[Congressional Record (Bound Edition), Volume 151 (2005), Part 4]
[House]
[Pages 4553-4556]
[From the U.S. Government Publishing Office, www.gpo.gov]




                               AMENDMENTS

  Under clause 8 of rule XVIII, proposed amendments were submitted as 
follows:

                               H.R. 1268

                       Offered By: Mr. Blumenauer

       Amendment No. 1: At the end of the bill (before the short 
     title), insert the following:

                TITLE VII--ADDITIONAL GENERAL PROVISIONS

       Sec. 7001. None of the funds appropriated in this Act shall 
     be available for the torture of any person who is imprisoned, 
     detained, or otherwise held in the custody of, a department, 
     agency, or official of the United States Government, or any 
     contractor of any such department or agency.

                               H.R. 1268

                       Offered By: Mr. Blumenauer

       Amendment No. 2: At the end of the bill (before the short 
     title), insert the following:

                TITLE VII--ADDITIONAL GENERAL PROVISIONS

       Sec. 7001. None of the funds appropriated in this Act shall 
     be available for--
       (1) the torture of any person who is imprisoned, detained, 
     or otherwise held in the custody of, a department, agency, or 
     official of the United States Government, or any contractor 
     of any such department or agency; or
       (2) the involuntary return of any person to a country in 
     which there are substantial grounds for believing the person 
     would be in danger of being subjected to torture, regardless 
     of whether the person is physically present in the United 
     States, pursuant to section 1242 of the Foreign Affairs 
     Reform and Restructuring Act of 1998.

                               H.R. 1268

                  Offered By: Ms. Jackson-Lee of Texas

       Amendment No. 3: Page 46, after line 20, insert the 
     following:

                  Immigration and Customs Enforcement


                         salaries and expenses

       For an additional amount for ``Salaries and Expenses'', 
     hereby derived from the amount provided in this Act for 
     ``United States Coast Guard--operating expenses'', 
     $40,000,000.

                               H.R. 1268

                         Offered By: Mr. Lantos

       Amendment No. 4: Add at the end (before the short title) 
     the following new title:

                      TITLE VII--HOPE AT HOME ACT

     SEC. 701. SHORT TITLE.

       This title may be cited as the ``Help Our Patriotic 
     Employers at Helping Our Military Employees Act'' or the 
     ``HOPE at HOME Act''.

     SEC. 702. NONREDUCTION IN PAY WHILE FEDERAL EMPLOYEE IS 
                   SERVING ON ACTIVE DUTY IN A RESERVE COMPONENT 
                   OF THE UNIFORMED SERVICES.

       (a) In General.--Subchapter IV of chapter 55 of title 5, 
     United States Code, is amended by adding at the end the 
     following new section:

     ``Sec. 5538. Nonreduction in pay while serving on active duty 
       in a reserve component

       ``(a) An employee who is also a member of a reserve 
     component and is absent from a position of employment with 
     the Federal Government under a call or order to serve on 
     active duty for a period of more than 30 days shall be 
     entitled to receive, for each pay period described in 
     subsection (b), an amount equal to the difference (if any) 
     between--
       ``(1) the amount of civilian basic pay that would otherwise 
     have been payable to the employee for such pay period if the 
     employee's civilian employment with the Government had not 
     been interrupted by the service on active duty; and
       ``(2) the amount of military compensation that is payable 
     to the employee for the service on active duty and is 
     allocable to such pay period.
       ``(b)(1) Amounts under this section shall be payable with 
     respect to each pay period (which would otherwise apply if 
     the employee's civilian employment had not been interrupted) 
     that occurs--
       ``(A) while the employee serves on active duty for a period 
     of more than 30 days;
       ``(B) while the employee is hospitalized for, or 
     convalescing from, an illness or injury incurred in, or 
     aggravated during, the performance of such active duty; or
       ``(C) during the 14-day period beginning at the end of such 
     active duty or the end of the period referred to in 
     subparagraph (B).
       ``(2) Paragraph (1) shall not apply with respect to a pay 
     period for which the employee receives civilian basic pay 
     (including by taking any annual, military, or other paid 
     leave) to which the employee is entitled by virtue of the 
     employee's civilian employment with the Government.
       ``(c) Any amount payable under this section to an employee 
     shall be paid--

[[Page 4554]]

       ``(1) by the employing agency of the employee;
       ``(2) from the appropriations or fund that would be used to 
     pay the employee if the employee were in a pay status; and
       ``(3) to the extent practicable, at the same time and in 
     the same manner as would civilian basic pay if the employee's 
     civilian employment had not been interrupted.
       ``(d) In consultation with Secretary of Defense, the Office 
     of Personnel Management shall prescribe such regulations as 
     may be necessary to carry out this section.
       ``(e) In consultation with the Office of Personnel 
     Management, the head of each employing agency shall prescribe 
     procedures to ensure that the rights under this section apply 
     to the employees of such agency. In consultation with the 
     Office of Personnel Management, the Administrator of the 
     Federal Aviation Administration shall prescribe procedures to 
     ensure that the rights under this section apply to the 
     employees of that agency.
       ``(f) In this section:
       ``(1) The terms `active duty for a period of more than 30 
     days', `member', and `reserve component' have the meanings 
     given such terms in section 101 of title 37.
       ``(2) The term `civilian basic pay', with respect to an 
     employee, includes any amount payable under section 5304 of 
     this title or under such other law providing for the 
     compensation of the employee by the employing agency for work 
     performed.
       ``(3) The term `employing agency', as used with respect to 
     an employee entitled to any payments under this section, 
     means the agency with respect to which the employee has 
     reemployment rights under chapter 43 of title 38. The term 
     `agency' has the meaning given such term in subparagraph (C) 
     of section 2302(a)(2) of this title, except that the term 
     includes Government corporations and agencies excluded by 
     clause (i) or (ii) of such subparagraph.
       ``(4) The term `military compensation' has the meaning 
     given the term `pay' in section 101(21) of title 37, except 
     that the term includes allowances under chapter 7 of such 
     title.''.
       (b) Clerical Amendment.--The table of sections at the 
     beginning of chapter 55 of title 5, is amended by inserting 
     after the item relating to section 5537 the following new 
     item:

``5538. Nonreduction in pay while serving on active duty in a reserve 
              component.''.

       (c) Application of Amendment.--Section 5538 of title 5, 
     United States Code, as added by subsection (a), shall apply 
     with respect to pay periods (as described in subsection (b) 
     of such section) beginning on or after the date of the 
     enactment of this Act.

     SEC. 703. ACTIVE-DUTY RESERVE COMPONENT EMPLOYEE CREDIT ADDED 
                   TO GENERAL BUSINESS CREDIT.

       (a) Addition of Credit.--Subpart D of part IV of subchapter 
     A of chapter 1 of the Internal Revenue Code of 1986 (relating 
     to business-related credits) is amended by adding at the end 
     the following new section:

     ``SEC. 45J. ACTIVE-DUTY RESERVE COMPONENT EMPLOYEE CREDIT.

       ``(a) General Rule.--For purposes of section 38, the Ready 
     Reserve-National Guard employee credit determined under this 
     section for any taxable year with respect to each Ready 
     Reserve-National Guard employee of an employer is an amount 
     equal to the lesser of--
       ``(1) 50 percent of the actual compensation amount paid 
     with respect to such Ready Reserve-National Guard employee 
     for such taxable year while the employee is absent from 
     employment for a reason described in subsection (b); or
       ``(2) $30,000.
       ``(b) Covered Pay Periods.--Subsection (a) shall apply with 
     respect to a Ready Reserve-National Guard employee--
       ``(1) while the employee serves on active duty for a period 
     of more than 30 days;
       ``(2) while the employee is hospitalized for, or 
     convalescing from, an illness or injury incurred in, or 
     aggravated during, the performance of such active duty; or
       ``(3) during the 14-day period beginning at the end of such 
     active duty or the end of the period referred to in 
     subparagraph (B).
       ``(c) Limitation.--No credit shall be allowed under 
     subsection (a) with respect to a Ready Reserve-National Guard 
     employee on any day on which the employee was not scheduled 
     to work (for a reason other than such service on active duty) 
     and ordinarily would not have worked.
       ``(d) Portion of Credit Refundable.--
       ``(1) In general.--In the case of an employer described in 
     paragraph (2), the aggregate credits allowed to a taxpayer 
     under subpart C shall be increased by the lesser of--
       ``(A) the credit which would be allowed under this section 
     without regard to this subsection and the limitation under 
     section 38(c), or
       ``(B) the amount by which the aggregate amount of credits 
     allowed by this subpart (determined without regard to this 
     subsection) would increase if the limitation imposed by 
     section 38(c) for any taxable year were increased by the 
     amount of employer payroll taxes imposed on the taxpayer 
     during the calendar year in which the taxable year begins.

     The amount of the credit allowed under this subsection shall 
     not be treated as a credit allowed under this subpart and 
     shall reduce the amount of the credit otherwise allowable 
     under subsection (a) without regard to section 38(c).
       ``(2) Employer described.--An employer is described in this 
     paragraph if the employer is--
       ``(A) an organization exempt from tax under this chapter,
       ``(B) any State or political subdivision thereof, the 
     District of Columbia, any possession of the United States, or 
     any agency or instrumentality of any of the foregoing, or
       ``(C) any Indian tribal government (within the meaning of 
     section 7871) or any agency or instrumentality thereof.
       ``(3) Employer payroll taxes.--For purposes of this 
     subsection--
       ``(A) In general.--The term `employer payroll taxes' means 
     the taxes imposed by--
       ``(i) section 3111(b), and
       ``(ii) sections 3211(a) and 3221(a) (determined at a rate 
     equal to the rate under section 3111(b)).
       ``(B) Special rule.--A rule similar to the rule of section 
     24(d)(2)(C) shall apply for purposes of subparagraph (A).
       ``(e) Definitions.--In this section--
       ``(1) The terms `active duty for a period of more than 30 
     days', `member', and `reserve component' have the meanings 
     given such terms in section 101 of title 37, United States 
     Code.
       ``(2) The term `compensation' means any remuneration for 
     employment, whether in cash or in kind, which is paid or 
     incurred by a taxpayer and which is deductible from the 
     taxpayer's gross income under section 162(a)(1).
       ``(3) The term `Ready Reserve-National Guard employee' with 
     respect to an employer, means an employee of the employer who 
     is also a member of a reserve component during a taxable 
     year.''.
       (b) Credit To Be Part of General Business Credit.--
     Subsection (b) of section 38 of such Code (relating to 
     general business credit) is amended by striking ``plus'' at 
     the end of paragraph (18), by striking the period at the end 
     of paragraph (19) and inserting ``, plus'', and by adding at 
     the end the following new paragraph:
       ``(20) the active-duty reserve component employee credit 
     determined under section 45J(a).''.
       (c) Conforming Amendment.--
       (1) Paragraph (2) of section 1324(b) of title 31, United 
     States Code, is amended by inserting ``or 45J'' after 
     ``section 35''.
       (2) The table of sections for subpart D of part IV of 
     subchapter A of chapter 1 of the Internal Revenue Code of 
     1986 is amended by inserting after the item relating to 
     section 45I the following new item:

``Sec. 45J. Active-duty reserve component employee credit.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 704. DIFFERENTIAL WAGE PAYMENTS.

       (a) Income Tax Withholding.--Section 3401 of the Internal 
     Revenue Code of 1986 (relating to definitions) is amended by 
     adding at the end the following new subsection:
       ``(i) Differential Wage Payments to Active Duty Members of 
     the Uniformed Services.--
       ``(1) In general.--For purposes of subsection (a), any 
     differential wage payment shall be treated as a payment of 
     wages by the employer to the employee.
       ``(2) Differential wage payment.--For purposes of paragraph 
     (1), the term `differential wage payment' means any payment 
     which--
       ``(A) is made by an employer to an individual with respect 
     to any period during which the individual is performing 
     service in the uniformed services while on active duty for a 
     period of more than 30 days, and
       ``(B) represents all or a portion of the wages the 
     individual would have received from the employer if the 
     individual were performing service for the employer.''.
       (b) Treatment of Differential Wage Payments for Retirement 
     Plan Purposes.--
       (1) Pension plans.--
       (A) In general.--Section 414(u) of such Code (relating to 
     special rules relating to veterans' reemployment rights under 
     USERRA) is amended by adding at the end the following new 
     paragraph:
       ``(11) Treatment of differential wage payments.--
       ``(A) In general.--Except as provided in this paragraph, 
     for purposes of applying this title to a retirement plan to 
     which this subsection applies--
       ``(i) an individual receiving a differential wage payment 
     shall be treated as an employee of the employer making the 
     payment,
       ``(ii) the differential wage payment shall be treated as 
     compensation, and
       ``(iii) the plan shall not be treated as failing to meet 
     the requirements of any provision described in paragraph 
     (1)(C) by reason of any contribution which is based on the 
     differential wage payment.
       ``(B) Special rule for distributions.--
       ``(i) In general.--Notwithstanding subparagraph (A)(i), for 
     purposes of section 401(k)(2)(B)(i)(I), 403(b)(7)(A)(ii), 
     403(b)(11)(A),

[[Page 4555]]

     or 457(d)(1)(A)(ii), an individual shall be treated as having 
     been severed from employment during any period the individual 
     is performing service in the uniformed services described in 
     section 3401(i)(2)(A).
       ``(ii) Limitation.--If an individual elects to receive a 
     distribution by reason of clause (i), the plan shall provide 
     that the individual may not make an elective deferral or 
     employee contribution during the 6-month period beginning on 
     the date of the distribution.
       ``(C) Nondiscrimination requirement.--Subparagraph (A)(iii) 
     shall apply only if all employees of an employer performing 
     service in the uniformed services described in section 
     3401(i)(2)(A) are entitled to receive differential wage 
     payments on reasonably equivalent terms and, if eligible to 
     participate in a retirement plan maintained by the employer, 
     to make contributions based on the payments . For purposes of 
     applying this subparagraph, the provisions of paragraphs (3), 
     (4), and (5), of section 410(b) shall apply.
       ``(D) Differential wage payment.--For purposes of this 
     paragraph, the term `differential wage payment' has the 
     meaning given such term by section 3401(i)(2).''.
       (B) Conforming amendment.--The heading for section 414(u) 
     of such Code is amended by inserting ``and to Differential 
     Wage Payments to Members on Active Duty'' after ``USERRA''.
       (2) Differential wage payments treated as compensation for 
     individual retirement plans.--Section 219(f)(1) of such Code 
     (defining compensation) is amended by adding at the end the 
     following new sentence: ``The term `compensation' includes 
     any differential wage payment (as defined in section 
     3401(i)(2))''.
       (c) Effective Dates.--
       (1) Subsection (a).--The amendments made by subsection (a) 
     shall apply to remuneration paid after December 31, 2004.
       (2) Subsection (b).--The amendments made by subsection (b) 
     shall apply to plan years beginning after December 31, 2004.
       (d) Provisions Relating to Plan Amendments.--
       (1) In general.--If this subsection applies to any plan or 
     annuity contract amendment--
       (A) such plan or contract shall be treated as being 
     operated in accordance with the terms of the plan or contract 
     during the period described in paragraph (2)(B)(i), and
       (B) except as provided by the Secretary of the Treasury, 
     such plan shall not fail to meet the requirements of the 
     Internal Revenue Code of 1986 or the Employee Retirement 
     Income Security Act of 1974 by reason of such amendment.
       (2) Amendments to which section applies.--
       (A) In general.--This subsection shall apply to any 
     amendment to any plan or annuity contract which is made--
       (i) pursuant to any amendment made by this section, and
       (ii) on or before the last day of the first plan year 
     beginning on or after January 1, 2007.
       (B) Conditions.--This subsection shall not apply to any 
     plan or annuity contract amendment unless--
       (i) during the period beginning on the date the amendment 
     described in subparagraph (A)(i) takes effect and ending on 
     the date described in subparagraph (A)(ii) (or, if earlier, 
     the date the plan or contract amendment is adopted), the plan 
     or contract is operated as if such plan or contract amendment 
     were in effect; and
       (ii) such plan or contract amendment applies retroactively 
     for such period.

     SEC. 705. CREDIT FOR INCOME DIFFERENTIAL FOR EMPLOYMENT OF 
                   ACTIVATED MILITARY RESERVIST AND REPLACEMENT 
                   PERSONNEL.

       (a) In General.--Subpart B of part IV of subchapter A of 
     chapter 1 of the Internal Revenue Code of 1986 (relating to 
     foreign tax credit, etc.) is amended by adding at the end the 
     following new section:

     ``SEC. 30B. EMPLOYER WAGE CREDIT FOR ACTIVATED MILITARY 
                   RESERVISTS.

       ``(a) General Rule.--There shall be allowed as a credit 
     against the tax imposed by this chapter for the taxable year 
     an amount equal to the sum of--
       ``(1) in the case of a small business employer, the 
     employment credit with respect to all qualified employees and 
     qualified replacement employees of the taxpayer, plus
       ``(2) the self-employment credit of a qualified self-
     employed taxpayer.
       ``(b) Employment Credit.--For purposes of this section--
       ``(1) Qualified employees.--
       ``(A) In general.--The employment credit with respect to a 
     qualified employee of the taxpayer for any taxable year is 
     equal to 50 percent of the lesser of--
       ``(i) the excess, if any, of--

       ``(I) the qualified employee's average daily qualified 
     compensation for the taxable year, over
       ``(II) the average daily military pay and allowances 
     received by the qualified employee during the taxable year, 
     while participating in qualified reserve component duty to 
     the exclusion of the qualified employee's normal employment 
     duties for the number of days the qualified employee 
     participates in qualified reserve component duty during the 
     taxable year, including time spent in a travel status, or

       ``(ii) $30,000.

     The employment credit, with respect to all qualified 
     employees, is equal to the sum of the employment credits for 
     each qualified employee under this subsection.
       ``(B) Average daily qualified compensation and average 
     daily military pay and allowances.--As used with respect to a 
     qualified employee--
       ``(i) the term `average daily qualified compensation' means 
     the qualified compensation of the qualified employee for the 
     taxable year divided by the difference between--

       ``(I) 365, and
       ``(II) the number of days the qualified employee 
     participates in qualified reserve component duty during the 
     taxable year, including time spent in a travel status, and

       ``(ii) the term `average daily military pay and allowances' 
     means--

       ``(I) the amount paid to the qualified employee during the 
     taxable year as military pay and allowances on account of the 
     qualified employee's participation in qualified reserve 
     component duty, divided by
       ``(II) the total number of days the qualified employee 
     participates in qualified reserve component duty, including 
     time spent in travel status.

       ``(C) Qualified compensation.--When used with respect to 
     the compensation paid or that would have been paid to a 
     qualified employee for any period during which the qualified 
     employee participates in qualified reserve component duty, 
     the term `qualified compensation' means--
       ``(i) compensation which is normally contingent on the 
     qualified employee's presence for work and which would be 
     deductible from the taxpayer's gross income under section 
     162(a)(1) if the qualified employee were present and 
     receiving such compensation,
       ``(ii) compensation which is not characterized by the 
     taxpayer as vacation or holiday pay, or as sick leave or pay, 
     or as any other form of pay for a nonspecific leave of 
     absence, and with respect to which the number of days the 
     qualified employee participates in qualified reserve 
     component duty does not result in any reduction in the amount 
     of vacation time, sick leave, or other nonspecific leave 
     previously credited to or earned by the qualified employee, 
     and
       ``(iii) group health plan costs (if any) with respect to 
     the qualified employee.
       ``(D) Qualified employee.--The term `qualified employee' 
     means a person who--
       ``(i) has been an employee of the taxpayer for the 31-day 
     period immediately preceding the period during which the 
     employee participates in qualified reserve component duty, 
     and
       ``(ii) is a member of the Ready Reserve of a reserve 
     component of an Armed Force of the United States as defined 
     in sections 10142 and 10101 of title 10, United States Code.
       ``(2) Qualified replacement employees.--
       ``(A) In general.--The employment credit with respect to a 
     qualified replacement employee of the taxpayer for any 
     taxable year is equal to 50 percent of the lesser of--
       ``(i) the individual's qualified compensation attributable 
     to service rendered as a qualified replacement employee, or
       ``(ii) $12,000.

     The employment credit, with respect to all qualified 
     replacement employees, is equal to the sum of the employment 
     credits for each qualified replacement employee under this 
     subsection.
       ``(B) Qualified compensation.--When used with respect to 
     the compensation paid to a qualified replacement employee, 
     the term `qualified compensation' means--
       ``(i) compensation which is normally contingent on the 
     qualified replacement employee's presence for work and which 
     is deductible from the taxpayer's gross income under section 
     162(a)(1),
       ``(ii) compensation which is not characterized by the 
     taxpayer as vacation or holiday pay, or as sick leave or pay, 
     or as any other form of pay for a nonspecific leave of 
     absence, and
       ``(iii) group health plan costs (if any) with respect to 
     the qualified replacement employee.
       ``(C) Qualified replacement employee.--The term `qualified 
     replacement employee' means an individual who is hired to 
     replace a qualified employee or a qualified self-employed 
     taxpayer, but only with respect to the period during which 
     such employee or taxpayer participates in qualified reserve 
     component duty, including time spent in travel status.
       ``(D) Failure to make differential wage payments.--The 
     employment credit with respect to a qualified replacement 
     employee of the taxpayer for any taxable year shall be zero 
     if the taxpayer does not make all differential wage payments 
     (as defined by section 3401(i)(2)) for the taxable year to 
     the qualified employee or the qualified self-employed 
     taxpayer (as the case may be) who is replaced by the 
     qualified replacement employee.
       ``(c) Self-Employment Credit.--For purposes of this 
     section--
       ``(1) In general.--The self-employment credit of a 
     qualified self-employed taxpayer for any taxable year is 
     equal to 50 percent of the lesser of--
       ``(A) the excess, if any, of--

[[Page 4556]]

       ``(i) the self-employed taxpayer's average daily self-
     employment income for the taxable year over
       ``(ii) the average daily military pay and allowances 
     received by the taxpayer during the taxable year, while 
     participating in qualified reserve component duty to the 
     exclusion of the taxpayer's normal self-employment duties for 
     the number of days the taxpayer participates in qualified 
     reserve component duty during the taxable year, including 
     time spent in a travel status, or
       ``(B) $30,000.
       ``(2) Average daily self-employment income and average 
     daily military pay and allowances.--As used with respect to a 
     self-employed taxpayer--
       ``(A) the term `average daily self-employment income' means 
     the self-employment income (as defined in section 1402(b)) of 
     the taxpayer for the taxable year plus the amount paid for 
     insurance which constitutes medical care for the taxpayer for 
     such year (within the meaning of section 162(l)) divided by 
     the difference between--
       ``(i) 365, and
       ``(ii) the number of days the taxpayer participates in 
     qualified reserve component duty during the taxable year, 
     including time spent in a travel status, and
       ``(B) the term `average daily military pay and allowances' 
     means--
       ``(i) the amount paid to the taxpayer during the taxable 
     year as military pay and allowances on account of the 
     taxpayer's participation in qualified reserve component duty, 
     divided by
       ``(ii) the total number of days the taxpayer participates 
     in qualified reserve component duty, including time spent in 
     travel status.
       ``(3) Qualified self-employed taxpayer.--The term 
     `qualified self-employed taxpayer' means a taxpayer who--
       ``(A) has net earnings from self-employment (as defined in 
     section 1402(a)) for the taxable year, and
       ``(B) is a member of the Ready Reserve of a reserve 
     component of an Armed Force of the United States.
       ``(d) Credit in Addition to Deduction.--The employment 
     credit or the self-employment credit provided in this section 
     is in addition to any deduction otherwise allowable with 
     respect to compensation actually paid to a qualified 
     employee, qualified replacement employee, or qualified self-
     employed taxpayer during any period the qualified employee or 
     qualified self-employed taxpayer participates in qualified 
     reserve component duty to the exclusion of normal employment 
     duties.
       ``(e) Coordination With Other Credits.--The amount of 
     credit otherwise allowable under sections 51(a) and 1396(a) 
     with respect to any employee shall be reduced by the credit 
     allowed by this section with respect to such employee.
       ``(f) Limitations.--
       ``(1) Application with other credits.--The credit allowed 
     under subsection (a) for any taxable year shall not exceed 
     the excess (if any) of--
       ``(A) the regular tax for the taxable year reduced by the 
     sum of the credits allowable under subpart A and sections 27, 
     29, and 30, over
       ``(B) the tentative minimum tax for the taxable year.
       ``(2) Disallowance for failure to comply with employment or 
     reemployment rights of members of the reserve components of 
     the armed forces of the united states.--No credit shall be 
     allowed under subsection (a) to a taxpayer for--
       ``(A) any taxable year, beginning after the date of the 
     enactment of this section, in which the taxpayer is under a 
     final order, judgment, or other process issued or required by 
     a district court of the United States under section 4323 of 
     title 38 of the United States Code with respect to a 
     violation of chapter 43 of such title, and
       ``(B) the 2 succeeding taxable years.
       ``(3) Disallowance with respect to persons ordered to 
     active duty for training.--No credit shall be allowed under 
     subsection (a) to a taxpayer with respect to any period by 
     taking into account any person who is called or ordered to 
     active duty for any of the following types of duty:
       ``(A) Active duty for training under any provision of title 
     10, United States Code.
       ``(B) Training at encampments, maneuvers, outdoor target 
     practice, or other exercises under chapter 5 of title 32, 
     United States Code.
       ``(C) Full-time National Guard duty, as defined in section 
     101(d)(5) of title 10, United States Code.
       ``(g) General Definitions and Special Rules.--For purposes 
     of this section--
       ``(1) Small business employer.--
       ``(A) In general.--The term `small business employer' 
     means, with respect to any taxable year, any employer who 
     employed an average of 50 or fewer employees on business days 
     during such taxable year.
       ``(B) Controlled groups.--For purposes of subparagraph (A), 
     all persons treated as a single employer under subsection 
     (b), (c), (m), or (o) of section 414 shall be treated as a 
     single employer.
       ``(2) Military pay and allowances.--The term `military pay' 
     means pay as that term is defined in section 101(21) of title 
     37, United States Code, and the term `allowances' means the 
     allowances payable to a member of the Armed Forces of the 
     United States under chapter 7 of that title.
       ``(3) Qualified reserve component duty.--The term 
     `qualified reserve component duty' includes only active duty 
     performed, as designated in the reservist's military orders, 
     in support of a contingency operation as defined in section 
     101(a)(13) of title 10, United States Code.
       ``(4) Special rule for certain manufacturers.--
       ``(A) In general.--In the case of any qualified 
     manufacturer, paragraph (1)(A) of this subsection shall be 
     applied by substituting `100' for `50'.
       ``(B) Qualified manufacturer.--For purposes of this 
     paragraph, the term `qualified manufacturer' means any person 
     if--
       ``(i) the primary business of such person is classified in 
     sector 31, 32, or 33 of the North American Industrial 
     Classification System, and
       ``(ii) all of such person's facilities which are used for 
     production in such business are located in the United States.
       ``(5) Carryback and carryforward allowed.--
       ``(A) In general.--If the credit allowable under subsection 
     (a) for a taxable year exceeds the amount of the limitation 
     under subsection (f)(1) for such taxable year (in this 
     paragraph referred to as the `unused credit year'), such 
     excess shall be a credit carryback to each of the 3 taxable 
     years preceding the unused credit year and a credit 
     carryforward to each of the 20 taxable years following the 
     unused credit year.
       ``(B) Rules.--Rules similar to the rules of section 39 
     shall apply with respect to the credit carryback and credit 
     carryforward under subparagraph (A).
       ``(6) Certain rules to apply.--Rules similar to the rules 
     of subsections (c), (d), and (e) of section 52 shall 
     apply.''.
       (b) Conforming Amendment.--Section 55(c)(2) of the Internal 
     Revenue Code of 1986 is amended by inserting ``30B(f)(1),'' 
     after ``30(b)(3),''.
       (c) Clerical Amendment.--The table of sections for subpart 
     B of part IV of subchapter A of chapter 1 of the Internal 
     Revenue Code of 1986 is amended by adding at the end of 30A 
     the following new item:

``Sec. 30B. Employer wage credit for activated military reservists.''.

       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2004.

     SEC. 706. EMPLOYER CONTRIBUTIONS TO IRAS OF CERTAIN MEMBERS 
                   OF THE UNIFORMED SERVICES.

       (a) In General.--Section 3121 of the Internal Revenue Code 
     of 1986 is amended by adding at the end the following:
       ``(z) Employer Contributions to IRAs of Certain Members of 
     the Uniformed Services.--Nothing in any paragraph of 
     subsection (a) (other than paragraphs (1) and (5)) shall 
     exclude from the term `wages' any employer payment on behalf 
     of an individual to an individual retirement plan if such 
     payment is made by the employer to such plan with respect to 
     any period during which the individual is performing service 
     in the uniformed services while on active duty for a period 
     of more than 30 days.''.
       (b) Railroad Retirement.--Subsection (e) of Section 3231 of 
     such Code is amended by adding at the end the following new 
     paragraph:
       ``(1) Employer contributions to iras of certain members of 
     the uniformed services.--Nothing in any paragraph of this 
     subsection (other than paragraph (2)) shall exclude from the 
     term `compensation' any amount described in section 
     3121(z).''.
       (c) Federal Unemployment Tax.--Section 3306 of such Code is 
     amended by adding at the end the following:
       ``(u) Employer Contributions to IRAs of Certain Members of 
     the Uniformed Services.--Nothing in any paragraph of 
     subsection (b) (other than paragraphs (1) and (5)) shall 
     exclude from the term `wages' any employer payment on behalf 
     of an individual to an individual retirement plan if such 
     payment is made by the employer to such plan with respect to 
     any period during which the individual is performing service 
     in the uniformed services while on active duty for a period 
     of more than 30 days.''.
       (d) Withholding.--Section 3401(a) of such Code is amended 
     by adding at the end the following new subsection:
       ``(u) Employer Contributions to IRAs of Certain Members of 
     the Uniformed Services.--Nothing in any paragraph of 
     subsection (a) (other than paragraph (12)) shall exclude from 
     the term `wages' any amount described in section 3121(z).''.
       (e) Effective Date.--The amendments made by this section 
     shall apply to amounts paid after December 31, 2004.

     SEC. 707. EMERGENCY DESIGNATION.

       Amounts provided pursuant to the amendments made by this 
     title are designated as an emergency requirement pursuant to 
     section 402 of the conference report to accompany S. Con. 
     Res. 95 (108th Congress).