[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 5765 Introduced in House (IH)]








109th CONGRESS
  2d Session
                                H. R. 5765

To amend the Internal Revenue Code of 1986 to allow employers a credit 
   against income tax for employing members of the Ready Reserve or 
                            National Guard.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             July 12, 2006

Mr. Alexander 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 allow employers a credit 
   against income tax for employing members of the Ready Reserve or 
                            National Guard.

    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 ``National Guard and Ready Reserves 
Employment Protection Act of 2006''.

SEC. 2. CREDIT FOR EMPLOYERS WHO EMPLOY MEMBERS OF THE READY RESERVE OR 
              NATIONAL GUARD.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 (relating to business-related 
credits) is amended by inserting after section 45M the following new 
section:

``SEC. 45N. CREDIT FOR EMPLOYERS WHO EMPLOY MEMBERS OF THE READY 
              RESERVE OR NATIONAL GUARD.

    ``(a) Allowance of Credit.--For purposes of section 38, the amount 
of the Ready Reserve-National Guard employment credit determined under 
this section with respect to any employer for any taxable year is 15 
percent of the qualified wages paid or incurred during the calendar 
year which ends with or within such taxable year.
    ``(b) Qualified Wages.--
            ``(1) In general.--For purposes of this section, the term 
        `qualified wages' means any wages paid or incurred by an 
        employer for services performed by a Ready Reserve-National 
        Guard employee.
            ``(2) Only first $10,000 of wages per year taken into 
        account.--With respect to each employee, the amount of 
        qualified wages which may be taken into account for a calendar 
        year shall not exceed $10,000.
            ``(3) Coordination with other credits.--The $10,000 amount 
        in paragraph (2) shall be reduced for any calendar year by the 
        amount of wages paid or incurred during such year which are 
        taken into account in determining the credit under section 
        45A(a), 51(a), 1396(a), 1400P(b), or 1400R.
    ``(c) Ready Reserve-National Guard Employee.--For purposes of this 
section--
            ``(1) In general.--Except as otherwise provided in this 
        subsection, the term `Ready Reserve-National Guard employee' 
        means, with respect to any period, any employee of an employer 
        if during such period--
                    ``(A) substantially all of the services performed 
                by such employee for such employer are performed in a 
                trade or business of the employer, and
                    ``(B) such employee is a member of the Ready 
                Reserve (as defined in section 10142 of title 10, 
                United States Code) or the National Guard (as defined 
                in section 101(c)(1) of such title 10).
            ``(2) Certain individuals not eligible.--The term `National 
        Guard-Ready Reserve employee' shall not include any individual 
        described in a subparagraph of section 1396(d)(2).
    ``(d) Other Definitions and Special Rules.--
            ``(1) Wages.--For purposes of this section, the term 
        `wages' has the meaning given to such term by section 1397(a).
            ``(2) Controlled groups, etc.--Rules similar to the rules 
        of subsections (b) and (c) of section 1397 shall apply for 
        purposes of this section.
    ``(e) Termination.--The term `wages' shall not include any amount 
paid or incurred to an individual who begins work for the employer 
after December 31, 2011.''.
    (b) Denial of Double Benefit.--Subsection (a) of section 280C of 
such Code (relating to denial of deduction for certain expenses for 
which credits are allowable) is amended by inserting ``45N,'' after 
``45A,''.
    (c) Credit to Be Part of General Business Credit.--Subsection (b) 
of section 38 of such Code is amended by redesignating paragraphs (25) 
through (30) as paragraphs (26) through (31), respectively, and by 
inserting after paragraph (24) the following new paragraph:
            ``(25) the Ready Reserve-National Guard employment credit 
        determined under section 45N(a),''.
    (d) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of such Code is amended by 
inserting after the item relating to section 45M the following new 
item:

``Sec. 45N. Credit for employers who employ members of the Ready 
                            Reserve or National Guard.''.
    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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