[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[H.R. 4056 Introduced in House (IH)]

111th CONGRESS
  1st Session
                                H. R. 4056

To amend the Internal Revenue Code of 1986 to allow small businesses a 
          credit against income tax for increasing employment.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            November 6, 2009

  Mr. Sestak 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 small businesses a 
          credit against income tax for increasing employment.

    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 ``Jobs Opportunity and Business 
Stability Act of 2009''.

SEC. 2. CREDIT FOR SMALL BUSINESSES THAT INCREASE EMPLOYMENT.

    (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 adding at the end the following new section:

``SEC. 45R. CREDIT FOR SMALL BUSINESSES THAT INCREASE EMPLOYMENT.

    ``(a) General Rule.--In the case of an eligible small business 
employer, the increased small business employment credit determined 
under this section shall be--
            ``(1) for any taxable year beginning in 2010, an amount 
        equal to 15 percent of the excess of--
                    ``(A) the aggregate wages paid during 2010, over
                    ``(B) 102 percent of the aggregate wages paid 
                during 2009, and
            ``(2) for any taxable year beginning in 2011, an amount 
        equal to 10 percent of the excess of--
                    ``(A) the aggregate wages paid during 2011, over
                    ``(B) 102 percent of the aggregate wages paid 
                during 2010.
    ``(b) Minimum Preceding Year Wages.--For purposes of subsection 
(a)--
            ``(1) the amount taken into account under paragraph (1)(B) 
        thereof shall not be less than 50 percent of the amount 
        described in paragraph (1)(A) thereof, and
            ``(2) the amount taken into account under paragraph (2)(B) 
        thereof shall not be less than 50 percent of the amount 
        described in paragraph (2)(A) thereof.
    ``(c) Total Wages Must Increase.--The amount of credit determined 
under this section for any taxable year shall not exceed the amount 
which would be so determined for such year (without regard to 
subsection (b)) if--
            ``(1) the aggregate amounts taken into account as wages 
        were determined without any dollar limitation, and
            ``(2) `105 percent' were substituted for `102 percent' in 
        the appropriate subparagraph of subsection (a).
    ``(d) Eligible Small Business Employer.--For purposes of this 
section, the term `eligible small business employer' means, with 
respect to any taxable year, any employer if--
            ``(1) such employer employed an average of less than 20 
        employees on business days during the preceding taxable year, 
        and
            ``(2) such employer (and any predecessor) met the gross 
        receipts test of section 448(c) for the preceding taxable year.
    ``(e) Wages.--For purposes of this section--
            ``(1) In general.--Except as provided in paragraph (2), the 
        term `wages' has the meaning given to such term by section 
        3121(a) with respect to the tax imposed by section 3101(a).
            ``(2) Railway labor.--In the case of remuneration subject 
        to the tax imposed by 3201(a), the term `wages' means so much 
        of compensation (as defined in section 3231(e)) for the 
        calendar year as does not exceed the contribution and benefit 
        base determined under section 230 of the Social Security Act 
        for such calendar year.
    ``(f) Certain Rules To Apply.--Rules similar to the following rules 
shall apply for purposes of this section:
            ``(1) Section 51(f) (relating to remuneration must be for 
        trade or business employment).
            ``(2) Section 51(k) (relating to treatment of successor 
        employers; treatment of employees performing services for other 
        persons).
            ``(3) Subsections (a) and (b) of section 52 (relating to 
        controlled groups).
    ``(g) Election To Have Credit Not Apply.--
            ``(1) In general.--A taxpayer may elect to have this 
        section not apply for any taxable year.
            ``(2) Time for making election.--An election under 
        paragraph (1) for any taxable year may be made (or revoked) at 
        any time before the expiration of the 3-year period beginning 
        on the last date prescribed by law for filing the return for 
        such taxable year (determined without regard to extensions).''.
    (b) Denial of Double Benefit.--Subsection (a) of section 280C of 
such Code is amended by inserting ``45R(a),'' after ``45P(a),''.
    (c) Credit Made Part of General Business Credit.--
            (1) In general.--Subsection (b) of section 38 of such Code 
        (relating to current year business credit) is amended by 
        striking ``plus'' at the end of paragraph (34), by striking the 
        period at the end of paragraph (35) and inserting ``, plus'', 
        and by adding at the end the following new paragraph:
            ``(36) in the case of an eligible small business employer 
        (as defined in section 45R(e)), the increased small business 
        employment credit determined under section 45R(a).''.
            (2) Deduction for certain unused business credits.--
        Subsection (c) of section 196 of such Code is amended by 
        striking ``and'' at the end of paragraph (12), by striking the 
        period at the end of paragraph (13) and inserting ``, and'', 
        and by adding after paragraph (13) the following new paragraph:
            ``(14) the increased small business employment credit 
        determined under section 45R(a).''.
    (d) Credit To Be Refundable.--Subsection (c) of section 38 of such 
Code (relating to limitation based on amount of tax) is amended by 
redesignating paragraph (5) as paragraph (6) and by inserting after 
paragraph (4) the following new paragraph:
            ``(5) Special rules for increased small business employment 
        credit.--In the case of the credit determined under section 
        45R--
                    ``(A) this section and section 39 shall be applied 
                separately with respect to such credit, and
                    ``(B) in applying paragraph (1) to such credit--
                            ``(i) the tentative minimum tax shall be 
                        treated as being zero, and
                            ``(ii) the limitation under paragraph (1) 
                        (as modified by clause (i)) shall be reduced by 
                        the credit allowed under subsection (a) for the 
                        taxable year (other than the credit determined 
                        under section 45R), and
                            ``(iii) the amount of the credit determined 
                        under section 45R in excess of the limitation 
                        under paragraph (1) (as modified by clause 
                        (ii)) shall be treated as a credit under 
                        subpart C.''.
    (e) 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 45Q the following new 
item:

``Sec. 45R. Credit for small businesses that increase employment.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2009.
    (g) Public Information Campaign.--The Secretary of the Treasury (or 
the Secretary's delegate) shall undertake a public information campaign 
to make employers aware of the credit added by this Act.
    (h) Study To Provide Comparable Benefits to Nonprofit 
Organizations.--The Secretary of the Treasury (or the Secretary's 
delegate) shall conduct a study on ways to provide benefits to 
nonprofit organizations which are comparable to the credit added by the 
Act. The results of such study shall be submitted to the Committee on 
Ways and Means of the House of Representatives and the Committee on 
Finance of the Senate not later than 90 days after the date of the 
enactment of this Act.
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