[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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