S.Amdt. 2906

SA 2906. Ms. COLLINS submitted an amendment intended to be proposed
to amendment SA 2786 proposed by Mr. Reid (for himself, Mr. Baucus, Mr.
Dodd, and Mr. Harkin) to the bill H.R. 3590, to amend the Internal
Revenue Code of 1986 to modify the first-time homebuyers credit in the
case of members of the Armed Forces and certain other Federal
employees, and for other purposes; which was ordered to lie on the
table; as follows:

Beginning on page 308, line 16, strike all through page
314, line 6, and insert the following:
``(c) Phaseout of Credit Amount Based on Number of
Employees and Average Wages.--
``(1) In general.--The amount of the credit determined
under subsection (b) without regard to this subsection shall
be reduced (but

[[Page S12426]]

not below zero) by the sum of the following amounts:
``(A) Such amount multiplied by a fraction the numerator of
which is the total number of full-time equivalent employees
of the employer in excess of 10 and the denominator of which
is 40.
``(B) Such amount multiplied by a fraction the numerator of
which is the average annual wages of the employer in excess
of the dollar amount in effect under subsection (d)(3)(B) and
the denominator of which is such dollar amount.
``(2) Safeharbor for growing employers.--
``(A) In general.--Notwithstanding paragraph (1) and except
as provided in subparagraph (B), the amount of the credit
determined under subsection (b) for any taxpayer for the
second or third taxable year of the credit period for such
taxpayer shall not be reduced by an amount greater than the
amount by which it would be reduced if such reduction amount
were determined by using the same fractions determined under
paragraph (1) for the first taxable year of such credit
period.
``(B) Reduction in aggregate amount of contributions.--For
purposes of determining the amount of the credit under
subsection (b) for any taxpayer to whom subparagraph (A)
applies for any taxable year of the taxpayer in the credit
period after the first such taxable year, the amount of the
nonelective contributions made on behalf of any employee
whose annual wages exceed twice the dollar amount in effect
under subsection (d)(3)(B) for such taxable year which may be
taken into account under subsection (b) shall not exceed such
annual wages multiplied by a fraction the numerator of which
is twice the dollar amount so in effect and the denominator
of which is such annual wages.
``(d) Eligible Small Employer.--For purposes of this
section--
``(1) In general.--The term `eligible small employer'
means, with respect to any taxable year, an employer--
``(A) which has no more than 50 full-time equivalent
employees for the taxable year,
``(B) the average annual wages of which do not exceed an
amount equal to twice the dollar amount in effect under
paragraph (3)(B) for the taxable year, and
``(C) which has in effect an arrangement described in
paragraph (4).
Notwithstanding subparagraphs (A) and (B), an employer which
is an eligible small employer for the first taxable year in a
credit period shall be treated as an eligible small employer
for the remaining taxable years in such credit period.
``(2) Full-time equivalent employees.--
``(A) In general.--The term `full-time equivalent
employees' means a number of employees equal to the number
determined by dividing--
``(i) the total number of hours of service for which wages
were paid by the employer to employees during the taxable
year, by
``(ii) 2,080.

Such number shall be rounded to the next lowest whole number
if not otherwise a whole number.
``(B) Excess hours not counted.--If an employee works in
excess of 2,080 hours of service during any taxable year,
such excess shall not be taken into account under
subparagraph (A).
``(C) Hours of service.--The Secretary, in consultation
with the Secretary of Labor, shall prescribe such
regulations, rules, and guidance as may be necessary to
determine the hours of service of an employee, including
rules for the application of this paragraph to employees who
are not compensated on an hourly basis.
``(3) Average annual wages.--
``(A) In general.--The average annual wages of an eligible
small employer for any taxable year is the amount determined
by dividing--
``(i) the aggregate amount of wages which were paid by the
employer to employees during the taxable year, by
``(ii) the number of full-time equivalent employees of the
employee determined under paragraph (2) for the taxable year.

Such amount shall be rounded to the next lowest multiple of
$1,000 if not otherwise such a multiple.
``(B) Dollar amount.--For purposes of paragraph (1)(B)--
``(i) 2011, 2012, and 2013.--The dollar amount in effect
under this paragraph for taxable years beginning in 2011,
2012, or 2013 is $25,000.
``(ii) Subsequent years.--In the case of a taxable year
beginning in a calendar year after 2013, the dollar amount in
effect under this paragraph shall be equal to $25,000,
multiplied by the cost-of-living adjustment determined under
section 1(f)(3) for the calendar year, determined by
substituting `calendar year 2012' for `calendar year 1992' in
subparagraph (B) thereof.
``(4) Contribution arrangement.--An arrangement is
described in this paragraph if it requires an eligible small
employer to make a nonelective contribution on behalf of each
employee who enrolls in a qualified health plan offered to
employees by the employer through an exchange in an amount
equal to a uniform percentage (not less than 50 percent) of
the premium cost of the qualified health plan.
``(5) Seasonal worker hours and wages not counted.--For
purposes of this subsection--
``(A) In general.--The number of hours of service worked
by, and wages paid to, a seasonal worker of an employer shall
not be taken into account in determining the full-time
equivalent employees and average annual wages of the employer
unless the worker works for the employer on more than 120
days during the taxable year.
``(B) Definition of seasonal worker.--The term `seasonal
worker' means a worker who performs labor or services on a
seasonal basis as defined by the Secretary of Labor,
including workers covered by section 500.20(s)(1) of title
29, Code of Federal Regulations and retail workers employed
exclusively during holiday seasons.
``(e) Other Rules and Definitions.--For purposes of this
section--
``(1) Employee.--
``(A) Certain employees excluded.--The term `employee'
shall not include--
``(i) an employee within the meaning of section 401(c)(1),
``(ii) any 2-percent shareholder (as defined in section
1372(b)) of an eligible small business which is an S
corporation,
``(iii) any 5-percent owner (as defined in section
416(i)(1)(B)(i)) of an eligible small business, or
``(iv) any individual who bears any of the relationships
described in subparagraphs (A) through (G) of section
152(d)(2) to, or is a dependent described in section
152(d)(2)(H) of, an individual described in clause (i), (ii),
or (iii).
``(B) Leased employees.--The term `employee' shall include
a leased employee within the meaning of section 414(n).
``(2) Credit period.--The term `credit period' means, with
respect to any eligible small employer, the 3-consecutive-
taxable year period beginning with the 1st taxable year in
which the employer (or any predecessor) offers 1 or more
qualified health plans to its employees through an Exchange.
______