[Congressional Bills 110th Congress]
[From the U.S. Government Publishing Office]
[S. 2648 Introduced in Senate (IS)]







110th CONGRESS
  2d Session
                                S. 2648

   To amend the Workforce Investment Act of 1998 to improve programs 
 carried out through youth opportunity grants, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           February 14, 2008

  Mr. Schumer introduced the following bill; which was read twice and 
                  referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Workforce Investment Act of 1998 to improve programs 
 carried out through youth opportunity grants, 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. SHORT TITLE.

    This Act may be cited as the ``Supporting Training and Employment 
Potential for Underemployed Populations Act'' or the ``STEP UP Act''.

                TITLE I--YOUTH OPPORTUNITY GRANT PROGRAM

SEC. 101. FINDINGS.

    Congress finds the following:
            (1) Finding employment that provides steady income and a 
        career track is a problem for young, undereducated men and 
        women who lack educational credentials and are disconnected 
        from the labor market.
            (2) That problem is particularly acute for young African-
        American men. In 2006, over \1/5\, or 21.8 percent, of black 
        men ages 16 through 24 were unemployed. This is roughly double 
        the unemployment rate for all young men (11.2 percent).
            (3) Even over a period of relative economic growth, 
        employment for disconnected African-American men has declined. 
        In 1999, 65 percent of African-American male high school 
        dropouts were jobless and not looking for work. In 2004, that 
        rate had risen to 72 percent.
            (4) The Youth Opportunity Grant Program was established in 
        the Workforce Investment Act of 1998 to provide intensive job 
        training and placement activities as well as other educational, 
        social, and recreational services to at-risk, hard-to-serve 
        youth.
            (5) The Youth Opportunity Grant Program built upon the most 
        promising strategies of previous demonstration programs that 
        strongly suggest the effectiveness of intensive case management 
        and follow-up services in assisting disconnected young men and 
        women in finding long-term employment.
            (6) By reauthorizing and refining the Youth Opportunity 
        Grant Program, Congress could help make strides against those 
        serious problems faced by both young African-American men and 
        other disconnected youth.
            (7) Over the course of the Youth Opportunity Grant Program, 
        36 localities with high poverty rates received funding through 
        grants. The Youth Opportunity Grant Program was effective in 
        assisting hard-to-reach populations. The Department of Labor 
        estimates that 42 percent of the eligible youth and 62 percent 
        of the eligible out-of-school youth in the target areas 
        enrolled in the Youth Opportunity Grant Program.
            (8) Further understanding of the successes of, challenges 
        faced by, and shortcomings of, the Youth Opportunity Grant 
        Program in the past, and in the future, will require extensive 
        evaluation and study by the Department of Labor.

SEC. 102. YOUTH OPPORTUNITY GRANTS.

    Section 169 of the Workforce Investment Act of 1998 (29 U.S.C. 
2914) is amended to read as follows:

``SEC. 169. YOUTH OPPORTUNITY GRANTS.

    ``(a) Grants.--
            ``(1) In general.--Using funds made available under 
        subsection (j), the Secretary shall make grants to eligible 
        local boards described in subsection (c) and eligible entities 
        described in subsection (d) to carry out programs that provide 
        activities described in subsection (b) for youth and young 
        adults. The boards and entities shall carry out the programs to 
        increase the long-term employment of youth and young adults who 
        seek assistance and who live in empowerment zones, enterprise 
        communities, or high poverty areas.
            ``(2) Definition.--In this section:
                    ``(A) Hard-to-serve young adult.--The term `hard-
                to-serve young adult' means an individual who is--
                            ``(i) not less than age 25 and not more 
                        than age 30; and
                            ``(ii)(I) an unemployed individual;
                            ``(II) a school dropout;
                            ``(III) an individual who has not received 
                        a secondary school diploma or its recognized 
                        equivalent;
                            ``(IV) an ex-offender; or
                            ``(V) a noncustodial parent with a child 
                        support obligation.
                    ``(B) Youth or young adult.--The term `youth or 
                young adult' means an individual who is not less than 
                age 14 and not more than age 30.
            ``(3) Grant period.--The Secretary may make a grant under 
        this section for a 2-year period, and may renew the grant for 
        each of the 3 succeeding years.
            ``(4) Grant awards.--In making grants under this section, 
        the Secretary shall ensure that grants are distributed 
        equitably among local boards and entities serving urban areas 
        and local boards and entities serving rural areas, taking into 
        consideration the poverty rate in such urban and rural areas, 
        as described in subsection (c)(3)(B).
    ``(b) Use of Funds.--
            ``(1) In general.--A local board or entity that receives a 
        grant under this section shall use the funds made available 
        through the grant to provide job training and employment 
        activities and related services, including--
                    ``(A) activities that meet the requirements of 
                section 129;
                    ``(B) youth development activities such as 
                activities relating to leadership development, 
                citizenship, and re-entry from the justice and juvenile 
                justice systems, community service, and recreation 
                activities; and
                    ``(C)(i) workforce preparation and attitudinal 
                training;
                    ``(ii) sector-specific skills training as described 
                in subsection (f)(1)(D);
                    ``(iii) educational completion services, including 
                classes that lead to a secondary school diploma or its 
                recognized equivalent (and programs to prepare for such 
                a class), remedial reading and mathematics classes 
                (including classes to prepare an individual to read and 
                do mathematics at a college level), and skills 
                certification and credentialing programs;
                    ``(iv) access to internships, transitional jobs, 
                work experience, and nontraditional employment 
                opportunities;
                    ``(v) access to other services either directly or 
                through an organization that enters into a strategic 
                partnership described in subsection (e) with the local 
                board or entity, including parenting classes for 
                fathers and mothers, financial literacy services, 
                services to improve health care (and mental health 
                care) treatment and access, and services to improve 
                access to affordable housing and shelter; and
                    ``(vi) assistance in obtaining the earned income 
                credit under section 32 of the Internal Revenue Code of 
                1986 and obtaining benefits through government 
                entitlement programs, such as the Medicaid program 
                under title XIX of the Social Security Act (42 U.S.C. 
                1396 et seq.) and unemployment compensation programs, 
                as well as other State and local entitlement programs 
                that may be applicable.
            ``(2) Intensive placement and follow-up services.--In 
        providing activities under this section, a local board or 
        entity shall provide--
                    ``(A) intensive placement services; and
                    ``(B) follow-up services, including case 
                management, every 2 months for not less than 24 months 
                after the completion of participation in the other 
                activities described in this subsection, as 
                appropriate.
            ``(3) Limitation on use for hard-to-serve young adults.--
        The local board or entity shall not use more than 25 percent of 
        the funds made available through the grant to provide 
        activities for hard-to-serve young adults.
    ``(c) Eligible Local Boards.--To be eligible to receive a grant 
under this section, a local board shall serve a community that--
            ``(1) has been designated as an empowerment zone or 
        enterprise community under section 1391 of the Internal Revenue 
        Code of 1986;
            ``(2)(A) is a State without a zone or community described 
        in paragraph (1); and
            ``(B) has been designated as a high poverty area by the 
        Governor of the State; or
            ``(3) is 1 of 2 areas in a State that--
                    ``(A) have been designated by the Governor as areas 
                for which a local board may apply for a grant under 
                this section; and
                    ``(B) meet the poverty rate criteria set forth in 
                subsections (a)(4), (b), and (d) of section 1392 of the 
                Internal Revenue Code of 1986.
    ``(d) Eligible Entities.--To be eligible to receive a grant under 
this section, an entity (other than a local board) shall--
            ``(1) be a recipient of financial assistance under section 
        166; and
            ``(2) serve a community that--
                    ``(A) meets the poverty rate criteria set forth in 
                subsections (a)(4), (b), and (d) of section 1392 of the 
                Internal Revenue Code of 1986; and
                    ``(B) is located on an Indian reservation or serves 
                Oklahoma Indians, or Native villages or Native groups 
                (as such terms are defined in section 3 of the Alaska 
                Native Claims Settlement Act (43 U.S.C. 1602)).
    ``(e) Strategic Partnerships.--
            ``(1) Local boards.--An eligible local board may--
                    ``(A) work independently to provide activities 
                under this section; or
                    ``(B) enter into a strategic partnership to provide 
                activities under this section with 1 or more entities 
                consisting of--
                            ``(i) a community-based job training 
                        provider who is an eligible provider identified 
                        in accordance with section 122(e)(3), or 
                        another provider selected by the local board;
                            ``(ii) State or local government entities;
                            ``(iii) labor organizations;
                            ``(iv) other entities described in the 
                        statement of need required by subsection 
                        (f)(1)(C);
                            ``(v) private sector employers;
                            ``(vi) educational institutions, including 
                        secondary schools (which may be public schools, 
                        parochial schools, or other private schools) or 
                        community colleges; or
                            ``(vii) entities in the judicial system, 
                        entities in the juvenile justice system, or 
                        organizations representing probation and parole 
                        officers.
            ``(2) Entities.--An eligible entity may--
                    ``(A) work independently to provide activities 
                under this section; or
                    ``(B) enter into a strategic partnership to provide 
                activities under this section with--
                            ``(i) the local board; and
                            ``(ii) 1 or more entities described in 
                        paragraph (1)(B).
    ``(f) Application.--To be eligible to receive a grant under this 
section, a local board or entity shall submit an application 
(individually or as part of a strategic partnership described in 
subsection (e)) to the Secretary at such time, in such manner, and 
containing such information as the Secretary may require, including--
            ``(1)(A) a description of the activities that the local 
        board or entity will provide under this section to youth and 
        young adults in the community described in subsection (c) or 
        (d);
            ``(B) a description of the strategic partnership referred 
        to in subsection (e), if any, that the applicant intends to 
        enter into to provide activities under this section;
            ``(C)(i) information describing how the applicant will 
        coordinate the planning and implementation of the activities to 
        be carried out under the grant with entities serving youth in 
        the community involved, including the one-stop operator and 
        one-stop partners in the local workforce investment system, 
        educational institutions including institutions of higher 
        education, child welfare agencies, entities in the juvenile 
        justice system, foster care agencies, and such other community-
        based organizations as may be appropriate; and
            ``(ii) a statement of need for the community;
            ``(D) information identifying employment sectors in the 
        local and regional economy that could employ youth and young 
        adults served under the grant and a plan to provide sector-
        specific skills training for jobs in those sectors and 
        employment opportunities in those sectors; and
            ``(E) information identifying the specific role, if any, 
        that private sector employers in growing employment sectors in 
        the local and regional economy will play in that plan, 
        including information describing their skills training 
        curricula and job placement programs;
            ``(2) a description of the performance measures negotiated 
        under subsection (h), and the manner in which the local boards 
        or entities will carry out the activities to meet the 
        performance measures;
            ``(3) a description of the manner in which the activities 
        will be linked to activities described in section 129; and
            ``(4) a description of the community support, including 
        financial support through leveraging additional public and 
        private resources, for the activities.
    ``(g) Consideration.--In making grants under this section, the 
Secretary shall give special consideration to a local board or entity 
that submits an application under subsection (f) as part of a strategic 
partnership described in subsection (e) that includes a private sector 
employer if the employer agrees to--
            ``(1) commit to hire youth and young adults who complete 
        the program carried out under the grant involved;
            ``(2) provide personnel, facilities, equipment, and a 
        skills training curriculum for the program;
            ``(3) provide internships, mentoring, and apprenticeship 
        opportunities for participants in the program; or
            ``(4) provide funding, scholarships, and access to 
        specified employer-based resources for the program.
    ``(h) Performance Measures.--
            ``(1) In general.--The Secretary shall negotiate and reach 
        agreement with the local board or entity on performance 
        measures, for the indicators of performance referred to in 
        subparagraphs (A) and (B) of section 136(b)(2), that will be 
        used under paragraph (3) to evaluate the performance of the 
        local board or entity in carrying out the activities described 
        in subsection (b). Each local performance measure shall consist 
        of such an indicator of performance, and a performance level 
        referred to in paragraph (2).
            ``(2) Performance levels.--The Secretary shall negotiate 
        and reach agreement with the local board or entity regarding 
        the--
                    ``(A) overall performance levels expected to be 
                achieved by the local board or entity on the indicators 
                of performance; and
                    ``(B) separate performance levels for those 
                indicators for the performance of the board or entity--
                            ``(i) regarding participants in the 
                        activities who are not less than age 14 and not 
                        more than age 24; and
                            ``(ii) regarding participants in the 
                        activities who are not less than age 25 and not 
                        more than age 30.
            ``(3) Evaluations and reports.--
                    ``(A) Evaluations.--
                            ``(i) Evaluations of prior activities.--Not 
                        later than 2 years after the date of enactment 
                        of the Supporting Training and Employment 
                        Potential for Underemployed Populations Act, 
                        the Secretary shall complete the evaluations 
                        described in paragraph (1) of local boards and 
                        entities, using performance measures with 
                        overall performance levels described in 
                        paragraph (2)(A), concerning activities carried 
                        out under subsection (b) prior to that date of 
                        enactment.
                            ``(ii) Evaluations of new activities.--Not 
                        later than 2 years after a local board or 
                        entity receives a grant under this section 
                        after that date of enactment, the Secretary 
                        shall conduct the evaluations described in 
                        paragraph (1) of that local board or entity, 
                        using performance measures with overall 
                        performance levels described in paragraph 
                        (2)(A) and performance measures with separate 
                        performance levels described in paragraph 
                        (2)(B).
                            ``(iii) Comparison groups.--The evaluations 
                        conducted under this paragraph shall include 
                        evaluations of carefully matched comparison 
                        groups.
                    ``(B) Reports.--The Secretary shall prepare a 
                report, based on the evaluations described in 
                subparagraph (A)(i), that contains the baseline data 
                obtained and that begins to detail the best practices 
                of recipients of grants under this section throughout 
                the Nation. The Secretary shall prepare an annual 
                report, based on the evaluations described in 
                subparagraph (A)(ii), that contains the data obtained 
                and that details the best practices of recipients of 
                grants under this section throughout the Nation, with 
                attention to how different activities impact both 
                different demographic sectors of the population and 
                different age groups in the population.
            ``(4) Use.--If the Secretary, in conducting evaluations 
        under paragraph (3), determines that a local board or entity 
        fails to meet the performance measures for 2 fiscal years, the 
        local board or entity shall not be eligible to receive a grant 
        under this section for a subsequent fiscal year.
    ``(i) Incentives for Business Partners.--The Secretary shall 
establish a plan to increase the availability of bonds through the 
Federal Bonding Program carried out through the Employment and Training 
Administration to employers that are partners in the programs carried 
out under this section.
    ``(j) Authorization of Appropriations.--There is authorized to be 
appropriated to carry out this section $250,000,000 for fiscal year 
2008 and each subsequent fiscal year.''.

SEC. 103. CONFORMING AMENDMENTS.

    Section 127 of the Workforce Investment Act of 1998 (29 U.S.C. 
2852) is amended--
            (1) in subsection (a)(1)--
                    (A) by striking ``sections'' and inserting 
                ``section''; and
                    (B) by striking ``and 169'' and all that follows 
                and inserting ``; and''; and
            (2) in subsection (b)(1)(A)--
                    (A) in clause (i), by striking ``provide youth 
                opportunity'' and all that follows through ``grants) 
                and''; and
                    (B) by striking clause (iv).

             TITLE II--EARNED INCOME TAX CREDIT ENHANCEMENT

SEC. 201. SHORT TITLE.

    This title may be cited as the ``Earned Income Tax Credit 
Enhancement Act of 2007''.

SEC. 202. FINDINGS.

    Congress finds the following:
            (1) The earned income tax credit is considered one of the 
        most successful antipoverty programs in the United States. 
        Previous expansions of the earned income tax credit in the 
        1990s were instrumental in lifting families, especially single 
        parents, out of poverty by increasing income and building 
        assets.
            (2) However, the earned income tax credit provides little 
        assistance for childless workers and noncustodial parents. The 
        credit for childless workers is only 15 percent of the credit 
        for a worker with 1 child.
            (3) Increasing the maximum earned income tax credit amount 
        for childless workers would help to lift more individuals out 
        of poverty and mirror the successful credit expansion of the 
        1990s. Additionally, lowering the age of eligibility will 
        extend this important credit to the growing population of young 
        adults living in poverty.
            (4) Although the effectiveness of the work opportunity tax 
        credit has come under scrutiny, the credit is limited in scope. 
        The credit is only available to employers and offers no 
        benefits to employees to encourage job retention. Additionally, 
        the credit only addresses short-term job retention, not long-
        term employment.
            (5) Expanding the work opportunity credit to employees and 
        increasing the time period of the credit's availability could 
        provide greater incentives for employees to stay in their jobs 
        and for employers to retain these workers over long-term 
        periods.

SEC. 203. ENHANCEMENTS TO EARNED INCOME TAX CREDIT.

    (a) Credit Allowed for Certain Childless Individuals Over Age 18.--
            (1) In general.--Subclause (II) of section 32(c)(1)(A)(ii) 
        of the Internal Revenue Code of 1986 (relating to eligible 
        individual) is amended by striking ``age 25'' and inserting 
        ``age 21''.
            (2) Exception for full-time students.--Paragraph (1) of 
        section 32(c) of such Code is amended by adding at the end the 
        following new subparagraph:
                    ``(G) Exception for full time students.--The term 
                `eligible individual' shall not include any individual 
                described in subparagraph (A)(ii) if such individual 
                has not attained the age of 25 before the close of the 
                taxable year and is a full time student for more than 
                one half of such taxable year.''.
    (b) Modification of Credit Amount for Individuals Without 
Qualifying Children.--
            (1) Modification of credit percentage.--The last row in the 
        table in section 32(b)(1)(A) of the Internal Revenue Code of 
        1986 is amended by striking ``7.65'' in the middle column and 
        inserting ``15.30''.
            (2) Modification of phaseout amount.--Subparagraph (A) of 
        section 32(b)(2) of such Code is amended to read as follows:
                    ``(A) In general.--Subject to subparagraph (B)--
                            ``(i) in the case of an eligible individual 
                        with 1 qualifying child--
                                    ``(I) the earned income amount is 
                                $6,330, and
                                    ``(II) the phaseout amount is 
                                $11,610,
                            ``(ii) in the case of an eligible 
                        individual with 2 or more qualifying children--
                                    ``(I) the earned income amount is 
                                $8,890, and
                                    ``(II) the phaseout amount is 
                                $11,610, and
                            ``(iii) in the case of an eligible 
                        individual with no qualifying children--
                                    ``(I) the earned income amount is 
                                $4,220, and
                                    ``(II) the phaseout amount is 200 
                                percent of the dollar amount applicable 
                                under subclause (I).''.
    (c) Increased Credit for Certain Individuals Without Qualifying 
Children.--
            (1) In general.--Paragraph (1) of section 32(b) of the 
        Internal Revenue Code of 1986 is amended by striking 
        subparagraphs (B) and (C) and inserting the following:
                    ``(B) Increased credit for certain individuals 
                without qualifying children.--In the case of an 
                eligible individual described in subparagraph (C), the 
                credit percentage under subparagraph (A) shall be 30.6 
                percent.
                    ``(C) Eligible individual described.--An eligible 
                individual is described in this subparagraph with 
                respect to a taxable year if--
                            ``(i) with respect to such eligible 
                        individual for the taxable year, another 
                        individual--
                                    ``(I) bears a relationship to the 
                                eligible individual described in 
                                section 152(c)(2),
                                    ``(II) meets the requirements of 
                                section 152(c)(3), and
                                    ``(III) has the same principal 
                                place of abode as the eligible 
                                individual for less than one-half of 
                                such taxable year,
                            ``(ii) such eligible individual is required 
                        to make child support payments with respect to 
                        the individual described in clause (i), and
                            ``(iii) such eligible individual has made 
                        all such required child support payments during 
                        the taxable year.
                For purposes of clause (iii), an eligible individual 
                shall be treated as having made all required child 
                support payments during a taxable year if such eligible 
                individual has made child support payments in an amount 
                not less than the total amount of child support 
                payments required for such eligible individual for such 
                taxable year.''.
            (2) Notification of failure to pay child support.--Section 
        464(b) of the Social Security Act (42 U.S.C. 664(b)) is amended 
        by adding at the end the following new paragraph:
            ``(3) The Secretary shall use notices of past-due support 
        under this section in administering the earned income tax 
        credit under section 32 of the Internal Revenue Code of 1986 
        for eligible individuals described in subsection (b)(1)(C) of 
        such section. The regulations promulgated pursuant to this 
        subsection shall require States to submit such notices at a 
        time adequate to allow the Secretary to properly administer 
        such credit for such individuals.''.
    (d) Repeal of EGTRRA Sunset.--Section 901 of the Economic Growth 
and Tax Relief Reconciliation Act of 2001 (relating to sunset 
provisions) shall not apply to the amendments made by section 303 of 
such Act (relating to marriage penalty relief for earned income credit; 
earned income to include only amounts includible in gross income; 
simplification of earned income credit).
    (e) Election to Average Earned Income.--Paragraph (2) of section 
32(c) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new subsection:
    ``(n) Election to Average Earned Income.--
            ``(1) In general.--Under rules established by the 
        Secretary, in the case of an eligible individual who has made 
        an election under this subsection, subsection (a) shall be 
        applied--
                    ``(A) by substituting `the taxpayer's 2-year 
                averaged earned income' for `the taxpayer's earned 
                income for the taxable year' in paragraph (1) thereof, 
                and
                    ``(B) by substituting `2-year averaged earned 
                income' for `earned income' in paragraph (2)(B) 
                thereof.
            ``(2) 2-year averaged earned income.--For purposes of this 
        subsection, the term `2-year averaged earned income' means, 
        with respect to any taxable year, the average of--
                    ``(A) the taxpayer's earned income for such taxable 
                year, and
                    ``(B) the taxpayer's earned income for the 
                preceding taxable year.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2007.

SEC. 204. CARRYBACK AND CARRYFORWARD OF STANDARD DEDUCTION AND PERSONAL 
              EXEMPTION DEDUCTIONS.

    (a) Standard Deduction.--Section 63 of the Internal Revenue Code of 
1986 (relating to taxable income defined) is amended by adding at the 
end the following new subsection:
    ``(g) Carryback and Carryforward of Deductions for Individuals Who 
Do Not Itemize.--
            ``(1) In general.--In the case of an eligible taxpayer, if 
        the sum of the deductions described in subsection (b) exceeds 
        the amount of the adjusted gross income of such taxpayer for 
        such taxable year (hereinafter in this subsection referred to 
        as the `unused deduction year'), such excess may be--
                    ``(A) carried back to the preceding taxable year, 
                and
                    ``(B) carried forward to each of the 2 taxable 
                years following the unused deduction year
            ``(2) Amount carried to each year.--
                    ``(A) Entire amount carried to first year.--The 
                entire amount of the unused deduction for an unused 
                deduction year shall be carried to the earliest of the 
                3 taxable years to which (by reason of paragraph (1)) 
                such deduction may be carried.
                    ``(B) Amount carried to other 2 years.--The amount 
                of the unused deduction for the unused deduction year 
                shall be carried to each of the other 2 taxable years 
                to the extent that such unused deduction may not be 
                used for a prior taxable year because of the amount of 
                adjusted gross income of the taxpayer for such taxable 
                year.
            ``(3) Eligible taxpayer.--For purposes of this subsection, 
        the term `eligible taxpayer' means, with respect to any taxable 
        year, a taxpayer with respect to whom a credit under section 32 
        is allowable for such taxable year.''.
    (b) Effective Date.--The amendment made by this section shall apply 
to taxable years beginning after the date of the enactment of this Act.

SEC. 205. ADVANCED REFUNDABLE CREDIT FOR MEMBERS OF TARGETED GROUPS.

    (a) Allowance of Credit.--
            (1) 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 36 as 
        section 37 and by inserting after section 35 the following new 
        section:

``SEC. 36. EMPLOYMENT CREDIT FOR MEMBERS OF TARGETED GROUPS.

    ``(a) Allowance of Credit.--In the case of an eligible individual, 
there shall be allowed as credit against the tax imposed by this title 
for the taxable year an amount equal to $500.
    ``(b) Eligible Individual.--For purposes of this section--
            ``(1) In general.--The term `eligible individual' means an 
        individual who is a member of a targeted group and--
                    ``(A) who--
                            ``(i) has worked exactly 1,500 hours for an 
                        employer during any period beginning on the 
                        date such individual was hired and ending with 
                        or within the taxable year, and
                            ``(ii) was continuously employed by such 
                        employer during such period, or
                    ``(B) who--
                            ``(i) began work with an employer during 
                        any 52-week period ending with or within such 
                        taxable year, and
                            ``(ii) was continuously employed by such 
                        employer during such 52-week period.
            ``(2) Member of a targeted group.--The term `member of a 
        targeted group' has the meaning given such term under section 
        51(d).
    ``(c) Special Rules.--For purposes of subsection (a)--
            ``(1) only 1 employer may be taken into account with 
        respect to any eligible individual for any taxable year, and
            ``(2) an individual may not be treated as an eligible 
        individual more than once with respect to any employer.
For purposes of this subsection, rules similar to the rules of 
subsections (a) and (b) of section 52 shall apply.
    ``(d) Coordination With Advance Payments.--
            ``(1) Recapture of excess advance payments.--If any payment 
        is made to the individual by an employer under section 3511 
        during any calendar year, then the tax imposed by this chapter 
        for the individual's last taxable year beginning in such 
        calendar year shall be increased by the aggregate amount of 
        such payments.
            ``(2) Reconciliation of payments advanced and credit 
        allowed.--Any increase in tax under paragraph (1) shall not be 
        treated as tax imposed by this chapter for purposes of 
        determining the amount of any credit (other than the credit 
        allowed by subsection (a)) allowed under this part.
    ``(e) Coordination With Certain Means Tested Programs.--For 
purposes of--
            ``(1) the United States Housing Act of 1937,
            ``(2) title V of the Housing Act of 1949,
            ``(3) section 101 of the Housing and Urban Development Act 
        of 1965,
            ``(4) sections 221(d)(3), 235, and 236 of the National 
        Housing Act, and
            ``(5) the Food Stamp Act of 1977,
any refund made to an individual (or the spouse of an individual) by 
reason of this section, and any payment made to such individual (or 
such spouse) by an employer under section 3511, shall not be treated as 
income (and shall not be taken into account in determining resources 
for the month of its receipt and the following month).''.
            (2) Conforming amendments.--
                    (A) Section 1324(b)(2) of title 31, United States 
                Code, is amended by inserting before the period at the 
                end ``, or enacted by section 204 of the Earned Income 
                Tax Credit Enhancement Act of 2007''.
                    (B) The table of sections for subpart A of part IV 
                of subchapter A of chapter 1 of the Internal Revenue 
                Code of 1986 is amended by redesignating the item 
                relating to section 36 as relating to section 37 and by 
                inserting after the item relating to section 35 the 
                following new item:

``Sec. 36. Employment credit for members of targeted groups.''.
    (b) Advanced Payments.--
            (1) In general.--Chapter 25 of the Internal Revenue Code of 
        1986 (relating to general provisions relating to employment 
        taxes) is amended by adding at the end the following new 
        section:

``SEC. 3511. ADVANCED PAYMENT OF EMPLOYMENT CREDIT FOR MEMBERS OF 
              TARGETED GROUPS.

    ``(a) In General.--Except as otherwise provided in this section, 
every employer making a payment of wages for a payroll period to an 
individual who is an eligible employee with respect to such payroll 
period shall, at the time of paying such wages, make an additional 
payment to such employee of $500.
    ``(b) Eligible Employee.--For purposes of this section, the term 
`eligible employee' means, with respect to any payroll period, an 
individual--
            ``(1) who is an eligible individual (as defined by section 
        36(b)), and
            ``(2) with respect to whom an eligibility certificate under 
        this section is in effect.
    ``(c) Eligibility Certificate.--For purposes of this title, an 
eligibility certificate under this section is a statement furnished by 
an employee to the employer which--
            ``(1) certifies that the employee is a member of a targeted 
        group (as defined in section 51(d)),
            ``(2) certifies that the employee does not have an 
        eligibility certificate under this section in effect for the 
        calendar year with respect to the payment of wages by another 
        employer, and
            ``(3) contains such other information as the Secretary may 
        require.
    ``(d) Payments to Be Treated as Payments of Withholding and FICA 
Taxes.--
            ``(1) In general.--For purposes of this title, payments 
        made by an employer under subsection (a) to his employees for 
        any payroll period--
                    ``(A) shall not be treated as the payment of 
                compensation, and
                    ``(B) shall be treated as made out of--
                            ``(i) amounts required to be deducted and 
                        withheld for the payroll period under section 
                        3401 (relating to wage withholding), and
                            ``(ii) amounts required to be deducted for 
                        the payroll period under section 3102 (relating 
                        to FICA employee taxes), and
                            ``(iii) amounts of the taxes imposed for 
                        the payroll period under section 3111 (relating 
                        to FICA employer taxes),
                as if the employer had paid to the Secretary, on the 
                day on which the wages are paid to the employees, an 
                amount equal to such payments.
            ``(2) Advance payments exceed taxes due.--In the case of 
        any employer, if for any payroll period the sum of the 
        aggregate amount of payments under subsection (a) plus any 
        amount paid under section 3507 exceeds the sum of the amounts 
        referred to in paragraph (1)(B), each such advance payment 
        shall be reduced by an amount which bears the same ratio to 
        such excess as such advance payment bears to the aggregate 
        amount of all such advance payments.
            ``(3) Employer may make full advance payments.--The 
        Secretary shall prescribe regulations under which an employer 
        may elect (in lieu of any application of paragraph (2))--
                    ``(A) to pay in full all amounts under subsection 
                (a), and
                    ``(B) to have additional amounts paid by reason of 
                this paragraph treated as the advance payment of taxes 
                imposed by this title.
            ``(4) Failure to make advance payments.--For purposes of 
        this title (including penalties), failure to make any advance 
        payment under this section at the time provided therefor shall 
        be treated as the failure at such time to deduct and withhold 
        under chapter 24 an amount equal to the amount of such advance 
        payment.''.
            (2) Clerical amendment.--The table of sections for chapter 
        25 of such Code is amended by adding at the end the following 
        new item:

``Sec. 3511. Advanced payment of employment credit for members of 
                            targeted groups.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.

SEC. 206. MODIFICATIONS TO WORK OPPORTUNITY CREDIT.

    (a) Expansion to Youth Opportunity Program Participants, WIA Youth 
Activity Participants, and Young Offenders.--
            (1) In general.--Paragraph (1) of section 51(d) of the 
        Internal Revenue Code of 1986 (relating to members of targeted 
        groups) is amended by striking ``or'' at the end of 
        subparagraph (H), and by adding at the end the following new 
        subparagraph:
                    ``(J) a youth opportunity program participant,
                    ``(K) a qualified WIA youth activity participant, 
                or
                    ``(L) a qualified young offender.''.
            (2) Definitions.--Subsection (d) of section 51 of the 
        Internal Revenue Code of 1986 is amended by redesignating 
        paragraphs (11), (12), and (13) as paragraphs (14), (15), and 
        (16), respectively, and by inserting after paragraph (10) the 
        following new paragraph:
            ``(11) Youth opportunity program participant.--The term 
        `youth opportunity program participant' means an individual who 
        is certified by an eligible local board or eligible entity (as 
        such board and entity are described in section 169 of the 
        Workforce Investment Act of 1998)--
                    ``(A) as having completed a program carried out 
                under that section, and
                    ``(B) as having a hiring date which is not more 
                than 1 year after the last date on which such 
                individual completed such a program.
            ``(12) Qualified wia youth activity participant.--The term 
        `qualified WIA youth activity participant' means any individual 
        who is certified by a designated local agency--
                    ``(A) as an eligible youth (as defined in section 
                101 of the Workforce Investment Act of 1998) who--
                            ``(i) is not less than age 18 and not more 
                        than age 21, and
                            ``(ii) has been enrolled in or has received 
                        a youth activity (as so defined) under chapter 
                        4 of subtitle B of title I of such Act, and
                    ``(B) as having a hiring date which is not more 
                than 1 year after the last date on which such 
                individual was so enrolled or so received such 
                activity.
            ``(13) Qualified young offender.--The term `qualified young 
        offender' means any individual who is certified by a designated 
        local agency--
                    ``(A) as being not less than age 18 and not more 
                than age 21,
                    ``(B) as having been convicted of a misdemeanor, 
                and
                    ``(C) as having a hiring date which is not more 
                than 1 year after the last date on which such 
                individual was so convicted or was released from 
                prison.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to individuals who begin work for the employer 
        after the date of the enactment of this Act.
    (b) Additional Work Opportunity Credit for Retained Employees.--
            (1) In general.--Subsection (a) of section 51 of the 
        Internal Revenue Code of 1986 (relating to amount of credit) is 
        amended by striking ``equal to 40 percent of the qualified 
        first-year wages for such year.'' and inserting ``equal to the 
        sum of--
            ``(1) 40 percent of the qualified first year wages for such 
        year, plus
            ``(2) $500 for each retained employee.''.
            (2) Retained employee.--Section 51 of the Internal Revenue 
        Code of 1986 is amended by adding at the end the following new 
        subsection:
    ``(l) Retained Employee.--For purposes of this section, the term 
`retained employee' means an employee who is a member of a targeted 
group and--
            ``(1) who--
                    ``(A) has worked exactly 1,500 hours for the 
                taxpayer during any period beginning on the date such 
                employee was hired and ending with or within the 
                taxable year, and
                    ``(B) was continuously employed by such taxpayer 
                during such period, or
            ``(2) who--
                    ``(A) began work with the taxpayer during any 52-
                week period ending with or within such taxable year, 
                and
                    ``(B) was continuously employed by such taxpayer 
                during such 52-week period.
        For purposes of the preceding sentence, no employee may be 
        treated as a retained employee more than once with respect to 
        any taxpayer.''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 207. PUBLICATION OF CHANGES AND ASSISTANCE WITH PREPARATION.

    The Secretary of the Treasury shall--
            (1) publicly disseminate information with respect to the 
        amendments made by this title (including the dissemination of 
        such information to State and local government one-stop job 
        centers), and
            (2) provide appropriate assistance to taxpayers (through 
        low-income taxpayer clinics and other sources) for the purpose 
        of allowing taxpayers to benefit from the amendments made by 
        this title.
                                 <all>