I 

114TH CONGRESS 

1ST SESSION H. R. 3198 

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 

JULY 23, 2015 

Mr. AGUILAR 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 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 ‘‘Small Business Jobs 

5 Act of 2015’’. 

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

7 SMALL EMPLOYER. 

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of 

10 1986 is amended by adding at the end the following: 


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1 ‘‘SEC. 45S. CERTAIN INDIVIDUALS HIRED BY A SMALL EM2 PLOYER. 

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

4 in the case of an eligible small employer, the small em5 ployer hiring credit determined under this section for any 

6 taxable year is the amount determined under subsection 

7 (b). 

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

9 The amount determined under this subsection for a tax10 able year with respect to a qualified small employer is the 

11 product of— 

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

13 3111(a) for the calendar year in which such taxable 

14 year ends, multiplied by 

15 ‘‘(2) the wages paid by the qualified small em16 ployer with respect to employment of all covered em17 ployees during the taxable year. 

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

19 subsection— 

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

21 employer’ means with respect to any calendar year, 

22 an employer who— 

23 ‘‘(A) has a place of business in a county 

24 with an annual unemployment rate for the pre25 ceding calendar year of at least one percentage 

26 point greater than the national annual unemVerDate Sep 11 2014 02:18 Jul 28, 2015 Jkt 049200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3198.IH H3198

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1 ployment rate for the preceding calendar year, 

2 and 

3 ‘‘(B) who on no business day of the pre4 ceding calendar year employed less than 2, or 

5 more than 100, employees. 

6 ‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE7 CEDING YEAR.—In the case of an employer which 

8 was not in existence throughout the preceding cal9 endar year, the determination of whether such em10 ployer is a small employer shall be based on the 

11 number of employees that it is reasonably expected 

12 such employer will employ on business days in the 

13 current calendar year. 

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

15 subsection— 

16 ‘‘(A) PREDECESSOR AND SUCCESSOR.— 

17 Any reference in this paragraph to an employer 

18 shall include a reference to any predecessor of, 

19 or successor to, such employer. 

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

21 treated as a single employer under subsection 

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

23 treated as one employer. 

24 ‘‘(C) GOVERNMENTAL EMPLOYERS NOT IN25 CLUDED.—The term ‘employer’ does not inVerDate Sep 11 2014 02:18 Jul 28, 2015 Jkt 049200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3198.IH H3198

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1 clude the United States, any State, or any polit2 ical subdivision thereof, or any instrumentality 

3 of the foregoing. 

4 ‘‘(D) DETERMINATION OF UNEMPLOYMENT

5 RATE.—The unemployment rate shall be the 

6 rate determined by the Bureau of Labor Statis7 tics. 

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

9 an election to claim the credit under this section is 

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

11 not apply to such employer for any year after such 

12 calendar year. 

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

14 subsection— 

15 ‘‘(1) IN GENERAL.—The term ‘covered em16 ployee’ means, with respect to any week, is an em17 ployee who— 

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

19 services performed by the employee— 

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

21 qualified small employer, or 

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

23 employer exempt from tax under section 

24 501(a), in furtherance of the activities re25 lated to the purpose or function constiVerDate Sep 11 2014 02:18 Jul 28, 2015 Jkt 049200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3198.IH H3198

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1 tuting the basis of the employer’s exemp2 tion under section 501, and 

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

4 hours of service per week. 

5 ‘‘(2) LIMITATION TO 5 EMPLOYEES.—An em6 ployer may not treat more than 5 employees as cov7 ered employees. 

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

9 consultation with the Secretary of Labor, shall pre10 scribe such regulations, rules, and guidance as may 

11 be necessary to determine the hours of service of an 

12 employee, including rules for the application of this 

13 paragraph to employees who are not compensated on 

14 an hourly basis. 

15 ‘‘(e) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL16 IGIBLE SMALL EMPLOYERS.— 

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

18 eligible small employer, there shall be treated as a 

19 credit allowable under subpart C (and not allowable 

20 under this subpart) the amount of the credit deter21 mined under this section with respect to such em22 ployer. 

23 ‘‘(2) TAX-EXEMPT ELIGIBLE SMALL EM24 PLOYER.—For purposes of this section, the term 

25 ‘tax-exempt eligible small employer’ means an eligiVerDate Sep 11 2014 02:18 Jul 28, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3198.IH H3198

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1 ble small employer which is any organization de2 scribed in section 501(c) which is exempt from tax3 ation under section 501(a). 

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

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

6 chapter with respect to the amount of the credit deter7 mined under this section. 

8 ‘‘(g) ELECTION.—This section shall apply to any tax9 payer for any taxable year only if such taxpayer elects (at 

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

11 regulations prescribe) to have this section apply for such 

12 taxable year. 

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

14 with respect to wages paid after December 31, 2017.’’. 

15 (b) CREDIT TO BE PART OF GENERAL BUSINESS

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

17 1986 (relating to current year business credit) is amended 

18 by striking ‘‘plus’’ at the end of paragraph (35), by strik19 ing the period at the end of paragraph (36) and inserting 

20 ‘‘, plus’’, and by inserting after paragraph (36) the fol21 lowing: 

22 ‘‘(37) the small employer small employer hiring 

23 credit determined under section 45S.’’. 

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

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


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1 of the Internal Revenue Code of 1986 is amended by add2 ing at the end the following: 

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

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

4 this section shall apply to amounts paid or incurred in tax5 able years beginning after December 31, 2015. 

Æ 


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