I 112th CONGRESS 2d Session H. R. 6030 IN THE HOUSE OF REPRESENTATIVES June 27, 2012 Mr. Levin (for himself, Mr. Rangel, Mr. Stark, Mr. McDermott, Mr. Lewis of Georgia, Mr. Neal, Mr. Becerra, Mr. Thompson of California, Mr. Larson of Connecticut, Mr. Blumenauer, Mr. Kind, Mr. Pascrell, Ms. Berkley, and Mr. Crowley) introduced the following bill; which was referred to the Committee on Ways and Means A BILL To provide a temporary tax credit for increased payroll, to eliminate certain tax benefits for major integrated oil companies, and for other purposes.

1.

Short title

This Act may be cited as the Hire Now Act of 2012.

2.

Temporary tax credit for increased payroll

(a)

In general

In the case of a qualified employer who elects the application of this section, there shall be allowed as a credit against the tax imposed by chapter 1 of the Internal Revenue Code of 1986 for the taxable year which includes December 31, 2012, an amount equal to 10 percent of the excess (if any) of— (1)the sum of the wages and compensation paid by such qualified employer for qualified services during calendar year 2012, over (2)the sum of such wages and compensation paid during calendar year 2011. (b)

Limitation

The amount of the excess taken into account under subsection (a) with respect to any qualified employer shall not exceed $5,000,000. (c)

Wages and compensation

For purposes of this section— (1)

Wages

The term wages has the meaning given such term under section 3121 of the Internal Revenue Code of 1986 for purposes of the tax imposed by section 3111(a) of such Code. (2)

Compensation

The term compensation has the meaning given such term under section 3231 of such Code for purposes of the portion of the tax imposed by section 3221(a) of such Code that corresponds to the tax imposed by section 3111(a) of such Code. (3)

Application of contribution and benefit base to calendar year 2011

For purposes of determining wages and compensation under subsection (a)(2), the contribution and benefit base as determined under section 230 of the Social Security Act shall be such amount as in effect for calendar year 2012. (4)

Special rule when no wages or compensation in 2011

In any case in which the sum of the wages and compensation paid by a qualified employer for qualified services during calendar year 2011 is zero, then the amount taken into account under subsection (a)(2) shall be 80 percent of the amount taken into account under subsection (a)(1). (5)

Coordination with other employment credits

The amount of the excess taken into account under subsection (a) shall be reduced by the sum of all other Federal tax credits determined with respect to wages or compensation paid in calendar year 2012. (d)

Other definitions

(1)

Qualified employer

For purposes of this section— (A)

In general

The term qualified employer has the meaning given such term under section 3111(d)(2) of the Internal Revenue Code of 1986, determined by substituting section 101 of the Higher Education Act of 1965 for section 101(b) of the Higher Education Act of 1965 in subparagraph (B) thereof. (B)

Aggregation rules

Rules similar to the rules of sections 414(b), 414(c), 414(m), and 414(o) of such Code shall apply to determine when multiple entities shall be treated as a single employer, and rules with respect to predecessor and successor employers may be applied, in such manner as may be prescribed by the Secretary of the Treasury or the Secretary's designee (in this section referred to as the Secretary). (2)

Qualified services

The term qualified services means services performed by an individual who is not described in section 51(i)(1) of such Code (applied by substituting qualified employer for taxpayer each place it appears)— (A)in a trade or business of the qualified employer, or (B)in the case of a qualified employer exempt from tax under section 501(a) of such Code, in furtherance of the activities related to the purpose or function constituting the basis of the employer's exemption under section 501 of such Code. (e)

Application of certain rules

Rules similar to the rules of sections 280C(a) and 6501(m) of the Internal Revenue Code of 1986 shall apply with respect to the credit determined under this section. (f)

Treatment of credit

For purposes of the Internal Revenue Code of 1986— (1)

Taxable employers

(A)

In general

The credit allowed under subsection (a) with respect to qualified services described in subsection (d)(2)(A) for any taxable year shall be added to the current year business credit under section 38(b) of such Code for such taxable year and shall be treated as a credit allowed under subpart D of part IV of subchapter A of chapter 1 of such Code. (B)

Limitation on carrybacks

No portion of the unused business credit under section 38 of such Code for any taxable year which is attributable to an increase in the current year business credit by reason of subparagraph (A) may be carried to a taxable year beginning before the date of the enactment of this section. (2)

Tax-exempt employers

(A)

In general

The credit allowed under subsection (a) with respect to qualified services described in subsection (d)(2)(B) for any taxable year— (i)shall be treated as a credit allowed under subpart C of part IV of subchapter A of chapter 1 of such Code, and (ii)shall be added to the credits described in subparagraph (A) of section 6211(b)(4) of such Code. (B)

Conforming amendment

Section 1324(b)(2) of title 31, United States Code, is amended by inserting or due under section 2 of the Hire Now Act of 2012 after the Housing Assistance Tax Act of 2008. (g)

Treatment of Possessions

(1)

Payments to possessions

(A)

Mirror code possessions

The Secretary 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 subsections (a) through (f). Such amounts shall be determined by the Secretary based on information provided by the government of the respective possession of the United States. (B)

Other possessions

The Secretary shall pay to each possession of the United States which does not have a mirror code tax system the amount estimated by the Secretary as being equal to the loss to that possession that would have occurred by reason of the application of subsections (a) through (f) 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 establishes to the satisfaction of the Secretary that the possession has implemented (or, at the discretion of the Secretary, will implement) an income tax benefit which is substantially equivalent to the income tax credit allowed under such subsections. (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 by reason of subsection (f)(1)(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 American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, the Commonwealth of Puerto Rico, and the United States Virgin 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, the payments under this subsection shall be treated in the same manner as a refund due from credit provisions described in such section. (h)

Regulations

The Secretary shall prescribe such regulations or guidance as are necessary to carry out the provisions of this section.

3.

Prohibition on using last-in, first-out accounting for major integrated oil companies

(a)

In general

Section 472 of the Internal Revenue Code of 1986 is amended by adding at the end the following new subsection: (h)

Major integrated oil companies

Notwithstanding any other provision of this section, a major integrated oil company (as defined in section 167(h)(5)(B)) may not use the method provided in subsection (b) in inventorying of any goods.. (b)

Effective date and special rule

(1)

In general

The amendment made by subsection (a) shall apply to taxable years ending after the date of the enactment of this Act. (2)

Change in method of accounting

In the case of any taxpayer required by the amendment made by this section to change its method of accounting for its first taxable year ending after the date of the enactment of this Act— (A)such change shall be treated as initiated by the taxpayer, (B)such change shall be treated as made with the consent of the Secretary of the Treasury, and (C)the net amount of the adjustments required to be taken into account by the taxpayer under section 481 of the Internal Revenue Code of 1986 shall be taken into account ratably over a period (not greater than 8 taxable years) beginning with such first taxable year.

4.

Limitation on deduction for intangible drilling and development costs of major integrated oil companies

(a)

In general

Section 263(c) of the Internal Revenue Code of 1986 is amended by adding at the end the following new sentence: This subsection shall not apply to amounts paid or incurred by a taxpayer in any taxable year in which such taxpayer is a major integrated oil company (as defined in section 167(h)(5)(B)).. (b)

Effective date

The amendment made by this section shall apply to amounts paid or incurred in taxable years ending after the date of the enactment of this Act.