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. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘Encouraging Work Act 
of 2005’’. 
SEC. 2. MODIFICATIONS TO WORK OPPORTUNITY CREDIT 
AND WELFARE-TO-WORK CREDIT. 
(a) CREDIT MADE PERMANENT.—
(1) Subsection (c) of section 51 of the Internal 
Revenue Code of 1986 is amended by striking para-
graph (4) (relating to termination). 
(2) Section 51A of such Code is amended by 
striking subsection (f). 
(b) ELIGIBILITY
OF
EX-FELONS
DETERMINED 
WITHOUT REGARD TO FAMILY INCOME.—Paragraph (4) 
of section 51(d) of such Code is amended by adding ‘‘and’’ 
at the end of subparagraph (A), by striking ‘‘, and’’ at 
the end of subparagraph (B) and inserting a period, and 
by striking all that follows subparagraph (B). 
(c) INCREASE IN MAXIMUM AGE FOR ELIGIBILITY OF 
FOOD
STAMP
RECIPIENTS.—Clause (i) of section 
51(d)(8)(A) of such Code is amended by striking ‘‘25’’ and 
inserting ‘‘40’’. 
(d) INCREASE IN MAXIMUM AGE FOR DESIGNATED 
COMMUNITY RESIDENTS.— 
(1) IN
GENERAL.—Paragraph (5) of section 
51(d) of such Code is amended to read as follows: 
‘‘(5) DESIGNATED COMMUNITY RESIDENTS.— 
‘‘(A) IN GENERAL.—The term ‘designated 
community resident’ means any individual who 
is certified by the designated local agency— 
‘‘(i) as having attained age 18 but not 
age 40 on the hiring date, and
‘‘(ii) as having his principal place of 
abode within an empowerment zone, enter-
prise community, or renewal community. 
‘‘(B) INDIVIDUAL MUST CONTINUE TO RE-
SIDE IN ZONE OR COMMUNITY.—In the case of 
a designated community resident, the term 
‘qualified wages’ shall not include wages paid or 
incurred for services performed while the indi-
vidual’s principal place of abode is outside an 
empowerment zone, enterprise community, or 
renewal community.’’. 
(2) CONFORMING AMENDMENT.—Subparagraph 
(D) of section 51(d)(1) is amended to read as fol-
lows: 
‘‘(D) a designated community resident,’’. 
(e) CLARIFICATION OF TREATMENT OF INDIVIDUALS 
UNDER INDIVIDUAL WORK PLANS.—Subparagraph (B) 
of section 51(d)(6) of such Code (relating to vocational 
rehabilitation referral) is amended by striking ‘‘or’’ at the 
end of clause (i), by striking the period at the end of 
clause (ii) and inserting ‘‘, or’’, and by adding at the end 
the following new clause: 
‘‘(iii) an individual work plan devel-
oped and implemented by an employment 
network pursuant to subsection (g) of sec-
tion 1148 of the Social Security Act with 
respect to which the requirements of such 
subsection are met.’’. 
(f) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after December 31, 2005. 
SEC. 3. CONSOLIDATION OF WORK OPPORTUNITY CREDIT 
WITH WELFARE-TO-WORK CREDIT. 
(a) IN GENERAL.—Paragraph (1) of section 51(d) of 
the Internal Revenue Code of 1986 is amended by striking 
‘‘or’’ at the end of subparagraph (G), by striking the pe-
riod at the end of subparagraph (H) and inserting ‘‘, or’’, 
and by adding at the end the following new subparagraph: 
‘‘(I) a long-term family assistance recipi-
ent.’’. 
(b) LONG-TERM FAMILY ASSISTANCE RECIPIENT.— 
Subsection (d) of section 51 of such Code is amended by 
redesignating paragraphs (10) through (12) as para-
graphs (11) through (13), respectively, and by inserting 
after paragraph (9) the following new paragraph: 
‘‘(10) LONG-TERM FAMILY ASSISTANCE RECIPI-
ENT.—The term ‘long-term family assistance recipi-
ent’ means any individual who is certified by the 
designated local agency—
‘‘(A) as being a member of a family receiv-
ing assistance under a IV–A program (as de-
fined in paragraph (2)(B)) for at least the 18- 
month period ending on the hiring date, 
‘‘(B)(i) as being a member of a family re-
ceiving such assistance for 18 months beginning 
after August 5, 1997, and 
‘‘(ii) as having a hiring date which is not 
more than 2 years after the end of the earliest 
such 18-month period, or 
‘‘(C)(i) as being a member of a family 
which ceased to be eligible for such assistance 
by reason of any limitation imposed by Federal 
or State law on the maximum period such as-
sistance is payable to a family, and 
‘‘(ii) as having a hiring date which is not 
more than 2 years after the date of such ces-
sation.’’. 
(c) INCREASED CREDIT FOR EMPLOYMENT OF LONG- 
TERM FAMILY ASSISTANCE RECIPIENTS.—Section 51 of 
such Code is amended by inserting after subsection (d) 
the following new subsection: 
‘‘(e) CREDIT FOR SECOND-YEAR WAGES FOR EM-
PLOYMENT OF LONG-TERM FAMILY ASSISTANCE RECIPI-
ENTS.—
‘‘(1) IN GENERAL.—With respect to the em-
ployment of a long-term family assistance recipi-
ent— 
‘‘(A) the amount of the work opportunity 
credit determined under this section for the tax-
able year shall include 50 percent of the quali-
fied second-year wages for such year, and 
‘‘(B) in lieu of applying subsection (b)(3), 
the amount of the qualified first-year wages, 
and the amount of qualified second-year wages, 
which may be taken into account with respect 
to such a recipient shall not exceed $10,000 per 
year. 
‘‘(2) QUALIFIED
SECOND-YEAR
WAGES.—For 
purposes of this subsection, the term ‘qualified sec-
ond-year wages’ means qualified wages— 
‘‘(A) which are paid to a long-term family 
assistance recipient, and 
‘‘(B) which are attributable to service ren-
dered during the 1-year period beginning on the 
day after the last day of the 1-year period with 
respect to such recipient determined under sub-
section (b)(2). 
‘‘(3) SPECIAL RULES FOR AGRICULTURAL AND 
RAILWAY LABOR.—If such recipient is an employee