[Congressional Bills 112th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2742 Introduced in House (IH)]

112th CONGRESS
  1st Session
                                H. R. 2742

To amend the Internal Revenue Code of 1986 to provide tax incentives to 
  employers for providing training programs for jobs specific to the 
                        needs of the employers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             August 1, 2011

  Ms. Fudge 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 tax incentives to 
  employers for providing training programs for jobs specific to the 
                        needs of the employers.

    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 ``Hire, Train, Retain Act of 2011''.

SEC. 2. FINDINGS.

    The Congress finds the following:
            (1) As of June 2011 9.2 percent of all Americans eligible 
        to work were unemployed, or 14.1 million people.
            (2) There are millions of workers who were displaced during 
        the recent ``Great Recession'' who need to be re-trained so 
        that they can re-integrate into the workforce. According to the 
        bi-annual Displaced Workers Survey, the unemployment rate was 
        4.5 percent in 2007 before spiking to nearly 10 percent in 
        2010.
            (3) Often overlooked are the 982,000 discouraged workers, 
        people who are not looking for work because they do not believe 
        that they are qualified for any available jobs.
            (4) Paradoxically, there are enough jobs available to 
        employ just over 20 percent of these persons--there were 3.0 
        million job openings on the last business day of May 2011 
        according to the Bureau of Labor Statistics.
            (5) The disconnect is that many people searching for work 
        lack the job-specific skills that they need to be competitive 
        for many of these vacancies. Specifically, technology is 
        outpacing the country's current approach to job-related 
        education and training. The difference between white collar and 
        blue collar jobs is fading because traditionally ``blue collar 
        jobs'' are more specialized than ever before.

SEC. 3. PAYROLL TAX FORGIVENESS FOR HIRING AND TRAINING WORKERS.

    (a) In General.--Section 3111 of the Internal Revenue Code of 1986 
is amended by adding at the end the following new subsection:
    ``(e) Special Exemption for Certain Individuals Hired in Between 
2011 and 2015.--
            ``(1) In general.--During the period beginning on the day 
        after the date of the enactment of this subsection and ending 
        on December 31, 2015, subsection (a) shall not apply to wages 
        paid by a qualified employer with respect to employment of any 
        qualified individual for services performed--
                    ``(A) in a trade or business of such qualified 
                employer, or
                    ``(B) in the case of a qualified employer exempt 
                from tax under section 501(a), in furtherance of the 
                activities related to the purpose or function 
                constituting the basis of the employer's exemption 
                under section 501.
            ``(2) Qualified employer.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified employer' 
                means any employer other than the United States, any 
                State, or any political subdivision thereof, or any 
                instrumentality of the foregoing that provides a 
                qualified job training program for or on behalf its 
                employees.
                    ``(B) Treatment of employees of post-secondary 
                educational institutions.--Notwithstanding subparagraph 
                (A), the term `qualified employer' includes any 
                employer which is a public institution of higher 
                education (as defined in section 101(b) of the Higher 
                Education Act of 1965).
            ``(3) Qualified individual.--For purposes of this 
        subsection, the term `qualified individual' means any 
        individual who--
                    ``(A) begins employment with a qualified employer 
                after the date of the enactment of this subsection and 
                before January 1, 2016,
                    ``(B) certifies by signed affidavit, under 
                penalties of perjury, that such individual has not been 
                employed for more than 40 hours during the 60-day 
                period ending on the date such individual begins such 
                employment,
                    ``(C) certifies by signed affidavit, under 
                penalties of perjury, that such individual has 
                satisfactorily completed a qualified job training 
                program,
                    ``(D) is not employed by the qualified employer to 
                replace another employee of such employer unless such 
                other employee separated from employment voluntarily or 
                for cause, and
                    ``(E) is not an individual described in section 
                51(i)(1) (applied by substituting `qualified employer' 
                for `taxpayer' each place it appears).
            ``(4) Qualified job training program.--For purposes of this 
        subsection, the term `qualified job training program' means--
                    ``(A) a program provided by a qualified employer 
                that is in-house and is specific training for available 
                jobs at such employer, or
                    ``(B) a program under which a qualified employer 
                partners with a public institution of higher education 
                (as defined in section 101(b) of the Higher Education 
                Act of 1965) to provide specific training for available 
                jobs at such employer.
            ``(5) Election.--A qualified employer may elect to have 
        this subsection not apply. Such election shall be made in such 
        manner as the Secretary may require.''.
    (b) Coordination With Work Opportunity Credit.--Section 51(c) of 
such Code is amended by adding at the end the following new paragraph:
            ``(6) Coordination with payroll tax forgiveness for hiring 
        and training workers.--The term `wages' shall not include any 
        amount paid or incurred to a qualified individual (as defined 
        in section 3111(e)(3)) during the 1-year period beginning on 
        the hiring date of such individual by a qualified employer (as 
        defined in section 3111(e)) unless such qualified employer 
        makes an election not to have section 3111(e) apply.''.
    (c) Transfers to Federal Old-Age and Survivors Insurance Trust 
Fund.--There are hereby appropriated to the Federal Old-Age and 
Survivors Trust Fund and the Federal Disability Insurance Trust Fund 
established under section 201 of the Social Security Act (42 U.S.C. 
401) amounts equal to the reduction in revenues to the Treasury by 
reason of the amendments made by subsection (a). Amounts appropriated 
by the preceding sentence shall be transferred from the general fund at 
such times and in such manner as to replicate to the extent possible 
the transfers that would have occurred to such Trust Fund had such 
amendments not been enacted.
    (d) Application to Railroad Retirement Taxes.--
            (1) In general.--Section 3221 of the Internal Revenue Code 
        of 1986 is amended by redesignating subsection (d) as 
        subsection (e) and by inserting after subsection (c) the 
        following new subsection:
    ``(d) Special Rate for Certain Individuals Hired in Between 2011 
and 2015.--
            ``(1) In general.--In the case of compensation paid by a 
        qualified employer during the period beginning on the day after 
        the date of the enactment of this subsection and ending on 
        December 31, 2015, with respect to having a qualified 
        individual in the employer's employ for services rendered to 
        such qualified employer, the applicable percentage under 
        subsection (a) shall be equal to the rate of tax in effect 
        under section 3111(b) for the calendar year.
            ``(2) Qualified employer.--For purposes of this subsection, 
        the term `qualified employer' means any employer other than the 
        United States, any State, or any political subdivision thereof, 
        or any instrumentality of the foregoing that provides a 
        qualified job training program for or on behalf its employees.
            ``(3) Qualified individual.--For purposes of this 
        subsection, the term `qualified individual' means any 
        individual who--
                    ``(A) begins employment with a qualified employer 
                after the date of the enactment of this subsection and 
                before January 1, 2016,
                    ``(B) certifies by signed affidavit, under 
                penalties of perjury, that such individual has not been 
                employed for more than 40 hours during the 60-day 
                period ending on the date such individual begins such 
                employment,
                    ``(C) certifies by signed affidavit, under 
                penalties of perjury, that such individual has 
                satisfactorily completed a qualified job training 
                program,
                    ``(D) is not employed by the qualified employer to 
                replace another employee of such employer unless such 
                other employee separated from employment voluntarily or 
                for cause, and
                    ``(E) is not an individual described in section 
                51(i)(1) (applied by substituting `qualified employer' 
                for `taxpayer' each place it appears).
            ``(4) Qualified job training program.--For purposes of this 
        subsection, the term `qualified job training program' means--
                    ``(A) a program provided by a qualified employer 
                that is in-house and is specific training for available 
                jobs at such employer, or
                    ``(B) a program under which a qualified employer 
                partners with a public institution of higher education 
                (as defined in section 101(b) of the Higher Education 
                Act of 1965) to provide specific training for available 
                jobs at such employer.
            ``(5) Election.--A qualified employer may elect to have 
        this subsection not apply. Such election shall be made in such 
        manner as the Secretary may require.''.
            (2) Transfers to social security equivalent benefit 
        account.--There are hereby appropriated to the Social Security 
        Equivalent Benefit Account established under section 15A(a) of 
        the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) 
        amounts equal to the reduction in revenues to the Treasury by 
        reason of the amendments made by paragraph (1). Amounts 
        appropriated by the preceding sentence shall be transferred 
        from the general fund at such times and in such manner as to 
        replicate to the extent possible the transfers which would have 
        occurred to such Account had such amendments not been enacted.
    (e) Effective Dates.--
            (1) In general.--Except as provided in paragraph (2), the 
        amendments made by this subsection shall apply to wages paid 
        after the date of the enactment of this Act.
            (2) Railroad retirement taxes.--The amendments made by 
        subsection (d) shall apply to compensation paid after the date 
        of the enactment of this Act.

SEC. 4. BUSINESS CREDIT FOR RETENTION OF CERTAIN NEWLY HIRED 
              INDIVIDUALS IN 2011.

    (a) In General.--In the case of any taxable year ending after the 
date of the enactment of this Act, the current year business credit 
determined under section 38(b) of the Internal Revenue Code of 1986 for 
such taxable year shall be increased, with respect to each retained 
worker with respect to which subsection (b)(2) is first satisfied 
during such taxable year, by the lesser of--
            (1) $1,000, or
            (2) 6.2 percent of the wages (as defined in section 3401(a) 
        of such Code) paid by the taxpayer to such retained worker 
        during the 52 consecutive week period referred to in subsection 
        (b)(2).
    (b) Retained Worker.--For purposes of this section, the term 
``retained worker'' means any qualified individual (as defined in 
section 3111(e)(3) or section 3221(d)(3) of the Internal Revenue Code 
of 1986)--
            (1) who was employed by the taxpayer on any date during the 
        taxable year,
            (2) who was so employed by the taxpayer for a period of not 
        less than 52 consecutive weeks, and
            (3) whose wages (as defined in section 3401(a)) for such 
        employment during the last 26 weeks of such period equaled at 
        least 80 percent of such wages for the first 26 weeks of such 
        period.
    (c) Employer Staffing and Payroll Must Increase.--No amount shall 
be allowed as a credit under this section to an employer for a taxable 
year unless the employer has a net increase for the taxable year in 
those who work at least 20 hours per week for the employer during the 
taxable year and the amount of its payroll during the taxable year.
    (d) Limitation on Carrybacks.--No portion of the unused business 
credit under section 38 of the Internal Revenue Code of 1986 for any 
taxable year which is attributable to the increase in the current year 
business credit under this section may be carried to a taxable year 
beginning before the date of the enactment of this section.
    (e) Treatment of Possessions.--
            (1) Payments to possessions.--
                    (A) Mirror code possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States with a mirror code tax system amounts equal to 
                the loss to that possession by reason of the 
                application of this section (other than this 
                subsection). Such amounts shall be determined by the 
                Secretary of the Treasury based on information provided 
                by the government of the respective possession.
                    (B) Other possessions.--The Secretary of the 
                Treasury shall pay to each possession of the United 
                States which does not have a mirror code tax system 
                amounts estimated by the Secretary of the Treasury as 
                being equal to the aggregate benefits that would have 
                been provided to residents of such possession by reason 
                of the application of this section (other than this 
                subsection) if a mirror code tax system had been in 
                effect in such possession. The preceding sentence shall 
                not apply with respect to any possession of the United 
                States unless such possession has a plan, which has 
                been approved by the Secretary of the Treasury, under 
                which such possession will promptly distribute such 
                payments to the residents of such possession.
            (2) Coordination with credit allowed against united states 
        income taxes.--No increase in the credit determined under 
        section 38(b) of the Internal Revenue Code of 1986 against 
        United States income taxes for any taxable year determined 
        under subsection (a) shall be taken into account with respect 
        to any person--
                    (A) to whom a credit is allowed against taxes 
                imposed by the possession by reason of this section for 
                such taxable year, or
                    (B) who is eligible for a payment under a plan 
                described in paragraph (1)(B) with respect to such 
                taxable year.
            (3) Definitions and special rules.--
                    (A) Possession of the united states.--For purposes 
                of this subsection, the term ``possession of the United 
                States'' includes the Commonwealth of Puerto Rico and 
                the Commonwealth of the Northern Mariana Islands.
                    (B) Mirror code tax system.--For purposes of this 
                subsection, the term ``mirror code tax system'' means, 
                with respect to any possession of the United States, 
                the income tax system of such possession if the income 
                tax liability of the residents of such possession under 
                such system is determined by reference to the income 
                tax laws of the United States as if such possession 
                were the United States.
                    (C) Treatment of payments.--For purposes of section 
                1324(b)(2) of title 31, United States Code, rules 
                similar to the rules of section 1001(b)(3)(C) of the 
                American Recovery and Reinvestment Tax Act of 2009 
                shall apply.
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