To provide a temporary tax credit for increased payroll, to eliminate certain tax benefits for major integrated oil companies, and for other purposes.

SECTION 1. SHORT TITLE.

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

SEC. 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.

SEC. 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.

SEC. 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.

Summary: Hire Now Act of 2012 - Amends the Internal Revenue Code to: (1) allow certain employers a tax credit for 10 of the excess of the wages and compensation paid to their employees in 2012 over the amount of such wages paid in 2011, up to a maximum amount of $5 million. (2) prohibit major integrated oil companies from using the last-in, first-out (LIFO) accounting method. And (3) deny major integrated oil companies a tax deduction for intangible drilling and development costs.