I 

109TH CONGRESS 

1ST SESSION H. R. 1272 

To amend the Internal Revenue Code of 1986 to modify the work opportunity 

credit and the welfare-to-work credit. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 14, 2005 

Mr. WELLER (for himself, Mr. RANGEL, and Mr. ENGLISH of Pennsylvania) 

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 modify 

the work opportunity credit and the welfare-to-work credit. 

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 ‘‘Encouraging Work Act 

5 of 2005’’. 

6 SEC. 2. MODIFICATIONS TO WORK OPPORTUNITY CREDIT 

7 AND WELFARE-TO-WORK CREDIT. 

8 (a) CREDIT MADE PERMANENT.— 
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1 (1) Subsection (c) of section 51 of the Internal 

2 Revenue Code of 1986 is amended by striking para3 graph (4) (relating to termination). 

4 (2) Section 51A of such Code is amended by 

5 striking subsection (f). 

6 (b) ELIGIBILITY OF EX-FELONS DETERMINED

7 WITHOUT REGARD TO FAMILY INCOME.—Paragraph (4) 

8 of section 51(d) of such Code is amended by adding ‘‘and’’ 

9 at the end of subparagraph (A), by striking ‘‘, and’’ at 

10 the end of subparagraph (B) and inserting a period, and 

11 by striking all that follows subparagraph (B). 

12 (c) INCREASE IN MAXIMUM AGE FOR ELIGIBILITY OF

13 FOOD STAMP RECIPIENTS.—Clause (i) of section 

14 51(d)(8)(A) of such Code is amended by striking ‘‘25’’ and 

15 inserting ‘‘40’’. 

16 (d) INCREASE IN MAXIMUM AGE FOR DESIGNATED

17 COMMUNITY RESIDENTS.— 

18 (1) IN GENERAL.—Paragraph (5) of section 

19 51(d) of such Code is amended to read as follows: 

20 ‘‘(5) DESIGNATED COMMUNITY RESIDENTS.— 

21 ‘‘(A) IN GENERAL.—The term ‘designated 

22 community resident’ means any individual who 

23 is certified by the designated local agency— 

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

25 age 40 on the hiring date, and 
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1 ‘‘(ii) as having his principal place of 

2 abode within an empowerment zone, enter3 prise community, or renewal community. 

4 ‘‘(B) INDIVIDUAL MUST CONTINUE TO RE5 SIDE IN ZONE OR COMMUNITY.—In the case of 

6 a designated community resident, the term 

7 ‘qualified wages’ shall not include wages paid or 

8 incurred for services performed while the indi9 vidual’s principal place of abode is outside an 

10 empowerment zone, enterprise community, or 

11 renewal community.’’. 

12 (2) CONFORMING AMENDMENT.—Subparagraph 

13 (D) of section 51(d)(1) is amended to read as fol14 lows: 

15 ‘‘(D) a designated community resident,’’. 

16 (e) CLARIFICATION OF TREATMENT OF INDIVIDUALS

17 UNDER INDIVIDUAL WORK PLANS.—Subparagraph (B) 

18 of section 51(d)(6) of such Code (relating to vocational 

19 rehabilitation referral) is amended by striking ‘‘or’’ at the 

20 end of clause (i), by striking the period at the end of 

21 clause (ii) and inserting ‘‘, or’’, and by adding at the end 

22 the following new clause: 

23 ‘‘(iii) an individual work plan devel24 oped and implemented by an employment 

25 network pursuant to subsection (g) of sec-
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1 tion 1148 of the Social Security Act with 

2 respect to which the requirements of such 

3 subsection are met.’’. 

4 (f) EFFECTIVE DATE.—The amendments made by 

5 this section shall apply to individuals who begin work for 

6 the employer after December 31, 2005. 

7 SEC. 3. CONSOLIDATION OF WORK OPPORTUNITY CREDIT 

8 WITH WELFARE-TO-WORK CREDIT. 

9 (a) IN GENERAL.—Paragraph (1) of section 51(d) of 

10 the Internal Revenue Code of 1986 is amended by striking 

11 ‘‘or’’ at the end of subparagraph (G), by striking the pe12 riod at the end of subparagraph (H) and inserting ‘‘, or’’, 

13 and by adding at the end the following new subparagraph: 

14 ‘‘(I) a long-term family assistance recipi15 ent.’’. 

16 (b) LONG-TERM FAMILY ASSISTANCE RECIPIENT.— 

17 Subsection (d) of section 51 of such Code is amended by 

18 redesignating paragraphs (10) through (12) as para19 graphs (11) through (13), respectively, and by inserting 

20 after paragraph (9) the following new paragraph: 

21 ‘‘(10) LONG-TERM FAMILY ASSISTANCE RECIPI22 ENT.—The term ‘long-term family assistance recipi23 ent’ means any individual who is certified by the 

24 designated local agency— 
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1 ‘‘(A) as being a member of a family receiv2 ing assistance under a IV–A program (as de3 fined in paragraph (2)(B)) for at least the 18- 

4 month period ending on the hiring date, 

5 ‘‘(B)(i) as being a member of a family re6 ceiving such assistance for 18 months beginning 

7 after August 5, 1997, and 

8 ‘‘(ii) as having a hiring date which is not 

9 more than 2 years after the end of the earliest 

10 such 18-month period, or 

11 ‘‘(C)(i) as being a member of a family 

12 which ceased to be eligible for such assistance 

13 by reason of any limitation imposed by Federal 

14 or State law on the maximum period such as15 sistance is payable to a family, and 

16 ‘‘(ii) as having a hiring date which is not 

17 more than 2 years after the date of such ces18 sation.’’. 

19 (c) INCREASED CREDIT FOR EMPLOYMENT OF LONG20 TERM FAMILY ASSISTANCE RECIPIENTS.—Section 51 of 

21 such Code is amended by inserting after subsection (d) 

22 the following new subsection: 

23 ‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EM24 PLOYMENT OF LONG-TERM FAMILY ASSISTANCE RECIPI25 ENTS.— 
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1 ‘‘(1) IN GENERAL.—With respect to the em2 ployment of a long-term family assistance recipi3 ent— 

4 ‘‘(A) the amount of the work opportunity 

5 credit determined under this section for the tax6 able year shall include 50 percent of the quali7 fied second-year wages for such year, and 

8 ‘‘(B) in lieu of applying subsection (b)(3), 

9 the amount of the qualified first-year wages, 

10 and the amount of qualified second-year wages, 

11 which may be taken into account with respect 

12 to such a recipient shall not exceed $10,000 per 

13 year. 

14 ‘‘(2) QUALIFIED SECOND-YEAR WAGES.—For 

15 purposes of this subsection, the term ‘qualified sec16 ond-year wages’ means qualified wages— 

17 ‘‘(A) which are paid to a long-term family 

18 assistance recipient, and 

19 ‘‘(B) which are attributable to service ren20 dered during the 1-year period beginning on the 

21 day after the last day of the 1-year period with 

22 respect to such recipient determined under sub23 section (b)(2). 

24 ‘‘(3) SPECIAL RULES FOR AGRICULTURAL AND

25 RAILWAY LABOR.—If such recipient is an employee 
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1 to whom subparagraph (A) or (B) of subsection 

2 (h)(1) applies, rules similar to the rules of such sub3 paragraphs shall apply except that— 

4 ‘‘(A) such subparagraph (A) shall be ap5 plied by substituting ‘$10,000’ for ‘$6,000’, and 

6 ‘‘(B) such subparagraph (B) shall be ap7 plied by substituting ‘$833.33’ for ‘$500’.’’. 

8 (d) REPEAL OF SEPARATE WELFARE-TO-WORK

9 CREDIT.— 

10 (1) IN GENERAL.—Section 51A of such Code is 

11 hereby repealed. 

12 (2) CLERICAL AMENDMENT.—The table of sec13 tions for subpart F of part IV of subchapter A of 

14 chapter 1 of such Code is amended by striking the 

15 item relating to section 51A. 

16 (e) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to individuals who begin work for 

18 the employer after December 31, 2005. 

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