I
107TH CONGRESS
2D SESSION
H. R. 3768
To amend the Internal Revenue Code of 1986 to provide tax credits for
hiring workers retrained in Trade Adjustment and Assistance programs.
IN THE HOUSE OF REPRESENTATIVES
FEBRUARY 14, 2002
Mr. BALDACCI 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 provide
tax credits for hiring workers retrained in Trade Adjust-
ment and Assistance programs.
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 ‘‘Worker Retraining In-
centive Act of 2002’’.
SEC. 2. REFUNDABLE CREDIT FOR PORTION OF SOCIAL SE-
CURITY TAXES BORNE BY EMPLOYEES WHO
COMPLETE 
TRAINING 
PROGRAM 
UNDER
TRADE ACT OF 1974.
(a) GENERAL RULE.—Subpart C of part IV of sub-
chapter A of chapter 1 (relating to refundable credits) is
amended by redesignating section 35 as section 36 and
by inserting after section 34 the following new section:
‘‘SEC. 35. CREDIT FOR PORTION OF SOCIAL SECURITY
TAXES BORNE BY EMPLOYEES WHO COM-
PLETE TRAINING PROGRAM UNDER TRADE
ACT OF 1974.
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli-
gible individual, there shall be allowed as a credit against
the tax imposed by this subtitle for the taxable year an
amount equal to the individual’s social security taxes at-
tributable to service rendered during the 1-year period be-
ginning with the day the individual begins work for the
employer.
‘‘(b) LIMITATION.—No credit shall be allowed under
subsection (a) with respect to an individual for a taxable
year if the sum of the wages (as defined in section
3121(a)) and compensation (as defined in section 3231(e))
of such individual for such 1-year period is $60,000 or
greater.
‘‘(c) ELIGIBLE INDIVIDUAL.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘eligible individual’ means an indi-
vidual who—
‘‘(A) successfully completes a Trade Ad-
justment Assistance program under chapter 2
of title II of the Trade Act of 1974, and
‘‘(B) within 1 year after the completion of
such program begins work with an employer in
a position requiring skills which are taught in
such program.
‘‘(2) EXCEPTION.—For purposes of paragraph
(1), an individual shall not be treated as an eligible
individual if such individual is reemployed with the
same employer (or successor thereto) in the same or
similar position in which such individual last served
before beginning such program.
‘‘(3) AGGREGATION RULE.—All persons treated
as a single employer under subsection (a) or (b) of
section 52, or subsection (n) or (o) of section 414,
shall be treated as a single employer for purposes of
this subsection.
‘‘(d) SOCIAL SECURITY TAXES.—For purposes of this
section—
‘‘(1) IN GENERAL.—The term ‘social security
taxes’ means, with respect to any taxpayer for any
taxable year—
‘‘(A) the amount of the taxes imposed by
section 3101(a) on amounts received by the tax-
payer during the calendar year in which the
taxable year begins,
‘‘(B) the amount of the taxes determined
using so much of the rate applicable under sec-
tion 3201(a) as does not exceed the rate of tax
in effect under section 3101(a) which is im-
posed by section 3201(a) on amounts received
by the taxpayer during the calendar year in
which the taxable year begins, and
‘‘(C) the amount of the taxes determined
using so much of the rate applicable under sec-
tion 3211(a)(1) as does not exceed the rate of
tax in effect under section 3101(a) which is im-
posed by section 3211(a)(1) on amounts re-
ceived by the taxpayer during the calendar year
in which the taxable year begins.
‘‘(2) COORDINATION WITH SPECIAL REFUND OF
SOCIAL SECURITY TAXES.—The term ‘social security
taxes’ shall not include any taxes to the extent the
taxpayer is entitled to a special refund of such taxes
under section 6413(c).
‘‘(3) SPECIAL RULE.—Any amounts paid pursu-
ant to an agreement under section 3121(l) (relating
to agreements entered into by American employers
with respect to foreign affiliates) which are equiva-
lent to the taxes referred to in paragraph (1)(A)
shall be treated as taxes referred to in such para-
graph.
‘‘(e) DENIAL
OF CREDIT
TO DEPENDENTS.—No
credit shall be allowed under this section to any individual
with respect to whom a deduction under section 151 is
allowable to another taxpayer for a taxable year beginning
in the calendar year in which such individual’s taxable
year begins.’’.
(b) TECHNICAL AMENDMENTS.—
(1) Paragraph (2) of section 1324(b) of title
31, United States Code, is amended by inserting ‘‘or
from section 35 of such Code’’ before the period at
the end.
(2) The table of sections for subpart C of part
IV of subchapter A of chapter 1 is amended by
striking the item relating to section 35 and inserting
the following:
‘‘Sec. 35. Credit for portion of social security taxes borne by em-
ployees who complete training program under
Trade Act of 1974.
‘‘Sec. 36. Overpayments of tax.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2002.
SEC. 3. CREDIT FOR PORTION OF EMPLOYER SOCIAL SECU-
RITY TAXES PAID WITH RESPECT TO EM-
PLOYEES HIRED AFTER COMPLETING TRAIN-
ING PROGRAMS UNDER TRADE ACT OF 1974.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business related credits) is amended by
adding at the end the following:
‘‘SEC. 45G. CREDIT FOR PORTION OF EMPLOYER SOCIAL
SECURITY TAXES PAID WITH RESPECT TO
EMPLOYEES 
HIRED 
AFTER 
COMPLETING
TRAINING PROGRAMS UNDER TRADE ACT OF
1974.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the employer trade adjustment assistance hiring credit de-
termined under this section for the taxable year is an
amount equal to the aggregate of the qualified social secu-
rity taxes paid or incurred which are attributable to serv-
ice of an eligible employee rendered during the 1-year pe-
riod beginning on the day the employee begins work for
the employer.
‘‘(b) LIMITATION.—No credit shall be allowed under
subsection (a) with respect to an employee for a taxable
year if the sum of the wages (as defined in section
3121(a)) and compensation (as defined in section 3231(e))
of such employee for such 1-year period is $60,000 or
greater.
‘‘(c) QUALIFIED SOCIAL SECURITY TAX.—
‘‘(1) IN GENERAL.—For purposes of this sec-
tion, the term ‘qualified social security tax’ means,
with respect to any eligible employee for any taxable
year—
‘‘(A) the amount of the taxes imposed by
section 3111(a) on amounts paid with respect
to such employee by the taxpayer during the
calendar year in which the taxable year begins,
and
‘‘(B) the amount of the taxes determined
using so much of the rate applicable under sec-
tion 3221(a) as does not exceed the rate of tax
in effect under section 3111(a) which is im-
posed by section 3221(a) on amounts paid with
respect to such employee by the taxpayer dur-
ing the calendar year in which the taxable year
begins.
‘‘(2) COORDINATION WITH SPECIAL REFUND OF
SOCIAL SECURITY TAXES.—The term ‘social security
taxes’ shall not include any taxes to the extent the
taxpayer is entitled to a special refund of such taxes
under section 6413(c).
‘‘(3) SPECIAL RULE.—Any amounts paid pursu-
ant to an agreement under section 3121(l) (relating
to agreements entered into by American employers
with respect to foreign affiliates) which are equiva-
lent to the taxes referred to in paragraph (1)(A)
shall be treated as taxes referred to in such para-
graph.
‘‘(d) ELIGIBLE EMPLOYEE.—For purposes of this
section, the term ‘eligible employee’ means an individual
who is an eligible individual (as defined in section 35(c)).
‘‘(e) DENIAL OF DOUBLE BENEFIT.—No deduction
or other credit shall be allowed under this chapter for any
amount taken into account in determining the credit under
this section.
‘‘(f) ELECTION NOT TO CLAIM CREDIT.—This sec-
tion shall not apply to a taxpayer for any taxable year
if such taxpayer elects to have this section not apply for
such taxable year.’’.
(b) CONFORMING AMENDMENTS.—
(1) Section 38(b) of such Code is amended by
striking ‘‘plus’’ at the end of paragraph (14), by
striking the period at the end of paragraph (15) and
inserting ‘‘, plus’’, and by adding at the end the fol-
lowing:
‘‘(16) the trade adjustment assistance hiring
credit determined under section 45G.’’.
(2) The table of sections for subpart D of part
IV of subchapter A of chapter 1 of such Code is
amended by adding at the end the following:
‘‘Sec. 45G. Credit for portion of employer social security taxes
paid with respect to employees hired after com-
pleting training programs under Trade Act of
1974.’’.
(c) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
December 31, 2002.
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