I

106TH CONGRESS

1ST SESSION H. R. 713

To amend the Internal Revenue Code of 1986 to provide a tax credit to

employers for the value of the service not performed during the period

employees are performing service as members of the Ready Reserve

or the National Guard.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 11, 1999

Mr. BILIRAKIS introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to provide

a tax credit to employers for the value of the service

not performed during the period employees are performing service as members of the Ready Reserve or the

National Guard.

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

3 SECTION 1. READY RESERVE-NATIONAL GUARD EMPLOYEE

4 CREDIT ADDED TO GENERAL BUSINESS

5 CREDIT.

6 (a) READY RESERVE-NATIONAL GUARD CREDIT.—

7 Subpart D of part IV of subchapter A of chapter 1 of
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1 the Internal Revenue Code of 1986 (relating to business2 related credits) is amended by adding at the end the fol3 lowing new section:

4 ‘‘SEC. 45D. READY RESERVE-NATIONAL GUARD EMPLOYEE

5 CREDIT.

6 ‘‘(a) GENERAL RULE.—For purposes of section 38,

7 the Ready Reserve-National Guard employee credit deter8 mined under this section for the taxable year is an amount

9 equal to 10 percent of the unpaid compensation amount

10 for the taxable year.

11 ‘‘(b) DEFINITION OF UNPAID COMPENSATION

12 AMOUNT.—For purposes of this section, the term ‘unpaid

13 compensation amount’ means the amount of compensation

14 which ordinarily would have been paid or incurred by an

15 employer with respect to a Ready Reserve-National Guard

16 employee on any day during a taxable year but was not

17 paid because the employee was absent from employment

18 for the purpose of performing qualified active duty.

19 ‘‘(c) LIMITATIONS.—

20 ‘‘(1) MAXIMUM CREDIT.—The maximum credit

21 allowable under subsection (a) shall not exceed

22 $2,000 in any taxable year with respect to any one

23 Ready Reserve-National Guard employee.

24 ‘‘(2) DAYS OTHER THAN WORK DAYS.—No

25 credit shall be allowed with respect to a Ready Re-
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1 serve-National Guard employee who performs quali2 fied active duty on any day on which the employee

3 was not scheduled to work (for a reason other than

4 to participate in qualified active duty) and ordinarily

5 would not have worked.

6 ‘‘(d) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) QUALIFIED ACTIVE DUTY.—The term

8 ‘qualified active duty’ means—

9 ‘‘(A) active duty, other than the training

10 duty specified in section 10147 of title 10,

11 United States Code (relating to training re12 quirements for the Ready Reserve), or section

13 502(a) of title 32, United States Code (relating

14 to required drills and field exercises for the Na15 tional Guard), in connection with which an em16 ployee is entitled to reemployment rights and

17 other benefits or to a leave of absence from em18 ployment under chapter 43 of title 38, United

19 States Code, and

20 ‘‘(B) hospitalization incident to such duty.

21 ‘‘(2) COMPENSATION.—The term ‘compensa22 tion’ means any remuneration for employment,

23 whether in cash or in kind, which, if paid by the tax24 payer, would have been deductible from the tax25 payer’s gross income under section 162(a)(1).
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1 ‘‘(3) READY RESERVE-NATIONAL GUARD EM2 PLOYEE.—The term ‘Ready Reserve-National Guard

3 employee’ means an employee who is a member of

4 the Ready Reserve or of the National Guard.

5 ‘‘(4) NATIONAL GUARD.—The term ‘National

6 Guard’ has the meaning given such term by section

7 101(c)(1) of title 10, United States Code.

8 ‘‘(5) READY RESERVE.—The term ‘Ready Re9 serve’ has the meaning given such term by section

10 10142 of title 10, United States Code.’’

11 (b) CREDIT TO BE PART OF GENERAL BUSINESS

12 CREDIT.—Subsection (b) of section 38 of such Code (re13 lating to general business credit) is amended by striking

14 ‘‘plus’’ at the end of paragraph (11), by striking the period

15 at the end of paragraph (12) and inserting ‘‘, plus’’, and

16 by adding at the end the following new paragraph:

17 ‘‘(13) the Ready Reserve-National Guard em18 ployee credit determined under section 45D(a).’’

19 SEC. 2. CONFORMING AMENDMENT.

20 The table of sections for subpart D of part IV of sub21 chapter A of chapter 1 of the Internal Revenue Code of

22 1986 is amended by inserting after the item relating to

23 section 45C the following new item:

‘‘Sec. 45D. Ready Reserve-National Guard employee credit.’’
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1 SEC. 3. EFFECTIVE DATE.

2 The amendments made by this Act shall apply to tax3 able years beginning after December 31, 1998.

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