I
112th CONGRESS
1st Session
H. R. 2742
IN THE HOUSE OF REPRESENTATIVES
August 1, 2011
Ms. Fudge introduced the following bill; which was referred to the Committee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives to employers for providing training programs for jobs specific to the needs of the employers.
Short title
This Act may be cited as the
Hire, Train, Retain Act of
2011
.
Findings
The Congress finds the following:
As of June 2011 9.2 percent of all Americans eligible to work were unemployed, or 14.1 million people.
There are millions
of workers who were displaced during the recent Great Recession
who need to be re-trained so that they can re-integrate into the workforce.
According to the bi-annual Displaced Workers Survey, the unemployment rate was
4.5 percent in 2007 before spiking to nearly 10 percent in 2010.
Often overlooked are the 982,000 discouraged workers, people who are not looking for work because they do not believe that they are qualified for any available jobs.
Paradoxically, there are enough jobs available to employ just over 20 percent of these persons—there were 3.0 million job openings on the last business day of May 2011 according to the Bureau of Labor Statistics.
The disconnect is
that many people searching for work lack the job-specific skills that they need
to be competitive for many of these vacancies. Specifically, technology is
outpacing the country’s current approach to job-related education and training.
The difference between white collar and blue collar jobs is fading because
traditionally blue collar jobs
are more specialized than ever
before.
Payroll tax forgiveness for hiring and training workers
In general
Section 3111 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection:
Special exemption for certain individuals hired in between 2011 and 2015
In general
During the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2015, subsection (a) shall not apply to wages paid by a qualified employer with respect to employment of any qualified individual for services performed—
in a trade or business of such qualified employer, or
in the case of a qualified employer exempt from tax under section 501(a), in furtherance of the activities related to the purpose or function constituting the basis of the employer’s exemption under section 501.
Qualified employer
For purposes of this subsection—
In general
The term qualified employer means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing that provides a qualified job training program for or on behalf its employees.
Treatment of employees of post-secondary educational institutions
Notwithstanding subparagraph (A), the term qualified employer includes any employer which is a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965).
Qualified individual
For purposes of this subsection, the term qualified individual means any individual who—
begins employment with a qualified employer after the date of the enactment of this subsection and before January 1, 2016,
certifies by signed affidavit, under penalties of perjury, that such individual has not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment,
certifies by signed affidavit, under penalties of perjury, that such individual has satisfactorily completed a qualified job training program,
is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and
is not an
individual described in section 51(i)(1) (applied by substituting
qualified employer
for taxpayer
each place it
appears).
Qualified job training program
For purposes of this subsection, the term qualified job training program means—
a program provided by a qualified employer that is in-house and is specific training for available jobs at such employer, or
a program under which a qualified employer partners with a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965) to provide specific training for available jobs at such employer.
Election
A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.
.
Coordination with work opportunity credit
Section 51(c) of such Code is amended by adding at the end the following new paragraph:
Coordination with payroll tax forgiveness for hiring and training workers
The term wages shall not include any amount paid or incurred to a qualified individual (as defined in section 3111(e)(3)) during the 1-year period beginning on the hiring date of such individual by a qualified employer (as defined in section 3111(e)) unless such qualified employer makes an election not to have section 3111(e) apply.
.
Transfers to Federal Old-Age and Survivors Insurance Trust Fund
There are hereby appropriated to the Federal Old-Age and Survivors Trust Fund and the Federal Disability Insurance Trust Fund established under section 201 of the Social Security Act (42 U.S.C. 401) amounts equal to the reduction in revenues to the Treasury by reason of the amendments made by subsection (a). 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 that would have occurred to such Trust Fund had such amendments not been enacted.
Application to Railroad Retirement Taxes
In general
Section 3221 of the Internal Revenue Code of 1986 is amended by redesignating subsection (d) as subsection (e) and by inserting after subsection (c) the following new subsection:
Special Rate for Certain Individuals Hired in between 2011 and 2015
In general
In the case of compensation paid by a qualified employer during the period beginning on the day after the date of the enactment of this subsection and ending on December 31, 2015, with respect to having a qualified individual in the employer’s employ for services rendered to such qualified employer, the applicable percentage under subsection (a) shall be equal to the rate of tax in effect under section 3111(b) for the calendar year.
Qualified employer
For purposes of this subsection, the term qualified employer means any employer other than the United States, any State, or any political subdivision thereof, or any instrumentality of the foregoing that provides a qualified job training program for or on behalf its employees.
Qualified individual
For purposes of this subsection, the term ‘qualified individual’ means any individual who—
begins employment with a qualified employer after the date of the enactment of this subsection and before January 1, 2016,
certifies by signed affidavit, under penalties of perjury, that such individual has not been employed for more than 40 hours during the 60-day period ending on the date such individual begins such employment,
certifies by signed affidavit, under penalties of perjury, that such individual has satisfactorily completed a qualified job training program,
is not employed by the qualified employer to replace another employee of such employer unless such other employee separated from employment voluntarily or for cause, and
is not an individual described in section 51(i)(1) (applied by substituting ‘qualified employer’ for ‘taxpayer’ each place it appears).
Qualified job training program
For purposes of this subsection, the term qualified job training program means—
a program provided by a qualified employer that is in-house and is specific training for available jobs at such employer, or
a program under which a qualified employer partners with a public institution of higher education (as defined in section 101(b) of the Higher Education Act of 1965) to provide specific training for available jobs at such employer.
Election
A qualified employer may elect to have this subsection not apply. Such election shall be made in such manner as the Secretary may require.
.
Transfers to social security equivalent benefit account
There are hereby appropriated to 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 the amendments made by paragraph (1). 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 Account had such amendments not been enacted.
Effective Dates
In general
Except as provided in paragraph (2), the amendments made by this subsection shall apply to wages paid after the date of the enactment of this Act.
Railroad retirement taxes
The amendments made by subsection (d) shall apply to compensation paid after the date of the enactment of this Act.
Business credit for retention of certain newly hired individuals in 2011
In general
In the case of any taxable year ending after the date of the enactment of this Act, the current year business credit determined under section 38(b) of the Internal Revenue Code of 1986 for such taxable year shall be increased, with respect to each retained worker with respect to which subsection (b)(2) is first satisfied during such taxable year, by the lesser of—
$1,000, or
6.2 percent of the wages (as defined in section 3401(a) of such Code) paid by the taxpayer to such retained worker during the 52 consecutive week period referred to in subsection (b)(2).
Retained worker
For purposes of this section, the term retained worker means any qualified individual (as defined in section 3111(e)(3) or section 3221(d)(3) of the Internal Revenue Code of 1986)—
who was employed by the taxpayer on any date during the taxable year,
who was so employed by the taxpayer for a period of not less than 52 consecutive weeks, and
whose wages (as defined in section 3401(a)) for such employment during the last 26 weeks of such period equaled at least 80 percent of such wages for the first 26 weeks of such period.
Employer staffing and payroll must increase
No amount shall be allowed as a credit under this section to an employer for a taxable year unless the employer has a net increase for the taxable year in those who work at least 20 hours per week for the employer during the taxable year and the amount of its payroll during the taxable year.
Limitation on carrybacks
No portion of the unused business credit under section 38 of the Internal Revenue Code of 1986 for any taxable year which is attributable to the increase in the current year business credit under this section may be carried to a taxable year beginning before the date of the enactment of this section.
Treatment of Possessions
Payments to possessions
Mirror code possessions
The Secretary of the Treasury shall pay to each possession of the United States with a mirror code tax system amounts equal to the loss to that possession by reason of the application of this section (other than this subsection). Such amounts shall be determined by the Secretary of the Treasury based on information provided by the government of the respective possession.
Other possessions
The Secretary of the Treasury shall pay to each possession of the United States which does not have a mirror code tax system amounts estimated by the Secretary of the Treasury as being equal to the aggregate benefits that would have been provided to residents of such possession by reason of the application of this section (other than this subsection) if a mirror code tax system had been in effect in such possession. The preceding sentence shall not apply with respect to any possession of the United States unless such possession has a plan, which has been approved by the Secretary of the Treasury, under which such possession will promptly distribute such payments to the residents of such possession.
Coordination with credit allowed against united states income taxes
No increase in the credit determined under section 38(b) of the Internal Revenue Code of 1986 against United States income taxes for any taxable year determined under subsection (a) shall be taken into account with respect to any person—
to whom a credit is allowed against taxes imposed by the possession by reason of this section for such taxable year, or
who is eligible for a payment under a plan described in paragraph (1)(B) with respect to such taxable year.
Definitions and special rules
Possession of the united states
For purposes of this subsection, the term “possession of the United States” includes the Commonwealth of Puerto Rico and the Commonwealth of the Northern Mariana Islands.
Mirror code tax system
For purposes of this subsection, the term “mirror code tax system” means, with respect to any possession of the United States, the income tax system of such possession if the income tax liability of the residents of such possession under such system is determined by reference to the income tax laws of the United States as if such possession were the United States.
Treatment of payments
For purposes of section 1324(b)(2) of title 31, United States Code, rules similar to the rules of section 1001(b)(3)(C) of the American Recovery and Reinvestment Tax Act of 2009 shall apply.