I 

113TH CONGRESS 

1ST SESSION H. R. 3127 

To amend the Internal Revenue Code of 1986 to allow a credit to small 

employers for certain newly hired employees, and for other purposes. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 18, 2013 

Mr. MAFFEI introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Small 

Business, 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 Internal Revenue Code of 1986 to allow a 

credit to small employers for certain newly hired employees, 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 ‘‘Cutting Red Tape, 

5 Green-Lighting Small Businesses Act of 2013’’. 


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1 SEC. 2. CREDIT FOR CERTAIN INDIVIDUALS HIRED BY A 

2 SMALL EMPLOYER. 

3 (a) IN GENERAL.—Subpart D of part IV of sub4 chapter A of chapter 1 of the Internal Revenue Code of 

5 1986 is amended by adding at the end the following: 

6 ‘‘SEC. 45S. CERTAIN INDIVIDUALS HIRED BY A SMALL EM7 PLOYER. 

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

9 in the case of an eligible small employer, the small em10 ployer hiring credit determined under this section for any 

11 taxable year is the amount determined under subsection 

12 (b). 

13 ‘‘(b) SMALL EMPLOYER HIRING CREDIT AMOUNT.— 

14 The amount determined under this subsection for a tax15 able year with respect to a qualified small employer is the 

16 product of— 

17 ‘‘(1) the tax rate in effect under section 

18 3111(a) for the calendar year in which such taxable 

19 year ends, multiplied by 

20 ‘‘(2) the wages paid by the qualified small em21 ployer with respect to employment of all covered em22 ployees during the taxable year. 

23 ‘‘(c) QUALIFIED EMPLOYER.—For purposes of this 

24 subsection— 

25 ‘‘(1) IN GENERAL.—The term ‘qualified small 

26 employer’ means with respect to any calendar year, 


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1 an employer who on no business day of the pre2 ceding calendar year employed less than 2, or more 

3 than 150, employees. 

4 ‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE5 CEDING YEAR.—In the case of an employer which 

6 was not in existence throughout the preceding cal7 endar year, the determination of whether such em8 ployer is a small employer shall be based on the 

9 number of employees that it is reasonably expected 

10 such employer will employ on business days in the 

11 current calendar year. 

12 ‘‘(3) SPECIAL RULES.—For purposes of this 

13 subsection— 

14 ‘‘(A) PREDECESSOR AND SUCCESSOR.— 

15 Any reference in this paragraph to an employer 

16 shall include a reference to any predecessor of, 

17 or successor to, such employer. 

18 ‘‘(B) AGGREGATION RULE.—All persons 

19 treated as a single employer under subsection 

20 (b), (c), (m), or (o) of section 414 shall be 

21 treated as one employer. 

22 ‘‘(C) GOVERNMENTAL EMPLOYERS NOT IN23 CLUDED.—The term ‘employer’ does not in24 clude the United States, any State, or any politVerDate Mar 15 2010 06:23 Sep 21, 2013 Jkt 029200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3127.IH H3127

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1 ical subdivision thereof, or any instrumentality 

2 of the foregoing. 

3 ‘‘(4) CREDIT APPLIES FOR ONLY 1 YEAR.—If 

4 an election to claim the credit under this section is 

5 in effect for any calendar year, paragraph (1) shall 

6 not apply to such employer for any year after such 

7 calendar year. 

8 ‘‘(d) COVERED EMPLOYEE.—For purposes of this 

9 subsection— 

10 ‘‘(1) IN GENERAL.—The term ‘covered em11 ployee’ means, with respect to any week, is an em12 ployee who— 

13 ‘‘(A) first begins work for the employer for 

14 services performed by the employee— 

15 ‘‘(i) in a trade or business of such 

16 qualified small employer, or 

17 ‘‘(ii) in the case of a qualified small 

18 employer exempt from tax under section 

19 501(a), in furtherance of the activities re20 lated to the purpose or function consti21 tuting the basis of the employer’s exemp22 tion under section 501, and 

23 ‘‘(B) is employed on average at least 30 

24 hours of service per week. 


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1 ‘‘(2) LIMITATION TO 5 EMPLOYEES.—An em2 ployer may not treat more than 5 employees as cov3 ered employees. 

4 ‘‘(3) HOURS OF SERVICE.—The Secretary, in 

5 consultation with the Secretary of Labor, shall pre6 scribe such regulations, rules, and guidance as may 

7 be necessary to determine the hours of service of an 

8 employee, including rules for the application of this 

9 paragraph to employees who are not compensated on 

10 an hourly basis. 

11 ‘‘(e) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL12 IGIBLE SMALL EMPLOYERS.— 

13 ‘‘(1) IN GENERAL.—In the case of a tax-exempt 

14 eligible small employer, there shall be treated as a 

15 credit allowable under subpart C (and not allowable 

16 under this subpart) the amount of the credit deter17 mined under this section with respect to such em18 ployer. 

19 ‘‘(2) TAX-EXEMPT ELIGIBLE SMALL EM20 PLOYER.—For purposes of this section, the term 

21 ‘tax-exempt eligible small employer’ means an eligi22 ble small employer which is any organization de23 scribed in section 501(c) which is exempt from tax24 ation under section 501(a). 


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1 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 

2 or credit shall be allowed under any other provision of this 

3 chapter with respect to the amount of the credit deter4 mined under this section. 

5 ‘‘(g) ELECTION.—This section shall apply to any tax6 payer for any taxable year only if such taxpayer elects (at 

7 such time and in such manner as the Secretary may by 

8 regulations prescribe) to have this section apply for such 

9 taxable year. 

10 ‘‘(h) TERMINATION.—This section shall not apply 

11 with respect to wages paid after December 31, 2015.’’. 

12 (b) CREDIT TO BE PART OF GENERAL BUSINESS

13 CREDIT.—Section 38(b) of the Internal Revenue Code of 

14 1986 (relating to current year business credit) is amended 

15 by striking ‘‘plus’’ at the end of paragraph (35), by strik16 ing the period at the end of paragraph (36) and inserting 

17 ‘‘, plus’’, and by inserting after paragraph (36) the fol18 lowing: 

19 ‘‘(37) the small employer hiring credit deter20 mined under section 45S.’’. 

21 (c) CLERICAL AMENDMENT.—The table of sections 

22 for subpart D of part IV of subchapter A of chapter 1 

23 of the Internal Revenue Code of 1986 is amended by add24 ing at the end the following: 

‘‘Sec. 45S. Certain individuals hired by a small employer.’’. 


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to amounts paid or incurred in tax3 able years beginning after December 31, 2013. 

4 SEC. 3. PAPERWORK REDUCTION. 

5 The Small Business Act (15 U.S.C. 631 et seq.) is 

6 amended by adding at the end the following: 

7 ‘‘SEC. 48. PAPERWORK REDUCTION. 

8 ‘‘Not later than 60 days after the date of the enact9 ment of this Act, the Administrator of the Small Business 

10 Administration shall determine, for a new small business 

11 concern, what applications, submissions, or other paper12 work for purposes of programs administered by the Ad13 ministrator, are not essential to file during the first year 

14 of operation, and shall make rules that waive the need for 

15 such paperwork.’’. 

Æ 


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