 26 USC 3304,
inserting ‘‘or 903(d)(4)’’ before ‘‘of the Social Security Act’’. 3306.
(2) Section 303(a)(5) of the Social Security Act is amended 42 USC 503.
in the second proviso by inserting ‘‘or 903(d)(4)’’ after ‘‘903(c)(2)’’.
(e) REGULATIONS.—The Secretary of Labor may prescribe any
operating instructions or regulations necessary to carry out this
section and the amendments made by this section.
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.
(a) IN GENERAL.—Chapter 1 is amended by adding at the
end the following new subchapter:
‘‘Subchapter Y—New York Liberty Zone Benefits
‘‘Sec. 1400L. Tax benefits for New York Liberty Zone.
‘‘SEC. 1400L. TAX BENEFITS FOR NEW YORK LIBERTY ZONE.
‘‘(a) EXPANSION OF WORK OPPORTUNITY TAX CREDIT.—
‘‘(1) IN GENERAL.—For purposes of section 51, a New York
Liberty Zone business employee shall be treated as a member
of a targeted group.
‘‘(2) NEW YORK LIBERTY ZONE BUSINESS EMPLOYEE.—For
purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘New York Liberty Zone
business employee’ means, with respect to any period, any
employee of a New York Liberty Zone business if substan-
tially all the services performed during such period by
such employee for such business are performed in the New
York Liberty Zone.
‘‘(B) INCLUSION OF CERTAIN EMPLOYEES OUTSIDE THE
NEW YORK LIBERTY ZONE.—
‘‘(i) IN GENERAL.—In the case of a New York Lib-
erty Zone business described in subclause (II) of
subparagraph (C)(i), the term ‘New York Liberty Zone
business employee’ includes any employee of such busi-
ness (not described in subparagraph (A)) if substan-
tially all the services performed during such period
by such employee for such business are performed in
the City of New York, New York.
‘‘(ii) LIMITATION.—The number of employees of
such a business that are treated as New York Liberty
Zone business employees on any day by reason of
clause (i) shall not exceed the excess of—
‘‘(I) the number of employees of such business
on September 11, 2001, in the New York Liberty
Zone, over
‘‘(II) the number of New York Liberty Zone
business employees (determined without regard to
this subparagraph) of such business on the day
to which the limitation is being applied.
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116 STAT. 34 PUBLIC LAW 107–147—MAR. 9, 2002
The Secretary may require any trade or business to
have the number determined under subclause (I)
verified by the New York State Department of Labor.
‘‘(C) NEW YORK LIBERTY ZONE BUSINESS.—
‘‘(i) IN GENERAL.—The term ‘New York Liberty
Zone business’ means any trade or business which
is—
‘‘(I) located in the New York Liberty Zone,
or
‘‘(II) located in the City of New York, New
York, outside the New York Liberty Zone, as a
result of the physical destruction or damage of
such place of business by the September 11, 2001,
terrorist attack.
‘‘(ii) CREDIT NOT ALLOWED FOR LARGE
BUSINESSES.—The term ‘New York Liberty Zone busi-
ness’ shall not include any trade or business for any
taxable year if such trade or business employed an
average of more than 200 employees on business days
during the taxable year.
‘‘(D) SPECIAL RULES FOR DETERMINING AMOUNT OF
CREDIT.—For purposes of applying subpart F of part IV
of subchapter B of this chapter to wages paid or incurred
to any New York Liberty Zone business employee—
‘‘(i) section 51(a) shall be applied by substituting
‘qualified wages’ for ‘qualified first-year wages’,
‘‘(ii) the rules of section 52 shall apply for purposes
of determining the number of employees under
subparagraph (B),
‘‘(iii) subsections (c)(4) and (i)(2) of section 51 shall
not apply, and
‘‘(iv) in determining qualified wages, the following
shall apply in lieu of section 51(b):
‘‘(I) QUALIFIED WAGES.—The term ‘qualified
wages’ means wages paid or incurred by the
employer to individuals who are New York Liberty
Zone business employees of such employer for work
performed during calendar year 2002 or 2003.
‘‘(II) ONLY FIRST $6,000 OF WAGES PER CAL-
ENDAR YEAR TAKEN INTO ACCOUNT.—The amount
of the qualified wages which may be taken into
account with respect to any individual shall not
exceed $6,000 per calendar year.
‘‘(b) SPECIAL ALLOWANCE FOR CERTAIN PROPERTY ACQUIRED
AFTER SEPTEMBER 10, 2001.—
‘‘(1) ADDITIONAL ALLOWANCE.—In the case of any qualified
New York Liberty Zone 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 such property, and
‘‘(B) the adjusted basis of the qualified New York Lib-
erty Zone 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.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 35
‘‘(2) QUALIFIED NEW YORK LIBERTY ZONE PROPERTY.—For
purposes of this subsection—
‘‘(A) IN GENERAL.—The term ‘qualified New York Lib-
erty Zone property’ means property—
‘‘(i)(I) which is described in section 168(k)(2)(A)(i),
or
‘‘(II) which is nonresidential real property, or resi-
dential rental property, which is described in subpara-
graph (B),
‘‘(ii) substantially all of the use of which is in
the New York Liberty Zone and is in the active conduct
of a trade or business by the taxpayer in such Zone,
‘‘(iii) the original use of which in the New York
Liberty Zone commences with the taxpayer after Sep-
tember 10, 2001,
‘‘(iv) which is acquired by the taxpayer by purchase
(as defined in section 179(d)) after September 10, 2001,
but only if no written binding contract for the acquisi-
tion was in effect before September 11, 2001, and
‘‘(v) which is placed in service by the taxpayer
on or before the termination date.
The term ‘termination date’ means December 31, 2006
(December 31, 2009, in the case of nonresidential real
property and residential rental property).
‘‘(B) ELIGIBLE REAL PROPERTY.—Nonresidential real
property or residential rental property is described in this
subparagraph only to the extent it rehabilitates real prop-
erty damaged, or replaces real property destroyed or con-
demned, as a result of the September 11, 2001, terrorist
attack. For purposes of the preceding sentence, property
shall be treated as replacing real property destroyed or
condemned if, as part of an integrated plan, such property
replaces real property which is included in a continuous
area which includes real property destroyed or condemned.
‘‘(C) EXCEPTIONS.—
‘‘(i) 30 PERCENT ADDITIONAL ALLOWANCE PROP-
ERTY.—Such term shall not include property to which
section 168(k) applies.
‘‘(ii) ALTERNATIVE DEPRECIATION PROPERTY.—The
term ‘qualified New York Liberty Zone property’ shall
not include any property described in section
168(k)(2)(C)(i).
‘‘(iii) QUALIFIED NEW YORK LIBERTY ZONE LEASE-
HOLD IMPROVEMENT PROPERTY.—Such term shall not
include any qualified New York Liberty Zone leasehold
improvement property.
‘‘(iv) ELECTION OUT.—For purposes of this sub- Applicability.
section, rules similar to the rules of section
168(k)(2)(C)(iii) shall apply.
‘‘(D) SPECIAL RULES.—For purposes of this subsection, Applicability.
rules similar to the rules of section 168(k)(2)(D) shall apply,
except that clause (i) thereof shall be applied without
regard to ‘and before September 11, 2004’.
‘‘(E) ALLOWANCE AGAINST ALTERNATIVE MINIMUM TAX.— Applicability.
For purposes of this subsection, rules similar to the rules
of section 168(k)(2)(F) shall apply.
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116 STAT. 36 PUBLIC LAW 107–147—MAR. 9, 2002
‘‘(c) 5-YEAR RECOVERY PERIOD FOR DEPRECIATION OF CERTAIN
LEASEHOLD IMPROVEMENTS.—
‘‘(1) IN GENERAL.—For purposes of section 168, the term
‘5-year property’ includes any qualified New York Liberty Zone
leasehold improvement property.
‘‘(2) QUALIFIED NEW YORK LIBERTY ZONE LEASEHOLD
IMPROVEMENT PROPERTY.—For purposes of this section, the term
‘qualified New York Liberty Zone leasehold improvement prop-
erty’ means qualified leasehold improvement property (as
defined in section 168(k)(3)) if—
‘‘(A) such building is located in the New York Liberty
Zone,
‘‘(B) such improvement is placed in service after Sep-
tember 10, 2001, and before January 1, 2007, and
‘‘(C) no written binding contract for such improvement
was in effect before September 11, 2001.
‘‘(3) REQUIREMENT TO USE STRAIGHT LINE METHOD.—The
applicable depreciation method under section 168 shall be the
straight line method in the case of qualified New York Liberty
Zone leasehold improvement property.
‘‘(4) 9-YEAR RECOVERY PERIOD UNDER ALTERNATIVE
SYSTEM.—For purposes of section 168(g), the class life of quali-
fied New York Liberty Zone leasehold improvement property
shall be 9 years.
‘‘(d) TAX-EXEMPT BOND FINANCING.—
‘‘(1) IN GENERAL.—For purposes of this title, any qualified
New York Liberty Bond shall be treated as an exempt facility
bond.
‘‘(2) QUALIFIED NEW YORK LIBERTY BOND.—For purposes
of this subsection, the term ‘qualified New York Liberty 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 quali-
fied project costs,
‘‘(B) such bond is issued by the State of New York
or any political subdivision thereof,
‘‘(C) the Governor or the Mayor designates such bond
for purposes of this section, and
‘‘(D) such bond is issued after the date of the enactment
of this section and before January 1, 2005.
‘‘(3) LIMITATIONS ON AMOUNT OF BONDS.—
‘‘(A) AGGREGATE AMOUNT DESIGNATED.—The maximum
aggregate face amount of bonds which may be designated
under this subsection shall not exceed $8,000,000,000, of
which not to exceed $4,000,000,000 may be designated
by the Governor and not to exceed $4,000,000,000 may
be designated by the Mayor.
‘‘(B) SPECIFIC LIMITATIONS.—The aggregate face
amount of bonds issued which are to be used for—
‘‘(i) costs for property located outside the New York
Liberty Zone shall not exceed $2,000,000,000,
‘‘(ii) residential rental property shall not exceed
$1,600,000,000, and
‘‘(iii) costs with respect to property used for retail
sales of tangible property and functionally related and
subordinate property shall not exceed $800,000,000.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 37
The limitations under clauses (i), (ii), and (iii) shall be
allocated proportionately between the bonds designated by
the Governor and the bonds designated by the Mayor in
proportion to the respective amounts of bonds designated
by each.
‘‘(C) MOVABLE PROPERTY.—No bonds shall be issued
which are to be used for movable fixtures and equipment.
‘‘(4) QUALIFIED PROJECT COSTS.—For purposes of this
subsection—
‘‘(A) IN GENERAL.—The term ‘qualified project costs’
means the cost of acquisition, construction, reconstruction,
and renovation of—
‘‘(i) nonresidential real property and residential
rental property (including fixed tenant improvements
associated with such property) located in the New York
Liberty Zone, and
‘‘(ii) public utility property (as defined in section
168(i)(10)) located in the New York Liberty Zone.
‘‘(B) COSTS FOR CERTAIN PROPERTY OUTSIDE ZONE
INCLUDED.—Such term includes the cost of acquisition,
construction, reconstruction, and renovation of nonresiden-
tial real property (including fixed tenant improvements
associated with such property) located outside the New
York Liberty Zone but within the City of New York, New
York, if such property is part of a project which consists
of at least 100,000 square feet of usable office or other
commercial space located in a single building or multiple
adjacent buildings.
‘‘(5) SPECIAL RULES.—In applying this title to any qualified
New York Liberty Bond, the following modifications shall apply:
‘‘(A) Section 146 (relating to volume cap) shall not
apply.
‘‘(B) Section 147(d) (relating to acquisition of existing Applicability.
property not permitted) shall be applied by substituting
‘50 percent’ for ‘15 percent’ each place it appears.
‘‘(C) Section 148(f)(4)(C) (relating to exception from Applicability.
rebate for certain proceeds to be used to finance construc-
tion expenditures) shall apply to the available construction
proceeds of bonds issued under this section.
‘‘(D) Repayments of principal on financing provided
by the issue—
‘‘(i) may not be used to provide financing, and
‘‘(ii) must be used not later than the close of the
1st semiannual period beginning after the date of the
repayment to redeem bonds which are part of such
issue.
The requirement of clause (ii) shall be treated as met
with respect to amounts received within 10 years after
the date of issuance of the issue (or, in the case of a
refunding bond, the date of issuance of the original bond)
if such amounts are used by the close of such 10 years
to redeem bonds which are part of such issue.
‘‘(E) Section 57(a)(5) shall not apply.
‘‘(6) SEPARATE ISSUE TREATMENT OF PORTIONS OF AN
ISSUE.—This subsection shall not apply to the portion of an
issue which (if issued as a separate issue) would be treated
as a qualified bond or as a bond that is not a private activity
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116 STAT. 38 PUBLIC LAW 107–147—MAR. 9, 2002
bond (determined without regard to paragraph (1)), if the issuer
elects to so treat such portion.
‘‘(e) ADVANCE REFUNDINGS OF CERTAIN TAX-EXEMPT BONDS.—
‘‘(1) IN GENERAL.—With respect to a bond described in
paragraph (2) issued as part of an issue 90 percent (95 percent
in the case of a bond described in paragraph (2)(C)) or more
of the net proceeds (as defined in section 150(a)(3)) of which
were used to finance facilities located within the City of New
York, New York (or property which is functionally related and
subordinate to facilities located within the City of New York
for the furnishing of water), one additional advanced refunding
after the date of the enactment of this section and before
January 1, 2005, shall be allowed under the applicable rules
of section 149(d) if—
‘‘(A) the Governor or the Mayor designates the advance
refunding bond for purposes of this subsection, and
‘‘(B) the requirements of paragraph (4) are met.
‘‘(2) BONDS DESCRIBED.—A bond is described in this para-
graph if such bond was outstanding on September 11, 2001,
and is—
‘‘(A) a State or local bond (as defined in section
103(c)(1)) which is a general obligation of the City of New
York, New York,
‘‘(B) a State or local bond (as so defined) other than
a private activity bond (as defined in section 141(a)) issued
by the New York Municipal Water Finance Authority or
the Metropolitan Transportation Authority of the State
of New York, or
‘‘(C) a qualified 501(c)(3) bond (as defined in section
145(a)) which is a qualified hospital bond (as defined in
section 145(c)) issued by or on behalf of the State of New
York or the City of New York, New York.
‘‘(3) AGGREGATE LIMIT.—For purposes of paragraph (1), the
maximum aggregate face amount of bonds which may be des-
ignated under this subsection by the Governor shall not exceed
$4,500,000,000 and the maximum aggregate face amount of
bonds which may be designated under this subsection by the
Mayor shall not exceed $4,500,000,000.
‘‘(4) ADDITIONAL REQUIREMENTS.—The requirements of this
paragraph are met with respect to any advance refunding of
a bond described in paragraph (2) if—
‘‘(A) no advance refundings of such bond would be
allowed under any provision of law after September 11,
2001,
‘‘(B) the advance refunding bond is the only other
outstanding bond with respect to the refunded bond, and
‘‘(C) the requirements of section 148 are met with
respect to all bonds issued under this subsection.
‘‘(f) INCREASE IN EXPENSING UNDER SECTION 179.—
‘‘(1) IN GENERAL.—For purposes of section 179—
‘‘(A) the limitation under section 179(b)(1) shall be
increased by the lesser of—
‘‘(i) $35,000, or
‘‘(ii) the cost of section 179 property which is quali-
fied New York Liberty Zone property placed in service
during the taxable year, and
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 39
‘‘(B) the amount taken into account under section
179(b)(2) with respect to any section 179 property which
is qualified New York Liberty Zone property shall be 50
percent of the cost thereof.
‘‘(2) QUALIFIED NEW YORK LIBERTY ZONE PROPERTY.—For
purposes of this subsection, the term ‘qualified New York Lib-
erty Zone property’ has the meaning given such term by sub-
section (b)(2).
‘‘(3) RECAPTURE.—Rules similar to the rules under section Applicability.
179(d)(10) shall apply with respect to any qualified New York
Liberty Zone property which ceases to be used in the New
York Liberty Zone.
‘‘(g) EXTENSION OF REPLACEMENT PERIOD FOR NONRECOGNITION Applicability.
OF GAIN.—Notwithstanding subsections (g) and (h) of section 1033,
clause (i) of section 1033(a)(2)(B) shall be applied by substituting
‘5 years’ for ‘2 years’ with respect to property which is compulsorily
or involuntarily converted as a result of the terrorist attacks on
September 11, 2001, in the New York Liberty Zone but only if
substantially all of the use of the replacement property is in the
City of New York, New York.
‘‘(h) NEW YORK LIBERTY ZONE.—For purposes of this section,
the term ‘New York Liberty Zone’ means the area located on or
south of Canal Street, East Broadway (east of its intersection with
Canal Street), or Grand Street (east of its intersection with East
Broadway) in the Borough of Manhattan in the City of New York,
New York.
‘‘(i) REFERENCES TO GOVERNOR AND MAYOR.—For purposes of
this section, the terms ‘Governor’ and ‘Mayor’ mean the Governor
of the State of New York and the Mayor of the City of New
York, New York, respectively.’’.
(b) CREDIT ALLOWED AGAINST REGULAR AND MINIMUM TAX.—
(1) IN GENERAL.—Subsection (c) of section 38 (relating to 26 USC 38.
limitation based on amount of tax) is amended by redesignating
paragraph (3) as paragraph (4) and by inserting after paragraph
(2) the following new paragraph:
‘‘(3) SPECIAL RULES FOR NEW YORK LIBERTY ZONE BUSINESS
EMPLOYEE CREDIT.—
‘‘(A) IN GENERAL.—In the case of the New York Liberty
Zone business employee credit—
‘‘(i) this section and section 39 shall be applied Applicability.
separately with respect to such credit, and
‘‘(ii) in applying paragraph (1) to such credit—
‘‘(I) the tentative minimum tax shall be treated
as being zero, and
‘‘(II) the limitation under paragraph (1) (as
modified by subclause (I)) shall be reduced by the
credit allowed under subsection (a) for the taxable
year (other than the New York Liberty Zone busi-
ness employee credit).
‘‘(B) NEW YORK LIBERTY ZONE BUSINESS EMPLOYEE
CREDIT.—For purposes of this subsection, the term ‘New
York Liberty Zone business employee credit’ means the
portion of work opportunity credit under section 51 deter-
mined under section 1400L(a).’’.
(2) CONFORMING AMENDMENT.—Subclause (II) of section
38(c)(2)(A)(ii) is amended by inserting ‘‘or the New York Liberty
Zone business employee credit’’ after ‘‘employment credit’’.
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116 STAT. 40 PUBLIC LAW 107–147—MAR. 9, 2002
Applicability. (3) EFFECTIVE DATE.—The amendments made by this sub-
26 USC 38 note. section shall apply to taxable years ending after December
31, 2001.
(c) CLERICAL AMENDMENT.—The table of subchapters for
chapter 1 is amended by adding at the end the following new
item:
‘‘Subchapter Y—New York Liberty Zone Benefits.’’.
TITLE IV—MISCELLANEOUS AND
TECHNICAL PROVISIONS
Subtitle A—General Miscellaneous
Provisions
26 USC 6041 SEC. 401. ALLOWANCE OF ELECTRONIC 1099’S.
note.
Any person required to furnish a statement under any section
of subpart B of part III of subchapter A of chapter 61 of the
Internal Revenue Code of 1986 for any taxable year ending after
the date of the enactment of this Act, may electronically furnish
such statement (without regard to any first class mailing require-
ment) to any recipient who has consented to the electronic provision
of the statement in a manner similar to the one permitted under
regulations issued under section 6051 of such Code or in such
other manner as provided by the Secretary.
SEC. 402. EXCLUDED CANCELLATION OF INDEBTEDNESS INCOME OF
S CORPORATION NOT TO RESULT IN ADJUSTMENT TO
BASIS OF STOCK OF SHAREHOLDERS.
26 USC 108. (a) IN GENERAL.—Subparagraph (A) of section 108(d)(7)
(relating to certain provisions to be applied at corporate level)
is amended by inserting before the period ‘‘, including by not taking
into account under section 1366(a) any amount excluded under
subsection (a) of this section’’.
26 USC 108 note. (b) EFFECTIVE DATE.—
Applicability. (1) IN GENERAL.—Except as provided in paragraph (2), the
amendment made by this section shall apply to discharges
of indebtedness after October 11, 2001, in taxable years ending
after such date.
(2) EXCEPTION.—The amendment made by this section shall
not apply to any discharge of indebtedness before March 1,
2002, pursuant to a plan of reorganization filed with a bank-
ruptcy court on or before October 11, 2001.
SEC. 403. LIMITATION ON USE OF NONACCRUAL EXPERIENCE METHOD
OF ACCOUNTING.
(a) IN GENERAL.—Paragraph (5) of section 448(d) is amended
to read as follows:
‘‘(5) SPECIAL RULE FOR CERTAIN SERVICES.—
‘‘(A) IN GENERAL.—In the case of any person using
an accrual method of accounting with respect to amounts
to be received for the performance of services by such
person, such person shall not be required to accrue any
portion of such amounts which (on the basis of such per-
son’s experience) will not be collected if—
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 41
‘‘(i) such services are in fields referred to in para-
graph (2)(A), or
‘‘(ii) such person meets the gross receipts test of
subsection (c) for all prior taxable years.
‘‘(B) EXCEPTION.—This paragraph shall not apply to
any amount if interest is required to be paid on such
amount or there is any penalty for failure to timely pay
such amount.
‘‘(C) REGULATIONS.—The Secretary shall prescribe
regulations to permit taxpayers to determine amounts
referred to in subparagraph (A) using computations or for-
mulas which, based on experience, accurately reflect the
amount of income that will not be collected by such person.
A taxpayer may adopt, or request consent of the Secretary
to change to, a computation or formula that clearly reflects
the taxpayer’s experience. A request under the preceding
sentence shall be approved if such computation or formula
clearly reflects the taxpayer’s experience.’’.
(b) EFFECTIVE DATE.— 26 USC 448 note.
(1) IN GENERAL.—The amendments made by this section Applicability.
shall apply to taxable years ending after the date of the enact-
ment of this Act.
(2) CHANGE IN METHOD OF ACCOUNTING.—In the case of
any taxpayer required by the amendments made by this section
to change its method of accounting for its first taxable year
ending after the date of the enactment of this Act—
(A) such change shall be treated as initiated by the
taxpayer,
(B) such change shall be treated as made with the
consent of the Secretary of the Treasury, and
(C) the net amount of the adjustments required to
be taken into account by the taxpayer under section 481
of the Internal Revenue Code of 1986 shall be taken into
account over a period of 4 years (or if less, the number
of taxable years that the taxpayer used the method per-
mitted under section 448(d)(5) of such Code as in effect
before the date of the enactment of this Act) beginning
with such first taxable year.
SEC. 404. EXCLUSION FOR FOSTER CARE PAYMENTS TO APPLY TO
PAYMENTS BY QUALIFIED PLACEMENT AGENCIES.
(a) IN GENERAL.—The matter preceding subparagraph (B) of
section 131(b)(1) (defining qualified foster care payment) is amended 26 USC 131.
to read as follows:
‘‘(1) IN GENERAL.—The term ‘qualified foster care payment’
means any payment made pursuant to a foster care program
of a State or political subdivision thereof—
‘‘(A) which is paid by—
‘‘(i) a State or political subdivision thereof, or
‘‘(ii) a qualified foster care placement agency, and’’.
(b) QUALIFIED FOSTER INDIVIDUALS TO INCLUDE INDIVIDUALS
PLACED BY QUALIFIED PLACEMENT AGENCIES.—Subparagraph (B)
of section 131(b)(2) (defining qualified foster individual) is amended
to read as follows:
‘‘(B) a qualified foster care placement agency.’’.
(c) QUALIFIED FOSTER CARE PLACEMENT AGENCY DEFINED.—
Subsection (b) of section 131 is amended by redesignating paragraph
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116 STAT. 42 PUBLIC LAW 107–147—MAR. 9, 2002
(3) as paragraph (4) and by inserting after paragraph (2) the fol-
lowing new paragraph:
‘‘(3) QUALIFIED FOSTER CARE PLACEMENT AGENCY.—The
term ‘qualified foster care placement agency’ means any place-
ment agency which is licensed or certified by—
‘‘(A) a State or political subdivision thereof, or
‘‘(B) an entity designated by a State or political subdivi-
sion thereof,
for the foster care program of such State or political subdivision
to make foster care payments to providers of foster care.’’.
Applicability. (d) EFFECTIVE DATE.—The amendments made by this section
26 USC 131 note. shall apply to taxable years beginning after December 31, 2001.
SEC. 405. INTEREST RATE RANGE FOR ADDITIONAL FUNDING
REQUIREMENTS.
(a) AMENDMENTS TO THE INTERNAL REVENUE CODE OF 1986.—
26 USC 412. (1) SPECIAL RULE.—Clause (i) of section 412(l)(7)(C)
(relating to interest rate) is amended by adding at the end
the following new subclause:
‘‘(III) SPECIAL RULE FOR 2002 AND 2003.—For
a plan year beginning in 2002 or 2003, notwith-
standing subclause (I), in the case that the rate
of interest used under subsection (b)(5) exceeds
the highest rate permitted under subclause (I),
the rate of interest used to determine current
liability under this subsection may exceed the rate
of interest otherwise permitted under subclause
(I); except that such rate of interest shall not
exceed 120 percent of the weighted average
referred to in subsection (b)(5)(B)(ii).’’.
(2) QUARTERLY CONTRIBUTIONS.—Subsection (m) of section
412 is amended by adding at the end the following new para-
graph:
‘‘(7) SPECIAL RULES FOR 2002 AND 2004.—In any case in
which the interest rate used to determine current liability
is determined under subsection (l)(7)(C)(i)(III)—
‘‘(A) 2002.—For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2002, the current
liability for the preceding plan year shall be redetermined
using 120 percent as the specified percentage determined
under subsection (l)(7)(C)(i)(II).
‘‘(B) 2004.—For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2004, the current
liability for the preceding plan year shall be redetermined
using 105 percent as the specified percentage determined
under subsection (l)(7)(C)(i)(II).’’.
(b) AMENDMENTS TO THE EMPLOYEE RETIREMENT INCOME SECU-
RITY ACT OF 1974.—
(1) SPECIAL RULE.—Clause (i) of section 302(d)(7)(C) of such
Act (29 U.S.C. 1082(d)(7)(C)) is amended by adding at the
end the following new subclause:
‘‘(III) SPECIAL RULE FOR 2002 AND 2003.—For
a plan year beginning in 2002 or 2003, notwith-
standing subclause (I), in the case that the rate
of interest used under subsection (b)(5) exceeds
the highest rate permitted under subclause (I),
the rate of interest used to determine current
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 43
liability under this subsection may exceed the rate
of interest otherwise permitted under subclause
(I); except that such rate of interest shall not
exceed 120 percent of the weighted average
referred to in subsection (b)(5)(B)(ii).’’.
(2) QUARTERLY CONTRIBUTIONS.—Subsection (e) of section
302 of such Act (29 U.S.C. 1082) is amended by adding at
the end the following new paragraph:
‘‘(7) SPECIAL RULES FOR 2002 AND 2004.—In any case in
which the interest rate used to determine current liability
is determined under subsection (d)(7)(C)(i)(III)—
‘‘(A) 2002.—For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2002, the current
liability for the preceding plan year shall be redetermined
using 120 percent as the specified percentage determined
under subsection (d)(7)(C)(i)(II).
‘‘(B) 2004.—For purposes of applying paragraphs (1)
and (4)(B)(ii) for plan years beginning in 2004, the current
liability for the preceding plan year shall be redetermined
using 105 percent as the specified percentage determined
under subsection (d)(7)(C)(i)(II).’’.
(c) PBGC.—Clause (iii) of section 4006(a)(3)(E) of the Employee
Retirement Income Security Act of 1974 (29 U.S.C. 1306(a)(3)(E))
is amended by adding at the end the following new subclause:
‘‘(IV) In the case of plan years beginning after December 31, Applicability.
2001, and before January 1, 2004, subclause (II) shall be applied
by substituting ‘100 percent’ for ‘85 percent’. Subclause (III) shall
be applied for such years without regard to the preceding sentence.
Any reference to this clause by any other sections or subsections
shall be treated as a reference to this clause without regard to
this subclause.’’.
SEC. 406. ADJUSTED GROSS INCOME DETERMINED BY TAKING INTO
ACCOUNT CERTAIN EXPENSES OF ELEMENTARY AND
SECONDARY SCHOOL TEACHERS.
(a) IN GENERAL.—Section 62(a)(2) (relating to certain trade 26 USC 62.
and business deductions of employees) is amended by adding at
the end the following:
‘‘(D) CERTAIN EXPENSES OF ELEMENTARY AND SEC-
ONDARY SCHOOL TEACHERS.—In the case of taxable years
beginning during 2002 or 2003, the deductions allowed
by section 162 which consist of expenses, not in excess
of $250, paid or incurred by an eligible educator in connec-
tion with books, supplies (other than nonathletic supplies
for courses of instruction in health or physical education),
computer equipment (including related software and serv-
ices) and other equipment, and supplementary materials
used by the eligible educator in the classroom.’’.
(b) ELIGIBLE EDUCATOR.—Section 62 is amended by adding
at the end the following:
‘‘(d) DEFINITION; SPECIAL RULES.—
‘‘(1) ELIGIBLE EDUCATOR.—
‘‘(A) IN GENERAL.—For purposes of subsection (a)(2)(D),
the term ‘eligible educator’ means, with respect to any
taxable year, an individual who is a kindergarten through
grade 12 teacher, instructor, counselor, principal, or aide
in a school for at least 900 hours during a school year.
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116 STAT. 44 PUBLIC LAW 107–147—MAR. 9, 2002
‘‘(B) SCHOOL.—The term ‘school’ means any school
which provides elementary education or secondary edu-
cation (kindergarten through grade 12), as determined
under State law.
‘‘(2) COORDINATION WITH EXCLUSIONS.—A deduction shall
be allowed under subsection (a)(2)(D) for expenses only to the
extent the amount of such expenses exceeds the amount exclud-
able under section 135, 529(c)(1), or 530(d)(2) for the taxable
year.’’.
Applicability. (c) EFFECTIVE DATE.—The amendments made by this section
26 USC 62 note. shall apply to taxable years beginning after December 31, 2001.
Subtitle B—Technical Corrections
SEC. 411. AMENDMENTS RELATED TO ECONOMIC GROWTH AND TAX
RELIEF RECONCILIATION ACT OF 2001.
(a) AMENDMENTS RELATED TO SECTION 101 OF THE ACT.—
26 USC 6428. (1) IN GENERAL.—Subsection (b) of section 6428 is amended
to read as follows:
‘‘(b) CREDIT TREATED AS NONREFUNDABLE PERSONAL CREDIT.—
For purposes of this title, the credit allowed under this section
shall be treated as a credit allowable under subpart A of part
IV of subchapter A of chapter 1.’’.
(2) CONFORMING AMENDMENTS.—
(A) Subsection (d) of section 6428 is amended to read
as follows:
‘‘(d) COORDINATION WITH ADVANCE REFUNDS OF CREDIT.—
‘‘(1) IN GENERAL.—The amount of credit which would (but
for this paragraph) be allowable under this section shall be
reduced (but not below zero) by the aggregate refunds and
credits made or allowed to the taxpayer under subsection (e).
Any failure to so reduce the credit shall be treated as arising
out of a mathematical or clerical error and assessed according
to section 6213(b)(1).
‘‘(2) JOINT RETURNS.—In the case of a refund or credit
made or allowed under subsection (e) with respect to a joint
return, half of such refund or credit shall be treated as having
been made or allowed to each individual filing such return.’’.
(B) Paragraph (2) of section 6428(e) is amended to
read as follows:
‘‘(2) ADVANCE REFUND AMOUNT.—For purposes of paragraph
(1), the advance refund amount is the amount that would
have been allowed as a credit under this section for such
first taxable year if—
‘‘(A) this section (other than subsections (b) and (d)
and this subsection) had applied to such taxable year,
and
‘‘(B) the credit for such taxable year were not allowed
to exceed the excess (if any) of—
‘‘(i) the sum of the regular tax liability (as defined
in section 26(b)) plus the tax imposed by section 55,
over
‘‘(ii) the sum of the credits allowable under part
IV of subchapter A of chapter 1 (other than the credits
allowable under subpart C thereof, relating to refund-
able credits).’’.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 45
(b) AMENDMENT RELATED TO SECTION 201 OF THE ACT.—
Subparagraph (B) of section 24(d)(1) is amended by striking 26 USC 24.
‘‘amount of credit allowed by this section’’ and inserting ‘‘aggregate
amount of credits allowed by this subpart’’.
(c) AMENDMENTS RELATED TO SECTION 202 OF THE ACT.—
(1) CORRECTIONS TO CREDIT FOR ADOPTION EXPENSES.—
(A) Paragraph (1) of section 23(a) is amended to read
as follows:
‘‘(1) IN GENERAL.—In the case of an individual, there shall
be allowed as a credit against the tax imposed by this chapter
the amount of the qualified adoption expenses paid or incurred
by the taxpayer.’’.
(B) Subsection (a) of section 23 is amended by adding
at the end the following new paragraph:
‘‘(3) $10,000 CREDIT FOR ADOPTION OF CHILD WITH SPECIAL
NEEDS REGARDLESS OF EXPENSES.—In the case of an adoption
of a child with special needs which becomes final during a
taxable year, the taxpayer shall be treated as having paid
during such year qualified adoption expenses with respect to
such adoption in an amount equal to the excess (if any) of
$10,000 over the aggregate qualified adoption expenses actually
paid or incurred by the taxpayer with respect to such adoption
during such taxable year and all prior taxable years.’’.
(C) Paragraph (2) of section 23(a) is amended by
striking the last sentence.
(D) Paragraph (1) of section 23(b) is amended by
striking ‘‘subsection (a)(1)(A)’’ and inserting ‘‘subsection
(a)’’.
(E) Subsection (i) of section 23 is amended by striking
‘‘the dollar limitation in subsection (b)(1)’’ and inserting
‘‘the dollar amounts in subsections (a)(3) and (b)(1)’’.
(F) Expenses paid or incurred during any taxable year 26 USC 23 note.
beginning before January 1, 2002, may be taken into
account in determining the credit under section 23 of the
Internal Revenue Code of 1986 only to the extent the
aggregate of such expenses does not exceed the applicable
limitation under section 23(b)(1) of such Code as in effect
on the day before the date of the enactment of the Economic
Growth and Tax Relief Reconciliation Act of 2001.
(2) CORRECTIONS TO EXCLUSION FOR EMPLOYER-PROVIDED
ADOPTION ASSISTANCE.—
(A) Subsection (a) of section 137 is amended to read
as follows:
‘‘(a) EXCLUSION.—
‘‘(1) IN GENERAL.—Gross income of an employee does not
include amounts paid or expenses incurred by the employer
for qualified adoption expenses in connection with the adoption
of a child by an employee if such amounts are furnished pursu-
ant to an adoption assistance program.
‘‘(2) $10,000 EXCLUSION FOR ADOPTION OF CHILD WITH SPE-
CIAL NEEDS REGARDLESS OF EXPENSES.—In the case of an adop-
tion of a child with special needs which becomes final during
a taxable year, the qualified adoption expenses with respect
to such adoption for such year shall be increased by an amount
equal to the excess (if any) of $10,000 over the actual aggregate
qualified adoption expenses with respect to such adoption
during such taxable year and all prior taxable years.’’.
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116 STAT. 46 PUBLIC LAW 107–147—MAR. 9, 2002
26 USC 137. (B) Paragraph (2) of section 137(b) is amended by
striking ‘‘subsection (a)(1)’’ and inserting ‘‘subsection (a)’’.
Applicability. (3) EFFECTIVE DATE.—The amendments made by this sub-
26 USC 23 note. section shall apply to taxable years beginning after December
31, 2002; except that the amendments made by paragraphs
(1)(C), (1)(D), and (2)(B) shall apply to taxable years beginning
after December 31, 2001.
(d) AMENDMENTS RELATED TO SECTION 205 OF THE ACT.—
(1) Section 45F(d)(4)(B) is amended by striking ‘‘subpart
A, B, or D of this part’’ and inserting ‘‘this chapter or for
purposes of section 55’’.
(2) Section 38(b)(15) is amended by striking ‘‘45F’’ and
inserting ‘‘45F(a)’’.
(e) AMENDMENTS RELATED TO SECTION 301 OF THE ACT.—
(1) Section 63(c)(2) is amended—
(A) in subparagraph (A), by striking ‘‘subparagraph
(C)’’ and inserting ‘‘subparagraph (D)’’,
(B) by striking ‘‘or’’ at the end of subparagraph (B),
(C) by redesignating subparagraph (C) as subpara-
graph (D),
(D) by inserting after subparagraph (B) the following
new subparagraph:
‘‘(C) one-half of the amount in effect under subpara-
graph (A) in the case of a married individual filing a
separate return, or’’, and
(E) by inserting the following flush sentence at the
end:
‘‘If any amount determined under subparagraph (A) is not
a multiple of $50, such amount shall be rounded to the
next lowest multiple of $50.’’.
(2)(A) Section 63(c)(4) is amended by striking ‘‘paragraph
(2) or (5)’’ and inserting ‘‘paragraph (2)(B), (2)(D), or (5)’’.
(B) Section 63(c)(4)(B)(i) is amended by striking ‘‘paragraph
(2)’’ and inserting ‘‘paragraph (2)(B), (2)(D),’’.
(C) Section 63(c)(4) is amended by striking the flush sen-
tence at the end (as added by section 301(c)(2) of Public Law
107–17).
(f) AMENDMENT RELATED TO SECTION 401 OF THE ACT.—Section
530(d)(4)(B)(iv) is amended by striking ‘‘because the taxpayer
elected under paragraph (2)(C) to waive the application of paragraph
(2)’’ and inserting ‘‘by application of paragraph (2)(C)(i)(II)’’.
(g) AMENDMENTS RELATED TO SECTION 511 OF THE ACT.—
(1) Section 2511(c) is amended by striking ‘‘taxable gift
under section 2503,’’ and inserting ‘‘transfer of property by
gift,’’.
(2) Section 2101(b) is amended by striking the last sentence.
(h) AMENDMENT RELATED TO SECTION 532 OF THE ACT.—Section
2016 is amended by striking ‘‘any State, any possession of the
United States, or the District of Columbia,’’.
(i) AMENDMENTS RELATING TO SECTION 602 OF THE ACT.—
(1) Subparagraph (A) of section 408(q)(3) is amended to
read as follows:
‘‘(A) QUALIFIED EMPLOYER PLAN.—The term ‘qualified
employer plan’ has the meaning given such term by section
72(p)(4)(A)(i); except that such term shall also include an
eligible deferred compensation plan (as defined in section
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 47
457(b)) of an eligible employer described in section
457(e)(1)(A).’’.
(2) Section 4(c) of Employee Retirement Income Security
Act of 1974 is amended— 29 USC 1003.
(A) by inserting ‘‘and part 5 (relating to administration
and enforcement)’’ before the period at the end, and
(B) by adding at the end the following new sentence:
‘‘Such provisions shall apply to such accounts and annuities Applicability.
in a manner similar to their application to a simplified
employee pension under section 408(k) of the Internal Rev-
enue Code of 1986.’’.
(j) AMENDMENTS RELATING TO SECTION 611 OF THE ACT.—
(1) Section 408(k) is amended— 26 USC 408.
(A) in paragraph (2)(C) by striking ‘‘$300’’ and inserting
‘‘$450’’, and
(B) in paragraph (8) by striking ‘‘$300’’ both places
it appears and inserting ‘‘$450’’.
(2) Section 409(o)(1)(C)(ii) is amended—
(A) by striking ‘‘$500,000’’ both places it appears and
inserting ‘‘$800,000’’, and
(B) by striking ‘‘$100,000’’ and inserting ‘‘$160,000’’.
(3) Section 611(i) of the Economic Growth and Tax Relief
Reconciliation Act of 2001 is amended by adding at the end 26 USC 415 note.
the following new paragraph:
‘‘(3) SPECIAL RULE.—In the case of plan that, on June
7, 2001, incorporated by reference the limitation of section
415(b)(1)(A) of the Internal Revenue Code of 1986, section
411(d)(6) of such Code and section 204(g)(1) of the Employee
Retirement Income Security Act of 1974 do not apply to a
plan amendment that—
‘‘(A) is adopted on or before June 30, 2002,
‘‘(B) reduces benefits to the level that would have
applied without regard to the amendments made by sub-
section (a) of this section, and
‘‘(C) is effective no earlier than the years described
in paragraph (2).’’.
(k) AMENDMENTS RELATING TO SECTION 613 OF THE ACT.—
(1) Section 416(c)(1)(C)(iii) is amended by striking ‘‘EXCEP-
TION FOR FROZEN PLAN’’ and inserting ‘‘EXCEPTION FOR PLAN
UNDER WHICH NO KEY EMPLOYEE (OR FORMER KEY EMPLOYEE)
BENEFITS FOR PLAN YEAR’’.
(2) Section 416(g)(3)(B) is amended by striking ‘‘separation
from service’’ and inserting ‘‘severance from employment’’.
(l) AMENDMENTS RELATING TO SECTIONS 614 and 616 OF THE
ACT.—
(1) Section 404(a)(12) is amended by striking ‘‘(9),’’ and
inserting ‘‘(9) and subsection (h)(1)(C),’’.
(2) Section 404(n) is amended by striking ‘‘subsection (a),’’
and inserting ‘‘subsection (a) or paragraph (1)(C) of subsection
(h)’’.
(3) Section 402(h)(2)(A) is amended by striking ‘‘15 percent’’
and inserting ‘‘25 percent’’.
(4) Section 404(a)(7)(C) is amended to read as follows:
‘‘(C) PARAGRAPH NOT TO APPLY IN CERTAIN CASES.—
‘‘(i) BENEFICIARY TEST.—This paragraph shall not
have the effect of reducing the amount otherwise
deductible under paragraphs (1), (2), and (3), if no
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116 STAT. 48 PUBLIC LAW 107–147—MAR. 9, 2002
employee is a beneficiary under more than 1 trust
or under a trust and an annuity plan.
‘‘(ii) ELECTIVE DEFERRALS.—If, in connection with
1 or more defined contribution plans and 1 or more
defined benefit plans, no amounts (other than elective
deferrals (as defined in section 402(g)(3))) are contrib-
uted to any of the defined contribution plans for the
taxable year, then subparagraph (A) shall not apply
with respect to any of such defined contribution plans
and defined benefit plans.’’.
(m) AMENDMENT RELATING TO SECTION 618 OF THE ACT.—
26 USC 25B. Section 25B(d)(2)(A) is amended to read as follows:
‘‘(A) IN GENERAL.—The qualified retirement savings
contributions determined under paragraph (1) shall be
reduced (but not below zero) by the aggregate distributions
received by the individual during the testing period from
any entity of a type to which contributions under paragraph
(1) may be made. The preceding sentence shall not apply
to the portion of any distribution which is not includible
in gross income by reason of a trustee-to-trustee transfer
or a rollover distribution.’’.
(n) AMENDMENTS RELATING TO SECTION 619 OF THE ACT.—
(1) Section 45E(e)(1) is amended by striking ‘‘(n)’’ and
inserting ‘‘(m)’’.
(2) Section 619(d) of the Economic Growth and Tax Relief
26 USC 38 note. Reconciliation Act of 2001 is amended by striking ‘‘established’’
and inserting ‘‘first effective’’.
(o) AMENDMENTS RELATING TO SECTION 631 OF THE ACT.—
(1) Section 402(g)(1) is amended by adding at the end
the following:
‘‘(C) CATCH-UP CONTRIBUTIONS.—In addition to
subparagraph (A), in the case of an eligible participant
(as defined in section 414(v)), gross income shall not include
elective deferrals in excess of the applicable dollar amount
under subparagraph (B) to the extent that the amount
of such elective deferrals does not exceed the applicable
dollar amount under section 414(v)(2)(B)(i) for the taxable
year (without regard to the treatment of the elective defer-
rals by an applicable employer plan under section 414(v)).’’.
(2) Section 401(a)(30) is amended by striking ‘‘402(g)(1)’’
and inserting ‘‘402(g)(1)(A)’’.
(3) Section 414(v)(2) is amended by adding at the end
the following:
‘‘(D) AGGREGATION OF PLANS.—For purposes of this
paragraph, plans described in clauses (i), (ii), and (iv) of
paragraph (6)(A) that are maintained by the same employer
(as determined under subsection (b), (c), (m) or (o)) shall
be treated as a single plan, and plans described in clause
(iii) of paragraph (6)(A) that are maintained by the same
employer shall be treated as a single plan.’’.
(4) Section 414(v)(3)(A)(i) is amended by striking ‘‘section
402(g), 402(h), 403(b), 404(a), 404(h), 408(k), 408(p), 415, or
457’’ and inserting ‘‘sections 401(a)(30), 402(h), 403(b), 408,
415(c), and 457(b)(2) (determined without regard to section
457(b)(3))’’.
(5) Section 414(v)(3)(B) is amended by striking ‘‘section
401(a)(4), 401(a)(26), 401(k)(3), 401(k)(11), 401(k)(12),
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 49
403(b)(12), 408(k), 408(p), 408B, 410(b), or 416’’ and inserting
‘‘section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k),
410(b), or 416’’.
(6) Section 414(v)(4)(B) is amended by inserting before 26 USC 414.
the period at the end the following: ‘‘, except that a plan
described in clause (i) of section 410(b)(6)(C) shall not be treated
as a plan of the employer until the expiration of the transition
period with respect to such plan (as determined under clause
(ii) of such section)’’.
(7) Section 414(v)(5) is amended—
(A) by striking ‘‘, with respect to any plan year,’’ in
the matter preceding subparagraph (A),
(B) by amending subparagraph (A) to read as follows:
‘‘(A) who would attain age 50 by the end of the taxable
year,’’, and
(C) in subparagraph (B) by striking ‘‘plan year’’ and
inserting ‘‘plan (or other applicable) year’’.
(8) Section 414(v)(6)(C) is amended to read as follows:
‘‘(C) EXCEPTION FOR SECTION 457 PLANS.—This sub-
section shall not apply to a participant for any year for
which a higher limitation applies to the participant under
section 457(b)(3).’’.
(9) Section 457(e) is amended by adding at the end the
following new paragraph:
‘‘(18) COORDINATION WITH CATCH-UP CONTRIBUTIONS FOR
INDIVIDUALS AGE 50 OR OLDER.—In the case of an individual
who is an eligible participant (as defined by section 414(v))
and who is a participant in an eligible deferred compensation
plan of an employer described in paragraph (1)(A), subsections
(b)(3) and (c) shall be applied by substituting for the amount
otherwise determined under the applicable subsection the
greater of—
‘‘(A) the sum of—
‘‘(i) the plan ceiling established for purposes of
subsection (b)(2) (without regard to subsection (b)(3)),
plus
‘‘(ii) the applicable dollar amount for the taxable
year determined under section 414(v)(2)(B)(i), or
‘‘(B) the amount determined under the applicable sub-
section (without regard to this paragraph).’’.
(p) AMENDMENTS RELATING TO SECTION 632 OF THE ACT.—
(1) Section 403(b)(1) is amended in the matter following
subparagraph (E) by striking ‘‘then amounts contributed’’ and
all that follows and inserting the following:
‘‘then contributions and other additions by such employer
for such annuity contract shall be excluded from the gross
income of the employee for the taxable year to the extent
that the aggregate of such contributions and additions (when
expressed as an annual addition (within the meaning of section
415(c)(2))) does not exceed the applicable limit under section
415. The amount actually distributed to any distributee under
such contract shall be taxable to the distributee (in the year
in which so distributed) under section 72 (relating to annuities).
For purposes of applying the rules of this subsection to contribu-
tions and other additions by an employer for a taxable year,
amounts transferred to a contract described in this paragraph
by reason of a rollover contribution described in paragraph
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116 STAT. 50 PUBLIC LAW 107–147—MAR. 9, 2002
(8) of this subsection or section 408(d)(3)(A)(ii) shall not be
considered contributed by such employer.’’.
26 USC 403. (2) Section 403(b) is amended by striking paragraph (6).
(3) Section 403(b)(3) is amended—
(A) in the first sentence by inserting the following
before the period at the end: ‘‘, and which precedes the
taxable year by no more than five years’’, and
(B) in the second sentence by striking ‘‘or any amount
received by a former employee after the fifth taxable year
following the taxable year in which such employee was
terminated’’.
(4) Section 415(c)(7) is amended to read as follows:
‘‘(7) SPECIAL RULES RELATING TO CHURCH PLANS.—
‘‘(A) ALTERNATIVE CONTRIBUTION LIMITATION.—
‘‘(i) IN GENERAL.—Notwithstanding any other
provision of this subsection, at the election of a partici-
pant who is an employee of a church or a convention
or association of churches, including an organization
described in section 414(e)(3)(B)(ii), contributions and
other additions for an annuity contract or retirement
income account described in section 403(b) with respect
to such participant, when expressed as an annual addi-
tion to such participant’s account, shall be treated as
not exceeding the limitation of paragraph (1) if such
annual addition is not in excess of $10,000.
‘‘(ii) $40,000 AGGREGATE LIMITATION.—The total
amount of additions with respect to any participant
which may be taken into account for purposes of this
subparagraph for all years may not exceed $40,000.
‘‘(B) NUMBER OF YEARS OF SERVICE FOR DULY ORDAINED,
COMMISSIONED, OR LICENSED MINISTERS OR LAY
EMPLOYEES.—For purposes of this paragraph—
‘‘(i) all years of service by—
‘‘(I) a duly ordained, commissioned, or licensed
minister of a church, or
‘‘(II) a lay person,
as an employee of a church, a convention or association
of churches, including an organization described in
section 414(e)(3)(B)(ii), shall be considered as years
of service for 1 employer, and
‘‘(ii) all amounts contributed for annuity contracts
by each such church (or convention or association of
churches) or such organization during such years for
such minister or lay person shall be considered to
have been contributed by 1 employer.
‘‘(C) FOREIGN MISSIONARIES.—In the case of any indi-
vidual described in subparagraph (D) performing services
outside the United States, contributions and other addi-
tions for an annuity contract or retirement income account
described in section 403(b) with respect to such employee,
when expressed as an annual addition to such employee’s
account, shall not be treated as exceeding the limitation
of paragraph (1) if such annual addition is not in excess
of the greater of $3,000 or the employee’s includible com-
pensation determined under section 403(b)(3).
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 51
‘‘(D) ANNUAL ADDITION.—For purposes of this para-
graph, the term ‘annual addition’ has the meaning given
such term by paragraph (2).
‘‘(E) CHURCH, CONVENTION OR ASSOCIATION OF
CHURCHES.—For purposes of this paragraph, the terms
‘church’ and ‘convention or association of churches’ have
the same meaning as when used in section 414(e).’’.
(5) Section 457(e)(5) is amended to read as follows: 26 USC 457.
‘‘(5) INCLUDIBLE COMPENSATION.—The term ‘includible com-
pensation’ has the meaning given to the term ‘participant’s
compensation’ by section 415(c)(3).’’.
(6) Section 402(g)(7)(B) is amended by striking ‘‘2001.’’ and
inserting ‘‘2001).’’.
(q) AMENDMENTS RELATING TO SECTION 643 OF THE ACT.—
(1) Section 401(a)(31)(C)(i) is amended by inserting ‘‘is a
qualified trust which is part of a plan which is a defined
contribution plan and’’ before ‘‘agrees’’.
(2) Section 402(c)(2) is amended by adding at the end
the following flush sentence:
‘‘In the case of a transfer described in subparagraph (A) or
(B), the amount transferred shall be treated as consisting first
of the portion of such distribution that is includible in gross
income (determined without regard to paragraph (1)).’’.
(r) AMENDMENTS RELATING TO SECTION 648 OF THE ACT.—
(1) Section 417(e) is amended—
(A) in paragraph (1) by striking ‘‘exceed the dollar
limit under section 411(a)(11)(A)’’ and inserting ‘‘exceed
the amount that can be distributed without the partici-
pant’s consent under section 411(a)(11)’’, and
(B) in paragraph (2)(A) by striking ‘‘exceeds the dollar
limit under section 411(a)(11)(A)’’ and inserting ‘‘exceeds
the amount that can be distributed without the partici-
pant’s consent under section 411(a)(11)’’.
(2) Section 205(g) of the Employee Retirement Income Secu-
rity Act of 1974 is amended— 29 USC 1055.
(A) in paragraph (1) by striking ‘‘exceed the dollar
limit under section 203(e)(1)’’ and inserting ‘‘exceed the
amount that can be distributed without the participant’s
consent under section 203(e)’’, and
(B) in paragraph (2)(A) by striking ‘‘exceeds the dollar
limit under section 203(e)(1)’’ and inserting ‘‘exceeds the
amount that can be distributed without the participant’s
consent under section 203(e)’’.
(s) AMENDMENT RELATING TO SECTION 652 OF THE ACT.—Sec-
tion 404(a)(1)(D)(iv) is amended by striking ‘‘PLANS MAINTAINED
BY PROFESSIONAL SERVICE EMPLOYERS’’ and inserting ‘‘SPECIAL RULE
FOR TERMINATING PLANS’’.
(t) AMENDMENTS RELATING TO SECTION 657 OF THE ACT.—
Section 404(c)(3) of the Employee Retirement Income Security Act
of 1974 is amended— 29 USC 1104.
(1) by striking ‘‘the earlier of’’ in subparagraph (A) the
second place it appears, and
(2) by striking ‘‘if the transfer’’ and inserting ‘‘a transfer
that’’.
(u) AMENDMENTS RELATING TO SECTION 659 OF THE ACT.—
(1) Section 4980F is amended—
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116 STAT. 52 PUBLIC LAW 107–147—MAR. 9, 2002
(A) in subsection (e)(1) by striking ‘‘written notice’’
and inserting ‘‘the notice described in paragraph (2)’’,
(B) by amending subsection (f)(2)(A) to read as follows:
‘‘(A) any defined benefit plan described in section 401(a)
which includes a trust exempt from tax under section
501(a), or’’, and
(C) in subsection (f)(3) by striking ‘‘significantly’’ both
places it appears.
(2) Section 204(h)(9) of the Employee Retirement Income
29 USC 1054. Security Act of 1974 is amended by striking ‘‘significantly’’
both places it appears.
(3) Section 659(c)(3)(B) of the Economic Growth and Tax
26 USC 4980F Relief Reconciliation Act of 2001 is amended by striking ‘‘(or’’
note. and inserting ‘‘(and’’.
(v) AMENDMENTS RELATING TO SECTION 661 OF THE ACT.—
26 USC 412. (1) Section 412(c)(9)(B) is amended—
(A) in clause (ii) by striking ‘‘125 percent’’ and inserting
‘‘100 percent’’, and
(B) by adding at the end the following new clause:
‘‘(iv) LIMITATION.—A change in funding method to
use a prior year valuation, as provided in clause (ii),
may not be made unless as of the valuation date within
the prior plan year, the value of the assets of the
plan are not less than 125 percent of the plan’s current
liability (as defined in paragraph (7)(B)).’’.
(2) Section 302(c)(9)(B) of the Employee Retirement Income
29 USC 1082. Security Act of 1974 is amended—
(A) in clause (ii) by striking ‘‘125 percent’’ and inserting
‘‘100 percent’’, and
(B) by adding at the end the following new clause:
‘‘(iv) A change in funding method to use a prior year valuation,
as provided in clause (ii), may not be made unless as of the valuation
date within the prior plan year, the value of the assets of the
plan are not less than 125 percent of the plan’s current liability
(as defined in paragraph (7)(B)).’’.
(w) AMENDMENTS RELATING TO SECTION 662 OF THE ACT.—
(1) Section 404(k) is amended—
(A) in paragraph (1) by striking ‘‘during the taxable
year’’,
(B) in paragraph (2)(B) by striking ‘‘(A)(iii)’’ and
inserting ‘‘(A)(iv)’’,
(C) in paragraph (4)(B) by striking ‘‘(iii)’’ and inserting
‘‘(iv)’’, and
(D) by redesignating subparagraph (B) of paragraph
(4) (as amended by subparagraph (C)) as subparagraph
(C) of paragraph (4) and by inserting after subparagraph
(A) the following new subparagraph:
‘‘(B) REINVESTMENT DIVIDENDS.—For purposes of
subparagraph (A), an applicable dividend reinvested pursu-
ant to clause (iii)(II) of paragraph (2)(A) shall be treated
as paid in the taxable year of the corporation in which
such dividend is reinvested in qualifying employer securi-
ties or in which the election under clause (iii) of paragraph
(2)(A) is made, whichever is later.’’.
(2) Section 404(k) is amended by adding at the end the
following new paragraph:
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 53
‘‘(7) FULL VESTING.—In accordance with section 411, an
applicable dividend described in clause (iii)(II) of paragraph
(2)(A) shall be subject to the requirements of section 411(a)(1).’’.
(x) EFFECTIVE DATE.—Except as provided in subsection (c), 26 USC 25B note.
the amendments made by this section shall take effect as if included
in the provisions of the Economic Growth and Tax Relief Reconcili-
ation Act of 2001 to which they relate.
SEC. 412. AMENDMENTS RELATED TO COMMUNITY RENEWAL TAX
RELIEF ACT OF 2000.
(a) AMENDMENT RELATED TO SECTION 101 OF THE ACT.—Section
469(i)(3)(E) is amended by striking clauses (ii), (iii), and (iv) and 26 USC 469.
inserting the following:
‘‘(ii) second to the portion of such loss to which
subparagraph (C) applies,
‘‘(iii) third to the portion of the passive activity
credit to which subparagraph (B) or (D) does not apply,
‘‘(iv) fourth to the portion of such credit to which
subparagraph (B) applies, and’’.
(b) AMENDMENT RELATED TO SECTION 306 OF THE ACT.—Section
151(c)(6)(C) is amended—
(1) by striking ‘‘FOR EARNED INCOME CREDIT.—For purposes
of section 32, an’’ and inserting ‘‘FOR PRINCIPAL PLACE OF ABODE
REQUIREMENTS.—An’’, and
(2) by striking ‘‘requirement of section 32(c)(3)(A)(ii)’’ and
inserting ‘‘principal place of abode requirements of section
2(a)(1)(B), section 2(b)(1)(A), and section 32(c)(3)(A)(ii)’’.
(c) AMENDMENT RELATED TO SECTION 309 OF THE ACT.—
Subparagraph (A) of section 358(h)(1) is amended to read as follows:
‘‘(A) which is assumed by another person as part of
the exchange, and’’.
(d) AMENDMENTS RELATED TO SECTION 401 OF THE ACT.—
(1)(A) Section 1234A is amended by inserting ‘‘or’’ after
the comma at the end of paragraph (1), by striking ‘‘or’’ at
the end of paragraph (2), and by striking paragraph (3).
(B)(i) Section 1234B is amended in subsection (a)(1) and
in subsection (b) by striking ‘‘sale or exchange’’ the first place
it appears in each subsection and inserting ‘‘sale, exchange,
or termination’’.
(ii) Section 1234B is amended by adding at the end the
following new subsection:
‘‘(f) CROSS REFERENCE.—
‘‘For special rules relating to dealer securities futures contracts,
see section 1256.’’.
(2) Section 1091(e) is amended—
(A) in the heading, by striking ‘‘SECURITIES.—’’ and
inserting ‘‘SECURITIES AND SECURITIES FUTURES CON-
TRACTS TO SELL.—’’,
(B) by inserting after ‘‘closing of a short sale of’’ the
following: ‘‘(or the sale, exchange, or termination of a securi-
ties futures contract to sell)’’,
(C) in paragraph (2), by inserting after ‘‘short sale
of’’ the following: ‘‘(or securities futures contracts to sell)’’,
and
(D) by adding at the end the following:
‘‘For purposes of this subsection, the term ‘securities futures con-
tract’ has the meaning provided by section 1234B(c).’’.
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116 STAT. 54 PUBLIC LAW 107–147—MAR. 9, 2002
26 USC 1233. (3)(A) Section 1233(e)(2) is amended by striking ‘‘and’’ at
the end of subparagraph (C), by striking the period and
inserting ‘‘; and’’ at the end of subparagraph (D), and inserting
after subparagraph (D) the following:
‘‘(E) entering into a securities futures contract (as so
defined) to sell shall be considered to be a short sale,
and the settlement of such contract shall be considered
to be the closing of such short sale.’’.
(B) Section 1234B(b) is amended by inserting after ‘‘or
this section,’’ the following: ‘‘or in section 1233,’’.
26 USC 151 note. (e) EFFECTIVE DATE.—The amendments made by this section
shall take effect as if included in the provisions of the Community
Renewal Tax Relief Act of 2000 to which they relate.
SEC. 413. AMENDMENTS RELATED TO THE TAX RELIEF EXTENSION
ACT OF 1999.
(a) AMENDMENTS RELATED TO SECTION 545 OF THE ACT.—Sec-
tion 857(b)(7) is amended—
(1) in clause (i) of subparagraph (B), by striking ‘‘the
amount of which’’ and inserting ‘‘to the extent the amount
of the rents’’, and
(2) in subparagraph (C), by striking ‘‘if the amount’’ and
inserting ‘‘to the extent the amount’’.
26 USC 857 note. (b) EFFECTIVE DATE.—The amendments made by this section
shall take effect as if included in section 545 of the Tax Relief
Extension Act of 1999.
SEC. 414. AMENDMENTS RELATED TO THE TAXPAYER RELIEF ACT OF
1997.
(a) AMENDMENTS RELATED TO SECTION 311 OF THE ACT.—Sec-
tion 311(e) of the Taxpayer Relief Act of 1997 (Public Law 105–
26 USC 1 note. 34; 111 Stat. 836) is amended—
(1) in paragraph (2)(A), by striking ‘‘recognized’’ and
inserting ‘‘included in gross income’’, and
(2) by adding at the end the following new paragraph:
‘‘(5) DISPOSITION OF INTEREST IN PASSIVE ACTIVITY.—Section
469(g)(1)(A) of the Internal Revenue Code of 1986 shall not
apply by reason of an election made under paragraph (1).’’.
26 USC 1 note. (b) EFFECTIVE DATE.—The amendments made by this section
shall take effect as if included in section 311 of the Taxpayer
Relief Act of 1997.
SEC. 415. AMENDMENT RELATED TO THE BALANCED BUDGET ACT OF
1997.
(a) AMENDMENT RELATED TO SECTION 4006 OF THE ACT.—
Section 26(b)(2) is amended by striking ‘‘and’’ at the end of subpara-
graph (P), by striking the period and inserting ‘‘, and’’ at the
end of subparagraph (Q), and by adding at the end the following
new subparagraph:
‘‘(R) section 138(c)(2) (relating to penalty for distribu-
tions from Medicare+Choice MSA not used for qualified
medical expenses if minimum balance not maintained).’’.
26 USC 26 note. (b) EFFECTIVE DATE.—The amendment made by this section
shall take effect as if included in section 4006 of the Balanced
Budget Act of 1997.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 55
SEC. 416. OTHER TECHNICAL CORRECTIONS.
(a) COORDINATION OF ADVANCED PAYMENTS OF EARNED INCOME
CREDIT.—
(1) Section 32(g)(2) is amended by striking ‘‘subpart’’ and 26 USC 32.
inserting ‘‘part’’.
(2) The amendment made by this subsection shall take Effective date.
effect as if included in section 474 of the Tax Reform Act 26 USC 32 note.
of 1984.
(b) SPECIAL RULE RELATED TO WASH SALE LOSSES.—
(1) Section 1256(f) is amended by adding at the end the
following new paragraph:
‘‘(5) SPECIAL RULE RELATED TO LOSSES.—Section 1091
(relating to loss from wash sales of stock or securities)
shall not apply to any loss taken into account by reason
of paragraph (1) of subsection (a).’’.
(2) The amendment made by this subsection shall take Effective date.
effect as if included in section 5075 of the Technical and Mis- 26 USC 1256
cellaneous Revenue Act of 1988. note.
(c) DISCLOSURE BY SOCIAL SECURITY ADMINISTRATION TO FED-
ERAL CHILD SUPPORT AGENCIES.—
(1) Section 6103(l)(8) is amended—
(A) in the heading, by striking ‘‘STATE AND LOCAL’’
and inserting ‘‘FEDERAL, STATE, AND LOCAL’’, and
(B) in subparagraph (A), by inserting ‘‘Federal or’’
before ‘‘State or local’’.
(2) The amendments made by this subsection shall take Effective date.
effect on the date of the enactment of this Act. 26 USC 6103
note.
(d) TREATMENT OF SETTLEMENTS UNDER PARTNERSHIP AUDIT
RULES.—
(1) The following provisions are each amended by inserting
‘‘or the Attorney General (or his delegate)’’ after ‘‘Secretary’’
each place it appears:
(A) Paragraphs (1) and (2) of section 6224(c).
(B) Section 6229(f)(2).
(C) Section 6231(b)(1)(C).
(D) Section 6234(g)(4)(A).
(2) The amendments made by this subsection shall apply Applicability.
with respect to settlement agreements entered into after the 26 USC 6224
date of the enactment of this Act. note.
(e) AMENDMENT RELATED TO PROCEDURE AND ADMINISTRA-
TION.—
(1) Section 6331(k)(3) (relating to no levy while certain
offers pending or installment agreement pending or in effect)
is amended to read as follows:
‘‘(3) CERTAIN RULES TO APPLY.—Rules similar to the rules
of—
‘‘(A) paragraphs (3) and (4) of subsection (i), and
‘‘(B) except in the case of paragraph (2)(C), paragraph
(5) of subsection (i),
shall apply for purposes of this subsection.’’.
(2) The amendment made by this subsection shall take Effective date.
effect on the date of the enactment of this Act. 26 USC 6331
note.
(f) MODIFIED ENDOWMENT CONTRACTS.—Paragraph (2) of sec- Applicability.
tion 318(a) of the Community Renewal Tax Relief Act of 2000
(114 Stat. 2763A–645) is repealed, and clause (ii) of section 26 USC 7702A
7702A(c)(3)(A) shall read and be applied as if the amendment and note.
made by such paragraph had not been enacted.
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116 STAT. 56 PUBLIC LAW 107–147—MAR. 9, 2002
SEC. 417. CLERICAL AMENDMENTS.
26 USC 25B. (1) The subsection (g) of section 25B that relates to termi-
nation is redesignated as subsection (h).
(2) The second sentence of section 42(h)(3)(C) is amended
by striking ‘‘the amounts described in’’ and all that follows
through the period and inserting ‘‘the amounts described in
clauses (ii) through (iv) over the aggregate housing credit dollar
amount allocated for such year.’’.
(3) Clause (ii) of section 42(m)(1)(B) is amended by striking
the second ‘‘and’’ at the end of subclause (II) and by inserting
‘‘and’’ at the end of subclause (III).
(4) Section 51A(c)(1) is amended by striking ‘‘51(d)(10)’’
and inserting ‘‘51(d)(11)’’.
(5) The flush sentence at the end of clause (ii) of section
56(a)(1)(A) is amended by striking ‘‘such 1250’’ and inserting
‘‘such section 1250’’.
(6) Section 151(c)(6)(B)(iii) is amended by inserting ‘‘as’’
before ‘‘such terms’’.
(7) Section 170(e)(6)(B)(i)(III) is amended by striking
‘‘2000,’’ and inserting ‘‘2000),’’.
(8) Section 172(b)(1)(F)(i) is amended—
(A) by striking ‘‘3 years’’ and inserting ‘‘3 taxable
years’’, and
(B) by striking ‘‘2 years’’ and inserting ‘‘2 taxable
years’’.
(9) Section 351(h)(1) is amended by inserting a comma
after ‘‘liability’’.
(10) Section 475(g)(3) is amended by striking ‘‘sections’’
and inserting ‘‘section’’.
(11) Section 529(e)(3)(B)(i) is amended by striking ‘‘sub-
section (b)(7)’’ and inserting ‘‘subsection (b)(6)’’.
(12) Section 741 is amended by striking ‘‘which have appre-
ciated substantially in value’’.
(13) Section 857(b)(7)(B)(i) is amended by striking ‘‘sub-
section 856(d)’’ and inserting ‘‘section 856(d)’’.
(14) Subparagraph (B) of section 943(e)(4) is amended by
aligning the left margin of the flush language with subpara-
graph (A).
(15) Subparagraph (B) of section 995(b)(3) is amended by
striking ‘‘International Security Assistance and Arms Export
Control Act of 1976’’ and inserting ‘‘Arms Export Control Act’’.
(16) Section 1394(c)(2) is amended by striking ‘‘subpara-
graph (A)’’ and inserting ‘‘paragraph (1)’’.
(17)(A) The section heading for section 4980E is amended
to read as follows:
‘‘SEC. 4980E. FAILURE OF EMPLOYER TO MAKE COMPARABLE ARCHER
MSA CONTRIBUTIONS.’’.
(B) The item relating to section 4980E in the table of
sections for chapter 43 is amended to read as follows:
‘‘Sec. 4980E. Failure of employer to make comparable Archer MSA contribu-
tions.’’.
(18) Section 6105(c)(1) is amended by striking ‘‘any’’ in
subparagraphs (C) and (E).
(19)(A) Section 6227(d) is amended by striking ‘‘subsection
(b)’’ and inserting ‘‘subsection (c)’’.
(B) Section 6228 is amended—
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 57
(i) in subsection (a)(1), by striking ‘‘subsection (b) of
section 6227’’ and inserting ‘‘subsection (c) of section 6227’’,
(ii) in subsection (a)(3)(A), by striking ‘‘subsection (b)
of’’, and
(iii) in subsections (b)(1) and (b)(2)(A), by striking ‘‘sub-
section (c) of section 6227’’ and inserting ‘‘subsection (d)
of section 6227’’.
(C) Section 6231(b)(2)(B)(i) is amended by striking ‘‘section 26 USC 6231.
6227(c)’’ and inserting ‘‘section 6227(d)’’.
(20) Section 1221(b)(1)(B)(i) is amended by striking
‘‘1256(b))’’ and inserting ‘‘1256(b)))’’.
(21) Section 159 of the Community Renewal Tax Relief
Act of 2000 (114 Stat. 2763A–624) is amended by striking 26 USC 1400E
‘‘fuctions’’ and inserting ‘‘functions’’. note.
(22) The amendment to section 170(e)(6)(B)(iv) made by Applicability.
section 165(b)(1) of the Community Renewal Tax Relief Act
of 2000 (114 Stat. 2763A–626) shall be applied as if it struck 26 USC 170.
‘‘in any of the grades K–12’’.
(23) Section 618(b)(2) of the Economic Growth and Tax
Relief Reconciliation Act of 2001 (Public Law 107–16; 115 Stat.
108) is amended—
(A) in subparagraph (A) by striking ‘‘203(d)’’ and 26 USC 24.
inserting ‘‘202(f)’’, and
(B) in subparagraphs (C), (D), and (E) by striking 26 USC 26, 904,
‘‘203’’ and inserting ‘‘202(f)’’. 1400C.
(24)(A) Section 525 of the Ticket to Work and Work Incen-
tives Improvement Act of 1999 (Public Law 106–170; 113 Stat.
1928) is amended by striking ‘‘7200’’ and inserting ‘‘7201’’. 7 USC 7212 note.
(B) Section 532(c)(2) of such Act (113 Stat. 1930) is
amended—
(i) in subparagraph (D), by striking ‘‘341(d)(3)’’ and 26 USC 341.
inserting ‘‘341(d)’’, and
(ii) in subparagraph (Q), by striking ‘‘954(c)(1)(B)(iii) 26 USC 954.
and inserting ‘‘954(c)(1)(B)’’.
SEC. 418. ADDITIONAL CORRECTIONS.
(a) AMENDMENTS RELATED TO SECTION 202 OF THE ECONOMIC
GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001.—
(1) Subsection (h) of section 23 is amended—
(A) by striking ‘‘subsection (a)(1)(B)’’ and inserting
‘‘subsection (a)(3)’’, and
(B) by adding at the end the following new flush sen-
tence:
‘‘If any amount as increased under the preceding sentence is not
a multiple of $10, such amount shall be rounded to the nearest
multiple of $10.’’.
(2) Subsection (f) of section 137 is amended by adding
at the end the following new flush sentence:
‘‘If any amount as increased under the preceding sentence is not
a multiple of $10, such amount shall be rounded to the nearest
multiple of $10.’’.
(b) AMENDMENTS RELATED TO SECTION 204 OF THE ECONOMIC
GROWTH AND TAX RELIEF RECONCILIATION ACT OF 2001.—Section
21(d)(2) is amended—
(1) in subparagraph (A) by striking ‘‘$200’’ and inserting
‘‘$250’’, and
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116 STAT. 58 PUBLIC LAW 107–147—MAR. 9, 2002
(2) in subparagraph (B) by striking ‘‘$400’’ and inserting
‘‘$500’’.
26 USC 21 note. (c) EFFECTIVE DATE.—The amendments made by this section
shall take effect as if included in the provisions of the Economic
Growth and Tax Relief Reconciliation Act of 2001 to which they
relate.
TITLE V—SOCIAL SECURITY HELD
HARMLESS; BUDGETARY TREATMENT
OF ACT
42 USC 401 note. SEC. 501. NO IMPACT ON SOCIAL SECURITY TRUST FUNDS.
(a) IN GENERAL.—Nothing in this Act (or an amendment 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 paragraph (1), the Sec-
retary 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 of the Social
Security Act (42 U.S.C. 401), 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.
SEC. 502. EMERGENCY DESIGNATION.
Congress designates as emergency requirements pursuant to
section 252(e) of the Balanced Budget and Emergency Deficit Con-
trol Act of 1985 the following amounts:
(1) An amount equal to the amount by which revenues
are reduced by this Act below the recommended levels of Fed-
eral revenues for fiscal year 2002, the total of fiscal years
2002 through 2006, and the total of fiscal years 2002 through
2011, provided in the conference report accompanying H. Con.
Res. 83, the concurrent resolution on the budget for fiscal
year 2002.
(2) Amounts equal to the amounts of new budget authority
and outlays provided in this Act in excess 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 total of fiscal years 2002 through 2006, and the
total of fiscal years 2002 through 2011.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 59
TITLE VI—EXTENSIONS OF CERTAIN
EXPIRING PROVISIONS
SEC. 601. ALLOWANCE OF NONREFUNDABLE PERSONAL CREDITS
AGAINST REGULAR AND MINIMUM TAX LIABILITY.
(a) IN GENERAL.—Paragraph (2) of section 26(a) is amended— 26 USC 26.
(1) by striking ‘‘RULE FOR 2000 AND 2001.—’’ and inserting
‘‘RULE FOR 2000, 2001, 2002, AND 2003.—’’, and
(2) by striking ‘‘during 2000 or 2001,’’ and inserting ‘‘during
2000, 2001, 2002, or 2003,’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 904(h) is amended by striking ‘‘during 2000
or 2001’’ and inserting ‘‘during 2000, 2001, 2002, or 2003’’.
(2) The amendments made by sections 201(b), 202(f), and 26 USC 23 note.
618(b) of the Economic Growth and Tax Relief Reconciliation
Act of 2001 shall not apply to taxable years beginning during
2002 and 2003.
(c) EFFECTIVE DATE.—The amendments made by this section Applicability.
shall apply to taxable years beginning after December 31, 2001. 26 USC 26 note.
SEC. 602. CREDIT FOR QUALIFIED ELECTRIC VEHICLES.
(a) IN GENERAL.—Section 30 is amended—
(1) in subsection (b)(2)—
(A) by striking ‘‘December 31, 2001,’’ and inserting
‘‘December 31, 2003,’’, and
(B) in subparagraphs (A), (B), and (C), by striking
‘‘2002’’, ‘‘2003’’, and ‘‘2004’’, respectively, and inserting
‘‘2004’’, ‘‘2005’’, and ‘‘2006’’, respectively, and
(2) in subsection (e), by striking ‘‘December 31, 2004’’ and
inserting ‘‘December 31, 2006’’.
(b) CONFORMING AMENDMENTS.—
(1) Subparagraph (C) of section 280F(a)(1) is amended by
adding at the end the following new clause:
‘‘(iii) APPLICATION OF SUBPARAGRAPH.—This
subparagraph shall apply to property placed in service
after August 5, 1997, and before January 1, 2007.’’.
(2) Subsection (b) of section 971 of the Taxpayer Relief
Act of 1997 is amended by striking ‘‘and before January 1, 26 USC 280F
2005’’. note.
(c) EFFECTIVE DATE.—The amendments made by this section Applicability.
shall apply to property placed in service after December 31, 2001. 26 USC 30 note.
SEC. 603. CREDIT FOR ELECTRICITY PRODUCED FROM CERTAIN
RENEWABLE RESOURCES.
(a) IN GENERAL.—Subparagraphs (A), (B), and (C) of section
45(c)(3) are both amended by striking ‘‘2002’’ and inserting ‘‘2004’’.
(b) EFFECTIVE DATE.—The amendments made by subsection Applicability.
(a) shall apply to facilities placed in service after December 31, 26 USC 45 note.
2001.
SEC. 604. WORK OPPORTUNITY CREDIT.
(a) IN GENERAL.—Subparagraph (B) of section 51(c)(4) is
amended by striking ‘‘2001’’ and inserting ‘‘2003’’.
(b) EFFECTIVE DATE.—The amendment made by subsection (a) Applicability.
shall apply to individuals who begin work for the employer after 26 USC 51 note.
December 31, 2001.
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116 STAT. 60 PUBLIC LAW 107–147—MAR. 9, 2002
SEC. 605. WELFARE-TO-WORK CREDIT.
26 USC 51A. (a) IN GENERAL.—Subsection (f) of section 51A is amended
by striking ‘‘2001’’ and inserting ‘‘2003’’.
Applicability. (b) EFFECTIVE DATE.—The amendment made by subsection (a)
26 USC 51A note. shall apply to individuals who begin work for the employer after
December 31, 2001.
SEC. 606. DEDUCTION FOR CLEAN-FUEL VEHICLES AND CERTAIN
REFUELING PROPERTY.
(a) IN GENERAL.—Section 179A is amended—
(1) in subsection (b)(1)(B)—
(A) by striking ‘‘December 31, 2001,’’ and inserting
‘‘December 31, 2003,’’, and
(B) in clauses (i), (ii), and (iii), by striking ‘‘2002’’,
‘‘2003’’, and ‘‘2004’’, respectively, and inserting ‘‘2004’’,
‘‘2005’’, and ‘‘2006’’, respectively, and
(2) in subsection (f), by striking ‘‘December 31, 2004’’ and
inserting ‘‘December 31, 2006’’.
Applicability. (b) EFFECTIVE DATE.—The amendments made by subsection
26 USC 179A (a) shall apply to property placed in service after December 31,
note.
2001.
SEC. 607. TAXABLE INCOME LIMIT ON PERCENTAGE DEPLETION FOR
OIL AND NATURAL GAS PRODUCED FROM MARGINAL
PROPERTIES.
(a) IN GENERAL.—Subparagraph (H) of section 613A(c)(6) is
amended by striking ‘‘2002’’ and inserting ‘‘2004’’.
Applicability. (b) EFFECTIVE DATE.—The amendment made by subsection (a)
26 USC 613A shall apply to taxable years beginning after December 31, 2001.
note.
SEC. 608. QUALIFIED ZONE ACADEMY BONDS.
(a) IN GENERAL.—Paragraph (1) of section 1397E(e) is amended
by striking ‘‘2000, and 2001’’ and inserting ‘‘2000, 2001, 2002,
and 2003’’.
Applicability. (b) EFFECTIVE DATE.—The amendment made by subsection (a)
26 USC 1397E shall apply to obligations issued after the date of the enactment
note. of this Act.
SEC. 609. COVER OVER OF TAX ON DISTILLED SPIRITS.
(a) IN GENERAL.—Paragraph (1) of section 7652(f) is amended
by striking ‘‘January 1, 2002’’ and inserting ‘‘January 1, 2004’’.
Applicability. (b) EFFECTIVE DATE.—The amendment made by subsection (a)
26 USC 7652 shall apply to articles brought into the United States after December
note. 31, 2001.
SEC. 610. PARITY IN THE APPLICATION OF CERTAIN LIMITS TO
MENTAL HEALTH BENEFITS.
(a) IN GENERAL.—Subsection (f) of section 9812, as amended
by the Departments of Labor, Health and Human Services, and
Education, and Related Agencies Appropriations Act, 2002, is
amended to read as follows:
‘‘(f) APPLICATION OF SECTION.—This section shall not apply
to benefits for services furnished—
‘‘(1) on or after September 30, 2001, and before January
10, 2002, and
‘‘(2) after December 31, 2003.’’.
26 USC 9812 (b) EFFECTIVE DATE.—The amendment made by subsection (a)
note. shall apply to plan years beginning after December 31, 2000.
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 61
SEC. 611. TEMPORARY SPECIAL RULES FOR TAXATION OF LIFE INSUR-
ANCE COMPANIES.
(a) REDUCTION IN MUTUAL LIFE INSURANCE COMPANY DEDUC-
TIONS NOT TO APPLY IN CERTAIN YEARS.—Section 809 (relating 26 USC 809.
to reduction in certain deductions of material life insurance compa-
nies) is amended by adding at the end the following:
‘‘(j) DIFFERENTIAL EARNINGS RATE TREATED AS ZERO FOR CER-
TAIN YEARS.—Notwithstanding subsection (c) or (f), the differential
earnings rate shall be treated as zero for purposes of computing
both the differential earnings amount and the recomputed differen-
tial earnings amount for a mutual life insurance company’s taxable
years beginning in 2001, 2002, or 2003.’’.
(b) EFFECTIVE DATE.—The amendment made by this section Applicability.
shall apply to taxable years beginning after December 31, 2000. 26 USC 809 note.
SEC. 612. AVAILABILITY OF MEDICAL SAVINGS ACCOUNTS.
(a) IN GENERAL.—Paragraphs (2) and (3)(B) of section 220(i)
(defining cut-off year) are each amended by striking ‘‘2002’’ each
place it appears and inserting ‘‘2003’’.
(b) CONFORMING AMENDMENTS.—
(1) Paragraph (2) of section 220(j) is amended by striking
‘‘1998, 1999, or 2001’’ each place it appears and inserting ‘‘1998,
1999, 2001, or 2002’’.
(2) Subparagraph (A) of section 220(j)(4) is amended by
striking ‘‘and 2001’’ and inserting ‘‘2001, and 2002’’.
(c) EFFECTIVE DATE.—The amendments made by this section 26 USC 220 note.
shall take effect on January 1, 2002.
SEC. 613. INCENTIVES FOR INDIAN EMPLOYMENT AND PROPERTY ON
INDIAN RESERVATIONS.
(a) EMPLOYMENT.—Subsection (f) of section 45A is amended
by striking ‘‘December 31, 2003’’ and inserting ‘‘December 31, 2004’’.
(b) PROPERTY.—Paragraph (8) of section 168(j) is amended by
striking ‘‘December 31, 2003’’ and inserting ‘‘December 31, 2004’’.
SEC. 614. SUBPART F EXEMPTION FOR ACTIVE FINANCING.
(a) IN GENERAL.—
(1) Section 953(e)(10) is amended—
(A) by striking ‘‘January 1, 2002’’ and inserting
‘‘January 1, 2007’’, and
(B) by striking ‘‘December 31, 2001’’ and inserting
‘‘December 31, 2006’’.
(2) Section 954(h)(9) is amended by striking ‘‘January 1,
2002’’ and inserting ‘‘January 1, 2007’’.
(b) LIFE INSURANCE AND ANNUITY CONTRACTS.—
(1) IN GENERAL.—Subparagraph (B) of section 954(i)(4) is
amended to read as follows:
‘‘(B) LIFE INSURANCE AND ANNUITY CONTRACTS.—
‘‘(i) IN GENERAL.—Except as provided in clause
(ii), the amount of the reserve of a qualifying insurance
company or qualifying insurance company branch for
any life insurance or annuity contract shall be equal
to the greater of—
‘‘(I) the net surrender value of such contract
(as defined in section 807(e)(1)(A)), or
‘‘(II) the reserve determined under paragraph
(5).
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116 STAT. 62 PUBLIC LAW 107–147—MAR. 9, 2002
‘‘(ii) RULING REQUEST, ETC.—The amount of the
reserve under clause (i) shall be the foreign statement
reserve for the contract (less any catastrophe, defi-
ciency, equalization, or similar reserves), if, pursuant
to a ruling request submitted by the taxpayer or as
provided in published guidance, the Secretary deter-
mines that the factors taken into account in deter-
mining the foreign statement reserve provide an appro-
priate means of measuring income.’’.
Applicability. (c) EFFECTIVE DATE.—The amendments made by this section
26 USC 953 note. shall apply to taxable years beginning after December 31, 2001.
SEC. 615. REPEAL OF REQUIREMENT FOR APPROVED DIESEL OR KER-
OSENE TERMINALS.
26 USC 4101. (a) IN GENERAL.—Subsection (e) of section 4101 is hereby
repealed.
26 USC 4101 (b) EFFECTIVE DATE.—The amendment made by subsection (a)
note. shall take effect on January 1, 2002.
SEC. 616. REAUTHORIZATION OF TANF SUPPLEMENTAL GRANTS FOR
POPULATION INCREASES FOR FISCAL YEAR 2002.
Section 403(a)(3) of the Social Security Act (42 U.S.C. 603(a)(3))
is amended by adding at the end the following:
‘‘(H) REAUTHORIZATION OF GRANTS FOR FISCAL YEAR
2002.—Notwithstanding any other provision of this
paragraph—
‘‘(i) any State that was a qualifying State under
this paragraph for fiscal year 2001 or any prior fiscal
year shall be entitled to receive from the Secretary
for fiscal year 2002 a grant in an amount equal to
the amount required to be paid to the State under
this paragraph for the most recent fiscal year in which
the State was a qualifying State;
Applicability. ‘‘(ii) subparagraph (G) shall be applied as if ‘2002’
were substituted for ‘2001’; and
‘‘(iii) out of any money in the Treasury of the
United States not otherwise appropriated, there are
appropriated for fiscal year 2002 such sums as are
necessary for grants under this subparagraph.’’.
SEC. 617. 1-YEAR EXTENSION OF CONTINGENCY FUND UNDER THE
TANF PROGRAM.
Section 403(b) of the Social Security Act (42 U.S.C. 603(b))
is amended—
(1) in paragraph (2), by striking ‘‘and 2001’’ and inserting
‘‘2001, and 2002’’; and
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PUBLIC LAW 107–147—MAR. 9, 2002 116 STAT. 63
(2) in paragraph (3)(C)(ii), by striking ‘‘2001’’ and inserting
‘‘2002’’.
Approved March 9, 2002.
LEGISLATIVE HISTORY—H.R. 3090:
HOUSE REPORTS: No. 107–251 (Comm. on Ways and Means).
CONGRESSIONAL RECORD:
Vol. 147 (2001): Oct. 24, considered and passed House.
Nov. 13, 14, considered in Senate.
Vol. 148 (2002): Feb. 14, considered and passed Senate, amended.
Mar. 7, House concurred in Senate amendment with an
amendment. House amendment considered in Senate.
Mar. 8, Senate concurred in House amendment.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 38 (2002):
Mar. 9, Presidential remarks.
Æ
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FY 2002 April–September funding balance (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_AttachII.pdf)
Attachment II
U. S. Department of Labor
Employment and Training Administration
Work Opportunity Tax Credit (WOTC)
FY 2002 Funding Balance for April – September FY 2002
State Balance
Total ..................................................$10,255,024
3 Alabama.............................................................................168,190
6 Alaska...................................................................................32,088
6 Arizona...............................................................................157,918
4 Arkansas............................................................................183,527
6 California........................................................................1,184,482
4 Colorado ..............................................................................98,552
1 Connecticut........................................................................152,454
2 Delaware ..............................................................................33,080
2 Dist of Columbia.................................................................40,391
3 Florida................................................................................363,556
3 Georgia...............................................................................295,393
6 Hawaii..................................................................................40,391
6 Idaho ....................................................................................32,088
5 Illinois.................................................................................537,717
5 Indiana...............................................................................198,663
5 Iowa ....................................................................................117,257
5 Kansas..................................................................................75,421
3 Kentucky............................................................................153,244
4 Louisiana...........................................................................257,296
1 Maine ...................................................................................37,057
2 Maryland...........................................................................249,219
1 Massachusetts....................................................................224,342
5 Michigan............................................................................366,455
5 Minnesota..........................................................................165,181
3 Mississippi ...........................................................................87,315
5 Missouri .............................................................................247,485
4 Montana...............................................................................32,088
5 Nebraska..............................................................................65,057
6 Nevada .................................................................................54,965
1 New Hampshire...................................................................40,391
1 New Jersey.........................................................................302,879
4 New Mexico.........................................................................82,504
1 New York ...........................................................................651,117
3 North Carolina..................................................................271,200
4 North Dakota.......................................................................32,088
5 Ohio....................................................................................475,673
4 Oklahoma............................................................................82,375
6 Oregon ...............................................................................121,691
2 Pennsylvania......................................................................524,997
6 Puerto Rico..........................................................................61,250
1 Rhode Island........................................................................40,391
3 South Carolina..................................................................106,093
4 South Dakota.......................................................................32,088
3 Tennessee...........................................................................255,008
4 Texas ..................................................................................647,111
4 Utah......................................................................................45,288
1 Vermont...............................................................................32,088
2 Virginia..............................................................................240,660
6 Washington........................................................................243,573
2 West Virginia......................................................................71,572
5 Wisconsin...........................................................................202,000
4 Wyoming..............................................................................32,088
1 Virgin Islands......................................................................10,027
ETA Form 9057 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9057.pdf)
Conditional Certifications Issued
Work Opportunity & Welfare-to-Work Tax Credits — Report No. 1
U.S. Department of Labor, Employment and Training Administration
State: [blank] Quarter Ending: [blank]
OMB Approval No. 1205-0371; Expires: 06/30/2002
I. By Issuing Agency — Number of Conditional Certifications Issued (WOTC | WtW | Dual Tax Credit)
1. Employment Service Offices
2. 1-Stop Career Centers
3. JTPA SDA's Substate Agencies and Their Providers
4. Job Corps Centers
5. Voc Rehab Agency
6. Veteran Affairs Offices
7. Welfare Offices
8. Social Security District Offices
9. All Other Participating Agencies
10. TOTAL (for quarter)
11. TOTAL (year-to-date)
II. By WOTC Target or Long Term IV-A Recipient Group — Number of Conditional Certifications Issued (WOTC | WtW | Dual Tax Credit)
12. IV-A Recipient
13. Veteran
14. Ex-Felon
15. High-Risk Youth (EZ/EC)
16. Voc Rehab Referral
17. Summer Youth (EZ/EC)
18. Food Stamp Recipient
19. SSI Recipient
20. Long-Term IV-A Recipient (WtW)
21. TOTAL (for quarter)
22. TOTAL (year-to-date)
Name and Title of Responsible Official (type or print): [blank]
Signature: [blank] Date Signed: [blank]
ETA 9057 (Rev. March 1998)
Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. Respondents obligation to reply to these reporting requirements are Mandatory (P.L. 104-188). Public reporting for this collection of information is estimated to average 8 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestion for reducing this burden, to the U.S. Department of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210. (Paperwork Reduction Project 1205-0371)
Instructions for Preparing ETA Form 9057 - Report 1:
ETA Form 9057 - Conditional Certifications by Tax Credit, Work Opportunity and Welfare-to-Work Tax
Credits - Report No. 1 is designed to report the number of Conditional Certifications (ETA Form 9062)
issued during each reporting quarter by the DLAs and participating agencies. The report should be
prepared using data collected through ETA Form 9062.
This report also reflects the changes enacted by P.L. 105-34. In addition to reauthorizing the WOTC and
expanding WOTC target groups to include certain SSI recipients, P.L. 105-34 also established a second
tax credit, the Welfare-to-Work Tax Credit, for certain long-term IV-A recipients. Therefore this report
collects quarterly data on conditional certifications by each tax credit. Further, because some individuals
may be eligible for both tax credits, and because such individuals must be issued dual certifications, all
data collected on conditional certifications must be reported by dual certification, as well as by WOTC
and WtW tax credit.
The report is divided into two sections. The first section, entitled "I. By Issuing Agency,” reports the
number of WOTC conditional certifications (CCs), the number of WtW CCs, and the number of dual (WOTC/
WtW) CCs issued by SESAs and all participating agencies (boxes 1-11).
Where no CCs have been issued, please enter “0.”
The second section, entitled "II. By WOTC Target or Long-Term IV-A Recipient Group,” reports the same
information -- the number of WOTC CCs, the number of WtW CCs, and the number of dual (WOTC/WtW)
CCs, by WOTC target group and by long-term IV-A recipient (boxes 12-22).
Where no CCs have been issued, please enter “0.”
The quarterly and year-to-date (cumulative) totals in Section I (boxes 10-11, respectively) should equal
the quarterly and year-to-date (cumulative) totals in Section II (boxes 21-22, respectively).
NOTE: This form no longer reports conditional certifications by type, i.e., by whether they are original
or revalidated (box 3 of ETA 9062). Therefore, counts of CCs in boxes 1-9 and 12-19 should not
distinguish between original and revalidated CCs. For example, if in the first quarter of Fiscal Year 1998, an
agency issued 70 original and 30 revalidated CCs, that agency issued 100 CCs.
Note also that this form no longer reports conditional certification invalidations.
ETA Form 9058 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9058.pdf)
Certification Workload and Characteristics of Certified Individuals
Work Opportunity and Welfare-to-Work Tax Credits — Report No. 2
U.S. Department of Labor, Employment and Training Administration
State: [blank] Quarter Ending: [blank]
OMB Approval No. 1205-0371; Expiration: 06/30/2002
PART I. CERTIFICATION WORKLOAD
Certification Requests (System Inputs):
(A) Pending Cert Requests — Actionable | Non-Actionable
(B) No. of New Cert Requests
(C) Total Cert Actions to be Processed
Certification Actions (System Outputs):
(D) No. of Cert Issued
(E) No. of Cert Denied
(F) No. Pending Action
PART II. CHARACTERISTICS OF CERTIFIED INDIVIDUALS BY TAX CREDIT
(1) By WOTC Target or Long-Term IV-A Recipient Group — No. of Conditional Certs Resulting in Certifications | No. of Certified Individuals (WOTC | WtW | Dual)
1. IV-A Recipient
2. Veteran
3. Ex-Felon
4. High-Risk Youth (EZ/EC)
5. Voc. Rehab Referral
6. Summer Youth (EZ/EC)
7. Food Stamp Recipient
8. SSI Recipient
9. Long-Term IV-A Recipient (WtW)
10. TOTAL (for quarter)
11. TOTAL (year-to-date)
(2) By Hourly Starting Wage — No. of Certified Individuals (WOTC | WtW)
12. Under Federal Minimum (Under $5.15 as of 9/1/97)
13. $5.15 - $5.99
14. $6.00 - $6.99
15. $7.00 - $7.99
16. $8.00 - $8.99
17. $9.00 and more
(3) By Occupation — No. of Certified Individuals (WOTC | WtW)
18. Professional, Tech, & Managerial
19. Clerical & Sales
20. Service
21. Farms, Forestry & Fishery
22. Processing
23. Machine Trades
24. Bench Work
25. Structural
26. Miscellaneous
Name and Title of Responsible Official: [blank]
Signature: [blank] Date Signed: [blank]
ETA 9058 Rev. 9/2001
Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. Respondents obligation to reply to these reporting requirements are Mandatory (P.L. 104-188). Public reporting burden for this collection of information is estimated to average 8 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden to the U.S. Department of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
The following information is designed to provide clarification for reporting areas that appear to be consistently
problematic for some States when completing quarterly report No. 2, ETA Form 9058.
Part I. CERTIFICATION WORKLOAD
[Items A, B, & C are system inputs:]
(A) Pending Certification Requests: Those IRS Form 8850s received in a prior report period on which a certification
decision has not yet been made, i.e. certification has neither been issued nor denied.
Actionable: Employer requests with sufficient information to allow for the State to make a certification determination
or for which requests for additional information have been made.
Non-Actionable: Those IRS Form 8850s which have no accompanying ETA 9061 or 9062, and for which repeated
requests and continued follow-up has failed to secure the needed information. States should only place employer
certification requests in this category when they no longer believe there is a reasonable expectation of obtaining the
needed information.
(B) No. of New Certification Requests: IRS Form 8850s received during the report quarter.
(C) Total Certification Actions to be Processed: the total number of "(A) Pending Certification Requests”
plus "(B) No. Of New Certification Requests” minus "Non-Actionable”. The following formula’s should be
considered:
(A+B)- non-actionable = (C)
[(actionable) + (no. of new cert actions to be processed)] = total cert actions
[Items D, E & F are system outputs]
(D) No. of Certifications Issued: Reports the total number during the quarter of the Total Certification Actions to -
be Processed that result in the State issuing a certification (e.g. ETA form 9063, to the employer). This number
should also include the number of conditional certifications resulting in certifications during the quarter.
(E) No. of Certifications Denied: Reports the total number, during the quarter, of the Total Certification Actions
to be Processed, that result in the employer being sent a formal denial during the report period.
(F) No. of Pending Actions: Reports the number of Total Certification Actions to be Processed certification on
which no decision has been rendered. [The total entered for column (F) becomes part of the next quarter’s total
for column (A) pending cert requests.] The following formula should be considered: [C - (D + E)] = (F)
Part II. CHARACTERISTICS OF CERTIFIED INDIVIDUALS BY TAX CREDIT:
Section (1) RECIPIENT GROUPS
No. Of Conditional Cert Resulting in Certifications: This section of the report provides a snapshot of Quarterly
Report No. 1 (ETA Form 9057). The figures represented in this column, should not be reflected in any other section(s)
of Part II of this report.
No. of Certified individuals: Please remember, the total (by quarter) in line 10 under the "WOTC” column should
include the total number reported under the "Dual" column. Likewise, the total (by quarter) in line 10 under the "WtW"
column should include the total reported under the "Dual" column. Also, the TOTAL reported in line 10 under the
WOTC column plus the TOTAL reported under the WtW column minus the TOTAL reported under the Dual column should
equal the TOTAL reported in Part I, section (D) "No. of Certs Issued” in the quarter. The following formula should be
considered:
(WOTC certs + WtW certs) - Dual certs = No. of Certs Issued
Section (2) BY HOURLY STARTING WAGE
WOTC: The total amount of hourly data reported in boxes 12 - 17 in the WOTC column should equal the quarterly
total in Section (1), line 10, under the WOTC column.
WtW: The total amount of hourly data reported in boxes 12 - 17 in the WtW column should equal the quarterly total in
Section (1), line 10, under the WtW column.
Section (3) BY OCCUPATION
WOTC: The total amount of occupational data reported in boxes 18 - 26 in the WOTC column should equal the quarterly
total in Section (1), line 10, under the WOTC column.
WtW: The total amount of occupational data reported in boxes 18 - 26 in the WtW column should equal the quarterly total in
Section (1), line 10, under the WtW column.
General Instructions: Please make sure that the name & title, signature, and date sections of the 9058 are completed.
Please provide the State “abbreviation” or "name" at the top of the form and avoid using numeric codes. Also, please make
sure the correct quarter-ending date is used.
ETA Form 9059 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9059.pdf)
Verification Results
Work Opportunity and Welfare-to-Work Tax Credits — Report No. 3
U.S. Department of Labor, Employment and Training Administration
State: [blank] Quarter Ending: [blank]
OMB Approval No. 1205-0371; Expires: 06/30/2002
A. CERTIFICATIONS ISSUED
1. Universe Size
2. Sample Size
3. Number Invalid
4. Percent Invalid (Complete Line Nos. 5 & 6 ONLY if the entry for Line No. 4 is 5 percent or greater.)
5. Number Invalid - 2nd Sample
6. Percent Invalid - 2nd Sample
B. ECONOMIC DETERMINATIONS (Ex-Felon ONLY)
7. Universe Size
8. Sample Size
9. Number Invalid
10. Percent Invalid (Complete Line Nos. 11 & 12 ONLY if the entry for Line No. 10 is 5 percent or greater.)
11. Percent Invalid - 2nd Sample
12. Number Invalid - 2nd Sample
Comments: [blank]
Name and Title of Responsible Official: [blank]
Signature: [blank] Date Signed (Mo., Day, Yr.): [blank]
ETA 9059 March 1998
Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. Respondents obligation to reply to these requirements are Mandatory (P.L. 104-188). Public reporting burden for this collection of information is estimated to average 8 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the U.S. Department of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
Instructions for Preparing and Completing ETA Form 9059 - Report No. 3.
Background: The Tax Equity and Fiscal Responsibility Act of 1982 (P.L. 97-248), reemphasized the "testing” of "TJTC Certifications,”
which was mandated by the Economic Recovery Tax Act of 1981 (P.L. 97-34). Besides specifying that funds "be used to test whether
individuals certified as members of targeted groups...are eligible for such certification, (including the use of statistical sampling techniques),”
the Act requires the Secretary of Labor to annually, report the results of these tests to the Congress. These provisions apply in full force to
the certification process under the WOTC and WtW Tax Credits.
Note. Verification activities require testing the validity of all the certifications issued by the SESAs, including the Conditional
Certifications and other documentation which results in a Certification. Quality Reviews and Audits are both parts of the verification
activities. A General Accounting Office (GAO) report recommended that verifications activities by done by..."other than the person who
originally processed,” the ICF or Conditional Certification.
ETA Form 9059 was designed to report the results of the quarterly audit of a randomly chosen sample (See Table - Sample Sizes, Chapter
VII-64 in the Handbook) of all of the certifications issued for that quarter as described in this chapter. Pursuant to
P.L. 105-34, as of October 1, 1997, the universe of certifications to be audited includes all Welfare-to-Work and dual (woTc/www)
certifications as well as all individual WOTC certifications issued for the reporting quarter.
(1) Line 1 - Universe Size. Enter the total number of Certifications issued during the reporting period. This number should be.
the same as the total number of certifications reported in Part |., Certification Actions (System Outputs), Column D of the ETA
Form 9058 (Report No. 2) for the same quarter.
(2) Line 2 - Sample Size. Enter the number of Certifications in the audit sample for which verification data was acquired for the
audits. This number must equal or exceed the appropriate number shown in the table on sample size in Chapter VII in the
Handbook.
(3) Line 3 - Number Invalid. Enter the number of certifications in the sample which, after verification, were determined to be
invalid.
(4) Line 4 - Percent Invalid. Calculate and enter the percentage of the sample determined to be invalid using the following
formula:
Number of Invalidations / Sample Size × 100
Note: If the percentage is less than 5 percent, do not complete lines 5 and 6. If the perecentage of Line 4 is 5 percent or
more, a second sample equal in size to the first must be drawn and verified in the same manner. The Number Invalid and
Percent Invalid from the second sample shall be entered in Lines 5 and 6. If the Percent Invalid in the second sample is 5
percent or more, corrective action shall be initiated according to instructions in Chapter VII of the Handbook.
(5) Lines 7-12 must be completed to perform a separate quarterly verification for economic determinations. (Ex-Felon only)
(6) Line 7 - Universe Size, Enter the total number of Certifications issued for the Ex-Felon target group during the reporting
period. This number should be the same as the total number of certifications reported in Part ll, Sec. (1), Line 3, of ETA
Form 9058 (Report No. 2) for the same quarter.
(7) Line 8 - Sample Size, Enter the total number of certifications in the audit sample for which verification data was acquired for
the audits. This number must equal or exceed the appropriate number shown in the table (p. VII-64) on sample size in this
Handbook.
(8) Line 9 = Number Invalid. Enter the number of certifications in the sample which, after verification, were determined to be
invalid.
(9) Line 10 - Percent Invalid. Calculate and enter the percentage of the sample determined to be invalid using the following
formula noted above. If this percentage is less than 5 percent, do not complete lines 11 and 12. If the percentage of Line 10
is 5 percent or more, a second sample, equal in size to the first must be drawn and verified in the same manner.
Note: !f the Percent Invalid in the second sample is 5 percent or more, corrective action shall be initiated according to
instructions in Chapter VII of the Handbook.
(10) Lines 11 & 12 - Percent Invalid & Number Invalid. Enter corresponding number from the second sample.
Lines 13 - Name and Title of Responsible Official: Signature and Date Signed. Print or type complete name of official
reporting the verification results; Signature, sign your name, legibly and enter the date (month, day, year) in which report
was completed and signed.
Page 2 of 2
ETA Form 9061 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9061.pdf)
Individual Characteristics Form
Work Opportunity Tax Credit and Welfare-to-Work Tax Credit
U.S. Department of Labor, Employment and Training Administration
OMB Control No. 1205-0371; Expires: 06/30/2002
1. CONTROL NO. (For Agency Use Only)
2. DATE RECEIVED (For Agency Use Only)
3. EMPLOYER NAME/ADDRESS
4. EMPLOYER ID NUMBER
5. EMPLOYMENT START DATE; Starting Wage: $____ per hour; POSITION:
6. Have you worked for the above employer before? Yes ___ No ___
7. NAME OF INDIVIDUAL (Last, First, Middle)
8. SOCIAL SECURITY NUMBER
The above named individual is determined to have the following characteristics for WOTC Target Group Certification:
9. Age between 16 - 25? Yes ___ No ___ If YES, indicate your Date of Birth below: Date of Birth ____
10. A veteran and a member of a family that received Food Stamps for a period of at least 3 months in the last 15 months. Yes ___ No ___ If YES, also complete Box 17.
11. Is a member of a family that received AFDC (TANF) benefits for any 9 months in the last 18 months. Yes ___ No ___ If YES, also complete Box 17.
12. Is a member of a family that received Food Stamps for the last 6 months? Yes ___ No ___ Or for at least a 3-month period within the last 5 months, BUT is no longer receiving them? Yes ___ No ___ If YES to either, also complete Box 17.
13. In the past year has been convicted of a felony or released from prison after a felony conviction. Yes ___ No ___ If YES, complete below: Date of Conviction ____; Date of Release ____; Total Income for the past 6 months for all family members living in the same household? Total Income: ____ (If No Income, Enter 0 above); No. of family members living in the same household for the past 6 months, including yourself: ____
14. Lives and plans to continue living in a Federal Empowerment Zone or Enterprise Community. Yes ___ No ___
15. Is receiving or has received Rehabilitation Services through a State Rehabilitation Services program or the Veterans’ Administration. Yes ___ No ___
16. Received Supplemental Security Income (SSI) benefits for any month ending within the last 60 days. Yes ___ No ___
17. If individual is not a primary recipient of benefits, please provide the following: Name of Primary Recipient ____; City/State of Benefits ____
This section is to be completed by individuals starting work after December 31, 1997, under the Welfare-to-Work Tax Credit only.
18. Is a member of a family that:
* Has received AFDC or TANF payments for at least the last 18 consecutive months; Yes ___ No ___ or
* Has received/is receiving AFDC or TANF payments for any 18 months starting after August 5, 1997; Yes ___ No ___ or
* Stopped being eligible for AFDC or TANF payments after Aug. 5, 1997 because Federal or state law limited the maximum time such assistance is payable. Yes ___ No ___
19. SOURCES USED TO DOCUMENT ELIGIBILITY:
Note: I certify that the information is true and correct to the best of my knowledge. I understand that the information above may be subject to verification. The signature of the party completing this form is required below.
20. SIGNATURE:
21. DATE:
ETA-9061 (Rev. Jan. 1998)
INSTRUCTIONS FOR COMPLETING THE INDIVIDUAL CHARACTERISTICS FORM (ICF) ETA 9061: Work Opportunity and Welfare-to-Work Tax Credits. This form is used in conjunction with IRS Form 8850 to determine eligibility for the Work Opportunity Tax Credit (WOTC)
and/or Welfare-to-Work (WtW) Tax Credit. The form may be completed by the applicant, the employer or employer representative, the SESA or
the Participating Agency (PA) and signed by the person or agency filling out the form. Note. This form is required to be used, with modification,
by all employers or third parties serving under contract as an agent or representative of the employer.
Box 1: Control Number (for agency use only). The SESA or PA determines the Control Number. It may be a Social Security Number,
case number, or other appropriate designation which permits easy filing, identification and retrieval of forms. Enter this number here.
Box 2: Date (for agency use only). Enter the month, day, and year when the form is received.
Box 3: Employer Name/Address. Enter the name and address including zip code and telephone number of the employer applying for
a WOTC and/or WtW Certification.
Box 4: Employer ID No. Enter employer’s federal taxpayer identification number.
Box 5: Employment Start Date/Wage/Position or Title. Enter the employment start date, the hourly wage, which the employee will
be paid. If not known, enter an estimated wage. Also, enter the job or position title, which the individual will be performing for the
employer.
Box 6: Previous Employment for This Employer. This requires a YES or NO answer. Enter a check mark (✔) in the blank space that
corresponds to your answer.
Box 7: Name of Individual. Enter full name of prospective employee.
Box 8: Social Security Number. Enter individual’s social security number here.
Boxes 9 through 18: Enter a check mark (✔) to indicate if your answer is a YES or a NO. Provide additional information where requested for
either the WOTC or the WtW target group eligibility.
Box 19. Sources to Document Eligibility. List and/or describe the documents or sources of collateral contacts that are attached to this
form or that will be provided. Indicate in parentheses, next to each document listed whether it is attached or forthcoming. Some examples are
provided below. The asterisk (*) indicates documents that may be obtained by the employer. Employers may also obtain a letter from the
agency that administers a relevant program, stating that the individual or a member of his-her household meets one of the eligibility
requirements.
AGE/BIRTHDATE (Required for high-Risk Summer Youth & Food Stamp):
• Birth Certificate
• Driver’s License
• School I.D. Card/School Records
• Work Permit
• Federal/State/Local Government I.D.*
• Hospital Record of Birth
NUMBER IN FAMILY:
• Public Assistance
• Social Services Agencies
• Family Members’ Statements
• Parole Officer’s Statements
VETERANS STATUS:
• DD-214
• Reserve Unit Contacts
• Discharge Papers
FAMILY INCOME (Required for Ex-Felon):
• Pay Stubs
• Employer Contacts
• W-2 Forms
• UI Documents
• Public Assistance Records
• Family Members’ Statements
• Parole Officer Statements
VOCATIONAL REHABILITATION REFERRAL:
• Voc. Rehab. Agency Contact
• Social Services Agency
• Veteran’s Administration Contact
AFDC/TANF & Long-Term Assistance Recipient:
• AFDC Benefits History
• Signed statement from authorized individual with specific description of months benefits were received.
• Case Number/identifier
EX-FELON STATUS:
• Parole Officer’s Name/Statement
• Correction Institution Records
• Court Record, Extract, Contact
FOOD STAMP RECIPIENT:
• Food Stamp Benefit History
• Signed statement from authorized individual with specific description of months benefits were received.
• Case Number/Identifier
SSI RECIPIENT:
• SSI Record or Authorization; SSI Contact
• Evidence of SSI Issuance
EMPOWERMENT ZONE/ENTERPRISE COMMUNITY:
• Driver’s License
• Work Permit
• Utility Bills
• Lease Document
• Voter Registration Card
• Computer Printout From
• Foodstamp Award Letter
• Housing Authority Verification
• Landlord’s Statement
• Letter From Social Service Agency or School
• Library Card**
• Medicaid/Medicare Card
• Property Tax Record
• Postmarked Envelope Addressed to Applicant
• Public Assistance Records
• Rent Receipt
• School I.D. Card
• Selective Service Registration Card
• W-4
* Where any item of documentation such as a Federal I.D. Card does not contain age or birthdate the SESA must obtain another documentary source to verify the individual’s age.
** Where any term of documentary evidence, such as a Library Card does not contain the holder’s address, the SESA must obtain documentary evidence issued in the jurisdiction where the EZ/EC is located showing the holder’s address.
Box 20. Signature. If applicant completes this form, he or she must enter signature here. If applicant is a minor (under age 18), the
parent or guardian should sign this box. If form is completed by the employer or his/her representative/agent, enter corresponding
signature here. If form was completed by the intake staff of a SESA or participating agency, enter signature of intake staff in this box.
Box 21. Date. Enter the month, day and year in which the form was completed.
Persons are not required to respond to this collection of information unless it displays a currently valid OMB control number. Respondent’s
obligation to reply to these requirements are mandatory as required by P.L. 105-34. Public reporting burden for this collection of information is
estimated to average 20 minutes per response, including the time for reviewing instructions, searching existing data sources, gathering and
maintaining the data needed, and completing and reviewing the information. Send comments regarding this burden estimate or any other
aspect of this collection of information, including suggestions for reducing this burden, to the U.S. Department of Labor, U.S. Employment
Service, Room 4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
(Cut along dotted line and keep in your files)
TO THE JOB APPLICANT OR EMPLOYEE:
THE INFORMATION AND THE SUPPORTING DOCUMENTATION YOU HAVE PROVIDED IN COMPLETING ;
THIS FORM OR IN SOME CASES OTHER INFORMATION THAT COULD HELP VERIFY THE RESPONSES YOU
HAVE GIVEN TO THE ITEMS/QUESTIONS IN THIS FORM WILL BE DISCLOSED BY YOUR EMPLOYER TO
THE STATE EMPLOYMENT SECURITY AGENCY (Enter corresponding State Employment Security Agency here)
IN ORDER TO QUALIFY FOR A FEDERAL EMPLOYER TAX CREDIT. PROVISION OF THIS INFORMATION IS
VOLUNTARY. HOWEVER, THE INFORMATION IS REQUIRED FOR YOUR EMPLOYER TO RECEIVE THE
FEDERAL TAX CREDIT. IF THE INFORMATION YOU PROVIDE IS ON A MEMBER OF YOUR FAMILY, YOU
SHOULD PROVIDE HIM/HER A COPY OF THIS NOTICE.
Page 3 of 3 ETA-9061 (Rev. Jan. 1998)
ETA Form 9062 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9062.pdf)
Conditional Certification
Work Opportunity and Welfare-to-Work Tax Credits
U.S. Department of Labor, Employment and Training Administration
OMB Approval No. 1205-0371; Expiration Date: 06/30/2002
1. INITIATING AGENCY CODE (For Agency Use Only): CODE: ____ Participating Agency ___ SESA ___
2. CONTROL NO. (For Agency Use Only): CONTROL NO. ____ Participating Agency ___ SESA ___
3. TYPE OF CONDITIONAL CERT. (Check one): a. Original ___ b. Revalidation ___
4. DATE COMPLETED (Mo., Day, Yr.)
5. State Employment Security Agency’s Name and Address
6. SIGNATURE (Authorized Official)
7. TELEPHONE NO.
PART 1. INTRODUCTION
8. NAME OF INDIVIDUAL (Last, First, Middle)
9. SOCIAL SECURITY NO.
10. ADDRESS (Number, Street, City, State, Zip Code)
11. TARGET GROUP CODE (Check one): Summer Youth (SY) ___; Enter Code if not SY: ____
12. GROUP (WtW): Long-Term Fam. Assistance Recipient ___; Enter Code: ____
13. APPLICANT’S SIGNATURE:
NOTE TO EMPLOYER:
14. The above named individual may be eligible for certification under the Work Opportunity Tax Credit (WOTC) program, and/or the Welfare-to-Work Tax Credit as authorized under the IRS Code, Sec. 51 or 51A. If the person is not employed before (Mo., Day, Yr.) ____, this form may not be used.
If you hire this person, you should request the certification necessary for you to claim a Work Opportunity Tax Credit or the Welfare-to-Work Tax Credit. Complete and sign the Employer Declaration below, mail to the Designated Local Agency together with the PSN, IRS Form 8850, not later than the 21st day after the applicant starts work, and the Employer WOTC/WtW Certification Form will be returned to you, if all statutory requirements have been met.
PART II. EMPLOYER DECLARATION
I, HEREBY, DECLARE that the above named person was or will be employed by:
15. NAME OF FIRM:
16. POSITION/JOB TITLE
17. EMPLOYMENT START DATE (Mo., Day, Yr.)
18. STARTING WAGE: $____ per hour
19. EMPLOYER’S NAME AND SIGNATURE:
20. DATE:
Please send a WOTC ___; WtW ___ certification(s) for this employee. The certification is for the purpose of obtaining benefits of the WOTC, under Sec. 51 and/or the Welfare-to-Work Credit, under Sec. 51A of the Internal Revenue Service. Employers are advised, that such credit will cease immediately upon notification of any subsequent invalidation. Employers are further advised that if the certification herein requested is for a member of the SUMMER YOUTH target group, the tax credit for which he/she may be eligible is subject to the limits described at Sec. 51(d)(7) of the Internal Revenue Code.
NOTE: Falsification of data on this form is a FEDERAL CRIME in violation of 18 USC 1001. Falsification of work or concealment of information is PUNISHABLE by a fine of no more than $10,000 or imprisonment of not more than 5 years.
ETA-9062 (Rev. Jan. 1998)
CONDITIONAL CERTIFICATION FORM (CCF) ETA 9062. When a SESA or Participating Agency has determined that a job-ready applicant
is, tentatively ELIGIBLE, as member of a target group, for the WOTC program or WtW tax credit, it shall use the following required form,
without modification, to show that an eligibility determination was made for the person named on this form.
NOTE: The Conditional Certification (CC) serves as an official record of the determination, alerts prospective employers to the availability
of the tax credits if this person is hired, and provides a means for the employer to request a WOTC or WtW Certification for this person.
INSTRUCTIONS FOR COMPLETING THE "Conditional Certification" FORM. (Boxes 1 - 12 are for Participating Agency and SESA use only)
Box 1: Initiating Agency Code. If the CC was established by the participating agency, enter its code. SESAs assign codes to
designate each participating agency to indicate the initiating source for the eligibility determination process. If the eligibility
determination was performed by the SESA, enter the SESA code, if available. Indicate with a check mark “✔” if initiating
agency is a Participating Agency or SESA.
Box 2: Control Number. In most cases, the participating agency determines the control no. However, SESAs may -for internal control
purposes- develop their own control number system. It may be a Social Security number or case number, or some other
appropriate designation, which permits easy filing, identification and retrieval of forms. Enter corresponding Control Number
and indicate with a check mark “✔” whether the source is a Participating Agency or SESA.
Box 3: Type of Conditional Certification. This system distinguishes between "Original," if the individual is being processed for the
first time, or "Revalidation,” if the eligibility process was performed within the previous 12-month period, 45 days for the
Ex-Felon and Summer Youth target groups only. Otherwise, the Conditional Certification is counted as "Original." Indicate with a
check mark “✔” whether eligibility determination is “Original” or “Revalidation.”
Box 4: Date Completed. Enter the month, day, year in which the eligibility determination was completed.
Box 5: SESA Name and Address (if known), responsible for processing Certification requests for the employer indicated
in Box 15). LEAVE BLANK IF SESA NAME AND ADDRESS IS NOT KNOWN. Otherwise, enter or stamp complete address,
including zip code and telephone.
Box 6: Signature. Enter signature of the authorized conditionally-certifying official.
Box 7: Telephone No. Enter corresponding SESA or participating agency area code, telephone number and extension, if available.
Part I. INTRODUCTION:
Box 8: Name of Individual. Enter the individual’s/applicant’s full name (i.e., last name, first name and middle initial).
Box 9: Social Security Number. Enter the individual’s/applicant’s social security number.
Box 10: Address. Enter the individual’s/applicant’s home address, including apartment number, zip code and telephone number.
Box 11: Target Group Code. Under the WOTC, enter a check mark “✔” to indicate if Summer Youth (SY) or Other, and enter
code for specific target group if different from SY, based on clients information and initial documentation provided.
Box 12: Target Group. Under the WtW Tax Credit, enter a check mark “✔” to indicate Conditional Certification for: Long-Term Family
Assistance group. Enter code for this specific group based on client’s information and initial documentation provided.
Box 13: Signature. Get individual’s/applicant’s signature. If a minor (under 18), parent or guardian must sign here.
Box 14. CC Validity Period (This box is to be completed by the SESA or Participating Agency only). Enter the month, day, year
when the CC expires (e.g., 45 days for Ex-Felons and Summer Youth, and longer periods as appropriate for the five other target groups).
Part II. EMPLOYER DECLARATION:
Box 15: Name of Firm. Enter full name of the employing firm (the firm where the employee will actually work).
Box 16: Position/Job Title. Enter the position or job title in which the employee will be performing.
Box 17: Employment Start Date: Enter the date on which the employee has begun or will begin work for the employing firm.
Box 18: Starting Wage: Enter the wage or salary which the employee will be paid.
Box 20: Date. Enter month, day and year in which Part II. Employer Declaration was completed and signed.
Persons are not required to respond to this collection of information unless it displays a currently valid OMB Control Number. Respondents’
obligation to reply to these requirements are mandatory as required by P.L. 104-188. Public reporting burden for this collection of
information is estimated to average 20 minutes per response, including the time for reviewing instructions, searching existing data sources,
gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this
burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, to the U.S. Department
of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
ETA 9062 March 1998
ETA Form 9063 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9063.pdf)
Employer Certification
Work Opportunity and Welfare-to-Work Tax Credits (OPTIONAL)
U.S. Department of Labor, Employment and Training Administration
OMB Approval No. 1205-0371; Expires: 06/30/2002
1. NAME AND ADDRESS OF CERTIFYING AGENCY
2. CONTROL NO. (For Agency Use Only)
3. DATE COMPLETED
4. TELEPHONE NO.
5. INITIATING AGENCY CODE (For Agency Use Only)
PART A. EMPLOYER
6. NAME AND ADDRESS OF FIRM
7. TELEPHONE NO.
8. EMPLOYER TAX EIN NO.
9. REPRESENTATIVE’S NAME AND TITLE
PART B. EMPLOYEE
10. NAME AND ADDRESS OF EMPLOYEE
11. SOCIAL SECURITY NO.
12. EMPLOYMENT START DATE (Mo. Day, Yr.)
13. WOTC TARGET GROUP: Summer Youth (SY) ___; Code if not SY: ____
14. WELFARE-TO-WORK TAX CREDIT GROUP: Long-Term Family Assistance Recipient ___
PART C. CERTIFICATION
I HEREBY CERTIFY, that the individual named in Part B, meets the eligibility criteria of Sec. 51 or Sec. 51A or both of the Internal Revenue Code.
15. NAME OF CERTIFYING OFFICER (Print or Type)
16. SIGNATURE (Certifying Officer)
17. DATE
COMMENTS:
TO EMPLOYERS. Employers are hereby informed that they cannot claim both the WOTC and the WtW tax credits for the same employee in the same taxable year.
Two-Tier Minimum Employment Period Under the WOTC. Under the provisions of the Taxpayer Relief Act of 1997, employers can claim a 25% WOTC for those target group members who were employed by the employer for, at least 120 hours or a 40% credit for individuals performing 400 hours or more of work for the employer. (120 hours in the case of summer youth employees).
Minimum Employment Period Under the Welfare-to-Work Credit. Under the provisions of the Taxpayer Relief Act of 1997 and the IRS Code Secs. 51 and 51A, employers can only claim the Welfare-to-Work Credit, for the Long-Term Family Assistance Recipient if he/she was employed by the employer for at least 180 days, or completed at least 400 hours of work.
Note. Whenever a SESA/DLA verifies that an employee qualifies both as a member of a WOTC target group and as a Long-Term Family Assistance Recipient for the WtW Tax Credit, the SESA/DLA should issue an Employer Certification, ETA 9063 certifying the employee’s DUAL status as member of a WOTC target group and as a Long-Term Family Assistance Recipient.
Persons are not required to respond to this request unless it displays an OMB approval number. Respondent’s obligation to reply to these requirements is required to obtain or retain benefits (P.L. 104-188. Public reporting burden for this collection of information is estimated to average 8 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, please send them to the U.S. Department of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
ETA 9063 March 1998
INSTRUCTIONS FOR COMPLETING AND ISSUING THE EMPLOYER CERTIFICATION FORM (CF) ETA FORM
9063 TO QUALIFIED EMPLOYERS. Documentary evidence of eligibility, income (for Ex-Felons only) and/or
sources of collateral contacts are required to issue WOTC and WtW Certification.
Note: SESAs must issue dual certifications for employees who qualify as a member of a WOTC target group and
as a long-term welfare recipient (WtW), and both certifications should be counted for reporting purposes.
Boxes to be completed on the Certification:
Box 1: Name and Address. Identify the SESA as the sole, authorized, certifying agency and include the
appropriate address and zip code.
Box 2. Control Number. Enter the control number developed by the SESA for its own use.
Box 3. Date Completed. Enter the month, day and year when the form was completed.
Box 4. Telephone Number. Enter area code and telephone number of certifying SESA.
Box 5. Initiating Agency Code. Enter agency code developed by SESA for its own use.
Box 6. Name and Address of Firm. Enter employer's name and address including zip code.
Box 7. Telephone Number. Enter area code and telephone number of employer.
Box 8. Employer Identification Number. Enter employer's identification number.
Box 9. Representative’s Name and Title. Enter the name and title of the individual or consulting firm
authorized by the employer to act on his/her behalf.
Box 10. Name and Address of Employee. Enter the employee’s full name (i.e., last name, first and initial)
and address including zip code and telephone number, if available.
Box 11. Social Security No. Enter the employee’s social security number.
Box 12. Employment Start Date. Enter the month, day and year when the employee began to work for
the employing firm.
Box 13. Targeted Group. Indicate, with a check mark “✔” if Summer Youth, or enter code for other
target groups under the WOTC Program.
Box 14. Group. Indicate, with a check mark “✔” if Long-Term Family Assistance Recipient under the
WtW Tax Credit.
Box 15. Certifying Official. Type or print full name and title of authorized certifying Official.
Box 16. Signature. Enter authorized, certifying official’s signature.
Box 17. Date. Enter month, day and year when the Certification is issued by the certifying official.
ETA-9063
(Rev. Jan. 1998)
ETA Form 9065 (official PDF: https://www.dol.gov/sites/dolgov/files/ETA/advisories/TEGL/2002/TEGL27-01_Attach_ETA9065.pdf)
Work Opportunity and Welfare-to-Work Tax Credits
U.S. Department of Labor, Employment and Training Administration
Agency Declaration of Verification Results (OPTIONAL)
OMB Approval No. 1205-0371; Expiration Date: 06/30/2002
1. NAME OF INDIVIDUAL:
2. SOCIAL SECURITY NO.
3. EMPLOYER NAME AND ADDRESS
THE SECTION BELOW IS TO BE COMPLETED BY THE DESIGNATED LOCAL CERTIFYING AGENCY ONLY:
4. CERTIFYING AGENCY; CC Issued By: Participating Agency ___ SESA ___
5. DATE CERTIFIED
6. SOURCES USED TO DOCUMENT ELIGIBILITY:
7. AUDIT SAMPLE RESULTS (Complete ONLY if selected as part of RANDOM SAMPLE in quarterly audit)
a. ___ I have reviewed/contacted the source(s) indicated in box 6 above and have confirmed that the certified individual is ELIGIBLE.
b. ___ I have reviewed/contacted the source(s) indicated in box 6 above and have confirmed that the certified individual is INELIGIBLE because: ____
c. ___ I have not been able to establish that the certified individual is INELIGIBLE because: ____
8. NAME AND TITLE OF REVIEWER (Type or print)
9. SIGNATURE
10. DATE
NOTE: Falsification of data on this form is a FEDERAL CRIME in violation of 18 USC 1001. Falsification of work or concealment of information is PUNISHABLE by a FINE of no more than $10,000 or IMPRISONMENT of not more than 5 years.
Persons are not required to respond to this request unless it displays an OMB approval number. Respondent’s obligation to reply to these requirements is required to obtain or retain benefits (P.L. 104-188. Public reporting burden for this collection of information is estimated to average 8 hours per response, including the time for reviewing instructions, searching existing data sources, gathering and maintaining the data needed, and completing and reviewing the collection of information. Send comments regarding this burden estimate or any other aspect of this collection of information, including suggestions for reducing this burden, please send them to the U.S. Department of Labor, U.S. Employment Service, Room N-4470, Washington, D.C. 20210 (Paperwork Reduction Project 1205-0371).
ETA-9065 (Rev. Jan. 1998)
BACKGROUND TO THE AGENCY DECLARATION OF VERIFICATION RESULTS (ADVR), ETA FORM 9065. The Tax Equity and Fiscal Responsibility Act (TEFRA) of 1982 (P.L. 97-248), reemphasized the "testing" of "TJTC Certifications,” which was
mandated by the Economic Recovery Tax Act (ERTA) of 1981 (P.L. 97-34). Besides specifying that funds "be used to test whether
individuals certified as members of targeted groups... are eligible for such certification (including the use of statistical sampling
techniques) ....” the Act requires the Secretary of Labor to, annually, report the results of these tests to the Congress. These provisions
apply in full force to the certification process under the WOTC program and the Welfare-to-Work Tax Credit.
Note. Verification activities require testing the validity of all Certifications issued by the SESAs, including the Conditional Certifications
and other documentation which results in Certifications. Quality review and audits are both parts of certification. A General Accounting
Office (GAO) report recommended that verification activities be done by "other than the person who originally processed...” the
Individual Characteristics Form or the Conditional Certification.
DEFINITIONS:
1. Quality Reviews - the review, at specific points in the eligibility determination/certification process, of forms, and other
documentation, including the Certification itself, to ensure that the required information is complete, consistent and accurately recorded.
2. Audit - the post-issuance examination of a random sample of Certifications and supporting documentation to verify the validity
of the Certifications issued.
INSTRUCTIONS FOR COMPLETING THE AGENCY DECLARATION OF VERIFICATION RESULTS (ADVR).
Box 1: Name of Individual. Enter the full name (last, first and middle initial) of the certified target group member/employee.
Box 2. Social Security No. Enter the employee’s social security number.
Box 3. Employer Name and Address. Enter employer’s name and address including zip code and telephone number.
Box 4. Certifying Agency. Enter name of SESA issuing Certification. Indicate with a check mark “✔” whether CC was issued by a
Participating Agency or a SESA.
Box 5. Date Certified. Enter month, day and year when the Certification was issued.
Box 6. Documentary Sources. List and/or describe the documentary evidence or sources of collateral contacts that are attached to
the Certification and/or Individual Characteristics Form.
Box 7. Audit Sample Results. Indicate with a “✔” if individual is “eligible” or “ineligible,” for a, b or c. If b or c, explain why and follow
instructions below.
a. If review of documentation reveals that the Certified individual is Eligible, enter a check mark “✔.”
b. If review of documentation reveals that the Certified individual is Ineligible, explain why, and for Conditional Certifications (CCs)
prepare and send:
Notification of Invalidation (NOI) to the applicant and the SESA/WOTC staff; and
Notify employer to whom applicant was referred that the CC is invalid because of missing or incorrect information/items
and that without such information no Certification can be issued.
For invalid Certifications, prepare and send to employer a Notice of Revocation (NOR) explaining the reasons of such action and
send a copy to the Regional Office and IRS in Washington, D.C., since employer eligibility for the tax credit does not cease until the
date the employer is notified, in writing, that the Certification has been invalidated, thereby, revoked.
c. If review of documentation reveals that the SESA has not been able to establish eligibility indicate and explain the reasons.
Box 8. Name and Title of Reviewer. Type or print full name and title of authorized staff conducting audit review.
Box 9. Signature. Enter signature of authorized reviewer conducting audit.
Box 10. Date. Enter month, day and year when audit was conducted.
ETA-9065 March 1998
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