I

106TH CONGRESS

1ST SESSION H. R. 712

To amend the Internal Revenue Code of 1986 to provide to employers a

tax credit for compensation paid 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

to employers a tax credit for compensation paid 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

8 the Internal Revenue Code of 1986 (relating to business-
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1 related credits) is amended by adding at the end the fol2 lowing new section:

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

4 CREDIT.

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

6 the Ready Reserve-National Guard employee credit deter7 mined under this section for the taxable year is an amount

8 equal to 50 percent of the actual compensation amount

9 for the taxable year.

10 ‘‘(b) DEFINITION OF ACTUAL COMPENSATION

11 AMOUNT.—For purposes of this section, the term ‘actual

12 compensation amount’ means the amount of compensation

13 paid or incurred by an employer with respect to a Ready

14 Reserve-National Guard employee on any day during a

15 taxable year when the employee was absent from employ16 ment for the purpose of performing qualified active duty.

17 ‘‘(c) LIMITATIONS.—

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

19 allowable under subsection (a) shall not exceed

20 $2,000 in any taxable year with respect to any one

21 Ready Reserve-National Guard employee.

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

23 credit shall be allowed with respect to a Ready Re24 serve-National Guard employee who performs quali25 fied active duty on any day on which the employee
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1 was not scheduled to work (for a reason other than

2 to participate in qualified active duty) and ordinarily

3 would not have worked.

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

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

6 ‘qualified active duty’ means—

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

8 duty specified in section 10147 of title 10,

9 United States Code (relating to training re10 quirements for the Ready Reserve), or section

11 502(a) of title 32, United States Code (relating

12 to required drills and field exercises for the Na13 tional Guard), in connection with which an em14 ployee is entitled to reemployment rights and

15 other benefits or to a leave of absence from em16 ployment under chapter 43 of title 38, United

17 States Code, and

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

19 ‘‘(2) COMPENSATION.—The term ‘compensa20 tion’ means any remuneration for employment,

21 whether in cash or in kind, which is paid or incurred

22 by a taxpayer and which is deductible from the tax23 payer’s gross income under section 162(a)(1).

24 ‘‘(3) READY RESERVE-NATIONAL GUARD EM25 PLOYEE.—The term ‘Ready Reserve-National Guard
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1 employee’ means an employee who is a member of

2 the Ready Reserve or of the National Guard.

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

4 Guard’ has the meaning given such term by section

5 101(c)(1) of title 10, United States Code.

6 ‘‘(5) READY RESERVE.—The term ‘Ready Re7 serve’ has the meaning given such term by section

8 10142 of title 10, United States Code.’’

9 (b) CREDIT TO BE PART OF GENERAL BUSINESS

10 CREDIT.—Subsection (b) of section 38 of such Code (re11 lating to general business credit) is amended by striking

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

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

14 by adding at the end the following new paragraph:

15 ‘‘(13) the Ready Reserve-National Guard em16 ployee credit determined under section 45D(a).’’

17 SEC. 2. CONFORMING AMENDMENT.

18 The table of sections for subpart D of part IV of sub19 chapter A of chapter 1 of the Internal Revenue Code of

20 1986 is amended by inserting after the item relating to

21 section 45C the following new item:

‘‘Sec. 45D. Ready Reserve-National Guard employee credit.’’

22 SEC. 3. EFFECTIVE DATE.

23 The amendments made by this Act shall apply to tax24 able years beginning after December 31, 1998.

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