ANCOR | National Issues

H.R.3090

Job Creation and Worker Assistance Act of 2002 (Enrolled as Agreed to or Passed by Both House and Senate)

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 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 (3) as paragraph (4) and by inserting after paragraph (2) the following new paragraph:

`(3) QUALIFIED FOSTER CARE PLACEMENT AGENCY- The term `qualified foster care placement agency' means any placement agency which is licensed or certified by--

`(A) a State or political subdivision thereof, or

`(B) an entity designated by a State or political subdivision thereof,

for the foster care program of such State or political subdivision to make foster care payments to providers of foster care.'.

(d) EFFECTIVE DATE- The amendments made by this section 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-

(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, notwithstanding 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 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 (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 SECURITY 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:

(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)--

(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, 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 and business deductions of employees) is amended by adding at the end the following:

`(D) CERTAIN EXPENSES OF ELEMENTARY AND SECONDARY 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 connection with books, supplies (other than nonathletic supplies for courses of instruction in health or physical education), computer equipment (including related software and services) 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.

`(B) SCHOOL- The term `school' means any school which provides elementary education or secondary education (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 excludable under section 135, 529(c)(1), or 530(d)(2) for the taxable year.'.

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-

(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 refundable credits).'.

(b) AMENDMENT RELATED TO SECTION 201 OF THE ACT- Subparagraph (B) of section 24(d)(1) is amended by striking `amount of credit allowed by this section' and inserting `aggregate amount of credits allowed by this subpart'.

(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.'.

(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 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 pursuant to an adoption assistance program.

`(2) $10,000 EXCLUSION 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 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.'.

(B) Paragraph (2) of section 137(b) is amended by striking `subsection (a)(1)' and inserting `subsection (a)'.

(3) EFFECTIVE DATE- The amendments made by this subsection 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),

(D) by inserting after subparagraph (B) the following new subparagraph:

`(C) one-half of the amount in effect under subparagraph (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 sentence 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 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--

(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 in a manner similar to their application to a simplified employee pension under section 408(k) of the Internal Revenue Code of 1986.'.

(j) AMENDMENTS RELATING TO SECTION 611 OF THE ACT-

(1) Section 408(k) is amended--

(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 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 subsection (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 `EXCEPTION 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'.