I

104TH CONGRESS

2D SESSION H. R. 3383

To amend the Fair Labor Standards Act of 1938 to increase the minimum

wage rate under that Act and to implement a new work opportunity

tax credit, and for other purposes.

IN THE HOUSE OF REPRESENTATIVES

MAY 1, 1996

Mr. HOUGHTON (for himself and Mr. ROBERTS) introduced the following bill;

which was referred to the Committee on Economic and Educational Opportunities, and in addition to the Committee on Ways and Means, for

a period to be subsequently determined by the Speaker, in each case for

consideration of such provisions as fall within the jurisdiction of the committee concerned

A BILL

To amend the Fair Labor Standards Act of 1938 to increase

the minimum wage rate under that Act and to implement

a new work opportunity tax credit, and for other purposes.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Minimum Wage In5 crease and Work Opportunity Tax Credit Act of 1996’’.
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1 SEC. 2. INCREASE IN MINIMUM WAGE.

2 Paragraph (1) of section 6(a) of the Fair Labor

3 Standards Act of 1938 (29 U.S.C. 206(a)) is amended to

4 read as follows:

5 ‘‘(1) except as otherwise provided in this sec6 tion, not less than $4.25 an hour during the period

7 ending 90 days after the date of the enactment of

8 the Minimum Wage Increase Act of 1996, not less

9 than $4.75 an hour during the year beginning on

10 that date, and not less than $5.25 an hour after the

11 expiration of such year;’’.

12 SEC. 2. WORK OPPORTUNITY TAX CREDIT.

13 (a) REFERENCE.—Whenever in this section an

14 amendment or repeal is expressed in terms of an amend15 ment to, or repeal of, a section or other provision, the ref16 erence shall be considered to be made to a section or other

17 provision of the Internal Revenue Code of 1986.

18 (b) AMOUNT OF CREDIT.—Subsection (a) of section

19 51 (relating to amount of credit) is amended by striking

20 ‘‘40 percent’’ and inserting ‘‘35 percent’’.

21 (c) MEMBERS OF TARGETED GROUPS.—Subsection

22 (d) of section 51 is amended to read as follows:

23 ‘‘(d) MEMBERS OF TARGETED GROUPS.—For pur24 poses of this subpart—

25 ‘‘(1) IN GENERAL.—An individual is a member

26 of a targeted group if such individual is—
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1 ‘‘(A) a qualified IV–A recipient,

2 ‘‘(B) a qualified veteran,

3 ‘‘(C) a qualified ex-felon,

4 ‘‘(D) a high-risk youth,

5 ‘‘(E) a vocational rehabilitation referral, or

6 ‘‘(F) a qualified summer youth employee.

7 ‘‘(2) QUALIFIED IV–A RECIPIENT.—

8 ‘‘(A) IN GENERAL.—The term ‘qualified

9 IV–A recipient’ means any individual who is

10 certified by the designated local agency as being

11 a member of a family receiving assistance under

12 a IV–A program for at least a 9-month period

13 ending during the 9-month period ending on the

14 hiring date.

15 ‘‘(B) IV–A PROGRAM.—For purposes of

16 this paragraph, the term ‘IV–A program’ means

17 any program providing assistance under a State

18 plan approved under part A of title IV of the

19 Social Security Act (relating to assistance for

20 needy families with minor children) and any

21 successor of such program.

22 ‘‘(3) QUALIFIED VETERAN.—

23 ‘‘(A) IN GENERAL.—The term ‘qualified

24 veteran’ means any veteran who is certified by

25 the designated local agency as being—
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1 ‘‘(i) a member of a family receiving

2 assistance under a IV–A program (as de3 fined in paragraph (2)(B)) for at least a 9-

4 month period ending during the 12-month

5 period ending on the hiring date, or

6 ‘‘(ii) a member of a family receiving

7 assistance under a food stamp program

8 under the Food Stamp Act of 1977 for at

9 least a 3-month period ending during the

10 12-month period ending on the hiring date.

11 ‘‘(B) VETERAN.—For purposes of subpara12 graph (A), the term ‘veteran’ means any indi13 vidual who is certified by the designated local

14 agency as—

15 ‘‘(i)(I) having served on active duty

16 (other than active duty for training) in the

17 Armed Forces of the United States for a

18 period of more than 180 days, or

19 ‘‘(II) having been discharged or re20 leased from active duty in the Armed

21 Forces of the United States for a service22 connected disability, and

23 ‘‘(ii) not having any day during the

24 60-day period ending on the hiring date
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1 which was a day of extended active duty in

2 the Armed Forces of the United States.

3 For purposes of clause (ii), the term ‘extended

4 active duty’ means a period of more than 90

5 days during which the individual was on active

6 duty (other than active duty for training).

7 ‘‘(4) QUALIFIED EX-FELON.—The term ‘quali8 fied ex-felon’ means any individual who is certified

9 by the designated local agency—

10 ‘‘(A) as having been convicted of a felony

11 under any statute of the United States or any

12 State,

13 ‘‘(B) as having a hiring date which is not

14 more than 1 year after the last date on which

15 such individual was so convicted or was released

16 from prison, and

17 ‘‘(C) as being a member of a family which

18 had an income during the 6 months imme19 diately preceding the earlier of the month in

20 which such income determination occurs or the

21 month in which the hiring date occurs, which,

22 on an annual basis, would be 70 percent or less

23 of the Bureau of Labor Statistics lower living

24 standard.
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1 Any determination under subparagraph (C) shall be

2 valid for the 45-day period beginning on the date

3 such determination is made.

4 ‘‘(5) HIGH-RISK YOUTH.—

5 ‘‘(A) IN GENERAL.—The term ‘high-risk

6 youth’ means any individual who is certified by

7 the designated local agency—

8 ‘‘(i) as having attained age 18 but not

9 age 25 on the hiring date, and

10 ‘‘(ii) as having his principal place of

11 abode within an empowerment zone or en12 terprise community.

13 ‘‘(B) YOUTH MUST CONTINUE TO RESIDE

14 IN ZONE.—In the case of a high-risk youth, the

15 term ‘qualified wages’ shall not include wages

16 paid or incurred for services performed while

17 such youth’s principal place of abode is outside

18 an empowerment zone or enterprise community.

19 ‘‘(6) VOCATIONAL REHABILITATION REFER20 RAL.—The term ‘vocational rehabilitation referral’

21 means any individual who is certified by the des22 ignated local agency as—

23 ‘‘(A) having a physical or mental disability

24 which, for such individual, constitutes or results

25 in a substantial handicap to employment, and
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1 ‘‘(B) having been referred to the employer

2 upon completion of (or while receiving) rehabili3 tative services pursuant to—

4 ‘‘(i) an individualized written rehabili5 tation plan under a State plan for voca6 tional rehabilitation services approved

7 under the Rehabilitation Act of 1973, or

8 ‘‘(ii) a program of vocational rehabili9 tation carried out under chapter 31 of title

10 38, United States Code.

11 ‘‘(7) QUALIFIED SUMMER YOUTH EMPLOYEE.—

12 ‘‘(A) IN GENERAL.—The term ‘qualified

13 summer youth employee’ means any individ14 ual—

15 ‘‘(i) who performs services for the em16 ployer between May 1 and September 15,

17 ‘‘(ii) who is certified by the designated

18 local agency as having attained age 16 but

19 not 18 on the hiring date (or if later, on

20 May 1 of the calendar year involved),

21 ‘‘(iii) who has not been an employee

22 of the employer during any period prior to

23 the 90-day period described in subpara24 graph (B)(i), and
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1 ‘‘(iv) who is certified by the des2 ignated local agency as having his principal

3 place of abode within an empowerment

4 zone or enterprise community.

5 ‘‘(B) SPECIAL RULES FOR DETERMINING

6 AMOUNT OF CREDIT.—For purposes of applying

7 this subpart to wages paid or incurred to any

8 qualified summer youth employee—

9 ‘‘(i) subsection (b)(2) shall be applied

10 by substituting ‘any 90-day period between

11 May 1 and September 15’ for ‘the 1-year

12 period beginning with the day the individ13 ual begins work for the employer’, and

14 ‘‘(ii) subsection (b)(3) shall be applied

15 by substituting ‘$3,000’ for ‘$6,000’.

16 The preceding sentence shall not apply to an in17 dividual who, with respect to the same em18 ployer, is certified as a member of another tar19 geted group after such individual has been a

20 qualified summer youth employee.

21 ‘‘(C) YOUTH MUST CONTINUE TO RESIDE

22 IN ZONE.—Paragraph (5)(B) shall apply for

23 purposes of this paragraph.
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1 ‘‘(8) HIRING DATE.—The term ‘hiring date’

2 means the day the individual is hired by the em3 ployer.

4 ‘‘(9) DESIGNATED LOCAL AGENCY.—The term

5 ‘designated local agency’ means a State employment

6 security agency established in accordance with the

7 Act of June 6, 1933, as amended (29 U.S.C. 49–

8 49n).

9 ‘‘(10) SPECIAL RULES FOR CERTIFICATIONS.—

10 ‘‘(A) IN GENERAL.—An individual shall

11 not be treated as a member of a targeted group

12 unless—

13 ‘‘(i) on or before the day on which

14 such individual begins work for the em15 ployer, the employer has received a certifi16 cation from a designated local agency that

17 such individual is a member of a targeted

18 group, or

19 ‘‘(ii)(I) on or before the day the indi20 vidual is offered employment with the em21 ployer, a pre-screening notice is completed

22 by the employer with respect to such indi23 vidual, and

24 ‘‘(II) not later than the 14th day after

25 the individual begins work for the em-
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1 ployer, the employer submits such notice,

2 signed by the employer and the individual

3 under penalties of perjury, to the des4 ignated local agency as part of a written

5 request for such a certification from such

6 agency.

7 For purposes of this paragraph, the term ‘pre8 screening notice’ means a document (in such

9 form as the Secretary shall prescribe) which

10 contains information provided by the individual

11 on the basis of which the employer believes that

12 the individual is a member of a targeted group.

13 ‘‘(B) INCORRECT CERTIFICATIONS.—If—

14 ‘‘(i) an individual has been certified

15 by a designated local agency as a member

16 of a targeted group, and

17 ‘‘(ii) such certification is incorrect be18 cause it was based on false information

19 provided by such individual,

20 the certification shall be revoked and wages

21 paid by the employer after the date on which

22 notice of revocation is received by the employer

23 shall not be treated as qualified wages.

24 ‘‘(C) EXPLANATION OF DENIAL OF RE25 QUEST.—If a designated local agency denies a
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1 request for certification of membership in a tar2 geted group, such agency shall provide to the

3 person making such request a written expla4 nation of the reasons for such denial.’’

5 (d) MINIMUM EMPLOYMENT PERIOD.—Paragraph

6 (3) of section 51(i) (relating to certain individuals ineli7 gible) is amended to read as follows:

8 ‘‘(3) INDIVIDUALS NOT MEETING MINIMUM EM9 PLOYMENT PERIOD.—No wages shall be taken into

10 account under subsection (a) with respect to any in11 dividual unless such individual either—

12 ‘‘(A) is employed by the employer at least

13 180 days (20 days in the case of a qualified

14 summer youth employee), or

15 ‘‘(B) has completed at least 500 hours

16 (120 hours in the case of a qualified summer

17 youth employee) of services performed for the

18 employer.’’

19 (e) TERMINATION.—Paragraph (4) of section 51(c)

20 (relating to wages defined) is amended to read as follows:

21 ‘‘(4) TERMINATION.—The term ‘wages’ shall

22 not include any amount paid or incurred to an indi23 vidual who begins work for the employer—

24 ‘‘(A) after December 31, 1994, and before

25 January 1, 1997, or
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1 ‘‘(B) after December 31, 1997.’’

2 (f) REDESIGNATION OF CREDIT.—

3 (1) Sections 38(b)(2) and 51(a) are each

4 amended by striking ‘‘targeted jobs credit’’ and in5 serting ‘‘work opportunity credit’’.

6 (2) The subpart heading for subpart F of part

7 IV of subchapter A of chapter 1 is amended by

8 striking ‘‘Targeted Jobs Credit’’ and inserting

9 ‘‘Work Opportunity Credit’’.

10 (3) The table of subparts for such part IV is

11 amended by striking ‘‘targeted jobs credit’’ and in12 serting ‘‘work opportunity credit’’.

13 (4) The heading for paragraph (3) of section

14 1396(c) is amended by striking ‘‘TARGETED JOBS

15 CREDIT’’ and inserting ‘‘WORK OPPORTUNITY CRED16 IT’’.

17 (g) TECHNICAL AMENDMENTS.—

18 (1) Paragraph (1) of section 51(c) is amended

19 by striking ‘‘, subsection (d)(8)(D),’’.

20 (2) Paragraph (3) of section 51(i) is amended

21 by striking ‘‘(d)(12)’’ each place it appears and in22 serting ‘‘(d)(6)’’.
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1 (h) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to individuals who begin work for

3 the employer after December 31, 1996.

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