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S. 4537 - Reinvigorating the Economy, Creating Opportunity for every Vocation, Employer, Retiree & Youth (RECOVERY) Act

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S. 4537; Reinvigorating the Economy, Creating Opportunity for every Vocation, Employer, Retiree & Youth (RECOVERY) Act

UNDATED
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Citations: S. 4537; Reinvigorating the Economy, Creating Opportunity for every Vocation, Employer, Retiree & Youth (RECOVERY) Act
[Editor's Note:

Asterisks indicate omitted text.

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116TH CONGRESS
2D SESSION

S. ___

To provide for economic recovery, and for other purposes.

IN THE SENATE OF THE UNITED STATES

Mr. CRUZ introduced the following bill; which was read twice and referred to the Committee on _____

A BILL

To provide for economic recovery, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE, ETC.

(a) SHORT TITLE. — This Act may be cited as the "Reinvigorating the Economy, Creating Opportunity for every Vocation, Employer, Retiree & Youth Act" or the "RECOVERY Act".

* * *

TITLE I — SAFELY RETURNING PEOPLE TO WORK: EMPLOYMENT AND THE WORKPLACE

Subtitle A — Workplace Safety

SEC. 101. ESTABLISHMENT OF TAX CREDIT FOR EMPLOYEE TESTING FOR COVID-19.

(a) IN GENERAL. — For purposes of section 38 of the Internal Revenue Code of 1986, the COVID-19 employee testing credit shall be treated as a credit listed at the end of subsection (b) of such section. For purposes of this subsection, the COVID-19 employee testing credit is an amount equal to the product of —

(1) the number of qualified COVID-19 tests administered to any employee of the taxpayer after the date of enactment of this Act and before January 1, 2021; and

(2) $150.

(b) LIMITATION. — For purposes of paragraph (1) of subsection (a), the credit allowed under such subsection shall not include any tests which are in excess of one qualified COVID-19 test for each employee for every 2 calendar weeks during calendar year 2020.

(c) QUALIFIED COVID-19 TEST. —

(1) IN GENERAL. — For purposes of this section, the term "qualified COVID-19 test" means —

(A) any diagnostic test for the detection of the virus SARS-CoV-2 or coronavirus disease 2019 (COVID-19); or

(B) any serology test for the detection of antibodies to such virus, which has been cleared or approved by the Food and Drug Administration or by the public health department of a State (or such other State entity as designated by the governor of the State) for such purpose and which is not provided to an employee after the date on which such employee has tested positive for the virus described in subparagraph (A) or the antibodies described in subparagraph (B).

(2) DEFINITIONS. — For purposes of this section —

(A) COVID-19. — References to COVID-19 include a reference to any other coronavirus with pandemic potential.

(B) EMPLOYEE, EMPLOYER. — The terms "employee" and "employer" have the respective meanings given such terms in section 101 of the Americans with Disabilities Act of 1990 (42 U.S.C. 12111).

(3) CLARIFICATION. — A qualified COVID-19 test shall be considered to be a medical examination that is job-related and consistent with business necessity, for purposes of section 102(d) of the Americans with Disabilities Act of 1990 (42 U.S.C. 12112(d)). It shall not be unlawful under section 102(a) of such Act (42 U.S.C. 12112(d)) for an employer to require such a test of an employee.

(d) ALLOWANCE OF DEDUCTION. — Nothing in this section or the Internal Revenue Code of 1986 shall prohibit any deduction which is otherwise allowable with respect to any expense incurred by the taxpayer for the acquisition or purchase of any COVID-19 test which is taken into account under subsection (a).

SEC. 102. RIGHT TO TEST.

(a) IN GENERAL. — Notwithstanding chapter V of the Federal Food, Drug, and Cosmetic Act (21 U.S.C. 351 et seq.) and section 353 of the Public Health Service Act (42 U.S.C. 263a), during any public health emergency declared by the Secretary of Health and Human Services (referred to in this section as the "Secretary") under section 319 of the Public Health Service Act (42 U.S.C.47d) or by a State in accordance with the law of the State, the public health department of such State (or such other State entity as designated by the governor of the State) may clear or approve diagnostic tests or diagnostic devices, for use in that State during the applicable public health emergency only.

(b) APPLICATION. — An approval or clearance pursuant to subsection (a) may —

(1) allow for the preparation, compounding, assembly, propagation, manufacture, development, sale, distribution, or use of a specified diagnostic test or diagnostic device to address the health diagnostic needs of the State during the public health emergency;

(2) apply to a diagnostic test or diagnostic device needed to address the health diagnostic needs of the State during the public health emergency, as determined by the State, including, but not limited to, a test or device that uses reagents or swabbing (including self-swab);

(3) apply to the testing of patients if the State certifies that the test can be validated, as determined by the State; and

(4) apply to laboratory-developed tests performed by laboratories and hospitals certified under section 353 of the Public Health Service Act (42 U.S.C. 263a), and to such tests performed by clinical laboratory companies.

(c) SUSPENSION ENFORCEMENT BY FDA. —

(1) IN GENERAL. — Except as provided in paragraph (1), with respect to a diagnostic test or diagnostic device approved or cleared by a State pursuant to subsection (a), the Secretary may not, for the duration of the applicable public health emergency engage in any enforcement action —

(A) with respect to the test or device, to the extent that such test or device is distributed and used within the State granting the approval or clearance in accordance with the requirements of the State;

(B) against a State or State entity that clears or approves the test or device in accordance with this section; or

(C) against any State, entity of a State, health care provider, health care facility, laboratory, educational institution, manufacturer, or distributor that prepares, propagates, compounds, assembles, or processes a diagnostic test or diagnostic device by chemical, physical, biological, or other procedure for such test or device or develops, manufactures, distributes, sells, administers, or evaluates such test —

(i) within the applicable State in accordance with the requirements of the State; or

(ii) for the applicable State or individuals or entities that are located within the applicable State.

(2) EXCEPTION. — The provisions of paragraph (1) shall not apply with respect to a State if the governor of the State requests that enforcement continue in the State during the public health emergency.

(d) ACTION BY FDA AFTER PUBLIC HEALTH EMERGENCY. — Not later than 180 days after the end of any public health emergency under which a State exercises its authority under subsection (a) with respect to a diagnostic test or diagnostic device, if the Food and Drug Administration has not cleared or approved such test or device under chapter V of the Federal Food, Drug, and Cosmetic Act, the Secretary shall review and make a final determination, within such 180-day period, with respect to such test or device for clearance or approval.

(e) DIAGNOSTIC TESTS AND DIAGNOSTIC DEVICES. — In this section, the terms "diagnostic test" and "diagnostic device" include in vitro diagnostic products, laboratory developed tests, viral tests, serological and anti-body tests, and any other test used to identify, analyze, or investigate a disease.

SEC. 103. SAFE AND HEALTHY WORKPLACE TAX CREDIT.

(a) IN GENERAL. — In the case of an employer, there shall be allowed as a credit against applicable employment taxes for each calendar quarter an amount equal to 50 percent of the sum of —

(1) the qualified employee protection expenses,

(2) the qualified workplace reconfiguration expenses, and

(3) the qualified workplace technology expenses, paid or incurred by the employer during such calendar quarter.

(b) LIMITATIONS AND REFUNDABILITY. —

(1) OVERALL DOLLAR LIMITATION ON CREDIT. —

(A) IN GENERAL. — The amount of the credit allowed under subsection (a) with respect to any employer for any calendar quarter shall not exceed the excess (if any) of —

(i) the applicable dollar limit with respect to such employer for such calendar quarter, over

(ii) the aggregate credits allowed under subsection (a) with respect to such employer for all preceding calendar quarters.

(B) APPLICABLE DOLLAR LIMIT. — The term "applicable dollar limit" means, with respect to any employer for any calendar quarter, the sum of —

(i) $1,000, multiplied by the average number of employees employed by such employer during such calendar quarter not in excess of 500, plus

(ii) $750, multiplied by such average number of employees in excess of 500 but not in excess of 1,000, plus

(iii) $500, multiplied by such average number of employees in excess of 1,000.

(2) CREDIT LIMITED TO EMPLOYMENT TAXES. — The credit allowed by subsection (a) with respect to any calendar quarter shall not exceed the applicable employment taxes (reduced by any credits allowed under subsections (e) and (f) of section 3111 of the Internal Revenue Code of 1986, sections 7001 and 7003 of the Families First Coronavirus Response Act, and section 2301 of the CARES Act) on the wages paid with respect to the employment of all the employees of the employer for such calendar quarter.

(3) REFUNDABILITY OF EXCESS CREDIT. —

(A) IN GENERAL. — If the amount of the credit under subsection (a) exceeds the limitation of paragraph (2) for any calendar quarter, such excess shall be treated as an overpayment that shall be refunded under sections 6402(a) and 6413(b) of the Internal Revenue Code of 1986.

(B) TREATMENT OF PAYMENTS. — For purposes of section 1324 of title 31, United States Code, any amounts due to the employer under this paragraph shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

(c) QUALIFIED EMPLOYEE PROTECTION EXPENSES. — For purposes of this section, the term "qualified employee protection expenses" means amounts paid or incurred by the employer for —

(1) equipment to protect employees and customers of the employer from contracting COVID-19, including masks, gloves, and disinfectants, and

(2) cleaning products or services related to preventing the spread of COVID-19.

Such term shall not include any expense for which the COVID-19 employee testing credit under section 101 is allowed.

(d) QUALIFIED WORKPLACE RECONFIGURATION EXPENSES. — For purposes of this section —

(1) IN GENERAL. — The term "qualified workplace reconfiguration expenses" means amounts paid or incurred by the employer to design and reconfigure retail space, work areas, break areas, or other areas that employees or customers regularly use in the ordinary course of the employer's trade or business if such design and reconfiguration —

(A) has a primary purpose of preventing the spread of COVID-19,

(B) is with respect to tangible property (within the meaning of section 168 of the Internal Revenue Code of 1986) which is located in the United States and which is leased or owned by the employer,

(C) is commensurate with the risks faced by the employees or customers, or is consistent with recommendations made by the Centers for Disease Control and Prevention or the Occupational Safety and Health Administration,

(D) is completed pursuant to a reconfiguration (or similar) plan that was not in place before March 13, 2020, and

(E) is completed before January 1, 2021.

(2) REGULATIONS. — The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including guidance defining primary purpose and reconfiguration plan.

(e) QUALIFIED WORKPLACE TECHNOLOGY EXPENSES. — For purposes of this section —

(1) IN GENERAL. — The term "qualified workplace technology expenses" means amounts paid or incurred by the employer for technology systems that employees or customers use in the ordinary course of the employer's trade or business if such technology system —

(A) has a primary purpose of preventing the spread of COVID-19,

(B) is used for limiting physical contact between customers and employees in the United States,

(C) is commensurate with the risks faced by the employees or customers, or is consistent with recommendations made by the Centers for Disease Control and Prevention or the Occupational Safety and Health Administration,

(D) is not acquired by the employer pursuant to a plan that was in place before March 13, 2020, and

(E) is placed in service by the employer before January 1, 2021.

(2) TECHNOLOGY SYSTEMS. — The term "technology systems" means computer software (as defined in section 167(f)(1) of the Internal Revenue Code of 1986) and qualified technological equipment (as defined in section 168(i)(2) of such Code).

(3) REGULATIONS. — The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out the purposes of this subsection, including guidance defining the terms "primary purpose" and "plan".

(f) OTHER DEFINITIONS. — For purposes of this section —

(1) APPLICABLE EMPLOYMENT TAXES. — The term "applicable employment taxes" means the following:

(A) The taxes imposed under section 3111(a) of the Internal Revenue Code of 1986.

(B) So much of the taxes imposed under section 3221(a) of such Code as are attributable to the rate in effect under section 3111(a) of such Code.

(2) COVID-19. — Except where the context clearly indicates otherwise, any reference in this section to COVID-19 shall be treated as including a reference to the virus which causes COVID-19.

(3) SECRETARY. — The term "Secretary" means the Secretary of the Treasury or such Secretary's delegate.

(4) OTHER TERMS. — Any term used in this section which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter.

(g) CERTAIN GOVERNMENTAL EMPLOYERS. — This section shall not apply to the Government of the United States, the government of any State or political subdivision thereof, or any agency or instrumentality of any of the foregoing.

(h) RULES RELATING TO EMPLOYER, ETC. —

(1) AGGREGATION RULE. — All persons treated as a single employer under subsection (a) or (b) of section 52 of the Internal Revenue Code of 1986, or subsection (m) or (o) of section 414 of such Code, shall be treated as one employer for purposes of this section.

(2) THIRD PARTY PAYORS. — Any credit allowed under subsection (a) shall be treated as a credit described in section 3511(d)(2) of such Code.

(i) TREATMENT OF DEPOSITS. — The Secretary shall waive any penalty under section 6656 of the Internal Revenue Code of 1986 for any failure to make a deposit of any applicable employment taxes if the Secretary determines that such failure was due to the reasonable anticipation of the credit allowed under subsection (a).

(j) CREDIT FOR SELF-EMPLOYED INDIVIDUALS. —

(1) IN GENERAL. — In the case of a self-employed individual, there shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 for any taxable year an amount equal to 50 percent of the sum of —

(A) the qualified employee protection expenses (as determined by treating the self-employed individual both as the employer and an employee),

(B) the qualified workplace reconfiguration expenses (as so determined), and

(C) the qualified workplace technology expenses (as so determined), paid or incurred by the individual during such taxable year.

(2) LIMITATION. — The amount of the credit allowed under paragraph (1) with respect to any self-employed individual for any taxable year shall not exceed $500.

(3) REFUNDABILITY. —

(A) IN GENERAL. — The credit determined under paragraph (1) shall be treated as a credit allowed to the taxpayer under subpart C of part IV of subchapter A of chapter 1 of such Code.

(B) TREATMENT OF PAYMENTS. — For purposes of section 1324 of title 31, United States Code, any refund due from the credit determined under paragraph (1) shall be treated in the same manner as a refund due from a credit provision referred to in subsection (b)(2) of such section.

(4) SELF-EMPLOYED INDIVIDUAL. —

(A) IN GENERAL. — For purposes of this section, the term "self-employed individual" means an individual who regularly carries on any trade or business within the meaning of section 1402 of the Internal Revenue Code of 1986, other than any such trade or business which is carried on by a partnership.

(B) DOCUMENTATION. — No credit shall be allowed under paragraph (1) to any individual unless the individual maintains such documentation as the Secretary may prescribe to establish such individual as an eligible self-employed individual.

(k) SPECIAL RULES. —

(1) DENIAL OF DOUBLE BENEFIT. — For purposes of this section —

(A) IN GENERAL. — Any deduction or other credit otherwise allowable under any provision of the Internal Revenue Code of 1986 with respect to any expense for which a credit is allowed under this section shall be reduced by the amount of the credit under this section with respect to such expense.

(B) BASIS ADJUSTMENT. — If a credit is allowed under this section with respect to any property of a character which is subject to the allowance for depreciation under section 167 of such Code, the basis of such property shall be reduced by the amount of the credit so allowed, and such reduction shall be taken into account before determining the amount of any allowance for depreciation with respect to such property for purposes of such Code.

(C) EXPENSES NOT TAKEN INTO ACCOUNT MORE THAN ONCE. — The same expense shall not be treated as described in more than one paragraph of subsection (a) or more than one subparagraph of subsection (j)(1), whichever is applicable.

(D) EMPLOYER OR SELF-EMPLOYMENT CREDIT ALLOWED. — The credit under subsection (a) and the credit for self-employed individuals under subsection (j) shall not apply to the same taxpayer.

(2) ELECTION NOT TO HAVE SECTION APPLY. — This section shall not apply with respect to any employer for any calendar quarter, or with respect to any self-employed individual for any taxable year, if such employer or self-employed individual elects (at such time and in such manner as the Secretary may prescribe) not to have this section apply.

(l) TRANSFERS TO CERTAIN TRUST FUNDS. — There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted.

(m) REGULATIONS AND GUIDANCE. — The Secretary shall prescribe such regulations and other guidance as may be necessary or appropriate to carry out the purposes of this section, including —

(1) with respect to the application of the credit under subsection (a) to third party payors (including professional employer organizations, certified professional employer organizations, or agents under section 3504 of the Internal Revenue Code of 1986), regulations or other guidance allowing such payors to submit documentation necessary to substantiate the amount of the credit allowed under subsection (a),

(2) regulations or other guidance for recapturing the benefit of credits determined under subsection (a) in cases where there is a subsequent adjustment to the credit determined under such subsection, and

(3) regulations or other guidance to prevent abuse of the purposes of this section.

(n) APPLICATION. — This section shall only apply to amounts paid or incurred after the date of the enactment of this Act, and before January 1, 2021.

* * *

SEC. 105. INCOME EXCLUSION FOR CERTAIN AMOUNTS RECEIVED IN 2020.

(a) IN GENERAL. — For purposes of chapter 1 of the Internal Revenue Code of 1986, in the case of an individual, gross income shall not include any amount of earned income (as defined in section 32(c)(2) of such Code, determined without regard to section 32(d)) received after August 31, 2020, and before January 1, 2021.

(b) LIMITATION. — The aggregate amount excluded from gross income under subsection (a) shall not exceed $10,000.

(c) EXCEPTION. — Subsection (a) shall not apply to any amount received as unemployment compensation under State or Federal law, including under the Federal-State Extended Unemployment Compensation Act, the pandemic unemployment assistance program under section 2102 of the Relief for Workers Affected by Coronavirus Act (contained in subtitle A of title II of division A of the CARES Act (Public Law 116-136)), or the pandemic emergency unemployment compensation program under section 2107 of such title II.

(d) ELECTION TO DETERMINE CHILD TAX CREDIT AND EARNED INCOME TAX CREDIT WITHOUT REGARD TO THIS SECTION. — For purposes of applying sections 24 and 32 of the Internal Revenue Code of 1986 for any taxable year ending in 2020, a taxpayer may elect to treat amounts excluded from gross income under subsection (a) as earned income.

* * *

TITLE II — THE NEXT GREAT AMERICAN ECONOMIC RECOVERY: JOB CREATION

SEC. 201. EXPENSING OF CERTAIN PROPERTY.

(a) PERMANENT FULL EXPENSING FOR QUALIFIED PROPERTY. —

(1) IN GENERAL. — Paragraph (6) of section 168(k) of the Internal Revenue Code of 1986 is amended to read as follows:

"(6) APPLICABLE PERCENTAGE. — For purposes of this subsection, the term 'applicable percentage' means, in the case of property placed in service (or, in the case of a specified plant described in paragraph (5), a plant which is planted or grafted) after September 27, 2017, 100 percent.".

(2) CONFORMING AMENDMENTS. —

(A) Section 168(k) of such Code is amended —

(i) in paragraph (2) —

(I) in subparagraph (A) —

(aa) in clause (i)(V), by inserting "and" at the end,

(bb) in clause (ii), by striking "clause (ii) of subparagraph (E), and" and inserting "clause (i) of subparagraph (E).", and

(cc) by striking clause (iii), (II) in subparagraph (B) —

(aa) in clause (i) —

(AA) by striking subclauses (II) and (III), and

(BB) by redesignating subclauses (IV) through (VI) as subclauses (II) through (IV), respectively,

(bb) by striking clause (ii), and

(cc) by redesignating clauses (iii) and (iv) as clauses (ii) and (iii), respectively,

(III) in subparagraph (C) —

(aa) in clause (i), by striking "and subclauses (II) and (III) of subparagraph (B)(i)", and

(bb) in clause (ii), by striking "subparagraph (B)(iii)" and inserting "subparagraph (B)(ii)", and

(IV) in subparagraph (E) —

(aa) by striking clause (i), and

(bb) by redesignating clauses (ii) and (iii) as clauses (i) and (ii), respectively, and

(ii) in paragraph (5)(A), by striking "planted before January 1, 2027, or is grafted before such date to a plant that has already been planted," and inserting "planted or grafted".

(B) Section 460(c)(6)(B) of such Code is amended by striking "which" and all that follows through the period and inserting "which has a recovery period of 7 years or less.".

(3) EFFECTIVE DATE. — The amendments made by this subsection shall take effect as if included in section 13201 of Public Law 115-97.

(b) NEUTRAL COST RECOVERY DEPRECIATION ADJUSTMENT FOR RESIDENTIAL RENTAL PROPERTY AND NONRESIDENTIAL REAL PROPERTY. —

(1) IN GENERAL. — Section 168 of the Internal Revenue Code of 1986 is amended by adding at the end thereof the following new subsection:

"(n) NEUTRAL COST RECOVERY DEPRECIATION ADJUSTMENT FOR RESIDENTIAL RENTAL PROPERTY AND NONRESIDENTIAL REAL PROPERTY. —

"(1) IN GENERAL. — In the case of any applicable property, the deduction under this section with respect to such property for any taxable year after the taxable year during which the property is placed in service shall be —

"(A) the amount determined under this section for such taxable year without regard to this subsection, multiplied by

"(B) the applicable neutral cost recovery ratio for such taxable year.

"(2) APPLICABLE NEUTRAL COST RECOVERY RATIO. — For purposes of paragraph (1), the applicable neutral cost recovery ratio for the applicable property for any taxable year is the number determined by —

"(A) dividing —

"(i) the gross domestic product deflator for the calendar quarter ending in such taxable year which corresponds to the calendar quarter during which the property was placed in service by the taxpayer, by

"(ii) the gross domestic product deflator for the calendar quarter during which the property was placed in service by the taxpayer, and

"(B) then multiplying the number determined under subparagraph (A) by the number equal to 1.03 to the nth power where 'n' is the number of full years in the period beginning on the 1st day of the calendar quarter during which the property was placed in service by the taxpayer and ending on the day before the beginning of the corresponding calendar quarter ending during such taxable year.

The applicable neutral cost recovery ratio shall never be less than 1. The applicable neutral cost recovery ratio shall be rounded to the nearest 1⁄1000.

"(3) SPECIAL RULE FOR EXISTING PROPERTY. — In the case of any applicable property which is placed in service before the date of enactment of this subsection, subparagraphs (A)(ii) and (B) of paragraph (2) shall be applied by substituting 'calendar quarter which includes the date of enactment of this subsection' for 'calendar quarter during which the property was placed in service by the taxpayer' each place it appears.

"(4) GROSS DOMESTIC PRODUCT DEFLATOR. — For purposes of paragraph (2), the gross domestic product deflator for any calendar quarter is the implicit price deflator for the gross domestic product for such quarter (as shown in the first revision thereof).

"(5) ELECTION NOT TO HAVE SUBSECTION APPLY. — This subsection shall not apply to any applicable property if the taxpayer elects not to have this subsection apply to such property. Such an election, once made, shall be irrevocable.

"(6) ADDITIONAL DEDUCTION NOT TO AFFECT BASIS OR RECAPTURE. —

"(A) IN GENERAL. — The additional amount determined under this section by reason of this subsection shall not be taken into account in determining the adjusted basis of any applicable property or of any interest in a passthru entity which holds such property and shall not be treated as a deduction for depreciation for purposes of sections 1245 and 1250.

"(B) PASS-THRU ENTITY DEFINED. — For purposes of subparagraph (A), the term 'passthru entity' means —

"(i) a regulated investment company,

"(ii) a real estate investment trust,

"(iii) an S corporation,

"(iv) a partnership,

"(v) an estate or trust, and

"(vi) a common trust fund.

"(7) APPLICABLE PROPERTY. — For purposes of this subsection, the term 'applicable property' means residential rental property or nonresidential real property (as such terms are defined in subsection (e)(2)).".

(2) MINIMUM TAX TREATMENT. — Paragraph (1) of section 56(a) of such Code is amended by adding at the end thereof the following new subparagraph:

"(E) USE OF NEUTRAL COST RECOVERY RATIO. — In the case of property to which section 168(n) applies, the deduction allowable under this paragraph with respect to such property for any taxable year (after the taxable year during which the property is placed in service) shall be —

"(i) the amount so allowable for such taxable year without regard to this subparagraph, multiplied by

"(ii) the applicable neutral cost recovery ratio for such taxable year (as determined under section 168(n)).

This subparagraph shall not apply to any property with respect to which there is an election in effect not to have section 168(n) apply.".

(3) EFFECTIVE DATE. — The amendments made by this subsection shall apply to property placed in service before, on, or after the date of the enactment of this Act, with respect to taxable years ending on or after such date.

(c) ELIMINATION OF AMORTIZATION OF RESEARCH AND EXPERIMENTAL EXPENDITURES. —

(1) IN GENERAL. — Subpart A of part III of subtitle C of title I of Public Law 115-97 is amended by striking section 13206.

(2) EFFECTIVE DATE. — The amendment made by this subsection shall take effect on the date of the enactment of this Act.

SEC. 202. TEMPORARY SUSPENSION OF PAYROLL TAXES.

(a) IN GENERAL. — Notwithstanding any other provision of law —

(1) with respect to remuneration received for pay periods ending during the payroll tax suspension period, the rate of tax under 3101(a) of the Internal Revenue Code of 1986 shall be 0 percent,

(2) with respect to compensation received for pay periods ending during the payroll tax suspension period, the rate of tax under 3201(a) of such Code shall be 0 percent,

(3) with respect to remuneration paid for pay periods ending during the payroll tax suspension period, the rate of tax under section 3111(a) of such Code shall be 0 percent (including for purposes of determining the applicable percentage under section 3221(a) of such Code), and

(4) with respect to self-employment income derived by an individual during the payroll tax suspension period, the rate of tax under section 1401(a) of such Code shall be 0 percent.

(b) COORDINATION WITH DEDUCTIONS FOR EMPLOYMENT TAXES. —

(1) DEDUCTION IN COMPUTING NET EARNINGS FROM SELF-EMPLOYMENT. — For purposes of applying section 1402(a)(12) of the Internal Revenue Code of 1986, the rate of tax imposed by section 1401(a) of such Code shall be determined without regard to the reduction in such rate under this section.

(2) INDIVIDUAL DEDUCTION. — In the case of the taxes imposed by section 1401 of such Code for any taxable year which begins in the payroll tax holiday period, the deduction under section 164(f) of such Code with respect to such taxes shall be determined without regard to the reduction in such rate under this section.

(c) PAYROLL TAX SUSPENSION PERIOD. — For purposes of this section, the term "payroll tax suspension period" means the period beginning on the day after the date of the enactment of this Act and ending on December 31,020.

(d) WAGES. — For purposes of this section, the term "wages" means wages (as defined in section 3121(a) of the Internal Revenue Code of 1986) and compensation (as defined in section 3231(e) of such Code).

(e) OTHER TERMS. — Any term used in this section which is also used in chapter 21 or 22 of the Internal Revenue Code of 1986 shall have the same meaning as when used in such chapter.

(f) EMPLOYER NOTIFICATION. — The Secretary of the Treasury (or such Secretary's delegate) shall notify employers of the payroll tax suspension period in any manner the Secretary deems appropriate.

(g) COORDINATION WITH DELAY OF PAYMENT OF EMPLOYER PAYROLL TAXES. — Section 2302(d)(2) of the CARES Act (Public Law 116-136) is amended by striking "January 1, 2021" and inserting "the date of the enactment of the RECOVERY Act".

(h) REGULATIONS. — The Secretary of the Treasury (or such Secretary's delegate) shall issue such regulations or other guidance as necessary to carry out the purposes of this section.

(i) TRANSFERS OF FUNDS. —

(1) TRANSFERS TO FEDERAL OLD-AGE AND SURVIVORS INSURANCE TRUST FUND. — There are hereby appropriated to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) and the Social Security Equivalent Benefit Account established under section 15A(a) of the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal to the reduction in revenues to the Treasury by reason of this section (without regard to this subsection). Amounts appropriated by the preceding sentence shall be transferred from the general fund at such times and in such manner as to replicate to the extent possible the transfers which would have occurred to such Trust Fund or Account had this section not been enacted.

(2) COORDINATION WITH OTHER FEDERAL LAWS. — For purposes of applying any provision of Federal law other than the provisions of the Internal Revenue Code of 1986, the rate of tax in effect under section 3101(a) of such Code shall be determined without regard to the reduction in such rate under this section.

SEC. 203. ONSHORING RARE EARTHS ACT.

(a) PERMANENT FULL EXPENSING FOR PROPERTY USED TO EXTRACT CRITICAL MINERALS AND METALS WITHIN THE UNITED STATES. —

(1) IN GENERAL. — Section 168(k) of the Internal Revenue Code of 1986 is amended by adding at the end the following:

"(11) SPECIAL RULE FOR PROPERTY USED IN THE MINING, RECLAIMING, OR RECYCLING OF CRITICAL MINERALS AND METALS WITHIN THE UNITED STATES. —

"(A) IN GENERAL. — In the case of any qualified property which is substantially involved in mining, reclaiming, or recycling critical minerals and metals from deposits in the United States, the applicable percentage shall be 100 percent.

"(B) CRITICAL MINERALS AND METALS. — For purposes of this paragraph, the term 'critical minerals and metals' means cerium, cobalt, dysprosium, erbium, europium, gadolinium, graphite, holmium, lanthanum, lithium, lutetium, manganese, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, and yttrium.".

(2) EFFECTIVE DATE. — The amendment made by this subsection shall apply to property placed in service after December 31, 2019.

(b) PERMANENT FULL EXPENSING FOR NONRESIDENTIAL REAL PROPERTY USED IN THE MINING, RECLAIMING, OR RECYCLING OF CRITICAL MINERALS AND METALS WITHIN THE UNITED STATES. —

(1) IN GENERAL. — Section 168 of the Internal Revenue Code of 1986, as amended by this Act, is further amended by adding at the end the following new subsection:

"(o) SPECIAL ALLOWANCE FOR NONRESIDENTIAL REAL PROPERTY USED IN THE MINING, RECLAIMING, OR RECYCLING OF CRITICAL MINERALS AND METALS WITHIN THE UNITED STATES. —

"(1) NEW STRUCTURES. — In the case of any qualified real property —

"(A)(i) if such property is placed in service on or after the date of enactment of this subsection, 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 100 percent of the adjusted basis of such property, or

"(ii) if such property was placed in service before the date of enactment of this subsection, the depreciation deduction provided by section 167(a) for the first taxable year beginning after such date shall include an allowance equal to 100 percent of the adjusted basis of such property, and

"(B) the adjusted basis of such property shall be reduced by the amount of such deduction before computing the amount otherwise allowable as a depreciation deduction under this chapter for such taxable year and any subsequent taxable year.

"(2) QUALIFIED REAL PROPERTY. — For purposes of this subsection, the term 'qualified real property' means any nonresidential real property which is substantially involved in mining, reclaiming, or recycling critical minerals and metals (as defined in subsection (k)(11)(B)) from deposits in the United States.".

(2) EFFECTIVE DATE. — The amendment made by this subsection shall apply to taxable years beginning after December 31, 2019.

(c) DEDUCTION FOR PURCHASE OF CRITICAL MINERALS AND METALS MINED, RECLAIMED, OR RECYCLED WITHIN THE UNITED STATES. —

(1) IN GENERAL. — Part VI of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 176 the following new section:

"SEC. 177. DEDUCTION FOR PURCHASE OF CRITICAL MINERALS AND METALS MINED, RECLAIMED, OR RECYCLED WITHIN THE UNITED STATES.

"(a) ALLOWANCE OF DEDUCTION. — There shall be allowed as a deduction for the taxable year an amount equal to 200 percent of the cost paid or incurred by the taxpayer for the purchase or acquisition of critical minerals and metals (as defined in section 168(k)(11)(B)) which have been mined, reclaimed, or recycled from deposits in the United States.

"(b) APPLICATION WITH OTHER DEDUCTIONS. — No deduction shall be allowed under any other provision of this chapter with respect to any expenditure with respect to which a deduction is allowed or allowable under this section to the taxpayer.".

(2) CONFORMING AMENDMENT. — The table of sections for part VI of subchapter B of chapter 1 of such Code is amended by inserting after the item relating to section 176 the following new item:

"Sec. 177. Deduction for purchase of critical minerals and metals mined, reclaimed, or recycled within the United States.".

(3) EFFECTIVE DATE. — The amendments made by this subsection shall apply to amounts paid or incurred after December 31, 2019.

(d) MODIFICATION OF PROHIBITION ON ACQUISITION OF CERTAIN SENSITIVE MATERIALS. —

(1) EXTENSION OF PROHIBITION TO MINED, REFINED, AND SEPARATED MATERIALS. — Subsection (a)(1) of section 2533c of title 10, United States Code, is amended by striking "melted or produced" and inserting "mined, refined, separated, melted, or produced".

(2) COMMERCIALLY AVAILABLE OFF-THE-SHELF ITEM EXCEPTION. — Subsection (c)(3)(A)(i) of such section is amended by striking "50 percent or more tungsten" and inserting "50 percent or more covered material".

(e) GRANT PROGRAM FOR DEVELOPMENT OF CRITICAL MINERALS AND METALS. —

(1) ESTABLISHMENT. — The Secretary of Defense, in consultation with the Secretary of the Interior, shall establish a grant program to finance pilot projects for the development of critical minerals and metals in the United States.

(2) LIMITATION ON GRANT AWARDS. — A grant awarded under paragraph (1) may not exceed $10,000,000.

(3) ECONOMIC VIABILITY. — In awarding grants under paragraph (1), the Secretary of Defense shall give priority to projects the Secretary determines are likely to be economically viable over the long term.

(4) SECONDARY RECOVERY. — In awarding grants under paragraph (1) during a fiscal year, the Secretary of Defense shall seek to award not less than 30 percent of the total amount of grants awarded during that fiscal year for projects relating to secondary recovery of critical minerals and metals.

(5) AUTHORIZATION OF APPROPRIATIONS. — There are authorized to be appropriated to the Secretary of Defense $50,000,000 for each of fiscal years 2021 through 2024 to carry out the grant program established under paragraph (1).

(6) DEFINITIONS. — In this section:

(A) CRITICAL MINERALS AND METALS. — The term "critical minerals and metals" means cerium, cobalt, dysprosium, erbium, europium, gadolinium, graphite, holmium, lanthanum, lithium, lutetium, manganese, neodymium, praseodymium, promethium, samarium, scandium, terbium, thulium, ytterbium, and yttrium.

(B) SECONDARY RECOVERY. — The term "secondary recovery" means the recovery of minerals and metals from discarded end-use products or from waste products produced during the metal refining and manufacturing process, including from mine waste piles, acid mine drainage sludge, or byproducts produced through legacy mining and metallurgy activities.

SEC. 204. ELIGIBILITY OF 501(C)(6) ORGANIZATIONS FOR LOANS UNDER THE PAYCHECK PROTECTION PROGRAM.

Section 7(a)(36)(D) of the Small Business Act (15 U.S.C. 636(a)(36)(D)) is amended —

(1) in clause (v), by inserting "or whether an entity described in clause (vii) employs not more than 300 employees," after "clause (i)(I),"; and

(2) by adding at the end the following:

"(vii) ELIGIBILITY FOR CERTAIN 501(C)(6) ORGANIZATIONS. —

"(I) IN GENERAL. — Except as provided in subclause (II), any organization that is described in section 501(c)(6) of the Internal Revenue Code of 1986 and that is exempt from taxation under section 501(a) of such Code (excluding professional football leagues and organizations with the purpose of promoting or participating in a political campaign or other activity) shall be eligible to receive a covered loan if —

"(aa) the organization does not receive more than 10 percent of its receipts from lobbying activities;

"(bb) the lobbying activities of the organization do not comprise more than 10 percent of the total activities of the organization; and

"(cc) the organization employs not more than 300 employees.

"(II) DESTINATION MARKETING ORGANIZATIONS. — During the covered period, any destination marketing organization shall be eligible to receive a covered loan if —

"(aa) the destination marketing organization does not receive more than 10 percent of its receipts from lobbying activities;

"(bb) the lobbying activities of the destination marketing organization do not comprise more than 10 percent of the total activities of the organization;

"(cc) the destination marketing organization employs not more than 300 employees; and

"(dd) the destination marketing organization —

"(AA) is described in section 501(c) of the Internal Revenue Code of 1986 and is exempt from taxation under section 501(a) of such Code; or

"(BB) is a quasi-governmental entity or is a political subdivision of a State or local government, including any instrumentality of those entities.

"(III) TIMING OF APPLICATION. — Any organization that is eligible to receive a covered loan by reason of this clause shall submit an application for such loan not later than September 30, 2020.".

* * *

SEC. 209. BEAT CHINA ACT.

(a) SHORT TITLE. — This section may be cited as the "Bring Entrepreneurial Advancements to Consumers Here In North America Act" or the "BEAT CHINA Act".

(b) IN GENERAL. — Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after section 139H the following new section:

"SEC. 139I. EXCLUSION OF GAIN ON DISPOSITION OF PROPERTY IN CONNECTION WITH QUALIFIED RELOCATION OF MANUFACTURING.

"(a) IN GENERAL. — In the case of a qualified manufacturer, gross income shall not include gain from the sale or exchange of qualified relocation disposition property.

"(b) QUALIFIED RELOCATION DISPOSITION PROPERTY. — For purposes of this section —

"(1) IN GENERAL. — The term 'qualified relocation disposition property' means any property which —

"(A) is sold or exchanged by a qualified manufacturer in connection with a qualified relocation of manufacturing, and

"(B) was used by such qualified manufacturer in the trade or business of manufacturing a qualified medical product in the foreign country from which such manufacturing is being relocated.

"(2) QUALIFIED RELOCATION OF MANUFACTURING. —

"(A) IN GENERAL. — The term 'qualified relocation of manufacturing' means, with respect to any qualified manufacturer, the relocation of the manufacturing of a qualified medical product from a foreign country to the United States.

"(B) RELOCATION OF PROPERTY NOT REQUIRED. — For purposes of subparagraph (A), manufacturing shall not fail to be treated as relocated merely because property used in such manufacturing was not relocated.

"(C) RELOCATION OF NOT LESS THAN EQUIVALENT PRODUCTIVE CAPACITY REQUIRED. — For purposes of subparagraph (A), manufacturing shall not be treated as relocated unless the property manufactured in the United States is substantially identical to the property previously manufactured in a foreign country and the increase in the units of production of such property in the United States by the qualified manufacturer is not less than the reduction in the units of production of such property in such foreign country by such qualified manufacturer.

"(c) QUALIFIED MANUFACTURER. — For purposes of this section, the term 'qualified manufacturer' means any person engaged in the trade or business of manufacturing a qualified medical product.

"(d) QUALIFIED MEDICAL PRODUCT. — For purposes of this section, the term 'qualified medical product' means any pharmaceutical, medical device, or medical supply.".

(c) CLERICAL AMENDMENT. — The table of sections for part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 139H the following new item:

"Sec. 139I. Exclusion of gain on disposition of property in connection with qualified relocation of manufacturing.".

(d) EFFECTIVE DATE. — The amendments made by this section shall apply to sales and exchanges after the date of the enactment of this Act.

SEC. 210. FUNDING FOR SPR PETROLEUM ACCOUNT.

(a) IN GENERAL. — There is appropriated, out of amounts in the Treasury not otherwise appropriated, for the fiscal year ending September 30, 2020, $3,000,000,000 for additional amounts for the "SPR Petroleum Account" for necessary expenses related to the acquisition, transportation, and injection of domestic petroleum products pursuant to the Energy Policy and Conservation Act (42 U.S.C. 6201 et seq.), to remain availableuntil September 30, 2021.

(b) EMERGENCY DESIGNATION. — The amount provided by this section is designated by the Congress as being for an emergency requirement pursuant to section51(b)(2)(A)(i) of the Balanced Budget and Emergency Deficit Control Act of 1985 (2 U.S.C. 901(b)(2)(A)(i)).

SEC. 211. EXPANSION OF RESEARCH CREDIT FOR QUALIFIED SMALL BUSINESSES.

(a) IN GENERAL. — Section 41(h) of the Internal Revenue Code of 1986 is amended —

(1) in paragraph (3)(A)(i)(I), by striking "$5,000,000" and inserting "$10,000,000",

(2) in paragraph (4)(B)(i), by striking "$250,000" and inserting "$500,000", and

(3) in paragraph (5)(B)(ii), by striking "$250,000" and inserting "$500,000".

(b) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2020.

SEC. 212. EXTENSION OF AVIATION EXCISE TAX HOLIDAY.

Section 4007 of division A of the CARES Act is amended by striking "ending before January 1, 2021" and inserting "ending on the date that is 1 year after the last day that the public health emergency declared by the Secretary of Health and Human Services under section 319 of the Public Health Service Act (42 U.S.C. 247d) on January 31, 2020, with respect to COVID-19, is in effect".

TITLE III — ESTABLISHING LONG-TERM RETIREMENT SECURITY

SEC. 301. ALLOWANCE OF DELAY IN MAKING 2020 RETIREMENT CONTRIBUTIONS.

(a) IN GENERAL. — An eligible participant in 1 or more applicable retirement plans may make additional contributions to such plans for any taxable year beginning in 2021 or 2022 in an aggregate amount not exceeding the participant's unused 2020 contribution amount.

(b) TREATMENT OF CONTRIBUTIONS AND PLANS. —

For purposes of the Internal Revenue Code of 1986 —

(1) TREATMENT OF CONTRIBUTIONS. — In the case of any additional contribution to which subsection (a) applies —

(A) such contribution shall not, with respect to such taxable year —

(i) be subject to any otherwise applicable limitation contained in sections 401(a)(30), 402(h), 408, and 415(c), or

(ii) be taken into account in applying such limitations to other contributions or benefits under such plan or any other such plan, and

(B) except as provided in paragraph (2)(B), such plan shall not be treated as failing to meet the requirements of section 401(a)(4), 401(k)(3), 401(k)(11), 403(b)(12), 408(k), 410(b), or 416 by reason of the making (or the right to make) such contribution.

(2) TREATMENT OF APPLICABLE PLANS. —

(A) IN GENERAL. — An applicable employer plan shall not be treated as failing to meet any requirement of such Code, or failing to be operated in accordance with the terms of the plan, solely because the plan —

(i) permits an eligible participant to make additional contributions described in subsection (a) for any plan year, or

(ii) does not make any matching contribution (as defined in section 401(m)(4) of such Code) with respect to additional contributions described in subsection (a) for any plan year.

(B) NONDISCRIMINATION REQUIREMENT. — The rules of section 414(v)(4) of such Code shall apply for purposes of this section.

(c) DEFINITIONS. — For purposes of this section —

(1) APPLICABLE RETIREMENT PLAN. — The term "applicable retirement plan" means any plan —

(A) which is —

(i) a plan, arrangement, or contract to which an elective deferral (as defined in section 401(g)(3) of the Internal Revenue Code of 1986) may be made, or

(ii) an individual retirement plan (as defined in section 7701(a)(37) of such Code), and

(B) which allows additional contributions under this section to be made to such plan.

(2) ELIGIBLE PARTICIPANT. — The term "eligible participant" means, with respect to any taxable year beginning in 2021 or 2022, a participant in a plan —

(A) who has an unused 2020 contribution amount, and

(B) with respect to whom no other elective deferrals (or in the case of an individual retirement plan, no other contributions) may, without regard to this section, be made to the plan for such taxable year by reason of any applicable limitation described in subsection (b)(1)(A)(i) or any comparable limitation or restriction contained in the terms of the plan.

In determining whether a participant is an eligible participant, the administrator of an applicable retirement plan may rely on a participant's certification that the participant satisfies the requirements of this paragraph.

(3) UNUSED 2020 CONTRIBUTION AMOUNT. —

(A) IN GENERAL. — The term "unused020 contribution amount" means, with respect to any applicable participant, the excess (if any) for the participant's last taxable year beginning

in 2020 of —

(i) in the case of —

(I) the applicable retirement plans described in paragraph (1)(A)(i) of such participant, the applicable limitations described in subsection (b)(1)(A)(i) on aggregate contributions to such plans for such taxable year, and

(II) the individual retirement plans of such participant, the applicable limitations described in subsection (b)(1)(A)(i) on aggregate contributions to such plans for such taxable year, over

(ii) the aggregate contributions to such applicable retirement plans or individual retirement plans, whichever is applicable, for such taxable year (other than rollover contributions not taken into account in applying such limitations under such Code).

(B) REDUCTIONS FOR PREVIOUSLY USED AMOUNTS. — The unused 2020 contribution amount for any taxable year beginning in 2021 or 2022 shall be reduced by the portion of such amount taken into account under this section for all preceding taxable years.

(C) SECRETARIAL ASSISTANCE. — The Secretary of the Treasury (or the Secretary's delegate) shall include, with returns of Federal individual income tax (or accompanying forms or instructions) for taxable years beginning in020 and 2021, forms or other materials which will assist participants in simply computing their unused 2020 contribution amount for each taxable year beginning in 2021 or 2022.

(d) EFFECTIVE DATES. —

(1) IN GENERAL. — This section shall apply for years beginning after December 31, 2020.

(2) PROVISIONS RELATING TO PLAN OR CONTRACT AMENDMENTS. —

(A) IN GENERAL. — If this paragraph applies to any plan or contract amendment —

(i) such plan or contract shall not fail to be treated as being operated in accordance with the terms of the plan during the period described in subparagraph (B)(ii) solely because the plan operates in accordance with this section, and

(ii) except as provided by the Secretary of the Treasury (or the Secretary's delegate), such plan or contract shall not fail to meet the requirements of section 411(d)(6) of the Internal Revenue Code of 1986 and section 204(g) of the Employee Retirement Income Security Act of 1974 by reason of such amendment.

(B) AMENDMENTS TO WHICH PARAGRAPH APPLIES. —

(i) IN GENERAL. — This paragraph shall apply to any amendment to any plan or annuity contract which —

(I) is made pursuant to the provisions of this section, and

(II) is made on or before the last day of the first plan year beginning on or after January 1, 2022.

In the case of a governmental plan, subclause (II) shall be applied by substituting "2024" for "2022".

(ii) CONDITIONS. — This paragraph shall not apply to any amendment unless during the period beginning on the effective date of the amendment and ending on December 31, 2022, the plan or contract is operated as if such plan or contract amendment were in effect.

SEC. 302. CONVERSION OF CERTAIN 2020 DISTRIBUTIONS TO QUALIFIED LOANS FOR PURPOSES OF CARES ACT.

(a) IN GENERAL. — At the election of any individual, any distribution from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Code of 1986) which is made on or after January 1, 2020, and before the date of the enactment of this Act may be treated for purposes of such Code and section 2202(b) of the CARES Act as a loan to which paragraphs (1) and (2) of such section 2202(b) apply.

(b) LIMITATION. — Subsection (a) shall apply only to so much of any such distributions as in the aggregate does not exceed the limitation determined under section 72(p)(2)(A) of the Internal Revenue Code of 1986, applied —

(1) by substituting "$100,000" for "$50,000" in clause (i) thereof, and

(2) by substituting "the present value of the nonforfeitable accrued benefit of the employee under the plan" for "one-half of the present value of the nonforfeitable accrued benefit of the employee under the plan" in clause (ii) thereof,

(c) TIMING OF LOAN. — If subsection (a) applies to any distribution, the individual shall be treated —

(1) as not having received a distribution, and

(2) as having received a loan on the date the original distribution was made.

(d) EMPLOYER CONSENT, ETC. — Subsection (a) shall not apply to any distribution unless the employer of the individual consents to the treatment of such distribution as a loan from the plan. Such consent may apply to the application of either paragraph (1) or (2) of section202(b) of the CARES Act, or both, with respect to any distribution.

SEC. 303. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING GAIN OR LOSS.

(a) IN GENERAL. — Part II of subchapter O of chapter 1 of the Internal Revenue Code of 1986 (relating to basis rules of general application) is amended by redesignating section 1023 as section 1024 and by  inserting after section 1022 the following new section:

"SEC. 1023. INDEXING OF CERTAIN ASSETS FOR PURPOSES OF DETERMINING GAIN OR LOSS.

"(a) GENERAL RULE. —

"(1) INDEXED BASIS SUBSTITUTED FOR ADJUSTED BASIS. — Solely for purposes of determining gain or loss on the sale or other disposition by a taxpayer (other than a corporation) of an indexed asset which has been held for more than 3 years, the indexed basis of the asset shall be substituted for its adjusted basis.

"(2) EXCEPTION FOR DEPRECIATION, ETC. — The deductions for depreciation, depletion, and amortization shall be determined without regard to the application of paragraph (1) to the taxpayer or any other person.

"(3) WRITTEN DOCUMENTATION REQUIREMENT. — Paragraph (1) shall apply only with respect to indexed assets for which the taxpayer has written documentation of the original purchase price paid or incurred by the taxpayer to acquire such asset.

"(b) INDEXED ASSET. —

"(1) IN GENERAL. — For purposes of this section, the term 'indexed asset' means —

"(A) common stock in a C corporation (other than a foreign corporation), or

"(B) tangible property, which is a capital asset or property used in the trade or business (as defined in section 1231(b)).

"(2) STOCK IN CERTAIN FOREIGN CORPORATIONS INCLUDED. — For purposes of this section —

"(A) IN GENERAL. — The term 'indexed asset' includes common stock in a foreign corporation which is regularly traded on an established securities market.

"(B) EXCEPTION. — Subparagraph (A) shall not apply to —

"(i) stock of a foreign investment company,

"(ii) stock in a passive foreign investment company (as defined in section 1296),

"(iii) stock in a foreign corporation held by a United States person who meets the requirements of section 1248(a)(2), and

"(iv) stock in a foreign personal holding company.

"(C) TREATMENT OF AMERICAN DEPOSITORY RECEIPTS. — An American depository receipt for common stock in a foreign corporation shall be treated as common stock in such corporation.

"(c) INDEXED BASIS. — For purposes of this section —

"(1) GENERAL RULE. — The indexed basis for any asset is —

"(A) the adjusted basis of the asset, increased by

"(B) the applicable inflation adjustment.

"(2) APPLICABLE INFLATION ADJUSTMENT. — The applicable inflation adjustment for any asset is an amount equal to —

"(A) the adjusted basis of the asset, multiplied by

"(B) the percentage (if any) by which —

"(i) the gross domestic product deflator for the last calendar quarter ending before the asset is disposed of, exceeds

"(ii) the gross domestic product deflator for the last calendar quarter ending before the asset was acquired by the taxpayer.

The percentage under subparagraph (B) shall be rounded to the nearest 1⁄10 of 1 percentage point.

"(3) GROSS DOMESTIC PRODUCT DEFLATOR. — The gross domestic product deflator for any calendar quarter is the implicit price deflator for the gross domestic product for such quarter (as shown in the last revision thereof released by the Secretary of Commerce before the close of the following calendar quarter).

"(d) SUSPENSION OF HOLDING PERIOD WHERE DIMINISHED RISK OF LOSS; TREATMENT OF SHORT SALES. —

"(1) IN GENERAL. — If the taxpayer (or a related person) enters into any transaction which substantially reduces the risk of loss from holding any asset, such asset shall not be treated as an indexed asset for the period of such reduced risk.

"(2) SHORT SALES. —

"(A) IN GENERAL. — In the case of a short sale of an indexed asset with a short sale period in excess of 3 years, for purposes of this title, the amount realized shall be an amount equal to the amount realized (determined without regard to this paragraph) increased by the applicable inflation adjustment. In applying subsection (c)(2) for purposes of the preceding sentence, the date on which the property is sold short shall be treated as the date of acquisition and the closing date for the sale shall be treated as the date of disposition.

"(B) SHORT SALE PERIOD. — For purposes of subparagraph (A), the short sale period begins on the day that the property is sold and ends on the closing date for the sale.

"(e) TREATMENT OF REGULATED INVESTMENT COMPANIES AND REAL ESTATE INVESTMENT TRUSTS. —

"(1) ADJUSTMENTS AT ENTITY LEVEL. —

"(A) IN GENERAL. — Except as otherwise provided in this paragraph, the adjustment under subsection (a) shall be allowed to any qualified investment entity (including for purposes of determining the earnings and profits of such entity).

"(B) EXCEPTION FOR CORPORATE SHAREHOLDERS. — Under regulations —

"(i) in the case of a distribution by a qualified investment entity (directly or indirectly) to a corporation —

"(I) the determination of whether such distribution is a dividend shall be made without regard to this section, and

"(II) the amount treated as gain by reason of the receipt of any capital gain dividend shall be increased by the percentage by which the entity's net capital gain for the taxable year (determined without regard to this section) exceeds the entity's net capital gain for such year determined with regard to this section, and

"(ii) there shall be other appropriate adjustments (including deemed distributions) so as to ensure that the benefits of this section are not allowed (directly or indirectly) to corporate shareholders of qualified investment entities.

For purposes of the preceding sentence, any amount includible in gross income under section 852(b)(3)(D) shall be treated as a capital gain dividend and an S corporation shall not be treated as a corporation.

"(C) EXCEPTION FOR QUALIFICATION PURPOSES. — This section shall not apply for purposes of sections 851(b) and 856(c).

"(D) EXCEPTION FOR CERTAIN TAXES IMPOSED AT ENTITY LEVEL. —

"(i) TAX ON FAILURE TO DISTRIBUTE ENTIRE GAIN. — If any amount is subject to tax under section 852(b)(3)(A) for any taxable year, the amount on which tax is imposed under such section shall be increased by the percentage determined under subparagraph (B)(i)(II). A similar rule shall apply in the case of any amount subject to tax under paragraph (2) or (3) of section 857(b) to the extent attributable to the excess of the net capital gain over the deduction for dividends paid determined with reference to capital gain dividends only. The first sentence of this clause shall not apply to so much of the amount subject to tax under section 852(b)(3)(A) as is designated by the company under section 852(b)(3)(D).

"(ii) OTHER TAXES. — This section shall not apply for purposes of determining the amount of any tax imposed by paragraph (4), (5), or (6) of section 857(b).

"(2) ADJUSTMENTS TO INTERESTS HELD IN ENTITY. —

"(A) REGULATED INVESTMENT COMPANIES. — Stock in a regulated investment company (within the meaning of section 851) shall be an indexed asset for any calendar quarter in the same ratio as —

"(i) the average of the fair market values of the indexed assets held by such company at the close of each month during such quarter, bears to "(ii) the average of the fair market values of all assets held by such company at the close of each such month.

"(B) REAL ESTATE INVESTMENT TRUSTS. — Stock in a real estate investment trust (within the meaning of section 856) shall be an indexed asset for any calendar quarter in the same ratio as —

"(i) the fair market value of the indexed assets held by such trust at the close of such quarter, bears to

"(ii) the fair market value of all assets held by such trust at the close of such quarter.

"(C) RATIO OF 80 PERCENT OR MORE. — If the ratio for any calendar quarter determined under subparagraph (A) or (B) would (but for this subparagraph) be 80 percent or more, such ratio for such quarter shall be 100 percent.

"(D) RATIO OF 20 PERCENT OR LESS. — If the ratio for any calendar quarter determined under subparagraph (A) or (B) would (but for this subparagraph) be 20 percent or less, such ratio for such quarter shall be zero.

"(E) LOOK-THRU OF PARTNERSHIPS. — For purposes of this paragraph, a qualified investment entity which holds a partnership interest shall be treated (in lieu of holding a partnership interest) as holding its proportionate share of the assets held by the partnership.

"(3) TREATMENT OF RETURN OF CAPITAL DISTRIBUTIONS. — Except as otherwise provided by the Secretary, a distribution with respect to stock in a qualified investment entity which is not a dividend and which results in a reduction in the adjusted basis of such stock shall be treated as allocable to stock acquired by the taxpayer in the order in which such stock was acquired.

"(4) QUALIFIED INVESTMENT ENTITY. — For purposes of this subsection, the term 'qualified investment entity' means —

"(A) a regulated investment company (within the meaning of section 851), and

"(B) a real estate investment trust (within the meaning of section 856).

"(f) OTHER PASS-THRU ENTITIES. —

"(1) PARTNERSHIPS. —

"(A) IN GENERAL. — In the case of a partnership, the adjustment made under subsection (a) at the partnership level shall be passed through to the partners.

"(B) SPECIAL RULE IN THE CASE OF SECTION 754 ELECTIONS. — In the case of a transfer of an interest in a partnership with respect to which the election provided in section 754 is in effect —

"(i) the adjustment under section 743(b)(1) shall, with respect to the transferor partner, be treated as a sale of the partnership assets for purposes of applying this section, and

"(ii) with respect to the transferee partner, the partnership's holding period for purposes of this section in such assets shall be treated as beginning on the date of such adjustment.

"(2) S CORPORATIONS. — In the case of an S corporation, the adjustment made under subsection (a) at the corporate level shall be passed through to the shareholders. This section shall not apply for purposes of determining the amount of any tax imposed by section 1374 or 1375.

"(3) COMMON TRUST FUNDS. — In the case of a common trust fund, the adjustment made under subsection (a) at the trust level shall be passed through to the participants.

"(4) INDEXING ADJUSTMENT DISREGARDED IN DETERMINING LOSS ON SALE OF INTEREST IN ENTITY. — Notwithstanding the preceding provisions of this subsection, for purposes of determining the amount of any loss on a sale or exchange of an interest in a partnership, S corporation, or common trust fund, the adjustment made under subsection (a) shall not be taken into account in determining the adjusted basis of such interest.

"(g) DISPOSITIONS BETWEEN RELATED PERSONS. —

"(1) IN GENERAL. — This section shall not apply to any sale or other disposition of property between related persons except to the extent that the basis of such property in the hands of the transferee is a substituted basis.

"(2) RELATED PERSONS DEFINED. — For purposes of this section, the term 'related persons' means —

"(A) persons bearing a relationship set forth in section 267(b), and

"(B) persons treated as single employer under subsection (b) or (c) of section 414.

"(h) TRANSFERS TO INCREASE INDEXING ADJUSTMENT. — If any person transfers cash, debt, or any other property to another person and the principal purpose of such transfer is to secure or increase an adjustment under subsection (a), the Secretary may disallow part or all of such adjustment or increase.

"(i) SPECIAL RULES. — For purposes of this section —

"(1) TREATMENT OF IMPROVEMENTS, ETC. — If there is an addition to the adjusted basis of any tangible property or of any stock in a corporation during the taxable year by reason of an improvement to such property or a contribution to capital of such corporation —

"(A) such addition shall never be taken into account under subsection (c)(1)(A) if the aggregate amount thereof during the taxable year with respect to such property or stock is less than $1,000, and

"(B) such addition shall be treated as a separate asset acquired at the close of such taxable year if the aggregate amount thereof during the taxable year with respect to such property or stock is $1,000 or more.

A rule similar to the rule of the preceding sentence shall apply to any other portion of an asset to the extent that separate treatment of such portion is appropriate to carry out the purposes of this section.

"(2) ASSETS WHICH ARE NOT INDEXED ASSETS THROUGHOUT HOLDING PERIOD. — The applicable inflation adjustment shall be appropriately reduced for periods during which the asset was not an indexed asset.

"(3) TREATMENT OF CERTAIN DISTRIBUTIONS. — A distribution with respect to stock in a corporation which is not a dividend shall be treated as a disposition.

"(4) SECTION CANNOT INCREASE ORDINARY LOSS. — To the extent that (but for this paragraph) this section would create or increase a net ordinary loss to which section 1231(a)(2) applies or an ordinary loss to which any other provision of this title applies, such provision shall not apply. The taxpayer shall be treated as having a long-term capital loss in an amount equal to the amount of the ordinary loss to which the preceding sentence applies.

"(5) ACQUISITION DATE WHERE THERE HAS BEEN PRIOR APPLICATION OF SUBSECTION (a)(1) WITH RESPECT TO THE TAXPAYER. — If there has been a prior application of subsection (a)(1) to an asset while such asset was held by the taxpayer, the date of acquisition of such asset by the taxpayer shall be treated as not earlier than the date of the most recent such prior application.

"(j) REGULATIONS. — The Secretary shall prescribe such regulations as may be necessary or appropriate to carry out the purposes of this section.".

(b) CLERICAL AMENDMENT. — The table of sections for part II of subchapter O of chapter 1 of the Internal Revenue Code of 1986 is amended by striking the item relating to section 1023 and by inserting after the item relating to section 1022 the following new item:

"Sec. 1023. Indexing of certain assets for purposes of determining gain or loss.

"Sec. 1024. Cross references.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to indexed assets acquired by the taxpayer after December 31, 2020, in taxable years ending after such date.

SEC. 304. RETIREMENT FREEDOM.

Any individual who is otherwise entitled to benefits under part A of title XVIII of the Social Security Act may elect (in such form and manner as may be specified by the Secretary of Health and Human Services) to opt out of such entitlement. Notwithstanding any other provision of law, in the case of an individual who makes such an election, such individual —

(1) may (in such form and manner as may be specified by the Secretary) subsequently choose to end such election and opt back into such entitlement (in accordance with a process determined by the Secretary) without being subject to any penalty;

(2) shall not be required to opt out of benefits under title II of such Act as a condition for making such election; and

(3) shall not be required to repay any amount paid under such part A for items and services furnished prior to making such election.

TITLE IV — FOR OUR CHILDREN: SAFELY RETURNING KIDS TO SCHOOL

SEC. 401. EDUCATION FREEDOM SCHOLARSHIPS AND OPPORTUNITY.

(a) EMERGENCY EDUCATION FREEDOM GRANTS. —

(1) DEFINITIONS. — In this subsection:

(A) DEFINITIONS FROM THE INTERNAL REVENUE CODE OF 1986. — The definitions in section 25E(c) of the Internal Revenue Code of 1986, as added by subsection (b), shall apply to this subsection, except as otherwise provided.

(B) EMERGENCY EDUCATION FREEDOM GRANT FUNDS. — The term "emergency education freedom grant funds" means the amount of funds available under paragraph (2)(A) for this subsection that are not reserved under paragraph (3)(A)(i).

(C) SECRETARY. — The term "Secretary" means the Secretary of Education.

(D) STATE. — The term "State" means each of the 50 States, the District of Columbia, and the Commonwealth of Puerto Rico.

(2) GRANTS. —

(A) PROGRAM AUTHORIZED. — From any amounts appropriated for section 18003 of division B of the CARES Act (Public Law 116-136) on or after the date of enactment of this Act, the Secretary shall, notwithstanding any other provision of title XVIII of division B of the CARES Act, use 10 percent of such amounts to carry out paragraph (3) and award emergency education freedom grants to States with approved applications, in order to enable the States to award subgrants to eligible scholarship-granting organizations under paragraph (4).

(B) TIMING. — The Secretary shall make the allotments required under this paragraph by not later than 30 days after the date of enactment of this Act.

(3) RESERVATION AND ALLOTMENTS. —

(A) IN GENERAL. — From the amounts made available under paragraph (2)(A), the Secretary shall —

(i) reserve —

(I) one-half of 1 percent for allotments for the United States Virgin Islands, Guam, American Samoa, and the Commonwealth of the Northern Mariana Islands, to be distributed among those outlying areas on the basis of their relative need, as determined by the Secretary, in accordance with the purpose of this subsection; and

(II) one-half of 1 percent of such amounts for the Secretary of the Interior, acting through the Bureau of Indian Education, to be used to provide subgrants described in paragraph (4) to eligible scholarship-granting organizations that serve students attending elementary schools or secondary schools operated or funded by the Bureau of Indian Education; and

(ii) subject to subparagraph (B), allot each State that submits an approved application under this subsection the sum of —

(I) the amount that bears the same relation to 20 percent of the emergency education freedom grant funds as the number of individuals aged 5 through 17 in the State, as determined by the Secretary on the basis of the most recent satisfactory data, bears to the number of those individuals, as so determined, in all such States that submitted approved applications; and

(II) an amount that bears the same relationship to 80 percent of the emergency education freedom grant funds as the number of individuals aged 5 through 17 from families with incomes below the poverty line in the State, as determined by the Secretary on the basis of the most recent satisfactory data, bears to the number of those individuals, as so determined, in all such States that submitted approved applications.

(B) MINIMUM ALLOTMENT. — No State shall receive an allotment under this paragraph for a fiscal year that is less than one-half of 1 percent of the emergency education freedom grant funds available for such fiscal year.

(4) SUBGRANTS TO ELIGIBLE SCHOLARSHIP-GRANTING ORGANIZATIONS. —

(A) IN GENERAL. — A State that receives an allotment under this subsection shall use the allotment to award subgrants, on a basis determined appropriate by the State, to eligible scholarship-granting organizations in the State.

(B) INITIAL TIMING. —

(i) STATES WITH EXISTING TAX CREDIT SCHOLARSHIP PROGRAM. — Not later than 30 days after receiving an allotment under paragraph (3)(A)(ii), a State with an existing, as of the date of application for an allotment under this subsection, tax credit scholarship program shall use not less than 50 percent of the allotment to award subgrants to eligible scholarship-granting organizations in the State.

(ii) STATES WITHOUT TAX CREDIT SCHOLARSHIP PROGRAMS. — By not later than 60 days after receiving an allotment under paragraph (3)(A)(ii), a State without a tax credit scholarship program shall use not less than 50 percent of the allotment to award subgrants to eligible scholarship-granting organizations in the State.

(C) USES OF FUNDS. — An eligible scholarship-granting organization that receives a subgrant under this paragraph —

(i) may reserve not more than 5 percent of the subgrant funds for public outreach, student and family support activities, and administrative expenses related to the subgrant; and

(ii) shall use not less than 95 percent of the subgrant funds to provide qualifying scholarships for qualified expenses only to individual elementary school and secondary school students who reside in the State in which the eligible scholarship-granting organization is recognized.

(5) REALLOCATION. — A State shall return to the Secretary any amounts of the allotment received under this subsection that the State does not award as subgrants under paragraph (4) by March 30,021, and the Secretary shall reallocate such funds to the remaining eligible States in accordance with paragraph (3)(A)(ii).

(6) RULES OF CONSTRUCTION. — The rules of construction under section 25E(d) of the Internal Revenue Code of 1986, as added by subsection (b), shall apply to this subsection in the same manner as such rules apply to section 25E of such Code, as so added.

(b) TAX CREDITS FOR CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING ORGANIZATIONS. —

(1) CREDIT FOR INDIVIDUALS. — Subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding after section 25D the following new section:

"SEC. 25E. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP-GRANTING ORGANIZATIONS.

"(a) ALLOWANCE OF CREDIT. — Subject to section 401(c)(3) of the RECOVERY Act, in the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of any qualified contributions made by the taxpayer during the taxable year.

"(b) AMOUNT OF CREDIT. — The credit allowed under subsection (a) for any taxable year shall not exceed 10 percent of the taxpayer's adjusted gross income for the taxable year.

"(c) DEFINITIONS. — For purposes of this section —

"(1) ELIGIBLE SCHOLARSHIP-GRANTING ORGANIZATION. — The term 'eligible scholarship-granting organization' means —

"(A) an organization that —

"(i) is described in section 501(c)(3) and exempt from taxation under section 501(a),

"(ii) provides qualifying scholarships to individual elementary and secondary students who —

"(I) reside in the State in which the eligible scholarship-granting organization is recognized, or

"(II) in the case of the Bureau of Indian Education, are members of a federally recognized tribe,

"(iii) a State identifies to the Secretary as an eligible scholarship-granting organization under section 401(c)(3)(E)(ii) of the RECOVERY Act,

"(iv) allocates at least 90 percent of qualified contributions to qualifying scholarships on an annual basis, and

"(v) provides qualifying scholarships to —

"(I) more than 1 eligible student,

"(II) more than 1 eligible family, and

"(III) different eligible students attending more than 1 education provider, or

"(B) an organization that —

"(i) is described in section 501(c)(3) and exempt from taxation under section 501(a), and

"(ii) pursuant to State law, was able, as of January 1, 2021, to receive contributions that are eligible for a State tax credit if such contributions are used by the organization to provide scholarships to individual elementary and secondary students, including scholarships for attending private schools.

"(2) QUALIFIED CONTRIBUTION. — The term 'qualified contribution' means a contribution of cash to any eligible scholarship-granting organization.

"(3) QUALIFIED EXPENSE. — The term 'qualified expense' means any educational expense that is —

"(A) for an individual student's elementary or secondary education, as recognized by the State, or

"(B) for the secondary education component of an individual elementary or secondary student's career and technical education, as defined by section 3(5) of the Carl D. Perkins Career and Technical Education Act of 2006 (20 U.S.C. 2302(5)).

"(4) QUALIFYING SCHOLARSHIP. — The term 'qualifying scholarship' means a scholarship granted by an eligible scholarship-granting organization to an individual elementary or secondary student for a qualified expense.

"(5) STATE. — The term 'State' means each of the 50 States, the District of Columbia, the Commonwealth of Puerto Rico, the outlying areas (as defined in section 1121(c) of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 6331(c)), and the Department of the Interior (acting through the Bureau of Indian Education).

"(d) RULES OF CONSTRUCTION. —

"(1) IN GENERAL. — A qualifying scholarship awarded to a student from the proceeds of a qualified contribution under this section shall not be considered assistance to the school or other educational provider that enrolls, or provides educational services to, the student or the student's parents.

"(2) EXCLUSION FROM INCOME. — Gross income shall not include any amount received by an individual as a qualifying scholarship and such amount shall not be taken into account as income or resources for purposes of determining the eligibility of such individual or any other individual for benefits or assistance, or the amount or extent of such benefits or assistance, under any Federal program or under any State or local program financed in whole or in part with Federal funds.

"(3) PROHIBITION OF CONTROL OVER NONPUBLIC EDUCATION PROVIDERS. —

"(A)(i) Nothing in this section shall be construed to permit, allow, encourage, or authorize any Federal control over any aspect of any private, religious, or home education provider, whether or not a home education provider is treated as a private school or home school under State law.

"(ii) This section shall not be construed to exclude private, religious, or home education providers from participation in programs or services under this section.

"(B) Nothing in this section shall be construed to permit, allow, encourage, or authorize an entity submitting a list of eligible scholarship-granting organizations on behalf of a State pursuant to section 401(c)(3)(E) of the RECOVERY Act to mandate, direct, or control any aspect of a private or home education provider, regardless of whether or not a home education provider is treated as a private school under State law.

"(C) No participating State or entity acting on behalf of a State pursuant to section 401(c)(3)(E) of the RECOVERY Act shall exclude, discriminate against, or otherwise disadvantage any education provider with respect to programs or services under this section based in whole or in part on the provider's religious character or affiliation, including religiously based or mission-based policies or practices.

"(4) PARENTAL RIGHTS TO USE SCHOLARSHIPS. — No participating State or entity acting on behalf of a State pursuant to section 401(c)(3)(E) of the RECOVERY Act shall disfavor or discourage the use of qualifying scholarships for the purchase of elementary and secondary education services, including those services provided by private or nonprofit entities, such as faith-based providers.

"(5) STATE AND LOCAL AUTHORITY. — Nothing in this section shall be construed to modify a State or local government's authority and responsibility to fund education.

"(e) DENIAL OF DOUBLE BENEFIT. — The Secretary shall prescribe such regulations or other guidance to ensure that the sum of the tax benefits provided by Federal, State, or local law for a qualified contribution receiving a Federal tax credit in any taxable year does not exceed the sum of the qualified contributions made by the taxpayer for the taxable year.

"(f) CARRYFORWARD OF CREDIT. — If a tax credit allowed under this section is not fully used within the applicable taxable year because of insufficient tax liability on the part of the taxpayer, the unused amount may be carried forward for a period not to exceed 5 years.

"(g) ELECTION. — This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.

"(h) ALTERNATIVE MINIMUM TAX. — For purposes of calculating the alternative minimum tax under section 55, a taxpayer may use any credit received for a qualified contribution under this section.".

(2) CLERICAL AMENDMENT. — The table of sections for subpart A of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by inserting after the item relating to section 25D the following new item:

"Sec. 25E. Contributions to eligible scholarship-granting organizations.".

(3) CREDIT FOR CORPORATIONS. — Subpart D of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 is amended by adding at the end the following new section:

"SEC. 45U. CONTRIBUTIONS TO ELIGIBLE SCHOLARSHIP GRANTING ORGANIZATIONS.

"(a) ALLOWANCE OF CREDIT. — Subject to section 401(c)(3) of the RECOVERY Act, for purposes of section 38, in the case of a domestic corporation, there shall be allowed as a credit against the tax imposed by this chapter for the taxable year an amount equal to the sum of any qualified contributions (as defined in section 25E(c)(2)) made by such corporation taxpayer during the taxable year.

"(b) AMOUNT OF CREDIT. — The credit allowed under subsection (a) for any taxable year shall not exceed 5 percent of the taxable income (as defined in section 170(b)(2)(D)) of the domestic corporation for such taxable year.

"(c) ADDITIONAL PROVISIONS. — For purposes of this section, any qualified contributions made by a domestic corporation shall be subject to the provisions of section5E (including subsection (d) of such section), to the extent applicable.

"(d) ELECTION. — This section shall apply to a taxpayer for a taxable year only if the taxpayer elects to have this section apply for such taxable year.".

(4) CREDIT PART OF GENERAL BUSINESS CREDIT. — Section 38(b) is amended —

(A) by striking "plus" at the end of paragraph (32);

(B) by striking the period at the end of paragraph (33) and inserting ", plus"; and

(C) by adding at the end the following new paragraph:

"(34) the credit for qualified contributions determined under section 45U(a).".

(5) CLERICAL AMENDMENT. — The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item:

"Sec. 45U. Contributions to eligible scholarship-granting organizations.".

(6) EFFECTIVE DATE. — The amendments made by this subsection shall apply to taxable years beginning after December 31, 2020.

(c) EDUCATION FREEDOM SCHOLARSHIPS WEB PORTAL AND ADMINISTRATION. —

(1) IN GENERAL. — The Secretary of the Treasury shall, in coordination with the Secretary of Education, establish, host, and maintain a web portal that —

(A) lists all eligible scholarship-granting organizations;

(B) enables a taxpayer to make a qualifying contribution to 1 or more eligible scholarship-granting organizations and to immediately obtain both a pre-approval of a tax credit for that contribution and a receipt for tax filings;

(C) provides information about the tax benefits under sections 25E and 45U of the Internal Revenue Code of 1986; and

(D) enables a State to submit and update information about its programs and its eligible scholarship-granting organizations for informational purposes only, including information on —

(i) student eligibility;

(ii) allowable educational expenses;

(iii) the types of allowable education providers;

(iv) the percentage of funds an organization may use for program administration; and

(v) the percentage of total contributions the organization awards in a calendar year.

(2) NONPORTAL CONTRIBUTIONS. — A taxpayer may opt to make a contribution directly to an eligible scholarship-granting organization, instead of through the web portal described in paragraph (1), provided that the taxpayer, or the eligible scholarship-granting organization on behalf of the taxpayer, applies for, and receives, pre-approval for a tax credit from the Secretary of the Treasury in coordination with the Secretary of Education.

(3) NATIONAL AND STATE LIMITATIONS ON CREDITS. —

(A) NATIONAL LIMITATION. — For each fiscal year, the total amount of qualifying contributions for which a credit is allowed under sections 25E and 45U of the Internal Revenue Code of 1986 shall not exceed $5,000,000,000.

(B) ALLOCATION OF LIMITATION. —

(i) INITIAL ALLOCATIONS. — For each calendar year, with respect to the limitation under subparagraph (A), the Secretary of the Treasury, in consultation with the Secretary of Education, shall —

(I) allocate to each State an amount equal to the sum of the qualifying contributions made in the State in the previous year; and

(II) from any amounts remaining following allocations made under subclause (I), allocate to each participating State an amount equal to the sum of —

(aa) an amount that bears the same relationship to 20 percent of such remaining amount as the number of individuals aged 5 through 17 in the State, as determined by the Secretary of Education on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined; and

(bb) an amount that bears the same relationship to 80 percent of such remaining amount as the number of individuals aged 5 through 17 from families with incomes below the poverty line in the State, as determined by the Secretary of Education, on the basis of the most recent satisfactory data, bears to the number of those individuals in all such States, as so determined.

(ii) MINIMUM ALLOCATION. — Notwithstanding clause (i), no State receiving an allocation under this subsection may receive less than one-half of 1 percent of the amount allocated for a fiscal year.

(iii) ALTERNATIVE ALLOCATION. —

(I) IN GENERAL. — Not later than the end of the fifth year of the program or 1 year after the end of the first fiscal year for which the total amount of credits claimed under section 25E and section 45U of the Internal Revenue Code of 1986 is $2,500,000,000 or more, whichever comes first, the Secretary of the Treasury, in consultation with the Secretary of Education, shall, by regulation, provide for an alternative allocation method that shall take effect beginning with the first fiscal year after such regulation takes effect.

(II) ALTERNATIVE ALLOCATION METHOD. — The alternative allocation method shall be expressed as a formula based on a combination of the following data for each State, as reported by the State to the Secretary of the Treasury:

(aa) The relative percentage of students in the State who receive an elementary or secondary scholarship through a State program that is financed through State tax-credited donations or appropriations and that permits the elementary or secondary scholarship to be used to attend a private school.

(bb) The total amount of all elementary and secondary scholarships awarded through a State program that is financed through State tax-credited donations or appropriations compared to the total amount of current State and local expenditures for free public education in the State.

(III) ALLOCATION FORMULA. — For any fiscal year to which subclause (I) applies, the Secretary of the Treasury, in consultation with the Secretary of Education, shall —

(aa) for each State, allocate an amount equal to the sum of the qualifying contributions made in the State in the previous year;

(bb) allocate 2⁄3 of the remaining amount (after application of item (aa)) of the national limitation for that year using the alternative allocation method under subclause (II); and

(cc) allocate 1⁄3 of the remaining amount (after application of item (aa) and (bb)) in accordance with clause (i)(II).

(IV) INELIGIBILITY. — For any fiscal year to which subclause (I) applies, a State that does not provide the Secretary of the Treasury with information described in subclause (II) is not eligible to receive an allocation through the alternative allocation method under such subclause.

(C) ALLOWABLE PARTNERSHIPS. — A State may choose to administer the allocation it receives under subparagraph (B) in partnership with 1 or more States, provided that the eligible scholarship-granting organizations in each partner State serve students who reside in all States in the partnership.

(D) TOTAL ALLOCATION. — A State's allocation, for any fiscal year, is the sum of the amount determined for such State under clauses (i) and (ii) of subparagraph (B), except as provided in subparagraph (B)(iii).

(E) ALLOCATION AND ADJUSTMENTS. —

(i) INITIAL ALLOCATION TO STATES. — Not later than November 1 of the year preceding a year for which there is a national limitation on credits under subparagraph (A) (referred to in this subsection as the "applicable year"), or as early as practicable with respect to the first year, the Secretary of the Treasury shall announce the State allocations under subparagraph (B) for the applicable year.

(ii) LIST OF ELIGIBLE SCHOLARSHIP GRANTING ORGANIZATIONS. —

(I) IN GENERAL. — Not later than January 1 of each applicable year, or as early as practicable with respect to the first year, each State shall provide the Secretary of the Treasury a list of eligible scholarship-granting organizations, including a certification that the entity submitting the list on behalf of the State has the authority to perform this function.

(II) RULE OF CONSTRUCTION. — Neither this subsection nor any other Federal law shall be construed as limiting the entities that may submit the list on behalf of a State.

(iii) REALLOCATION OF UNCLAIMED CREDITS. — The Secretary of the Treasury shall reallocate a State's allocation to other States, in accordance with subparagraph (B), if the State —

(I) chooses not to identify scholarship-granting organizations under clause (ii) in any applicable year; or

(II) does not have an existing eligible scholarship-granting organization.

(iv) REALLOCATION. — On or after April 1 of any applicable year, the Secretary of the Treasury may reallocate, to 1 or more other States that have eligible scholarship-granting organizations in the States, without regard to subparagraph (B), the allocation of a State for which the State's allocation has not been claimed.

(4) DEFINITIONS. — Any term used in this subsection which is also used in section 25E of the Internal Revenue Code of 1986 shall have the same meaning as when used in such section.

SEC. 402. HELPING PARENTS EDUCATE CHILDREN DURING THE CORONAVIRUS PANDEMIC.

(a) IN GENERAL. — Section 529(c)(7) of the Internal Revenue Code of 1986 is amended to read as follows:

"(7) TREATMENT OF ELEMENTARY AND SECONDARY TUITION. — Any reference in this section to the term 'qualified higher education expense' shall include a reference to the following expenses in connection with enrollment or attendance at, or for students enrolled at or attending, an elementary or secondary public, private, or religious school:

"(A) Tuition.

"(B) Curriculum and curricular materials.

"(C) Books or other instructional materials.

"(D) Online educational materials.

"(E) Tuition for tutoring or educational classes outside of the home, including at a tutoring facility, but only if the tutor or instructor is not related to the student and —

"(i) is licensed as a teacher in any State,

"(ii) has taught at an eligible educational institution, or

"(iii) is a subject matter expert in the relevant subject.

"(F) Fees for a nationally standardized norm-referenced achievement test, an advanced placement examination, or any examinations related to college or university admission.

"(G) Fees for dual enrollment in an institution of higher education.

"(H) Educational therapies for students with disabilities provided by a licensed or accredited practitioner or provider, including occupational, behavioral, physical, and speech-language therapies.

Such term shall include expenses for the purposes described in subparagraphs (B), (C), (D), (E), and

(H) in connection with a homeschool (whether treated as a homeschool or a private school for purposes of applicable State law).".

(b) EFFECTIVE DATE. — The amendment made by subsection (a) shall apply to distributions made after the date of the enactment of this Act.

(c) ROLLOVERS FROM CERTAIN RETIREMENT PLANS. — In the case of a distribution from an eligible retirement plan described in clause (i), (ii), or (iii) of section 402(c)(8)(B) of the Internal Revenue Code of 1986 after February 29, 2020, and before January 1, 2021 —

(1) section 72(t) of such Code shall not apply to such distribution;

(2) such distribution shall be treated as meeting the requirements of section 401(k)(2)(B)(i), if applicable; and

(3) such distribution shall be treated as having been contributed in a direct trustee-to-trustee transfer within 60 days of the distribution for purposes of section 401(a)(31) or 408(d)(3), whichever is applicable, if within 60 days of such distribution, an amount equal to the amount of such distribution is contributed to a qualified tuition program under section 529 of the Internal Revenue Code of 1986.

SEC. 403. SAFE SCHOOL STUDENT PROTECTIVE EQUIPMENT TAX CREDIT.

(a) IN GENERAL. — In the case of an individual, there shall be allowed as a credit against the tax imposed by subtitle A of the Internal Revenue Code of 1986 an amount equal to the lesser of —

(1) the sum of any eligible expenses paid or incurred by the taxpayer during the taxable year, or

(2) $500.

(b) TREATMENT OF CREDIT. — The credit allowed by subsection (a) shall be treated as allowed by subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986.

(c) DEFINITIONS. — For purposes of this section —

(1) ELIGIBLE EXPENSES. — The term "eligible expenses" means any expenses which are paid or incurred by the taxpayer —

(A) for any equipment or products which are used by a qualified student to prevent such student from contracting or transmitting COVID-19, including masks, gloves, and disinfectants, and

(B) before January 1, 2022.

(2) QUALIFIED STUDENT. — The term "qualified student" means an individual who —

(A) is a qualifying child (as defined in section 152(c) of the Internal Revenue Code of 1986) of the taxpayer, and

(B) attends an elementary school or secondary school (as such terms are defined in section 8101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 7801)) which, during the school year beginning with or within the taxable year, is operating in a manner which is substantially similar to the manner in which such school operated during the school year which began in 2018.

(d) REGULATIONS. — The Secretary of the Treasury (or the Secretary's delegate), in coordination with the Secretary of Education, shall prescribe such regulations or other guidance as may be necessary to carry out the purposes of this section, including any such regulations or guidance as are deemed necessary to allow schools to operate in a manner which satisfies the requirements described in subsection (c)(2)(B).

(e) APPLICATION. — This section shall only apply to amounts paid or incurred in taxable years beginning after December 31, 2019.

* * *

SEC. 503. PANDEMIC HEALTHCARE ACCESS.

(a) IN GENERAL. — For purposes of section 223 of the Internal Revenue Code of 1986, notwithstanding subsection (c)(1) thereof, during the coronavirus emergency period, any individual who is covered by any health plan, including a health plan which is not a high deductible health plan, shall be treated as an eligible individual.

(b) CONTRIBUTION DEADLINE. — An individual who is treated as an eligible individual for purposes of section 223 of the Internal Revenue Code of 1986 solely by reason of subsection (a) may make contributions to the health savings account (as defined in section 223(d) of such Code) of such individual up to the due date for the return of Federal income tax for the taxable year which includes the last day of the coronavirus emergency period.

(c) CORONAVIRUS EMERGENCY PERIOD. — For purposes of this section, the coronavirus emergency period is the period beginning on March 13, 2020, and ending on the later of —

(1) the last day on which the declaration of emergency involving Federal primary responsibility determined to exist by the President under section 501(b) of the Robert T. Stafford Disaster Relief and Emergency Assistance Act (42 U.S.C. 5191(b)) with respect to the Coronavirus Disease 2019 (COVID-19) is in effect; or

(2) the last day on which the declaration of national emergency declared by the President under the National Emergencies Act (50 U.S.C. 1601 et seq.) with respect to the Coronavirus Disease 2019 (COVID-19) is in effect.

* * *

SEC. 507. INCREASING ACCESS TO TAX-FREE CARE.

(a) HSA PENALTY. — Section 223(e)(4)(A) of the Internal Revenue Code of 1986 is amended by striking "20 percent" and inserting "10 percent".

(b) PAYMENT OF NON-DEPENDENT MEDICAL EXPENSES IN 2020. —

(1) MEDICAL EXPENSES. — Section 223(d)(2) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

"(E) NON-DEPENDENT MEDICAL EXPENSES IN 2020. — During calendar year 2020, subparagraph (A) shall be applied without regard to the requirement that medical care be for the individual, the spouse of such individual, and any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such individual.".

(2) ROLLOVER. — Section 223(f)(5) of such Code is amended by adding at the end the following new subparagraph:

"(C) ROLLOVER GIFTS. — Notwithstanding the preceding provisions of this paragraph, an amount is described in this paragraph as a rollover contribution in the case of a taxable year beginning in 2020, and paragraph (2) shall not apply to any amount paid or distributed from a health savings account of a beneficiary to a health savings account of an individual (without regard to whether the individual is such beneficiary, the spouse of such beneficiary, or any dependent (as defined in section 152, determined without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) of such beneficiary), to the extent —

"(i) the amount received is paid into the health savings account for the benefit of such individual not later than the 60th day after the day on which the account beneficiary receives the payment or distribution, and

"(ii) the aggregate amount of such transfers to all other individuals does not exceed $2,020 in 2020.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

SEC. 508. ACCESS TO DIRECT MEDICAL CARE.

(a) TREATMENT OF MEDICAL CARE SERVICE ARRANGEMENTS. —

(1) INCLUSION AS MEDICAL EXPENSES. — Paragraph (2) of section 223(d) of the Internal Revenue Code of 1986, as amended by this Act, is further amended by adding at the end the following new subparagraph:

"(F) INCLUSION OF MEDICAL CARE SERVICE ARRANGEMENTS. — The term 'qualified medical expenses' shall include —

"(i) periodic fees paid to a physician for a defined set of medical services or for the right to receive medical services on an as-needed basis, and

"(ii) amounts prepaid for medical services designed to screen for, diagnose, cure, mitigate, treat, or prevent disease and promote wellness.".

(2) ARRANGEMENT NOT TO BE TREATED AS HEALTH INSURANCE. — Subsection (c) of section 223 of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(6) TREATMENT OF MEDICAL CARE SERVICE ARRANGEMENTS. — An arrangement under which an individual is provided medical services in exchange for a fixed periodic fee or payment for such services shall not be treated as a health plan, insurance, or arrangement described in paragraph (1).".

(b) PERIODIC PROVIDER FEES TREATED AS MEDICAL CARE. — Section 213(d) of the Internal Revenue Code of 1986 is amended by adding at the end the following new paragraph:

"(12) PERIODIC PROVIDER FEES. — Periodic fees paid for a defined set of medical services provided on an as-needed basis shall be treated as amounts paid for medical care.".

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to taxable years beginning after December 31, 2019.

* * *

SEC. 603. ABOVE-THE-LINE DEDUCTION FOR CHARITABLE CONTRIBUTIONS FOR INDIVIDUALS NOT ITEMIZING DEDUCTIONS.

(a) IN GENERAL. — Paragraph (22) of section 62(a) of the Internal Revenue Code of 1986 is amended to read as follows:

"(22) CHARITABLE CONTRIBUTIONS FOR INDIVIDUALS NOT ITEMIZING DEDUCTIONS. —

"(A) IN GENERAL. — In the case of an individual who does not elect to itemize deductions for the taxable year, the deduction allowed by section 170 with respect to charitable contributions (as defined in section 170(c)) made during the period beginning on January 1, 2020, and ending on December 31, 2021.

"(B) LIMITATION. — The deduction to which subparagraph (A) applies for any taxable year shall not exceed an amount equal to 1⁄3 of the amount of the standard deduction with respect to such individual for such taxable year.".

(b) CONFORMING AMENDMENT. — Section 62 of the Internal Revenue Code of 1986 is amended by striking subsection (f).

(c) EFFECTIVE DATE. — The amendments made by this section shall apply to charitable contributions (as defined in section 170(c) of the Internal Revenue Code of 1986) made after December 31, 2018.

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