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 employ-
ees, and for other purposes. 
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 ‘‘Small Business Jobs 
Act of 2015’’. 
SEC. 2. CREDIT FOR CERTAIN INDIVIDUALS HIRED BY A 
SMALL EMPLOYER. 
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following: 
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‘‘SEC. 45S. CERTAIN INDIVIDUALS HIRED BY A SMALL EM-
PLOYER. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of an eligible small employer, the small em-
ployer hiring credit determined under this section for any 
taxable year is the amount determined under subsection 
(b). 
‘‘(b) SMALL EMPLOYER HIRING CREDIT AMOUNT.— 
The amount determined under this subsection for a tax-
able year with respect to a qualified small employer is the 
product of— 
‘‘(1) the tax rate in effect under section 
3111(a) for the calendar year in which such taxable 
year ends, multiplied by 
‘‘(2) the wages paid by the qualified small em-
ployer with respect to employment of all covered em-
ployees during the taxable year. 
‘‘(c) QUALIFIED EMPLOYER.—For purposes of this 
subsection— 
‘‘(1) IN GENERAL.—The term ‘qualified small 
employer’ means with respect to any calendar year, 
an employer who— 
‘‘(A) has a place of business in a county 
with an annual unemployment rate for the pre-
ceding calendar year of at least one percentage 
point greater than the national annual unem-
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ployment rate for the preceding calendar year, 
and 
‘‘(B) who on no business day of the pre-
ceding calendar year employed less than 2, or 
more than 100, employees. 
‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE-
CEDING YEAR.—In the case of an employer which 
was not in existence throughout the preceding cal-
endar year, the determination of whether such em-
ployer is a small employer shall be based on the 
number of employees that it is reasonably expected 
such employer will employ on business days in the 
current calendar year. 
‘‘(3) SPECIAL
RULES.—For purposes of this 
subsection— 
‘‘(A) PREDECESSOR
AND
SUCCESSOR.— 
Any reference in this paragraph to an employer 
shall include a reference to any predecessor of, 
or successor to, such employer. 
‘‘(B) AGGREGATION
RULE.—All persons 
treated as a single employer under subsection 
(b), (c), (m), or (o) of section 414 shall be 
treated as one employer. 
‘‘(C) GOVERNMENTAL EMPLOYERS NOT IN-
CLUDED.—The term ‘employer’ does not in-
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clude the United States, any State, or any polit-
ical subdivision thereof, or any instrumentality 
of the foregoing. 
‘‘(D) DETERMINATION OF UNEMPLOYMENT 
RATE.—The unemployment rate shall be the 
rate determined by the Bureau of Labor Statis-
tics. 
‘‘(4) CREDIT APPLIES FOR ONLY 1 YEAR.—If 
an election to claim the credit under this section is 
in effect for any calendar year, paragraph (1) shall 
not apply to such employer for any year after such 
calendar year. 
‘‘(d) COVERED EMPLOYEE.—For purposes of this 
subsection— 
‘‘(1) IN
GENERAL.—The term ‘covered em-
ployee’ means, with respect to any week, is an em-
ployee who— 
‘‘(A) first begins work for the employer for 
services performed by the employee— 
‘‘(i) in a trade or business of such 
qualified small employer, or 
‘‘(ii) in the case of a qualified small 
employer exempt from tax under section 
501(a), in furtherance of the activities re-
lated to the purpose or function consti-
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tuting the basis of the employer’s exemp-
tion under section 501, and 
‘‘(B) is employed on average at least 30 
hours of service per week. 
‘‘(2) LIMITATION TO 5 EMPLOYEES.—An em-
ployer may not treat more than 5 employees as cov-
ered employees. 
‘‘(3) HOURS OF SERVICE.—The Secretary, in 
consultation with the Secretary of Labor, shall pre-
scribe such regulations, rules, and guidance as may 
be necessary to determine the hours of service of an 
employee, including rules for the application of this 
paragraph to employees who are not compensated on 
an hourly basis. 
‘‘(e) CREDIT MADE AVAILABLE TO TAX-EXEMPT EL-
IGIBLE SMALL EMPLOYERS.— 
‘‘(1) IN GENERAL.—In the case of a tax-exempt 
eligible small employer, there shall be treated as a 
credit allowable under subpart C (and not allowable 
under this subpart) the amount of the credit deter-
mined under this section with respect to such em-
ployer. 
‘‘(2) 
TAX-EXEMPT
ELIGIBLE
SMALL
EM-
PLOYER.—For purposes of this section, the term 
‘tax-exempt eligible small employer’ means an eligi-
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ble small employer which is any organization de-
scribed in section 501(c) which is exempt from tax-
ation under section 501(a). 
‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 
or credit shall be allowed under any other provision of this 
chapter with respect to the amount of the credit deter-
mined under this section. 
‘‘(g) ELECTION.—This section shall apply to any tax-
payer for any taxable year only if such taxpayer elects (at 
such time and in such manner as the Secretary may by 
regulations prescribe) to have this section apply for such 
taxable year. 
‘‘(h) TERMINATION.—This section shall not apply 
with respect to wages paid after December 31, 2017.’’. 
(b) CREDIT TO BE PART OF GENERAL BUSINESS 
CREDIT.—Section 38(b) of the Internal Revenue Code of 
1986 (relating to current year business credit) is amended 
by striking ‘‘plus’’ at the end of paragraph (35), by strik-
ing the period at the end of paragraph (36) and inserting 
‘‘, plus’’, and by inserting after paragraph (36) the fol-
lowing: 
‘‘(37) the small employer small employer hiring 
credit determined under section 45S.’’. 
(c) CLERICAL AMENDMENT.—The table of sections 
for subpart D of part IV of subchapter A of chapter 1 
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of the Internal Revenue Code of 1986 is amended by add-
ing at the end the following: 
‘‘Sec. 45S. Certain individuals hired by a small employer.’’. 
(d) EFFECTIVE DATE.—The amendments made by 
this section shall apply to amounts paid or incurred in tax-
able years beginning after December 31, 2015. 
Æ 
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