Stronger Way Act

Bill: 114-s-3231
Sponsor: full_name: Sen. Baldwin, Tammy [D-WI]
Introduced: 2016-07-14
Policy area: Labor and Employment
Subjects: Employment and training programs

Income tax credits

Inflation and prices

Poverty and welfare assistance

Tax treatment of families

Unemployment

Wages and earnings
Latest action: action_date: 2016-07-14
text: Read twice and referred to the Committee on Finance.

Summaries:
action_date: 2016-07-14
action_desc: Introduced in Senate
text: <p><b>Stronger Way Act</b></p> <p>This bill requires the Department of Labor to establish a program, through grant agreements with state and local government agencies, that provides eligible unemployed or partially employed individuals with opportunities to work in a transitional job for the purpose of enabling them to gain, through wage-paying jobs, the experience and skills needed to move into regular employment.</p> <p>The Internal Revenue Code is amended to revise the earned income tax credit.</p> <p>The bill eliminates the existing child care tax credit and establishes in its place a refundable child tax credit equal to a specified percentage of the taxpayer's earned income, with limitations.</p>

tv_txt: II 114th CONGRESS 2d Session S. 3231 IN THE SENATE OF THE UNITED STATES July 14, 2016 Ms. Baldwin (for herself and Mr. Booker ) introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To establish a policy framework that offers and rewards work, strengthens the incentive to work, greatly reduces poverty, and creates new jobs in the United States, and for other purposes.

1. Short title; table of contents (a) Short title This Act may be cited as the Stronger Way Act . (b) Table of contents The table of contents of this Act is as follows: Sec. 1. Short title; table of contents. TITLE I—Transitional jobs program Sec. 101. Purposes. Sec. 102. Definitions. Sec. 103. Transitional jobs. Sec. 104. Authorization of appropriations. TITLE II—Poverty reduction tax credits Sec. 201. Reform of earned income credit. Sec. 202. Establishment of fully refundable child tax credit. I Transitional jobs program 101. Purposes The purposes of the transitional jobs program under this title are to— (1) reduce poverty and unemployment; (2) offer unemployed or partially employed individuals, in any local area in a State, the opportunity to work in a transitional job for the purpose of enabling such individuals to gain, through wage-paying jobs, the experience and skills needed to move into regular employment; and (3) assist employers to create new regular employment. 102. Definitions In this title: (1) Employer of record The term employer of record means a local government, nonprofit, or for-profit entity selected under section 103(c)(3)(A) to carry out the responsibilities described in section 103(d). (2) Host site employer The term host site employer means an employer that— (A) provides an individual who is eligible for a transitional job with the opportunity to work in a specific transitional job for which the individual is qualified, as determined by such employer, at a worksite that is under the direct supervision of such employer; and (B) agrees to be responsible for— (i) selecting, training, and supervising the transitional jobs worker, including providing a written job description, initial training, ongoing management, and periodic performance reviews; (ii) certifying to the employer of record, in the manner prescribed by the Secretary, the number of hours that the transitional jobs worker has worked for the host site employer; and (iii) cooperating with the employer of record in facilitating the movement of the transitional jobs worker into regular employment. (3) Local area The term local area means a city, county, or other general purpose political subdivision of a State. (4) Regular employment The term regular employment means regular, unsubsidized employment, as defined by the Secretary. (5) Secretary The term Secretary means the Secretary of Labor. (6) State The term State means each of the several States of the United States, the District of Columbia, and the Commonwealth of Puerto Rico. (7) Transitional job The term transitional job means a job offered to an eligible individual through the program authorized under section 103 that— (A) provides the rate of pay described in section 103(d)(6); and (B) provides the individual with employment of— (i) not less than 16 hours per week; and (ii) not more than 40 hours per week, when combined with any hours per week of work that the individual is employed through any other employer (if applicable). 103. Transitional jobs (a) Program authorized From amounts made available under section 104, the Secretary shall establish a program, through grant agreements described in subsection (c) with State and local government agencies, that provides eligible unemployed or partially employed individuals with opportunities to work in a transitional job for the purpose of enabling such individuals to gain, through wage-paying jobs, the experience and skills needed to move into regular employment. (b) Eligibility To be eligible for a transitional job, an individual shall— (1) be a resident of the United States, and a resident of the State in which the individual applies for a transitional job; (2) be not less than 18 years of age; (3) not be incarcerated in any Federal or State penal institution, unless the individual is participating in a work-release program authorized by the United States or a State and the United States or the State authorizes employment under this circumstance in a transitional job; and (4) be unemployed, or employed for less than 30 hours per week, for not less than 4 consecutive weeks preceding the individual's application for a transitional job. (c) Transitional jobs program administration (1) In general The Secretary shall enter into agreements with State and local government agencies under which— (A) the State and local government agencies carry out all activities described in paragraph (3); and (B) the Secretary provides grants to the State and local government agencies to carry out such activities. (2) Selection criteria The Secretary shall select State and local government agencies for the agreements described in paragraph (1) based on— (A) the agencies' level of experience and commitment to transitional jobs programs; and (B) such other criteria as the Secretary determines appropriate, which may include criteria relating to the implementation by such agencies of transitional jobs program models under this title. (3) Activities The activities described in this paragraph are the following: (A) Select, on a competitive basis, and enter into a contract with one or more local government, nonprofit, or for-profit entities to— (i) administer the transitional jobs program in the State or local area to be served; and (ii) function as the employer of record described in subsection (d). (B) Pay each entity selected to serve as an employer of record, based upon the terms of the contract and full documentation of performance, for the entity's performance of its contractually defined services in administering the transitional jobs program, including reimbursement of the entity for appropriate wages and taxes the entity has paid, as required under paragraphs (6) and (7) of subsection (d), to or on behalf of eligible individuals who worked in transitional jobs in the entity's capacity as an employer of record. A State or local governmental agency may require a host employer to pay a portion of the appropriate wages and taxes for the individual. (C) Cooperate with the Comptroller General of the United States, the Congressional Budget Office, and other Federal and State agencies in the performance of audits and the conduct of fiscal and programmatic oversight. (D) Annually submit to the Secretary, and to the governor or other chief executive officer of the State in which the program is located, and the State legislature, a report on the State or local government agency's role and accomplishments in the operation of the transitional jobs program, in a format specified by the Secretary. (E) Conduct, or enter into arrangements with independent academic or research organizations to conduct, periodic evaluations of the effectiveness of the program within the State or local area served in— (i) reducing poverty and unemployment; (ii) enabling unemployed and underemployed individuals to gain the experience and skills needed to move into regular employment; and (iii) assisting employers in creating new regular employment. (F) Promulgate any rules necessary for the agency's operation of the transitional jobs program. (4) Scope of program (A) In general The Secretary shall, to the greatest extent practicable and subject to the availability of appropriations, ensure that the agreements described in paragraph (1) make the transitional jobs program available to eligible individuals in all local areas of all States. (B) Individuals with significant barriers to employment Notwithstanding subparagraph (A), a State or local government agency entering into an agreement under paragraph (1) may, in carrying out the activities described in paragraph (3), choose to target the assistance to eligible individuals under subsection (b) who have significant barriers to employment. (C) Use of existing systems A State or local government agency entering into an agreement under paragraph (1) may carry out the activities described in paragraph (3) through, or in alignment with, other subsidized employment and job training activities or systems available within the State or local area. (d) Responsibilities of an employer of record Each local government, nonprofit, or for-profit entity selected to serve as an employer of record under subsection (c)(3)(A) shall do each of the following: (1) Determine the eligibility of individuals applying for the transitional jobs program under this title. (2) Conduct orientation activities for individuals that the employer of record has determined are eligible for the transitional jobs program. (3) Assess the education, prior work experience, and other relevant factors of each eligible individual who requests a transitional job, for the purpose of assisting the individual to be successful in applying for and performing well in a specific transitional job. (4) Connect each eligible individual requesting a transitional job to the one-stop delivery system established under section 121(e) of the Workforce Innovation and Opportunity Act ( 29 U.S.C. 3151(e) ), and to other resources that provide assistance to job seekers. (5) Offer each eligible individual who desires to work in a transitional job and meets the eligibility requirements under paragraphs (1) through (4) of subsection (b) the opportunity to work for a host site employer. The host site employer may be— (A) the employer of record; or (B) another organization that has entered into an agreement with the employer of record, and as part of such agreement, agrees to function as, and meet the responsibilities of, a host site employer, for a period not to exceed 30 weeks, subject to the requirements of subsection (e). (6) Pay each individual described in paragraph (5), for each hour of work performed for the host site employer, an amount at a rate of pay that is equal to, or greater than, the greater of— (A) the minimum wage rate applicable in the State in which the applicable position is located; (B) the wage rate applicable under section 6 of the Fair Labor Standards Act of 1938 ( 29 U.S.C. 206 ); or (C) if the State or local governmental agency determines appropriate, the prevailing wage rate, as determined by the State or local governmental agency, for the type of work performed by the individual. (7) With respect to the employment of each individual described in paragraph (5)— (A) pay any applicable Federal taxes for employers, including the employer taxes imposed under sections 3111, 3221, and 3301 of the Internal Revenue Code of 1986; (B) pay any other State or local government taxes that employers in the relevant State or local area are required to pay; (C) withhold from the individual’s earnings the taxes imposed under sections 3101 and 3201 of the Internal Revenue Code of 1986, and any other Federal, State or local tax required to be withheld for employees; (D) complete and submit to the appropriate government agencies, all required Federal, State, or local tax-related and employment-related forms that an employer would typically submit, including by ensuring that each individual provides the information necessary for the completion of such forms; (E) provide the individual with a Form W–2 Wage and Tax Statement for the calendar year; (F) provide for workers' compensation coverage for the individual under the applicable Federal and State workers’ compensation laws; (G) perform, either directly or through an agreement described in paragraph (5)(B) with a host site employer, all other functions that an employer would typically perform; (H) comply with the requirements for providing health insurance coverage under the Patient Protection and Affordable Care Act ( Public Law 111–148 ), including the amendments made by such Act; and (I) provide any benefits that are otherwise required of employers in the relevant State or local area. (8) Ensure that no transitional job would result in a violation of any of the worker protections provided in subsection (f). (e) Duration of transitional job (1) In general An individual may work in a transitional job for a period not to exceed 30 weeks, as long as— (A) the individual continues to meet the eligibility requirements for a transitional job under paragraphs (1) through (3) of subsection (b); (B) the individual, during the period of employment in the transitional job, pursues efforts to replace hours of work in the transitional job with regular employment; (C) the individual has not— (i) obtained regular employment that consistently equals or exceeds 30 hours of work per week; or (ii) turned down any appropriate offer for such regular employment, as determined by the Secretary; and (D) if the individual receives and accepts an appropriate offer for such regular employment, the individual does not postpone the starting date for such employment beyond the earliest date practicable, as determined by the Secretary, even if such date occurs before the individual has reached the maximum transitional job time period of 30 weeks. (2) Additional transitional job A State or local government agency administering a transitional jobs program under this section shall, subject to the availability of funds, allow an individual who has completed the maximum number of weeks in a transitional job an opportunity to work in a different transitional job, under the same terms and conditions established under this section, if the individual— (A) is unable, after the end of 30 weeks of employment in a transitional job, to find regular employment that consistently equals or exceeds 30 hours per week; (B) engages in an intensive job search, as defined by the Secretary, for not less than 4 consecutive weeks following the completion of a transitional job, and remains unable to find regular employment; and (C) meets the eligibility requirements under paragraphs (1) through (4) of subsection (b). (f) Worker protections (1) Prohibition against violation of contracts A transitional job shall not violate an existing contract for services or a collective bargaining agreement, and a transitional job that would violate a collective bargaining agreement shall not be undertaken without the written concurrence of the labor organization and employer concerned. (2) Other prohibitions An individual described in subsection (d)(5) shall not be assigned to a transitional job— (A) when any other individual is on layoff from the same or any substantially equivalent job; (B) if the employer has terminated the employment of any regular employee or otherwise caused an involuntary reduction in its workforce with the intention of filling the vacancy so created with the individual working in the transitional job; or (C) if the employer has caused an involuntary reduction to less than full time in hours of any employee in the same or a substantially equivalent job. (g) Evaluations The Secretary may reserve not more than a total of 10 percent of the amounts made available under section 104 for— (1) evaluations of transitional jobs program models implemented with grants awarded under this title; and (2) other evaluations of grants and activities carried out under this title. 104. Authorization of appropriations There are authorized to be appropriated to carry out this title such sums as may be necessary. II Poverty reduction tax credits 201. Reform of earned income credit (a) In general Section 32 of the Internal Revenue Code of 1986 is amended— (1) by amending subsection (b) to read as follows: (b) Percentages and amounts For purposes of subsection (a): (1) Percentages The credit percentage and the phaseout percentage shall be determined as follows: In the case of an eligible individual with: The credit percentage is: The phaseout percentage is: No qualifying children 23.15 23.15 1 qualifying child 70    23.85 2 qualifying children 75    24.50 3 or more qualifying children 80    29.70. (2) Amounts (A) In general Subject to subparagraph (B), the earned income amount and the phaseout amount shall be determined as follows: In the case of an eligible individual with: The earned income amount is: The phaseout amount is: No qualifying children $6,612 $16,969 1 qualifying child $8,277 $15,000 2 qualifying children $9,675 $15,000 3 qualifying children $12,220 $15,000. (B) Joint returns (i) In general Except as provided in clause (ii), in the case of a joint return filed by an eligible individual and such individual's spouse, the phaseout amount determined under subparagraph (A) shall be increased by $5,550. (ii) Taxpayers with no qualifying children In the case of a joint return filed by an eligible individual and such individual’s spouse who do not have a qualifying child for the taxable year, the phaseout amount in the third column of the first row of the table in subparagraph (A) shall be increased by $8,000. , (2) in subclause (II) of subsection (c)(1)(A)(ii), by striking attained age 25 but not attained age 65 and inserting attained age 21 but not attained age 67 , and (3) by amending subsection (j) to read as follows: (j) Inflation adjustments (1) In general In the case of any taxable year beginning after 2017, each of the dollar amounts in subparagraph (A) of subsection (b)(2) (after being increased under subparagraph (B) thereof) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins, determined by substituting calendar year 2016 for calendar year 1992 in subparagraph (B) thereof. (2) Rounding If any dollar amount increased under paragraph (1) is not a multiple of $50, such dollar amount shall be rounded to the nearest multiple of $50. . (b) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016. 202. Establishment of fully refundable child tax credit (a) Elimination of existing child tax credit Subpart A of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by striking section 24. (b) Establishment of fully refundable child tax credit Subpart C of part IV of subchapter A of chapter 1 of subtitle A of such Code is amended by inserting after section 36B the following new section: 36C. Child tax credit (a) Allowance of credit In the case of a taxpayer with a qualifying child, there shall be allowed as a credit against the tax imposed by this subtitle for the taxable year an amount equal to 15 percent of the taxpayer's earned income (within the meaning of section 32) which is taken into account in computing taxable income for the taxable year. (b) Limitation (1) In general Except as provided in paragraph (2), the amount of the credit allowable to a taxpayer by subsection (a) for the taxable year shall not exceed an amount equal to the product of $1,000 and the number of qualifying children of the taxpayer. (2) Reduction based on modified adjusted gross income (A) In general The amount which would (but for this paragraph) be allowable as a credit under this subsection shall be reduced (but not below zero) by $50 for each $1,000 (or fraction thereof) by which the taxpayer's modified adjusted gross income exceeds— (i) $110,000 in the case of a joint return, (ii) $75,000 in the case of an individual who is not married, and (iii) $55,000 in the case of a married individual filing a separate return. (B) Marital status For purposes of this paragraph, marital status shall be determined under section 7703. (c) Qualifying child (1) In general In this section, the term qualifying child means a qualifying child of the taxpayer (as defined in section 152(c)) who has not attained age 17. (2) Exception for certain non-citizens The term qualifying child shall not include any individual who would not be a dependent if subparagraph (A) of section 152(b)(3) were applied without regard to all that follows resident of the United States . (d) Modified adjusted gross income In this section, the term modified adjusted gross income means adjusted gross income increased by any amount excluded from gross income under section 911, 931, or 933. (e) Inflation adjustment (1) In general In the case of any taxable year beginning after 2017, the $1,000 amount in subsection (b)(1) shall be increased by an amount equal to— (A) such dollar amount, multiplied by (B) the cost-of-living adjustment determined under section 1(f)(3) for the calendar year in which the taxable year begins determined by substituting calendar year 2016 for calendar year 1992 in subparagraph (B) thereof. (2) Rounding If any increase determined under paragraph (1) is not a multiple of $50, such increase shall be rounded to the nearest multiple of $50. (f) Identification requirement (1) Qualifying child identification requirement No credit shall be allowed under this section to a taxpayer with respect to any qualifying child unless the taxpayer includes the name and taxpayer identification number of such qualifying child on the return of tax for the taxable year and such taxpayer identification number was issued on or before the due date for filing such return. (2) Taxpayer identification requirement No credit shall be allowed under this section if the identifying number of the taxpayer was issued after the due date for filing the return for the taxable year. (g) Taxable year must be full taxable year Except in the case of a taxable year closed by reason of the death of the taxpayer, no credit shall be allowable under this section in the case of a taxable year covering a period of less than 12 months. (h) Restrictions on taxpayers who improperly claimed credit in prior year (1) Taxpayers making prior fraudulent or reckless claims (A) In general No credit shall be allowed under this section for any taxable year in the disallowance period. (B) Disallowance period For purposes of subparagraph (A), the disallowance period is— (i) the period of 10 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to fraud, and (ii) the period of 2 taxable years after the most recent taxable year for which there was a final determination that the taxpayer's claim of credit under this section was due to reckless or intentional disregard of rules and regulations (but not due to fraud). (2) Taxpayers making improper prior claims In the case of a taxpayer who is denied credit under this section for any taxable year as a result of the deficiency procedures under subchapter B of chapter 63, no credit shall be allowed under this section for any subsequent taxable year unless the taxpayer provides such information as the Secretary may require to demonstrate eligibility for such credit. . (c) Conforming amendments (1) The table of sections for subpart A of part IV of subchapter A of chapter 1 of subtitle A of the Internal Revenue Code of 1986 is amended by striking the item relating to section 24. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 of subtitle A of such Code is amended by inserting after the item relating to section 36B the following: Sec. 36C. Child tax credit. . (3) Subparagraph (B) of section 45R(f)(3) of such Code is amended to read as follows: (B) Special rule Any amounts paid pursuant to an agreement under section 3121(l) (relating to agreements entered into by American employers with respect to foreign affiliates) which are equivalent to the taxes referred to in subparagraph (A) shall be treated as taxes referred to in such subparagraph. . (4) Section 152(f)(6)(B)(ii) of such Code is amended by striking section 24 and inserting section 36C . (5) Paragraph (26) of section 501(c) of such Code is amended in the flush matter at the end by striking section 24(c) and inserting section 36C(c) . (6) Section 6211(b)(4)(A) of such Code is amended by inserting 36C, after 36B, . (7) Section 6213(g)(2) of such Code is amended— (A) in subparagraph (I), by striking section 24(e) and inserting section 36C(d) , and (B) in subparagraph (L), by striking 24, 32 and inserting 32, 36C . (8) Subchapter B of chapter 65 of subtitle F of such Code is amended by striking section 6429. (9) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting 36C, after 36B, . (d) Effective date The amendments made by this section shall apply to taxable years beginning after December 31, 2016.