[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4385 Introduced in House (IH)]







109th CONGRESS
  1st Session
                                H. R. 4385

To amend the Internal Revenue Code of 1986 to provide that employees of 
 certain companies seeking bankruptcy protection are eligible for the 
          health coverage tax credit, and for other purposes.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           November 17, 2005

 Mr. Strickland (for himself, Mr. Ryan of Ohio, and Mr. Brown of Ohio) 
 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 that employees of 
 certain companies seeking bankruptcy protection are eligible for the 
          health coverage tax credit, 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. ELIGIBILITY OF EMPLOYEES OF CORPORATIONS IN BANKRUPTCY FOR 
              HEALTH COVERAGE TAX CREDIT.

    (a) In General.--Section 35 of the Internal Revenue Code of 1986 
(relating to health insurance costs of eligible individuals) is amended 
by adding at the end the following new subsection:
    ``(h) Application to Eligible Bankrupt Business Employees.--
            ``(1) In general.--An eligible bankrupt business employee 
        shall be treated as an eligible individual for purposes of this 
        section and section 7527.
            ``(2) Employer provided health care.--In the case of an 
        eligible bankrupt business employee (and any qualifying family 
        member of such employee), for purposes of this section and 
        section 7527--
                    ``(A) the term `qualified health insurance' shall 
                include coverage under a group health plan that is 
                available through the employment of such employee by 
                the corporation referred to in paragraph (3)(A), and
                    ``(B) subsection (f)(1) shall not apply with 
                respect to such coverage.
            ``(3) Eligible bankrupt business employee.--For purposes of 
        this subsection--
                    ``(A) In general.--The term `eligible bankrupt 
                business employee' means any individual who is employed 
                by a corporation on the date that such corporation 
                becomes a debtor in a case under chapter 11 of title 
                11, United States Code.
                    ``(B) Time limitations.--
                            ``(i) In general.--An individual shall be 
                        treated as an eligible bankrupt business 
                        employee only with respect to the period of 
                        months beginning with the month which includes 
                        the date described in subparagraph (A) and 
                        ending with the month which includes the 
                        earliest of--
                                    ``(I) the date that such debtor 
                                receives a discharge in such case,
                                    ``(II) the date that such case is 
                                converted to a case under chapter 7 of 
                                such title, or
                                    ``(III) the date that such case is 
                                dismissed.
                            ``(ii) 2 year limitation.--An individual 
                        shall not be treated as an eligible bankrupt 
                        business employee with respect to any month 
                        beginning after the 2-year period beginning on 
                        the date described in subparagraph (A).
                    ``(C) Coordination with taa and pbgc recipient 
                status.--An individual shall not be treated as an 
                eligible bankrupt business employee with respect to any 
                month if such individual is an eligible TAA recipient, 
                an eligible alternative TAA recipient, or an eligible 
                PBGC pension recipient with respect to such month.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to months beginning after the date of the enactment of this Act, with 
respect to cases commenced under title 11, United State Code, before, 
on, or after such date.

SEC. 2. OTHER HEALTH CARE TAX CREDIT IMPROVEMENTS.

    (a) Decrease in Age Eligibility Requirement for PBGC Pension 
Recipients.--Subparagraph (A) of section 35(c)(4) of the Internal 
Revenue Code of 1986 (defining eligible PBGC pension recipient) is 
amended by striking ``age 55'' and inserting ``age 50''.
    (b) Repeal of 3 Month Requirement of Existing Coverage.--Clause (i) 
of section 35(e)(2)(B) of such Code (defining qualifying individual) is 
amended by striking ``9801(c)'' and inserting ``9801(c) (prior to the 
employment separation necessary to attain the status of an eligible 
individual)''.
    (c) Eligibility of Spouse of Certain Individuals Entitled to 
Medicare.--Subsection (b) of section 35 of such Code (defining eligible 
coverage month) is amended by adding at the end the following new 
paragraph:
            ``(3) Special rule for spouse of individual entitled to 
        medicare.--Any month which would be an eligible coverage month 
        with respect to a taxpayer (determined without regard to 
        subsection (f)(2)(A)) shall be an eligible coverage month for 
        any spouse of such taxpayer.''.
    (d) Effective Date.--The amendments made by this section shall 
apply to months beginning after the date of the enactment of this Act.
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