[Congressional Bills 114th Congress]
[From the U.S. Government Publishing Office]
[S. 3231 Introduced in Senate (IS)]

<DOC>






114th CONGRESS
  2d Session
                                S. 3231

     To establish a policy framework that offers and rewards work, 
strengthens the incentive to work, greatly reduces poverty, and creates 
         new jobs in the United States, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             July 14, 2016

Ms. Baldwin (for herself and Mr. Booker) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
     To establish a policy framework that offers and rewards work, 
strengthens the incentive to work, greatly reduces poverty, and creates 
         new jobs in the United States, 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; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Stronger Way 
Act''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
                   TITLE I--TRANSITIONAL JOBS PROGRAM

Sec. 101. Purposes.
Sec. 102. Definitions.
Sec. 103. Transitional jobs.
Sec. 104. Authorization of appropriations.
                TITLE II--POVERTY REDUCTION TAX CREDITS

Sec. 201. Reform of earned income credit.
Sec. 202. Establishment of fully refundable child tax credit.

                   TITLE I--TRANSITIONAL JOBS PROGRAM

SEC. 101. PURPOSES.

    The purposes of the transitional jobs program under this title are 
to--
            (1) reduce poverty and unemployment;
            (2) offer unemployed or partially employed individuals, in 
        any local area in a State, the opportunity to work in a 
        transitional job for the purpose of enabling such individuals 
        to gain, through wage-paying jobs, the experience and skills 
        needed to move into regular employment; and
            (3) assist employers to create new regular employment.

SEC. 102. DEFINITIONS.

    In this title:
            (1) Employer of record.--The term ``employer of record'' 
        means a local government, nonprofit, or for-profit entity 
        selected under section 103(c)(3)(A) to carry out the 
        responsibilities described in section 103(d).
            (2) Host site employer.--The term ``host site employer'' 
        means an employer that--
                    (A) provides an individual who is eligible for a 
                transitional job with the opportunity to work in a 
                specific transitional job for which the individual is 
                qualified, as determined by such employer, at a 
                worksite that is under the direct supervision of such 
                employer; and
                    (B) agrees to be responsible for--
                            (i) selecting, training, and supervising 
                        the transitional jobs worker, including 
                        providing a written job description, initial 
                        training, ongoing management, and periodic 
                        performance reviews;
                            (ii) certifying to the employer of record, 
                        in the manner prescribed by the Secretary, the 
                        number of hours that the transitional jobs 
                        worker has worked for the host site employer; 
                        and
                            (iii) cooperating with the employer of 
                        record in facilitating the movement of the 
                        transitional jobs worker into regular 
                        employment.
            (3) Local area.--The term ``local area'' means a city, 
        county, or other general purpose political subdivision of a 
        State.
            (4) Regular employment.--The term ``regular employment'' 
        means regular, unsubsidized employment, as defined by the 
        Secretary.
            (5) Secretary.--The term ``Secretary'' means the Secretary 
        of Labor.
            (6) State.--The term ``State'' means each of the several 
        States of the United States, the District of Columbia, and the 
        Commonwealth of Puerto Rico.
            (7) Transitional job.--The term ``transitional job'' means 
        a job offered to an eligible individual through the program 
        authorized under section 103 that--
                    (A) provides the rate of pay described in section 
                103(d)(6); and
                    (B) provides the individual with employment of--
                            (i) not less than 16 hours per week; and
                            (ii) not more than 40 hours per week, when 
                        combined with any hours per week of work that 
                        the individual is employed through any other 
                        employer (if applicable).

SEC. 103. TRANSITIONAL JOBS.

    (a) Program Authorized.--From amounts made available under section 
104, the Secretary shall establish a program, through grant agreements 
described in subsection (c) with State and local government agencies, 
that provides eligible unemployed or partially employed individuals 
with opportunities to work in a transitional job for the purpose of 
enabling such individuals to gain, through wage-paying jobs, the 
experience and skills needed to move into regular employment.
    (b) Eligibility.--To be eligible for a transitional job, an 
individual shall--
            (1) be a resident of the United States, and a resident of 
        the State in which the individual applies for a transitional 
        job;
            (2) be not less than 18 years of age;
            (3) not be incarcerated in any Federal or State penal 
        institution, unless the individual is participating in a work-
        release program authorized by the United States or a State and 
        the United States or the State authorizes employment under this 
        circumstance in a transitional job; and
            (4) be unemployed, or employed for less than 30 hours per 
        week, for not less than 4 consecutive weeks preceding the 
        individual's application for a transitional job.
    (c) Transitional Jobs Program Administration.--
            (1) In general.--The Secretary shall enter into agreements 
        with State and local government agencies under which--
                    (A) the State and local government agencies carry 
                out all activities described in paragraph (3); and
                    (B) the Secretary provides grants to the State and 
                local government agencies to carry out such activities.
            (2) Selection criteria.--The Secretary shall select State 
        and local government agencies for the agreements described in 
        paragraph (1) based on--
                    (A) the agencies' level of experience and 
                commitment to transitional jobs programs; and
                    (B) such other criteria as the Secretary determines 
                appropriate, which may include criteria relating to the 
                implementation by such agencies of transitional jobs 
                program models under this title.
            (3) Activities.--The activities described in this paragraph 
        are the following:
                    (A) Select, on a competitive basis, and enter into 
                a contract with one or more local government, 
                nonprofit, or for-profit entities to--
                            (i) administer the transitional jobs 
                        program in the State or local area to be 
                        served; and
                            (ii) function as the employer of record 
                        described in subsection (d).
                    (B) Pay each entity selected to serve as an 
                employer of record, based upon the terms of the 
                contract and full documentation of performance, for the 
                entity's performance of its contractually defined 
                services in administering the transitional jobs 
                program, including reimbursement of the entity for 
                appropriate wages and taxes the entity has paid, as 
                required under paragraphs (6) and (7) of subsection 
                (d), to or on behalf of eligible individuals who worked 
                in transitional jobs in the entity's capacity as an 
                employer of record. A State or local governmental 
                agency may require a host employer to pay a portion of 
                the appropriate wages and taxes for the individual.
                    (C) Cooperate with the Comptroller General of the 
                United States, the Congressional Budget Office, and 
                other Federal and State agencies in the performance of 
                audits and the conduct of fiscal and programmatic 
                oversight.
                    (D) Annually submit to the Secretary, and to the 
                governor or other chief executive officer of the State 
                in which the program is located, and the State 
                legislature, a report on the State or local government 
                agency's role and accomplishments in the operation of 
                the transitional jobs program, in a format specified by 
                the Secretary.
                    (E) Conduct, or enter into arrangements with 
                independent academic or research organizations to 
                conduct, periodic evaluations of the effectiveness of 
                the program within the State or local area served in--
                            (i) reducing poverty and unemployment;
                            (ii) enabling unemployed and underemployed 
                        individuals to gain the experience and skills 
                        needed to move into regular employment; and
                            (iii) assisting employers in creating new 
                        regular employment.
                    (F) Promulgate any rules necessary for the agency's 
                operation of the transitional jobs program.
            (4) Scope of program.--
                    (A) In general.--The Secretary shall, to the 
                greatest extent practicable and subject to the 
                availability of appropriations, ensure that the 
                agreements described in paragraph (1) make the 
                transitional jobs program available to eligible 
                individuals in all local areas of all States.
                    (B) Individuals with significant barriers to 
                employment.--Notwithstanding subparagraph (A), a State 
                or local government agency entering into an agreement 
                under paragraph (1) may, in carrying out the activities 
                described in paragraph (3), choose to target the 
                assistance to eligible individuals under subsection (b) 
                who have significant barriers to employment.
                    (C) Use of existing systems.--A State or local 
                government agency entering into an agreement under 
                paragraph (1) may carry out the activities described in 
                paragraph (3) through, or in alignment with, other 
                subsidized employment and job training activities or 
                systems available within the State or local area.
    (d) Responsibilities of an Employer of Record.--Each local 
government, nonprofit, or for-profit entity selected to serve as an 
employer of record under subsection (c)(3)(A) shall do each of the 
following:
            (1) Determine the eligibility of individuals applying for 
        the transitional jobs program under this title.
            (2) Conduct orientation activities for individuals that the 
        employer of record has determined are eligible for the 
        transitional jobs program.
            (3) Assess the education, prior work experience, and other 
        relevant factors of each eligible individual who requests a 
        transitional job, for the purpose of assisting the individual 
        to be successful in applying for and performing well in a 
        specific transitional job.
            (4) Connect each eligible individual requesting a 
        transitional job to the one-stop delivery system established 
        under section 121(e) of the Workforce Innovation and 
        Opportunity Act (29 U.S.C. 3151(e)), and to other resources 
        that provide assistance to job seekers.
            (5) Offer each eligible individual who desires to work in a 
        transitional job and meets the eligibility requirements under 
        paragraphs (1) through (4) of subsection (b) the opportunity to 
        work for a host site employer. The host site employer may be--
                    (A) the employer of record; or
                    (B) another organization that has entered into an 
                agreement with the employer of record, and as part of 
                such agreement, agrees to function as, and meet the 
                responsibilities of, a host site employer, for a period 
                not to exceed 30 weeks, subject to the requirements of 
                subsection (e).
            (6) Pay each individual described in paragraph (5), for 
        each hour of work performed for the host site employer, an 
        amount at a rate of pay that is equal to, or greater than, the 
        greater of--
                    (A) the minimum wage rate applicable in the State 
                in which the applicable position is located;
                    (B) the wage rate applicable under section 6 of the 
                Fair Labor Standards Act of 1938 (29 U.S.C. 206); or
                    (C) if the State or local governmental agency 
                determines appropriate, the prevailing wage rate, as 
                determined by the State or local governmental agency, 
                for the type of work performed by the individual.
            (7) With respect to the employment of each individual 
        described in paragraph (5)--
                    (A) pay any applicable Federal taxes for employers, 
                including the employer taxes imposed under sections 
                3111, 3221, and 3301 of the Internal Revenue Code of 
                1986;
                    (B) pay any other State or local government taxes 
                that employers in the relevant State or local area are 
                required to pay;
                    (C) withhold from the individual's earnings the 
                taxes imposed under sections 3101 and 3201 of the 
                Internal Revenue Code of 1986, and any other Federal, 
                State or local tax required to be withheld for 
                employees;
                    (D) complete and submit to the appropriate 
                government agencies, all required Federal, State, or 
                local tax-related and employment-related forms that an 
                employer would typically submit, including by ensuring 
                that each individual provides the information necessary 
                for the completion of such forms;
                    (E) provide the individual with a Form W-2 Wage and 
                Tax Statement for the calendar year;
                    (F) provide for workers' compensation coverage for 
                the individual under the applicable Federal and State 
                workers' compensation laws;
                    (G) perform, either directly or through an 
                agreement described in paragraph (5)(B) with a host 
                site employer, all other functions that an employer 
                would typically perform;
                    (H) comply with the requirements for providing 
                health insurance coverage under the Patient Protection 
                and Affordable Care Act (Public Law 111-148), including 
                the amendments made by such Act; and
                    (I) provide any benefits that are otherwise 
                required of employers in the relevant State or local 
                area.
            (8) Ensure that no transitional job would result in a 
        violation of any of the worker protections provided in 
        subsection (f).
    (e) Duration of Transitional Job.--
            (1) In general.--An individual may work in a transitional 
        job for a period not to exceed 30 weeks, as long as--
                    (A) the individual continues to meet the 
                eligibility requirements for a transitional job under 
                paragraphs (1) through (3) of subsection (b);
                    (B) the individual, during the period of employment 
                in the transitional job, pursues efforts to replace 
                hours of work in the transitional job with regular 
                employment;
                    (C) the individual has not--
                            (i) obtained regular employment that 
                        consistently equals or exceeds 30 hours of work 
                        per week; or
                            (ii) turned down any appropriate offer for 
                        such regular employment, as determined by the 
                        Secretary; and
                    (D) if the individual receives and accepts an 
                appropriate offer for such regular employment, the 
                individual does not postpone the starting date for such 
                employment beyond the earliest date practicable, as 
                determined by the Secretary, even if such date occurs 
                before the individual has reached the maximum 
                transitional job time period of 30 weeks.
            (2) Additional transitional job.--A State or local 
        government agency administering a transitional jobs program 
        under this section shall, subject to the availability of funds, 
        allow an individual who has completed the maximum number of 
        weeks in a transitional job an opportunity to work in a 
        different transitional job, under the same terms and conditions 
        established under this section, if the individual--
                    (A) is unable, after the end of 30 weeks of 
                employment in a transitional job, to find regular 
                employment that consistently equals or exceeds 30 hours 
                per week;
                    (B) engages in an intensive job search, as defined 
                by the Secretary, for not less than 4 consecutive weeks 
                following the completion of a transitional job, and 
                remains unable to find regular employment; and
                    (C) meets the eligibility requirements under 
                paragraphs (1) through (4) of subsection (b).
    (f) Worker Protections.--
            (1) Prohibition against violation of contracts.--A 
        transitional job shall not violate an existing contract for 
        services or a collective bargaining agreement, and a 
        transitional job that would violate a collective bargaining 
        agreement shall not be undertaken without the written 
        concurrence of the labor organization and employer concerned.
            (2) Other prohibitions.--An individual described in 
        subsection (d)(5) shall not be assigned to a transitional job--
                    (A) when any other individual is on layoff from the 
                same or any substantially equivalent job;
                    (B) if the employer has terminated the employment 
                of any regular employee or otherwise caused an 
                involuntary reduction in its workforce with the 
                intention of filling the vacancy so created with the 
                individual working in the transitional job; or
                    (C) if the employer has caused an involuntary 
                reduction to less than full time in hours of any 
                employee in the same or a substantially equivalent job.
    (g) Evaluations.--The Secretary may reserve not more than a total 
of 10 percent of the amounts made available under section 104 for--
            (1) evaluations of transitional jobs program models 
        implemented with grants awarded under this title; and
            (2) other evaluations of grants and activities carried out 
        under this title.

SEC. 104. AUTHORIZATION OF APPROPRIATIONS.

    There are authorized to be appropriated to carry out this title 
such sums as may be necessary.

                TITLE II--POVERTY REDUCTION TAX CREDITS

SEC. 201. REFORM OF EARNED INCOME CREDIT.

    (a) In General.--Section 32 of the Internal Revenue Code of 1986 is 
amended--
            (1) by amending subsection (b) to read as follows:
    ``(b) Percentages and Amounts.--For purposes of subsection (a):
            ``(1) Percentages.--The credit percentage and the phaseout 
        percentage shall be determined as follows:


------------------------------------------------------------------------
                                                                 The
                                                 The credit    phaseout
 ``In the case of an eligible individual with:   percentage   percentage
                                                    is:          is:
------------------------------------------------------------------------
No qualifying children........................        23.15        23.15
1 qualifying child............................         70          23.85
2 qualifying children.........................         75          24.50
3 or more qualifying children.................         80         29.70.
------------------------------------------------------------------------

            ``(2) Amounts.--
                    ``(A) In general.--Subject to subparagraph (B), the 
                earned income amount and the phaseout amount shall be 
                determined as follows:


------------------------------------------------------------------------
                                                 The earned      The
 ``In the case of an eligible individual with:     income      phaseout
                                                 amount is:   amount is:
------------------------------------------------------------------------
No qualifying children........................       $6,612      $16,969
1 qualifying child............................       $8,277      $15,000
2 qualifying children.........................       $9,675      $15,000
3 qualifying children.........................      $12,220     $15,000.
------------------------------------------------------------------------

                    ``(B) Joint returns.--
                            ``(i) In general.--Except as provided in 
                        clause (ii), in the case of a joint return 
                        filed by an eligible individual and such 
                        individual's spouse, the phaseout amount 
                        determined under subparagraph (A) shall be 
                        increased by $5,550.
                            ``(ii) Taxpayers with no qualifying 
                        children.--In the case of a joint return filed 
                        by an eligible individual and such individual's 
                        spouse who do not have a qualifying child for 
                        the taxable year, the phaseout amount in the 
                        third column of the first row of the table in 
                        subparagraph (A) shall be increased by 
                        $8,000.'',
            (2) in subclause (II) of subsection (c)(1)(A)(ii), by 
        striking ``attained age 25 but not attained age 65'' and 
        inserting ``attained age 21 but not attained age 67'', and
            (3) by amending subsection (j) to read as follows:
    ``(j) Inflation Adjustments.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2017, each of the dollar amounts in 
        subparagraph (A) of subsection (b)(2) (after being increased 
        under subparagraph (B) thereof) shall be increased by an amount 
        equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins, determined by substituting 
                `calendar year 2016' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any dollar amount increased under 
        paragraph (1) is not a multiple of $50, such dollar amount 
        shall be rounded to the nearest multiple of $50.''.
    (b) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.

SEC. 202. ESTABLISHMENT OF FULLY REFUNDABLE CHILD TAX CREDIT.

    (a) Elimination of Existing Child Tax Credit.--Subpart A of part IV 
of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code 
of 1986 is amended by striking section 24.
    (b) Establishment of Fully Refundable Child Tax Credit.--Subpart C 
of part IV of subchapter A of chapter 1 of subtitle A of such Code is 
amended by inserting after section 36B the following new section:

``SEC. 36C. CHILD TAX CREDIT.

    ``(a) Allowance of Credit.--In the case of a taxpayer with a 
qualifying child, there shall be allowed as a credit against the tax 
imposed by this subtitle for the taxable year an amount equal to 15 
percent of the taxpayer's earned income (within the meaning of section 
32) which is taken into account in computing taxable income for the 
taxable year.
    ``(b) Limitation.--
            ``(1) In general.--Except as provided in paragraph (2), the 
        amount of the credit allowable to a taxpayer by subsection (a) 
        for the taxable year shall not exceed an amount equal to the 
        product of $1,000 and the number of qualifying children of the 
        taxpayer.
            ``(2) Reduction based on modified adjusted gross income.--
                    ``(A) In general.--The amount which would (but for 
                this paragraph) be allowable as a credit under this 
                subsection shall be reduced (but not below zero) by $50 
                for each $1,000 (or fraction thereof) by which the 
                taxpayer's modified adjusted gross income exceeds--
                            ``(i) $110,000 in the case of a joint 
                        return,
                            ``(ii) $75,000 in the case of an individual 
                        who is not married, and
                            ``(iii) $55,000 in the case of a married 
                        individual filing a separate return.
                    ``(B) Marital status.--For purposes of this 
                paragraph, marital status shall be determined under 
                section 7703.
    ``(c) Qualifying Child.--
            ``(1) In general.--In this section, the term `qualifying 
        child' means a qualifying child of the taxpayer (as defined in 
        section 152(c)) who has not attained age 17.
            ``(2) Exception for certain non-citizens.--The term 
        `qualifying child' shall not include any individual who would 
        not be a dependent if subparagraph (A) of section 152(b)(3) 
        were applied without regard to all that follows `resident of 
        the United States'.
    ``(d) Modified Adjusted Gross Income.--In this section, the term 
`modified adjusted gross income' means adjusted gross income increased 
by any amount excluded from gross income under section 911, 931, or 
933.
    ``(e) Inflation Adjustment.--
            ``(1) In general.--In the case of any taxable year 
        beginning after 2017, the $1,000 amount in subsection (b)(1) 
        shall be increased by an amount equal to--
                    ``(A) such dollar amount, multiplied by
                    ``(B) the cost-of-living adjustment determined 
                under section 1(f)(3) for the calendar year in which 
                the taxable year begins determined by substituting 
                `calendar year 2016' for `calendar year 1992' in 
                subparagraph (B) thereof.
            ``(2) Rounding.--If any increase determined under paragraph 
        (1) is not a multiple of $50, such increase shall be rounded to 
        the nearest multiple of $50.
    ``(f) Identification Requirement.--
            ``(1) Qualifying child identification requirement.--No 
        credit shall be allowed under this section to a taxpayer with 
        respect to any qualifying child unless the taxpayer includes 
        the name and taxpayer identification number of such qualifying 
        child on the return of tax for the taxable year and such 
        taxpayer identification number was issued on or before the due 
        date for filing such return.
            ``(2) Taxpayer identification requirement.--No credit shall 
        be allowed under this section if the identifying number of the 
        taxpayer was issued after the due date for filing the return 
        for the taxable year.
    ``(g) Taxable Year Must Be Full Taxable Year.--Except in the case 
of a taxable year closed by reason of the death of the taxpayer, no 
credit shall be allowable under this section in the case of a taxable 
year covering a period of less than 12 months.
    ``(h) Restrictions on Taxpayers Who Improperly Claimed Credit in 
Prior Year.--
            ``(1) Taxpayers making prior fraudulent or reckless 
        claims.--
                    ``(A) In general.--No credit shall be allowed under 
                this section for any taxable year in the disallowance 
                period.
                    ``(B) Disallowance period.--For purposes of 
                subparagraph (A), the disallowance period is--
                            ``(i) the period of 10 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        fraud, and
                            ``(ii) the period of 2 taxable years after 
                        the most recent taxable year for which there 
                        was a final determination that the taxpayer's 
                        claim of credit under this section was due to 
                        reckless or intentional disregard of rules and 
                        regulations (but not due to fraud).
            ``(2) Taxpayers making improper prior claims.--In the case 
        of a taxpayer who is denied credit under this section for any 
        taxable year as a result of the deficiency procedures under 
        subchapter B of chapter 63, no credit shall be allowed under 
        this section for any subsequent taxable year unless the 
        taxpayer provides such information as the Secretary may require 
        to demonstrate eligibility for such credit.''.
    (c) Conforming Amendments.--
            (1) The table of sections for subpart A of part IV of 
        subchapter A of chapter 1 of subtitle A of the Internal Revenue 
        Code of 1986 is amended by striking the item relating to 
        section 24.
            (2) The table of sections for subpart C of part IV of 
        subchapter A of chapter 1 of subtitle A of such Code is amended 
        by inserting after the item relating to section 36B the 
        following:

``Sec. 36C. Child tax credit.''.
            (3) Subparagraph (B) of section 45R(f)(3) of such Code is 
        amended to read as follows:
                    ``(B) Special rule.--Any amounts paid pursuant to 
                an agreement under section 3121(l) (relating to 
                agreements entered into by American employers with 
                respect to foreign affiliates) which are equivalent to 
                the taxes referred to in subparagraph (A) shall be 
                treated as taxes referred to in such subparagraph.''.
            (4) Section 152(f)(6)(B)(ii) of such Code is amended by 
        striking ``section 24'' and inserting ``section 36C''.
            (5) Paragraph (26) of section 501(c) of such Code is 
        amended in the flush matter at the end by striking ``section 
        24(c)'' and inserting ``section 36C(c)''.
            (6) Section 6211(b)(4)(A) of such Code is amended by 
        inserting ``36C,'' after ``36B,''.
            (7) Section 6213(g)(2) of such Code is amended--
                    (A) in subparagraph (I), by striking ``section 
                24(e)'' and inserting ``section 36C(d)'', and
                    (B) in subparagraph (L), by striking ``24, 32'' and 
                inserting ``32, 36C''.
            (8) Subchapter B of chapter 65 of subtitle F of such Code 
        is amended by striking section 6429.
            (9) Paragraph (2) of section 1324(b) of title 31, United 
        States Code, is amended by inserting ``36C,'' after ``36B,''.
    (d) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2016.
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