I 
109TH CONGRESS 
1ST SESSION 
H. R. 143 
To provide job creation and assistance, and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
JANUARY 4, 2005 
Mr. MCHUGH introduced the following bill; which was referred to the Com-
mittee on Education and the Workforce, and in addition to the Commit-
tees on Ways and Means, Judiciary, and Financial Services, for a period 
to be subsequently determined by the Speaker, in each case for consider-
ation of such provisions as fall within the jurisdiction of the committee 
concerned 
A BILL 
To provide job creation and assistance, 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 ‘‘Rural America Job 
Assistance and Creation Act’’. 
SEC. 2. GRANTS FOR REGIONAL SKILLS ALLIANCE SKILL 
DEVELOPMENT. 
(a) AUTHORIZATION.—
(1) IN GENERAL.—The Secretary of Labor, in 
consultation with the Secretary of Commerce, shall 
award grants to eligible entities described in sub-
section (b) to assist such entities to improve the job 
skills necessary for employment in specific indus-
tries. 
(2) ELIGIBLE ENTITIES DESCRIBED.— 
(A) IN GENERAL.—An eligible entity de-
scribed in this subsection is a consortium 
that— 
(i) shall consist of representatives 
from not less than 5 businesses, or a lesser 
number of businesses if such lesser number 
of businesses employs at least 30 percent 
of the employees in the industry involved 
in the region (or a nonprofit organization 
that represents such businesses); 
(ii) may consist of representatives 
from— 
(I) labor organizations; 
(II) State and local government; 
and 
(III) educational institutions; 
(iii) is established to serve one or 
more particular industries; and
(iv) is established to serve a particular 
geographic region. 
(B) MAJORITY OF REPRESENTATIVES.—A 
majority of the representatives comprising the 
consortium shall be representatives described in 
subparagraph (A)(i). 
(3) PRIORITY
FOR
SMALL
BUSINESSES.—In 
providing grants under paragraph (1), the Secretary 
of Labor shall give priority to an eligible entity if a 
majority of representatives forming the entity rep-
resent small-business concerns (as defined in section 
3(a) of the Small Business Act (15 U.S.C. 632(a))). 
(4) 
MAXIMUM
AMOUNT
OF
GRANT.—The 
amount of a grant awarded to an eligible entity 
under paragraph (1) may not exceed $1,000,000 for 
any fiscal year. 
(b) USE OF AMOUNTS.— 
(1) IN GENERAL.—The Secretary of Labor may 
not award a grant under subsection (a) to an eligible 
entity unless such entity agrees to use amounts re-
ceived from such grant to improve the job skills nec-
essary for employment by businesses in the industry 
with respect to which such entity was established. 
(2) CONDUCT OF PROGRAM.—
(A) IN
GENERAL.—In carrying out the 
program described in paragraph (1), the eligible 
entity may provide for— 
(i) an assessment of training and job 
skill needs for the industry; 
(ii) the development of a sequence of 
skill standards that are benchmarked to 
advanced industry practices; 
(iii) the development of curriculum 
and training methods, including, where ap-
propriate, e-learning or technology-based 
training; 
(iv) the purchase, lease, or receipt of 
donations of training equipment; 
(v) the identification of training pro-
viders and the development of partnerships 
between the industry and educational insti-
tutions, including community colleges; 
(vi) the development of apprenticeship 
programs; 
(vii) the development of training pro-
grams for workers, including dislocated 
workers; 
(viii) the development of training 
plans for businesses; and
(ix) the development of the member-
ship of the entity. 
(B) ADDITIONAL REQUIREMENT.—In car-
rying out the program described in paragraph 
(1), the eligible entity shall provide for the de-
velopment and tracking of performance outcome 
measures for the program and the training pro-
viders involved in the program. 
(3) ADMINISTRATIVE COSTS.—The eligible enti-
ty may use not more than 10 percent of the amount 
of a grant to pay for administrative costs associated 
with the program described in paragraph (1). 
(c) REQUIREMENT OF MATCHING FUNDS.— 
(1) IN GENERAL.—The Secretary of Labor may 
not award a grant under subsection (a) to an eligible 
entity unless such entity agrees that the entity will 
make available non-Federal contributions toward the 
costs of carrying out activities under the grant in an 
amount that is not less than $2 for each $1 of Fed-
eral funds provided under the grant, of which— 
(A) $1 shall be provided by the businesses 
participating in the entity; and 
(B) $1 shall be provided by the State or 
local government involved. 
(2) OTHER CONTRIBUTIONS.—
(A) EQUIPMENT.—Equipment donations to 
facilities that are not owned or operated by the 
members of the eligible entity involved and that 
are shared by such members may be included in 
determining compliance with paragraph (1). 
(B) LIMITATION.—An eligible entity may 
not include in-kind contributions in complying 
with the requirement of paragraph (1). The 
Secretary of Labor may consider such dona-
tions in ranking applications. 
(d) LIMIT
ON ADMINISTRATIVE EXPENSES.—The 
Secretary of Labor may use not more than 5 percent of 
the amounts made available to carry out this section to 
pay the Federal administrative costs associated with 
awarding grants under this section. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$50,000,000 for each of fiscal years 2006, 2007, and 
2008, and such sums as are necessary for each fiscal year 
thereafter. 
SEC. 3. GRANTS FOR REGIONAL SKILLS ALLIANCE PLAN-
NING. 
(a) AUTHORIZATION.— 
(1) IN GENERAL.—The Secretary of Labor, in 
consultation with the Secretary of Commerce, shall
award grants to States to enable such States to as-
sist businesses, organizations, and agencies de-
scribed in section 2(a)(2) in conducting planning to 
form consortia described in such section. 
(2) 
MAXIMUM
AMOUNT
OF
GRANT.—The 
amount of a grant awarded to a State under para-
graph (1) may not exceed $500,000 for any fiscal 
year. 
(b) APPLICATION.—The Secretary of Labor may not 
award a grant under subsection (a) to a State unless such 
State submits to the Secretary an application at such 
time, in such manner, and containing such information as 
the Secretary may reasonably require. 
(c) REQUIREMENT OF MATCHING FUNDS.—The Sec-
retary of Labor may not award a grant under subsection 
(a) to a State unless such State agrees that it will make 
available non-Federal contributions toward the costs of 
carrying out activities under this section in an amount 
that is not less than $1 for each $1 of Federal funds pro-
vided under the grant. 
(d) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to carry out this section 
$5,000,000 for fiscal year 2006.
SEC. 4. GRANTS FOR SUPPORT OF BUSINESS INCUBATOR 
ACTIVITIES. 
(a) PURPOSE.—It is the purpose of this section to 
encourage entrepreneurial creativity and risk taking 
through the support of the furnishing of business incu-
bator services for newly established small businesses and 
medium-sized businesses. 
(b) GRANT PROGRAM.—To achieve the purpose of 
this section, the Secretary of Commerce shall carry out 
a program to provide, through grants, financial assistance 
for the establishment and support of entities that provide 
business incubator services in support of the initiation and 
initial sustainment of business activities by newly estab-
lished small businesses and medium-sized businesses. 
(c) AWARDS OF GRANTS.— 
(1) ELIGIBILITY
REQUIREMENTS.—The Sec-
retary shall prescribe the eligibility requirements for 
the awarding of grants under this section. 
(2) COMPETITIVE SELECTION.—The Secretary 
shall use a competitive process for the awarding of 
grants under this section and, under that process, 
select recipients of the grants on the basis of merit, 
with priority given to underserved rural and urban 
communities.
(3) APPLICATIONS
FOR
GRANTS.—The Sec-
retary shall prescribe the form and content of appli-
cations required for grants under this section. 
(d) ADDITIONAL ADMINISTRATIVE AUTHORITIES.— 
(1) COST-SHARING.—The Secretary may re-
quire the recipient of a grant under this section to 
defray a specific level of its operating expenses for 
business incubator services out of funds available 
from sources other than the Federal Government. 
(2) ADDITIONAL
TERMS
AND
CONDITIONS.— 
The Secretary, in awarding a grant, may impose any 
other terms and conditions for the use of the pro-
ceeds of the grant that the Secretary determines ap-
propriate for carrying out the purpose of this section 
and to protect the interests of the United States, in-
cluding the requirement that entities providing busi-
ness incubator services that receive a grant under 
this section develop a plan for ultimately becoming 
self-sufficient. 
(e) DEFINITIONS.—In this section: 
(1) BUSINESS
INCUBATOR
SERVICES.—The 
term ‘‘business incubator services’’ includes profes-
sional and technical services necessary for the initi-
ation and initial sustainment of operations of a
newly established business, including such services 
as the following: 
(A) LEGAL SERVICES.—Legal services, in-
cluding aid in preparing corporate charters, 
partnership agreements, and basic contracts. 
(B) 
INTELLECTUAL
PROPERTY
SERV-
ICES.—Services in support of the protection of 
intellectual property through patents, trade-
marks, or otherwise. 
(C) TECHNOLOGY SERVICES.—Services in 
support of the acquisition and use of advanced 
technology, including the use of Internet serv-
ices and web-based services. 
(D) PLANNING.—Advice on— 
(i) strategic planning; and 
(ii) marketing, including advertising. 
(2) SMALL BUSINESS AND MEDIUM-SIZED BUSI-
NESS.— 
(A) SECRETARY TO PRESCRIBE.—The Sec-
retary shall prescribe the definitions of the 
terms ‘‘small business’’ and ‘‘medium-sized 
business’’ for the purpose of this section. 
(B) SMALL BUSINESS STANDARDS.—In de-
fining the term ‘‘small business’’ for the pur-
pose of this section, the Secretary shall apply
the standards applicable for the definition of 
the term ‘‘small-business concern’’ under sec-
tion 3 of the Small Business Act (15 U.S.C. 
632). 
(3) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Commerce. 
(f) REGULATIONS.—The Secretary shall prescribe 
regulations for the grant program administered under this 
section. 
(g) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated for the Department of 
Commerce to carry out this section $50,000,000 for fiscal 
year 2006, and $200,000,000 for each fiscal year there-
after. 
SEC. 5. NOTIFICATION OF FEDERAL AND STATE ELECTED 
OFFICIALS 
PRIOR 
TO 
DISLOCATION 
OF 
WORKERS. 
Section 3(a)(2) of the Worker Adjustment and Re-
training Notification Act (29 U.S.C. 2102(a)(2)) is 
amended by inserting ‘‘Federal, State, and’’ after ‘‘the 
unit of’’.
SEC. 6. SUBMISSION OF H–1B LABOR CONDITION APPLICA-
TION AT SAME TIME AS CLASSIFICATION PE-
TITION. 
Section 212(n)(1) of the Immigration and Nationality 
Act (8 U.S.C. 1182(n)(1)) is amended by adding at the 
end the following: ‘‘The application under this paragraph 
shall be submitted by an employer at the same time as 
the classification petition is filed under section 214 relat-
ing to the H–1B nonimmigrants who are the subject of 
the application.’’. 
SEC. 7. EXCLUSION FROM INCOME OF SEVERANCE PAY-
MENT AMOUNTS. 
(a) IN GENERAL.—Part III of subchapter B of chap-
ter 1 of the Internal Revenue Code of 1986 (relating to 
items specifically excluded from gross income) is amended 
by inserting after section 139 the following new section: 
‘‘SEC. 139A. SEVERANCE PAYMENTS. 
‘‘(a) IN GENERAL.—In the case of an individual, 
gross income shall not include any qualified severance pay-
ment. 
‘‘(b) LIMITATION.—The amount to which the exclu-
sion under subsection (a) applies shall not exceed $25,000 
with respect to each separation from employment de-
scribed in subsection (c)(1)(B). 
‘‘(c) QUALIFIED SEVERANCE PAYMENT.—For pur-
poses of this section—
‘‘(1) IN GENERAL.—The term ‘qualified sever-
ance payment’ means any payment received by an 
individual if— 
‘‘(A) such payment was paid by such 
individual‘s employer on account of such indi-
vidual’s separation from employment, and 
‘‘(B) such separation was in connection 
with a reduction in the work force of the em-
ployer. 
‘‘(2) LIMITATION.—Such term shall not include 
any payment received by an individual if the aggre-
gate payments received with respect to the separa-
tion from employment exceed $150,000.’’. 
(b) CLERICAL AMENDMENT.—The table of sections 
for part III of subchapter B of chapter 1 of such Code 
is amended by inserting after the item relating to section 
139 the following new items: 
‘‘139A. Severance payments.’’ 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to taxable years beginning after 
December 31, 2005. 
SEC. 8. EXPANSION OF WORK OPPORTUNITY TAX CREDIT. 
(a) IN GENERAL.—Section 51(d)(1) of the Internal 
Revenue Code of 1986 (relating to members of targeted 
groups) is amended by striking ‘‘or’’ at the end of sub-
paragraph (G), by striking the period at the end of sub-
paragraph (H) and inserting ‘‘, or’’, and by adding at the 
end the following: 
‘‘(I) a qualified small business employee.’’. 
(b) QUALIFIED SMALL BUSINESS EMPLOYEE.—Sec-
tion 51(d) of the Internal Revenue Code of 1986 is amend-
ed by redesignating paragraphs (10) through (12) as para-
graphs (11) through (13), respectively, and by inserting 
after paragraph (9) the following: 
‘‘(10) 
QUALIFIED
SMALL
BUSINESS
EM-
PLOYEE.— 
‘‘(A) IN
GENERAL.—The term ‘qualified 
small business employee’ means any indi-
vidual— 
‘‘(i) hired by a qualified small busi-
ness located in a development zone, or 
‘‘(ii) hired by a qualified small busi-
ness and who is certified by the designated 
local agency as residing in such a develop-
ment zone. 
‘‘(B) QUALIFIED SMALL BUSINESS.—The 
term ‘qualified small business’ has the meaning 
given the term ‘small employer’ by section 
4980D(d)(2). 
‘‘(C) DEVELOPMENT ZONE.—For purposes 
of this section—
‘‘(i) IN GENERAL.—The term ‘devel-
opment zone’ means any area— 
‘‘(I) which is nominated under 
the procedures defined in sections 
1400E(a)(1)(A) and 1400E(a)(4) for 
renewal communities; 
‘‘(II) which the Secretary of 
Housing and Urban Development des-
ignates as a development zone, after 
consultation with the Secretary of 
Commerce; 
‘‘(III) which has a population of 
not less than 5,000 and not more 
than 150,000; 
‘‘(IV) which has a poverty rate 
not less than 20 percent (within the 
meaning of section 1400E(c)(3)(C)); 
‘‘(V) which has an average an-
nual rate of job growth of less than 2 
percent during any 3 years of the pre-
ceding 5-year period; and 
‘‘(VI) which, during the period 
beginning January 1, 1990 and end-
ing with the date of the enactment of 
this section, has a net out-migration
of inhabitants, or other population 
loss, from the area of at least 2 per-
cent of the population of the area dur-
ing such period. 
‘‘(ii) NUMBER
OF
DESIGNATIONS.— 
The Secretary of Housing and Urban De-
velopment may not designate more than 
100 development zones. 
‘‘(D) SPECIAL RULES FOR DETERMINING 
AMOUNT OF CREDIT.—For purposes of applying 
this subpart to wages paid or incurred to any 
qualified small business employee— 
‘‘(i) subsection (a) shall be applied by 
substituting ‘20 percent of the qualified 
first, second, third, fourth, or fifth year 
wages’ for ‘40 percent of the qualified first 
year wages’, and 
‘‘(ii) in lieu of paragraphs (2) and (3) 
of subsection (b), the following definitions 
and special rule shall apply: 
‘‘(I) 
QUALIFIED
FIRST-YEAR 
WAGES.—The term ‘qualified first- 
year wages’ means, with respect to 
any individual, qualified wages attrib-
utable to service rendered during the
1-year period beginning with the day 
the individual begins work for the em-
ployer. 
‘‘(II) QUALIFIED
SECOND-YEAR 
WAGES.—The term ‘qualified second- 
year wages’ means, with respect to 
any individual, qualified wages attrib-
utable to service rendered during the 
1-year period beginning on the day 
after the last day of the 1-year period 
with respect to such individual deter-
mined under subclause (I). 
‘‘(III) QUALIFIED
THIRD-YEAR 
WAGES.—The term ‘qualified third- 
year wages’ means, with respect to 
any individual, qualified wages attrib-
utable to service rendered during the 
1-year period beginning on the day 
after the last day of the 1-year period 
with respect to such individual deter-
mined under subclause (II). 
‘‘(IV) QUALIFIED FOURTH-YEAR 
WAGES.—The term ‘qualified fourth- 
year wages’ means, with respect to 
any individual, qualified wages attrib-
utable to service rendered during the 
1-year period beginning on the day 
after the last day of the 1-year period 
with respect to such individual deter-
mined under subclause (III). 
‘‘(V) 
QUALIFIED
FIFTH-YEAR 
WAGES.—The term ‘qualified fifth- 
year wages’ means, with respect to 
any individual, qualified wages attrib-
utable to service rendered during the 
1-year period beginning on the day 
after the last day of the 1-year period 
with respect to such individual deter-
mined under subclause (IV). 
‘‘(VI) ONLY
FIRST
$15,000
OF 
WAGES
PER
YEAR
TAKEN
INTO
AC-
COUNT.—The amount of the qualified 
first, second, third, fourth, and fifth 
year wages which may be taken into 
account with respect to any individual 
shall not exceed $15,000 per year.’’. 
(c) EFFECTIVE DATE.—The amendments made by 
this section shall apply to individuals who begin work for 
the employer after the date of enactment of this Act. 
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