Short title

This Act may be cited as the

Hire, Train, Retain Act of 2011

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.

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

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.

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.