[Congressional Record Volume 145, Number 87 (Friday, June 18, 1999)]
[Extensions of Remarks]
[Pages E1333-E1334]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                               H.R. 2015

                                 ______
                                 

                        HON. CHARLES A. GONZALEZ

                                of texas

                    in the house of representatives

                         Friday, June 18, 1999

  Mr. GONZALEZ. Mr. Speaker, I introduced H.R. 2015 on June 7, 1999. 
This legislation would reauthorize the Welfare to Work Tax Credit and 
the Work Opportunity Tax Credit programs for five years. Both of these 
tax credits are set to expire on June 30th of this year.
  Mr. Speaker, for the last seven years America has experienced an 
historic level of economic growth. The unemployment rate is at a 29 
year low, and over 18 million jobs have been created. But, despite this 
spectacular success there still are many pockets of poverty and of 
unemployment or underemployment in our country. Mr. Speaker, the 
Welfare to Work tax credit and the Work Opportunity Tax Credits are 
specifically targeted to increasing employment amongst the hardest to 
hire worker groups in this country. These credits reward work, and 
their tax benefits accrue to the private firms that hire from these at-
risk groups. If we are serious about moving millions of welfare 
recipients as well as unemployed and underemployed Americans into full 
time jobs in the private sector, Congress must act now to fully 
reauthorize the Welfare to Work and Work Opportunity Tax Credits.
  The Welfare to Work Tax Credit was established as part of the 
Taxpayer Relief Act of 1997. This tax credit is intended for long term 
Temporary Assistance to Needy Families (TANF) recipients. A private 
firm that hires a member of a family that has received TANF benefits 
for at least 18 consecutive months can apply for the credit. The 
Welfare to Work Tax Credit counts against a firm's federal income tax 
liability for an amount up to 35% of the first $10,000 earned during 
the individual's first year of employment, and 50% for the first 
$10,000 earned during the second year of employment. An employer must 
retain eligible workers for at least 400 hours or 180 days in order to 
receive the credit. In the first two quarters of FY 1999, over 47,000 
Welfare to Work certifications were issued.
  The Work Opportunity Tax Credit was initially authorized as part of 
the Small Business Job Protection Act of 1996. This tax credit is 
intended for several hard to hire groups other than long term welfare 
recipients. Groups eligible for the Work Opportunity Tax Credit are: 
Members of families receiving TANF benefits for any 9 months during the 
18 month period before starting employment; 18 to 24 year-olds whose 
principal place of abode in an empowerment zone or an enterprise 
community; 18 to 24 year-olds who are members of families receiving 
food stamp benefits for the 6-month period ending on the hiring date; 
16 to 17 year-olds hired for summer work for any 90 day period between 
May 1 and September 15 whose principal place of abode is an empowerment 
zone or an enterprise community.
  Veterans who are members of families that have received food stamps 
for at least a 3 month period during the 15 month period ending on the 
hiring date.
  Individuals with physical or mental disabilities that have been 
referred by their state's vocational rehabilitation program.
  Economically disadvantaged ex-felons.
  Supplemental Security Income (SSI) recipients.
  For eligible hires who remain on a firm's payroll at least 400 hours, 
an employer can apply a Work Opportunity Tax credit against the firm's 
federal income tax for an amount equal to up to 40 percent of the first 
$6,000 in wages paid during the worker's first year of employment. For 
eligible hires who remain employed from 120 hours to 399 hours the Work 
Opportunity Tax Credit rate is 25 percent for the first $6,000 in 
wages. With regards to summer youth employees, the Work Opportunity Tax 
Credit is applied against the first $3,000 earned in any 90 day period 
between May 1 and September 15. During Fiscal

[[Page E1334]]

Year 1998, 285,322 Work Opportunity Tax Credit certifications were 
issued. For the first two quarters of FY 1999, 157,850 such 
certifications were issued.
  Both the Welfare to Work and Work Opportunity Tax Credits are set to 
expire this year on June 30th. H.R. 2015 would reauthorize both credits 
for five years. Mr. Speaker, I believe it is important that this 
Congress take a firm stand in favor of economic development and reduce 
the remaining pockets of unemployment and underemployment in this 
country by fully reauthorizing both the Welfare to Work and the Work 
Opportunity Tax Credits for 5 years. Both these credits have minimal 
impact on the federal budget. The Joint Committee of Taxation estimated 
that currently issued credit certifications for the Work Opportunity 
Tax Credit would cost $445 million between fiscal year 1999 and fiscal 
year 2004, and Welfare to Work credits would cost $25 million for the 
same period. We cannot afford to put these programs at risk each year 
during the annual budget process. We need to reauthorize them for at 
least a full 5 year period. Mr. Speaker, I encourage may colleagues to 
join me in support of H.R. 2015.

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