[Congressional Bills 107th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3001 Introduced in House (IH)]
107th CONGRESS
1st Session
H. R. 3001
To amend the Internal Revenue Code of 1986 to exclude certain severance
payments from gross income and to allow a refundable credit for job
training expenses of older long-time employees who are laid off.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
October 2, 2001
Mr. Smith of New Jersey (for himself, Mr. Moran of Virginia, Mr. King,
Mr. Borski, Ms. Hart, Mr. Hall of Ohio, Mr. Ford, and Mr. Calvert)
introduced the following bill; which was referred to the Committee on
Ways and Means, and in addition to the Committee on Education and the
Workforce, for a period to be subsequently determined by the Speaker,
in each case for consideration of such provisions as fall within the
jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to exclude certain severance
payments from gross income and to allow a refundable credit for job
training expenses of older long-time employees who are laid off.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Displaced Older Worker Assistance
Act of 2001''.
SEC. 2. EXCLUSION FROM INCOME OF SEVERANCE PAYMENT AMOUNTS.
(a) In General.--Part III of subchapter B of chapter 1 of the
Internal Revenue Code of 1986 (relating to items specifically excluded
from gross income) is amended by redesignating section 139 as section
139A and by inserting after section 138 the following new section:
``SEC. 139. SEVERANCE PAYMENTS.
``(a) In General.--In the case of an individual, gross income shall
not include any qualified severance payment.
``(b) Limitations.--
``(1) Amount.--The amount to which the exclusion under
subsection (a) applies shall not exceed--
``(A) $15,000, with respect to any separation from
employment, reduced by
``(B) the aggregate amount excluded from gross
income under subsection (a) in prior taxable years.
``(2) Years to which exclusion applies.--No qualified
severance payment shall be excluded from gross income under
subsection (a) unless such payment is received in the taxable
year in which separation from employment occurs or in one of
the two succeeding taxable years.
``(c) Qualified Severance Payment.--For purposes of this section,
the term `qualified severance payment' means any payment received by an
individual if--
``(1) such payment was paid by such individual's employer
on account of such individual's separation from employment, and
``(2) such individual received a written notice from such
employer indicating that such payment is a severance payment.''
(b) Clerical Amendment.--The table of sections for part III of
subchapter B of chapter 1 of such Code is amended by striking the item
relating to section 139 and inserting the following new items:
``Sec. 139. Severance payments.
``Sec. 139A. Cross references to other
Acts.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years ending after the date of the enactment of this
Act.
SEC. 3. REFUNDABLE CREDIT FOR RETRAINING EXPENSES FOR CERTAIN OLDER
LONG-TIME EMPLOYEES WHO ARE LAID OFF.
(a) In General.--Subpart C of part IV of subchapter A of chapter 1
of the Internal Revenue Code of 1986 (relating to refundable credits)
is amended by redesignating section 35 as section 36 and by inserting
after section 34 the following new section:
``SEC. 35. RETRAINING EXPENSES FOR CERTAIN OLDER LONG-TIME EMPLOYEES
WHO ARE LAID OFF.
``(a) Allowance of Credit.--In the case of an eligible individual,
there shall be allowed as a credit against the tax imposed by this
subtitle an amount equal to the qualified job training expenses which
are paid or incurred during the taxable year.
``(b) Maximum Credit.--The amount of qualified job training
expenses of an individual which may be taken into account under
subsection (a) with respect to a reduction in a work force for the
taxable year shall not exceed $2,000, reduced by the amount of such
expenses which were taken into account under subsection (a) (or would
have been so taken into account but for subsection (c)) with respect to
such reduction for all prior taxable years.
``(c) Limitation Based on Adjusted Gross Income.--
``(1) In general.--The dollar amount contained in
subsection (b) shall be reduced (but not below zero) by an
amount which bears the same ratio to such limitation as--
``(A) the excess of--
``(i) the taxpayer's adjusted gross income
for such taxable year, over
``(ii) the applicable dollar amount, bears
to
``(B) $20,000.
``(2) Rounding.--Any amount determined under paragraph (1)
which is not a multiple of $10 shall be rounded to the next
lowest $10.
``(3) Applicable dollar amount.--For purposes of this
subsection, the term `applicable dollar amount' means--
``(A) in the case of a taxpayer filing a joint
return, $100,000,
``(B) in the case of any other taxpayer (other than
a married individual filing a separate return),
$75,000, and
``(C) in the case of a married individual filing a
separate return, $50,000.
A rule similar to the rule of section 219(g)(4) shall apply for
purposes of this paragraph.
``(d) Definitions.--For purposes of this section--
``(1) Eligible individual.--The term `eligible individual'
means any individual if--
``(A) during the taxable year or the preceding
taxable year, such individual separated from employment
in connection with a reduction in the work force of
such individual's employer (other than a seasonal
reduction), and
``(B) as of the date of such separation, such
individual had attained age 50.
``(2) Qualified job training expenses.--
``(A) In general.--The term `qualified job training
expenses' means--
``(i) tuition and fees required for the
enrollment or attendance of the eligible
individual--
``(I) at an eligible educational
institution, or
``(II) in an applicable training
program,
``(ii) fees, books, supplies, and equipment
required for an eligible individual for--
``(I) courses of instruction at an
eligible educational institution, or
``(II) an applicable training
program, and
``(iii) a reasonable allowance for meals
and lodging while attending an eligible
educational institution or an applicable
training program.
``(B) Eligible educational institution.--The term
`eligible educational institution' means--
``(i) an institution of higher education
(as defined in section 101 or 102 of the Higher
Education Act of 1965), or
``(ii) an area vocational technical
education school (as defined in subparagraph
(C) or (D) of section 3(3) of the Carl D.
Perkins Vocational and Technical Education Act
of 1998) to the extent such school is located
within any State (as defined in section 3 of
such Act).
``(C) Applicable training program.--The term
`applicable training program' means--
``(i) any program under the Carl D. Perkins
Vocational and Technical Education Act of 1998,
chapter 5 of subtitle B of title I of the
Workforce Investment Act of 1998, or the
Wagner-Peyser Act, and
``(ii) any training program approved under
section 236 of the Trade Act of 1974.''
(b) Technical Amendments.--
(1) Paragraph (2) of section 1324(b) of title 31, United
States Code, is amended by inserting ``from section 35 of such
Code, or'' after ``1978,''.
(2) The table of sections for subpart C of part IV of
subchapter A of chapter 1 of such Code is amended by striking
the last item and inserting the following new items:
``Sec. 35. Retraining expenses for
certain older long-time
employees who are laid off.
``Sec. 36. Overpayments of tax.''
(c) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2000.
SEC. 4. STUDY ON SPECIAL NEEDS OF DISPLACED OLDER WORKERS.
(a) In General.--The Comptroller General of the United States, in
collaboration with the Secretary of Labor and the head of any other
Federal agency offering a job training or retraining program, shall
conduct a study on the special needs of displaced older workers. The
study shall--
(1) examine the unique differences in needs and challenges
that older workers face when finding a new job after a layoff
or work separation in comparison to younger workers facing such
challenges;
(2) include an assessment of whether existing Federal job
training or retraining programs adequately serve and meet the
special needs and challenges of older workers;
(3) include an assessment of whether older workers are
disproportionately impacted by job losses attributable to
international trade; and
(4) include an assessment of the financial incentives for
typical private firms to invest in worker training for older
workers in comparison to such incentives for younger workers.
(b) Submission of Reports to Congress.--
(1) Final report.--Not later than 2 years after the date of
the enactment of this Act, the Comptroller General shall submit
to the Congress a report on the study required by subsection
(a). The report shall include such legislative and
administrative recommendations as the Comptroller General
determines are necessary or appropriate to improve the
effectiveness of existing Federal programs in serving the needs
of displaced older workers.
(2) Interim report.--Not later than 6 months after the date
of the enactment of this Act, the Comptroller General shall
submit to the Congress an interim report with respect to the
study required by this section.
(c) Older Worker Defined.--For purposes of this section, the term
``older worker'' means an individual who is in or desires to be in the
workforce and who has attained age 50.
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