NAFTA-Impacted Communities Relief Act - Amends the Internal Revenue Code to: (1) provide for the designation of communities as impacted by the North American Free Trade Agreement (NAFTA) based upon job loss and unemployment resulting from NAFTA; (2) allow employers in such NAFTA-impacted communities a business tax credit for up to 8.5 percent of wages paid to employees; (3) increase depreciation expensing levels for business assets located in NAFTA-impacted communities; and (4) direct the Secretary of Labor to provide grants to States containing NAFTA-impacted communities for education and job training assistance.
[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[H.R. 614 Introduced in House (IH)]
109th CONGRESS
1st Session
H. R. 614
To amend the Internal Revenue Code of 1986 to provide tax incentives
and job training grants for communities affected by the migration of
businesses and jobs to Canada or Mexico as a result of the North
American Free Trade Agreement.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 8, 2005
Mr. McIntyre introduced the following bill; which was referred to the
Committee on Ways and Means, and in addition to the Committee on
Education and the Workforce, for a period to be subsequently determined
by the Speaker, in each case for consideration of such provisions as
fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to provide tax incentives
and job training grants for communities affected by the migration of
businesses and jobs to Canada or Mexico as a result of the North
American Free Trade Agreement.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``NAFTA-Impacted Communities Relief
Act''.
SEC. 2. DESIGNATION OF AND TAX INCENTIVES FOR NAFTA-IMPACTED
COMMUNITIES.
(a) In General.--Chapter 1 of the Internal Revenue Code of 1986 is
amended by adding at the end the following new subchapter:
``Subchapter Z--NAFTA-Impacted Communities
``Sec. 1400M. Designation of NAFTA-impacted communities.
``Sec. 1400N. NAFTA-impacted community employment credit.
``Sec. 1400O. Increase in expensing under Section 179.
``Sec. 1400P. NAFTA-impacted community business defined.
``SEC. 1400M. DESIGNATION OF NAFTA-IMPACTED COMMUNITIES.
``(a) Designation.--
``(1) NAFTA-impacted community.--For purposes of this
title, the term `NAFTA-impacted community' means any area--
``(A) which is nominated by one or more local
governments and the State or States in which it is
located for designation as a community impacted by the
North American Free Trade Agreement (hereinafter in
this section referred to as a `nominated area'), and
``(B) which the Secretary of Commerce designates as
a NAFTA-impacted community, after consultation with--
``(i) in the case of an area in a rural
area, the Secretary of Agriculture;
``(ii) in the case of an area in an urban
area, the Secretary of Housing and Urban
Development; and
``(iii) in the case of an area on an Indian
reservation, the Secretary of the Interior.
``(2) Number of designations.--The Secretary of Commerce
may designate not more than 35 nominated areas as NAFTA-
impacted communities.
``(3) Areas designated based on degree of loss of jobs
resulting from nafta, etc.--Except as otherwise provided in
this section, the nominated areas designated as NAFTA-impacted
communities under this subsection shall be those nominated
areas with the highest average ranking with respect to the
criteria described in subsection (c)(3). For purposes of the
preceding sentence, an area shall be ranked within each such
criterion on the basis of the amount by which the area exceeds
such criterion, with the area which exceeds such criterion by
the greatest amount given the highest ranking.
``(4) Limitation on designations.--
``(A) Publication of regulations.--The Secretary of
Commerce shall prescribe by regulation no later than 4
months after the date of the enactment of this section,
after consultation with the officials described in
paragraph (1)(B)--
``(i) the procedures for nominating an area
under paragraph (1)(A),
``(ii) the parameters relating to the size
and population characteristics of a NAFTA-
impacted community, and
``(iii) the manner in which nominated areas
will be evaluated based on the criteria
specified in subsection (c).
``(B) Procedural rules.--The Secretary of Commerce
shall not make any designation of a nominated area as a
NAFTA-impacted community under paragraph (2) unless--
``(i) a nomination regarding such area is
submitted in such a manner and in such form,
and contains such information, as the Secretary
of Commerce shall by regulation prescribe, and
``(ii) the Secretary of Commerce determines
that any information furnished is reasonably
accurate.
``(5) Nomination process for indian reservations.--For
purposes of this subchapter, in the case of a nominated area on
an Indian reservation, the reservation governing body (as
determined by the Secretary of the Interior) shall be treated
as being both the State and local governments with respect to
such area.
``(b) Period for Which Designation Is in Effect.--
``(1) In general.--Any designation of an area as a NAFTA-
impacted community shall remain in effect during the period
beginning on the date of the designation and ending on the
earliest of--
``(A) December 31, 2012,
``(B) the termination date designated by the State
and local governments in their nomination, or
``(C) the date the Secretary of Commerce revokes
such designation.
``(2) Revocation of designation.--The Secretary of Commerce
may revoke the designation under this section of an area if the
Secretary determines that the loss of jobs and other effects of
NAFTA on the area have been substantially alleviated. Such
determination shall include, at a minimum, a finding that the
unemployment rate in the area is equal to or lower than the
national unemployment rate, and a finding that new businesses
are being attracted to the area.
``(c) Area and Eligibility Requirements.--
``(1) In general.--The Secretary of Commerce may designate
a nominated area as a NAFTA-impacted community under subsection
(a) only if the area meets the requirements of paragraphs (2)
and (3) of this subsection.
``(2) Area requirements.--For purposes of paragraph (1), a
nominated area meets the requirements of this paragraph if--
``(A) the area is within the jurisdiction of one or
more local governments,
``(B) the boundary of the area is continuous,
``(C) the area does not include an empowerment zone
(as defined in section 1393(b)), and
``(D) the area does not include a renewal community
designated under section 1400E.
``(3) Eligibility requirements.--
``(A) In general.--For purposes of paragraph (1), a
nominated area meets the requirements of this paragraph
if the State and the local governments in which it is
located certify (and the Secretary of Commerce, after
such review of Department of Labor data and other
appropriate supporting data as he deems appropriate,
accepts such certification) that--
``(i) the unemployment rate in the area, as
determined by the most recent available data,
was at least 1 percentage point above the
national unemployment rate for the period to
which such data relate, and
``(ii) in the case of--
``(I) a rural area, at least 300
workers who live or work in the area
have been certified as eligible to
apply for NAFTA transitional adjustment
assistance under subchapter D of
chapter 2 of title II of the Trade Act
of 1974 (19 U.S.C. 2341 et seq.), and
``(II) an urban area, at least 500
workers have been so certified.
``(B) Rural area defined.--For purposes of this
section, the term `rural area' means an area--
``(i) which is within a local government
jurisdiction or jurisdictions with a population
of less than 10,000,
``(ii) which is outside of a metropolitan
statistical area (within the meaning of section
143(k)(2)(B)), or
``(iii) which is determined by the
Secretary of Commerce, after consultation with
the Secretary of Agriculture, to be a rural
area.
``(C) Urban area defined.--For purposes of this
section, the term `urban area' means any area that is
not a rural area.
``(d) Coordination With Treatment of Enterprise Communities.--For
purposes of this title, if there are in effect with respect to the same
area both--
``(1) a designation as a NAFTA-impacted community, and
``(2) a designation as an enterprise community,
both of such designations shall be given full effect with respect to
such area.
``(e) Definitions and Special Rules.--For purposes of this
subchapter, rules similar to the rules of paragraphs (5) and (7) of
section 1393 shall apply.
``SEC. 1400N. NAFTA-IMPACTED COMMUNITY EMPLOYMENT CREDIT.
``(a) Amount of Credit.--For purposes of section 38, the amount of
the NAFTA-impacted community employment credit determined under this
section with respect to any employer for any taxable year is 8.5
percent of the qualified NAFTA-impacted community wages paid or
incurred during the calendar year which ends with or within such
taxable year.
``(b) Qualified NAFTA-Impacted Community Wages.--
``(1) In general.--For purposes of this section, the term
`qualified NAFTA-impacted community wages' means any wages paid
or incurred by an employer for services performed by an
employee while such employee is a qualified NAFTA-impacted
community employee.
``(2) Only first $15,000 of wages per year taken into
account.--With respect to each qualified NAFTA-impacted
community employee, the amount of qualified NAFTA-impacted
community wages which may be taken into account for a calendar
year shall not exceed $15,000.
``(3) Coordination with work opportunity credit.--
``(A) In general.--The term `qualified NAFTA-
impacted community wages' shall not include wages taken
into account in determining the credit under section
51.
``(B) Coordination with paragraph (2).--The $15,000
amount in paragraph (2) shall be reduced for any
calendar year by the amount of wages paid or incurred
during such year which are taken into account in
determining the credit under section 51.
``(c) Qualified NAFTA-Impacted Community Employee.--For purposes of
this section--
``(1) In general.--Except as otherwise provided in this
subsection, the term `qualified NAFTA-impacted community
employee' means, with respect to any period, any employee of an
employer if--
``(A) substantially all of the services performed
during such period by such employee for such employer
are performed within a NAFTA-impacted community in a
trade or business of the employer, and
``(B) the principal place of abode of such employee
while performing such services is within such NAFTA-
impacted community.
``(2) Other rules.--Rules similar to the rules of
paragraphs (2) and (3) of section 1396(d) shall apply.
``(d) Other Definitions and Special Rules.--For purposes of this
section, the rules of section 1397 shall apply.
``SEC. 1400O. INCREASE IN EXPENSING UNDER SECTION 179.
``(a) General Rule.--In the case of a NAFTA-impacted community
business (as defined in section 1400P), for purposes of section 179--
``(1) the limitation under section 179(b)(1) shall be
increased by the lesser of--
``(A) $10,000, or
``(B) the cost of section 179 property which is
qualified NAFTA-impacted property placed in service
during the taxable year, and
``(2) the amount taken into account under section 179(b)(2)
with respect to any section 179 property which is qualified
NAFTA-impacted property shall be 50 percent of the cost
thereof.
``(b) Recapture.--Rules similar to the rules under section
179(d)(10) shall apply with respect to any qualified NAFTA-impacted
property which ceases to be used in a NAFTA-impacted community by a
NAFTA-impacted community business.
``(c) Qualified NAFTA-Impacted Property.--For purposes of this
section--
``(1) In general.--The term `qualified NAFTA-impacted
property' means section 179 property (as defined in section
179(d)) if--
``(A) such property was acquired by the taxpayer
after December 31, 2001, and before January 1, 2011,
and
``(B) such property would be qualified zone
property (as defined in section 1397C) if references to
NAFTA-impacted communities were substituted for
references to empowerment zones in section 1397C.
``(2) Certain rules to apply.--The rules of subsections
(a)(2) and (b) of section 1397C shall apply for purposes of
this section.
``SEC. 1400P. NAFTA-IMPACTED COMMUNITY BUSINESS DEFINED.
``For purposes of this part, the term `NAFTA-impacted community
business' means any entity or proprietorship which would be a qualified
business entity or qualified proprietorship under section 1397C if
references to NAFTA-impacted communities were substituted for
references to empowerment zones in such section.''.
(b) Technical and Conforming Amendments.--
(1) NAFTA-impacted community employment credit part of
general business credit.--Subsection (b) of section 38 of such
Code (relating to current year business credit) is amended by
striking ``plus'' at the end of paragraph (18), by striking the
period at the end of paragraph (19) and inserting ``, plus'',
and by adding at the end the following new paragraph:
``(20) the NAFTA-impacted community employment credit
determined under section 1400N(a).''.
(2) Denial of deduction for portion of wages equal to
nafta-impacted community employment credit.--
(A) Subsection (a) of section 280C of such Code
(relating to rule for employment credits) is amended by
striking ``and 1396(a)'' and inserting ``1396(a), and
1400N(a)''.
(B) Subsection (c) of section 196 of such Code
(relating to deduction for certain unused business
credits) is amended by striking ``and'' at the end of
paragraph (11), by striking the period at the end of
paragraph (12) and inserting ``, and'', and by adding
at the end the following new paragraph:
``(13) the NAFTA-impacted community employment credit
determined under section 1400N(a).''.
(3) Carryovers.--Subsection (c) of section 381 of such Code
(relating to carryovers in certain corporate acquisitions) is
amended by adding at the end the following new paragraph:
``(27) NAFTA-impacted community provisions.--The acquiring
corporation shall take into account (to the extent proper to
carry out the purposes of this section and subchapter XI, and
under such regulations as may be prescribed by the Secretary)
the items required to be taken into account for purposes of
subchapter XI in respect of the distributor or transferor
corporation.''.
(c) Clerical Amendments.--The table of subchapters for chapter 1 of
such Code is amended by adding at the end the following new item:
``subchapter z. nafta-impacted communities''.
SEC. 3. GRANTS FOR JOB TRAINING ASSISTANCE FOR NAFTA-IMPACTED
COMMUNITIES.
(a) In General.--The Secretary of Labor shall provide grants to
States that contain NAFTA-impacted communities, as designated under
section 1400M of the Internal Revenue Code of 1986 (as added by section
2(a) of this Act), for the purpose of providing sub-grants to nonprofit
organizations and community or junior colleges in order to provide
short-term job training courses, courses in entrepreneurism and self-
employment, and other related job training assistance that will promote
the economic self-sufficiency of individuals located in NAFTA-impacted
communities.
(b) Maximum Amount of Grant.--The total amount provided under a
grant to a State under subsection (a) for a fiscal year may not exceed
the product of--
(1) $1,000,000; and
(2) the number of NAFTA-impacted communities located in the
State.
(c) Authorization of Appropriations.--
(1) In general.--There are authorized to be appropriated to
carry out this section $35,000,000 for each of the fiscal years
2006 through 2012.
(2) Availability.--Amounts appropriated pursuant to the
authorization of appropriations under paragraph (1) are
authorized to remain available until expended.
<all>
Introduced in House
Introduced in House
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Committee on Ways and Means, and in addition to the Committee on Education and the Workforce, for a period to be subsequently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned.
Referred to the Subcommittee on Trade.
Referred to the Subcommittee on 21st Century Competitiveness.
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