I 

111TH CONGRESS 

2D SESSION H. R. 4965 

To amend the Internal Revenue Code of 1986 to reduce the employer portion 

of payroll taxes in the case of employers who expand payroll in 2010 

and 2011 in areas with high unemployment and to make permanent 

the research and development credit, bonus depreciation, and increased 

expensing limitations. 

IN THE HOUSE OF REPRESENTATIVES 

MARCH 25, 2010 

Mr. DONNELLY of Indiana 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 reduce 

the employer portion of payroll taxes in the case of 

employers who expand payroll in 2010 and 2011 in areas 

with high unemployment and to make permanent the 

research and development credit, bonus depreciation, and 

increased expensing limitations. 

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 ‘‘Targeted Job Creation 

5 and Business Investment Act’’. 

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1 SEC. 2. REDUCTION IN EMPLOYER PORTION OF PAYROLL 

2 TAX FOR CERTAIN EMPLOYERS INCREASING 

3 PAYROLL. 

4 (a) IN GENERAL.—In the case of any calendar quar5 ter beginning in 2010 or 2011, the aggregate amount of 

6 employer payroll tax deposits of an employer shall be re7 duced by an amount equal to the applicable percentage 

8 of the payroll increase of such employer for such calendar 

9 quarter which is attributable to wages paid to a qualified 

10 individual. 

11 (b) DEFINITIONS AND SPECIAL RULES.—For pur12 poses of this section— 

13 (1) EMPLOYER PAYROLL TAX DEPOSITS.—The 

14 term ‘‘employer payroll tax deposits’’ means deposits 

15 an employer is required to make under section 6302 

16 of the Internal Revenue Code of 1986 of taxes im17 posed on such employer under section 3111 of such 

18 Code with respect to individuals in his employ. 

19 (2) APPLICABLE PERCENTAGE.—The applicable 

20 percentage shall be— 

21 (A) in the case of any calendar quarter be22 ginning in 2010, 15 percent, and 

23 (B) in the case of any calendar quarter be24 ginning in 2011, 10 percent. 

25 (3) PAYROLL INCREASE.— 

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1 (A) IN GENERAL.—The term ‘‘payroll in2 crease’’ means, with respect to an employer for 

3 a calendar quarter, the excess (if any) of— 

4 (i) the aggregate amount of wages (as 

5 defined in section 3121(a) of such Code) 

6 paid by such employer to all employees for 

7 such calendar quarter, over 

8 (ii) aggregate amount of inflation ad9 justed wages paid by such employer to all 

10 employees for the same calendar quarter in 

11 the preceding calendar year. 

12 (B) WAGES.—The term ‘‘wages’’ has the 

13 meaning given such term by section 3121(a) of 

14 such Code for purposes of section 3111(a). 

15 (C) INFLATION ADJUSTED WAGES.—The 

16 term ‘‘inflation adjusted wages’’ means an 

17 amount equal to— 

18 (i) wages with respect to an employee, 

19 multiplied by 

20 (ii) the cost-of-living adjustment de21 termined under section 1(f)(3) for the cal22 endar year for which the reduction in de23 posits under this section is being deter24 mined occurs, determined by substituting 

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1 ‘calendar year 2009’ for ‘calendar year 

2 1992’ in subparagraph (B) thereof. 

3 (4) QUALIFIED INDIVIDUAL.—The term ‘‘quali4 fied individual’’ means any individual— 

5 (A) who begins employment with a quali6 fied employer after February 3, 2010, and be7 fore January 1, 2012, 

8 (B) whose principal place of employment 

9 with such employer is certified by the employer 

10 as being within a county the unemployment 

11 rate of which is not less than 8.5 percent (as 

12 determined by reference to the most recent un13 employment data announced by the Bureau of 

14 Labor Statistics of the Department of Labor 

15 for the month during which such individual be16 gins employment), 

17 (C) who is not employed by the qualified 

18 employer to replace another employee of such 

19 employer unless such other employee separated 

20 from employment voluntarily or for cause, and 

21 (D) who is not an individual described in 

22 section 51(i)(1). 

23 (5) EXCESS REDUCTIONS TREATED AS RE24 FUNDABLE.— 

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1 (A) IN GENERAL.—The amount of em2 ployer payroll tax deposits of an employer for 

3 any quarter shall not be reduced below zero 

4 under subsection (a). 

5 (B) EXCESS TREATED AS PAYMENT OF

6 TAX.— 

7 (i) IN GENERAL.—The amount by 

8 which the reduction for any calendar quar9 ter under subsection (a) would (but for 

10 subparagraph (A)) have exceeded the ag11 gregate employer payroll tax deposits of 

12 the employer for such quarter shall be 

13 treated as a payment of the tax imposed 

14 by subtitle A of such Code for the last tax15 able year ending before such calendar 

16 quarter ends. 

17 (ii) TIMING.—Secretary shall, subject 

18 to the provisions of such Code, refund or 

19 credit any overpayment attributable to this 

20 section as rapidly as possible. 

21 (iii) NO INTEREST.—No interest shall 

22 be allowed on any overpayment attrib23 utable to this section. 

24 (6) DENIAL OF DOUBLE BENEFIT.—The 

25 amount of any deduction allowable to the employer 

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1 under chapter 1 of such Code for taxes paid under 

2 section 3111 of such Code with respect to employ3 ment during any calendar quarter shall be reduced 

4 by the amount by which the employer payroll tax de5 posits of such employer are reduced under sub6 section (a) for such quarter. 

7 (7) WAGES MUST BE FOR TRADE OR BUSI8 NESS.—A rule similar to the rule of section 51(f) of 

9 such Code shall apply. 

10 (8) ADJUSTMENTS FOR CERTAIN ACQUISITIONS, 

11 ETC.—Under regulations prescribed by the Sec12 retary— 

13 (A) ACQUISITIONS.—If, after December 

14 31, 2009, an employer acquires the major por15 tion of a trade or business of another person 

16 (hereafter in this paragraph referred to as the 

17 ‘‘predecessor’’) or the major portion of a sepa18 rate unit of a trade or business of a prede19 cessor, then, for purposes of applying this sec20 tion for any calendar quarter ending after such 

21 acquisition, the amount of wages or compensa22 tion deemed paid by the employer during peri23 ods before such acquisition shall be increased by 

24 so much of such wages or compensation paid by 

25 the predecessor with respect to the acquired 

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1 trade or business as is attributable to the por2 tion of such trade or business acquired by the 

3 employer. 

4 (B) DISPOSITIONS.—If, after December 

5 31, 2009— 

6 (i) an employer disposes of the major 

7 portion of any trade or business of the em8 ployer or the major portion of a separate 

9 unit of a trade or business of the employer 

10 in a transaction to which paragraph (1) 

11 applies, and 

12 (ii) the employer furnishes the acquir13 ing person such information as is nec14 essary for the application of subparagraph 

15 (A), 

16 then, for purposes of applying this section for 

17 any calendar quarter ending after such disposi18 tion, the amount of wages or compensation 

19 deemed paid by the employer during periods be20 fore such disposition shall be reduced by so 

21 much of such wages as is attributable to such 

22 trade or business or separate unit. 

23 (9) EMPLOYERS NOT ON QUARTERLY SYS24 TEM.—The Secretary of the Treasury shall prescribe 

25 rules for the application of this section in the case 

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1 of an eligible employer whose required income tax 

2 deposits are not made on a quarterly basis. 

3 SEC. 3. PERMANENT EXTENSION OF RESEARCH CREDIT. 

4 (a) IN GENERAL.—Section 41 of the Internal Rev5 enue Code of 1986 is amended by striking subsection (h). 

6 (b) CONFORMING AMENDMENT.—Paragraph (1) of 

7 section 45C(b) of such Code is amended by striking sub8 paragraph (D). 

9 (c) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 December 31, 2009. 

12 SEC. 4. BONUS DEPRECIATION MADE PERMANENT. 

13 (a) IN GENERAL.—Paragraph (2) of section 168(k) 

14 of the Internal Revenue Code of 1986 is amended— 

15 (1) in subparagraph (A)— 

16 (A) by adding ‘‘and’’ at the end of clause 

17 (ii), 

18 (B) by striking ‘‘, and before January 1, 

19 2010’’ in clause (iii)(I), 

20 (C) by striking ‘‘, and before January 1, 

21 2010, and’’ in clause (iii)(II) and inserting a 

22 period, and 

23 (D) by striking clause (iv), 

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1 (2) in subparagraph (B), by striking clause (ii) 

2 and by redesignating clauses (iii) and (iv) as clauses 

3 (ii) and (iii), respectively, and 

4 (3) in subparagraph (E)(i), by striking ‘‘, and 

5 before January 1, 2010’’. 

6 (b) CONFORMING AMENDMENTS.— 

7 (1) Subclause (I) of section 168(k)(2)(B)(i) of 

8 such Code is amended by striking ‘‘(iii), and (iv)’’ 

9 and inserting ‘‘and (iii)’’. 

10 (2) Clause (i) of section 168(k)(2)(C) of such 

11 Code is amended by striking ‘‘, (iii) and (iv)’’ and 

12 inserting ‘‘and (iii)’’. 

13 (3) Subparagraph (B) of section 168(l)(5) of 

14 such Code is amended to read as follows: 

15 ‘‘(B) by substituting ‘, and before January 

16 1, 2013.’ for the period at the end of clause (i) 

17 thereof, and’’. 

18 (4) Subparagraph (D) of section 1400L(b)(2) 

19 of such Code is amended by striking ‘‘clause (i) 

20 thereof shall be applied without regard to ‘and be21 fore January 1, 2010,’ and’’. 

22 (5) Subparagraph (B) of section 1400N(d)(3) 

23 of such Code is amended to read as follows: 

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1 ‘‘(B) by substituting ‘, and before January 

2 1, 2008.’ for the period at the end of clause (i) 

3 thereof, and’’. 

4 (6) The heading for subsection (k) of section 

5 168 of such Code is amended by striking ‘‘and be6 fore January 1, 2010’’. 

7 (c) EFFECTIVE DATE.—The amendments made by 

8 this section shall apply to property placed in service after 

9 December 31, 2009. 

10 SEC. 5. PERMANENT INCREASE IN LIMITATIONS ON EX11 PENSING OF CERTAIN DEPRECIABLE BUSI12 NESS ASSETS. 

13 (a) IN GENERAL.—Subsection (b) of section 179 of 

14 the Internal Revenue Code of 1986 (relating to limita15 tions) is amended— 

16 (1) by striking ‘‘$25,000’’ and all that follows 

17 in paragraph (1) and inserting ‘‘$250,000.’’, 

18 (2) by striking ‘‘$200,000’’ and all that follows 

19 in paragraph (2) and inserting ‘‘$800,000’’, 

20 (3) by striking ‘‘after 2007 and before 2011, 

21 the $120,000 and $500,000’’ in paragraph (5)(A) 

22 and inserting ‘‘after 2009, the $250,000 and the 

23 $800,000’’, 

24 (4) by striking ‘‘2006’’ in paragraph (5)(A)(ii) 

25 and inserting ‘‘2008’’, and 

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1 (5) by striking paragraph (7). 

2 (b) EFFECTIVE DATE.—The amendments made by 

3 this section shall apply to taxable years beginning after 

4 December 31, 2009. 

Æ 

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