To amend the Internal Revenue Code of 1986 to provide a credit to employers for hiring new employees.

January 4, 2005

Ms. HOOLEY introduced the following bill; which was referred to the Committee on Ways and Means

To amend the Internal Revenue Code of 1986 to provide a credit to employers for hiring new employees.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the `Expand America's Workforce Act of 2005'.

SEC. 2. NEW EMPLOYEE CREDIT ADDED TO GENERAL BUSINESS CREDIT.

(a) In General- 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. NEW EMPLOYEE CREDIT.

`(a) General Rule- For purposes of section 38, the new employee credit determined under this section for a taxable year is an amount equal to $5,000 multiplied by the number of new qualified employees for the taxable year.

`(b) Limitation- For purposes of subsection (a), the number of employees treated as new qualified employees for the taxable year may not exceed the excess (if any) of--

`(1) the number of full-time employees of the taxpayer on the last day of the taxable year, over

`(2) the number of full-time employees of the taxpayer on the first day of the taxable year.

`(c) New Qualified Employees-

`(1) IN GENERAL- For purposes of this section, the term `new qualified employee' means an individual who--

`(A) as of the last day of the taxable year of the employer, is a full-time employee of the employer, and

`(B) first began full-time employment with the employer during the 12-month period beginning 9 months before the end of the preceding taxable year and ending on the last day of the 3rd month beginning in the taxable year.

`(2) EXCEPTION- No individual with respect to whom a credit is determined for the taxable year under section 51 shall be treated as a new qualified employee.

`(d) Special Rules- For purposes of this section--

`(1) FULL-TIME EMPLOYMENT- An employee shall be considered full-time if such employee is employed at least 30 hours per week for each week during the 12-month period referred to in subsection (b)(1).

`(2) AGGREGATION RULE- All persons treated as a single employer under subsection (a) or (b) of section 52, or subsection (m) or (o) of section 414, shall be treated as one person.

`(e) Termination- This section shall not apply to taxable years beginning after December 31, 2007.'.

(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 new employee credit determined under section 45J(a).'.

(c) Conforming Amendment- The table of sections for subpart D of part IV of subchapter A of chapter 1 of such Code is amended by adding at the end the following new item:

`45J. New employee credit.'.

(d) Effective Date- The amendments made by this section shall apply to taxable years beginning after December 31, 2005.

END