WORK OPPORTUNITY TAX CREDIT.

SEC. 1201. WORK OPPORTUNITY TAX CREDIT. (a) Amount of Credit.— Subsection (a) of section 51 (relating to amount of credit) is amended by striking “40 percent” and inserting “35 percent”. (b) Members of Targeted Groups.— Subsection (d) of section 51 is amended to read as follows: “(d) Members Of Targeted Groups.— For purposes of this subpart— “(1) In general.— An individual is a member of a targeted group if such individual is— “(A) a qualified IV-A recipient, “(B) a qualified veteran, “(C) a qualified ex-felon, “(D) a high-risk youth, “(E) a vocational rehabilitation referral, “(F) a qualified summer youth employee, or “(G) a qualified food stamp recipient. “(2) Qualified iv-a recipient.— “(A) In general.— The term ‘qualified IV-A recipient’ means any individual who is certified by the designated local agency as being a member of a family receiving assistance110 STAT. 1769 under a IV-A program for at least a 9-month period ending during the 9-month period ending on the hiring date. “(B) IV-A program.— For purposes of this paragraph, the term ‘IV-A program’ means any program providing assistance under a State plan approved under part A of title IV of the Social Security Act (relating to assistance for needy families with minor children) and any successor of such program. “(3) Qualified veteran.— “(A) In general.— The term ‘qualified veteran’ means any veteran who is certified by the designated local agency as being— “(i) a member of a family receiving assistance under a IV-A program (as defined in paragraph (2)(B)) for at least a 9-month period ending during the 12-month period ending on the hiring date, or “(ii) a member of a family receiving assistance under a food stamp program under the Food Stamp Act of 1977 for at least a 3-month period ending during the 12-month period ending on the hiring date. “(B) Veteran.— For purposes of subparagraph (A), the term ‘veteran’ means any individual who is certified by the designated local agency as— “(i) (I) having served on active duty (other than active duty for training) in the Armed Forces of the United States for a period of more than 180 days, or “(II) having been discharged or released from active duty in the Armed Forces of the United States fora service-connected disability, and “(ii) not having any day during the 60-day period ending on the hiring date which was a day of extended active duty in the Armed Forces of the United States. For purposes of clause (ii), the term ‘extended active duty’ means a period of more than 90 days during which the individual was on active duty (other than active duty for training). “(4) Qualified ex-felon.— The term ‘qualified ex-felon’ means any individual who is certified by the designated local agency— “(A) as having been convicted of a felony under any statute of the United States or any State, “(B) as having a hiring date which is not more than 1 year after the last date on which such individual was so convicted or was released from prison, and “(C) as being a member of a family which had an income during the 6 months immediately preceding the earlier of the month in which such income determination occurs or the month in which the hiring date occurs, which, on an annual basis, would be 70 percent or less of the Bureau of Labor Statistics lower living standard. Any determination under subparagraph (C) shall be valid for the 45-day period beginning on the date such determination is made. “(5) High-risk youth.— 110 STAT. 1770 “(A) In general.— The term ‘high-risk youth’ means any individual who is certified by the designated local agency— “(i) as having attained age 18 but not age 25 on the hiring date, and “(ii) as having his principal place of abode within an empowerment zone or enterprise community. “(B) Youth must continue to reside in zone.— In the case of a high-risk youth, the term ‘qualified wages’ shall not include wages paid or incurred for services performed while such youths principal place of abode is outside an empowerment zone or enterprise community. “(6) Vocational rehabilitation referral.— The term ‘vocational rehabilitation referral’ means any individual who is certified by the designated local agency as— “(A) having a physical or mental disability which, for such individual, constitutes or results in a substantial handicap to employment, and “(B) having been referred to the employer upon completion of (or while receiving) rehabilitative services pursuant to— “(i) an individualized written rehabilitation plan under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973, or “(ii) a program of vocational rehabilitation carried out under chapter 31 of title 38, United States Code. “(7) Qualified summer youth employee.— “(A) In general.— The term ‘qualified summer youth employee’ means any individual— “(i) who performs services for the employer between May 1 and September 15, “(ii) who is certified by the designated local agency as having attained age 16 but not 18 on the hiring date (or if later, on May 1 of the calendar year involved), “(iii) who has not been an employee of the employer during any period prior to the 90-day period described in subparagraph (B)(i), and “(iv) who is certified by the designated local agency as having his principal place of abode within an empowerment zone or enterprise community. “(B) Special rules for determining amount of credit.— For purposes of applying this subpart to wages paid or incurred to any qualified summer youth employee— “(i) subsection (b)(2) shall be applied by substituting ‘any 90-day period between May 1 and September 15’ for ‘the 1-year period beginning with the day the individual begins work for the employer’, and “(ii) subsection (b)(3) shall be applied by substituting ‘$3,000’ for ‘$6,000’. The preceding sentence shall not apply to an individual who, with respect to the same employer, is certified as a member of another targeted group after such individual has been a qualified summer youth employee. “(C) Youth must continue to reside in zone.— Paragraph (5)(B) shall apply for purposes of subparagraph (A)(iv). 110 STAT. 1771 “(8) Qualified food stamp recipient.— “(A) In general.— The term ‘qualified food stamp recipient’ means any individual who is certified by the designated local agency— “(i) as having attained age 18 but not age 25 on the hiring date, and “(ii) as being a member of a family— “(I) receiving assistance under a food stamp program under the Food Stamp Act of 1977 for the 6-month period ending on the hiring date, or “(II) receiving such assistance for at least 3 months of the 5-month period ending on the hiring date, in the case of a member of a family who ceases to be eligible for such assistance under section 6(o) of the Food Stamp Act of 1977. “(B) Participation information.— Notwithstanding any other provision of law, the Secretary of the Treasury and the Secretary of Agriculture shall enter into an agreement to provide information to designated local agencies with respect to participation in the food stamp program. “(9) Hiring date.— The term ‘hiring date’ means the day the individual is hired by the employer. “(10) Designated local agency.— The term ‘designated local agency’ means a State employment security agency established in accordance with the Act of June 6, 1933, as amended (29 U.S.C. 49–49n). “(11) Special rules for certifications.— “(A) In general.— An individual shall not be treated as a member of a targeted group unless— “(i) on or before the day on which such individual begins work for the employer, the employer has received a certification from a designated local agency that such individual is a member of a targeted group, or “(ii) (I) on or before the day the individual is offered employment with the employer, a prescreening notice is completed by the employer with respect to such individual, and “(II) not later than the 21st day after the individual begins work for the employer, the employer submits such notice, signed by the employer and the individual under penalties of perjury, to the designated local agency as part of a written request for such a certification from such agency. For purposes of this paragraph, the term ‘prescreening notice’ means a document (in such form as the Secretary shall prescribe) which contains information provided by the individual on the basis of which the employer believes that the individual is a member of a targeted group. “(B) Incorrect certifications.— If— “(i) an individual has been certified by a designated local agency as a member of a targeted group, and “(ii) such certification is incorrect because it was based on false information provided by such individual, the certification shall be revoked and wages paid by the employer after the date on which notice of revocation is110 STAT. 1772 received by the employer shall not be treated as qualified wages. “(C) Explanation of denial of request.— If a designated local agency denies a request for certification of membership in a targeted group, such agency shall provide to the person making such request a written explanation of the reasons for such denial.”. (c) Minimum Employment Period.— Paragraph (3) of section 51(i) (relating to certain individuals ineligible) is amended to read as follows: “(3) Individuals not meeting minimum employment period.— No wages shall be taken into account under subsection (a) with respect to any individual unless such individual either— “(A) is employed by the employer at least 180 days (20 days in the case of a qualified summer youth employee), or “(B) has completed at least 400 hours (120 hours in the case of a qualified summer youth employee) of services performed for the employer.”. (d) Termination.— Paragraph (4) of section 51(c) (relating to wages defined) is amended to read as follows: “(4) Termination.— The term ‘wages’ shall not include any amount paid or incurred to an individual who begins work for the employer— “(A) after December 31, 1994, and before October 1, 1996, or “(B) after September 30, 1997.”. (e) Redesignation of Credit.— (1) Sections 38(b)(2), 41(b)(2)(D)(iii), 45A(b)(1)(B), 51 (a) and (g), and 196(c) are each amended in the text by striking “targeted jobs credit” each place it appears and inserting “work opportunity credit”. (2) The subpart heading for subpart F of part IV of subchapter A of chapter 1 is amended by striking “Targeted Jobs Credit” and inserting “Work Opportunity Credit”. (3) The table of subparts for such part IV is amended by striking “targeted jobs credit” and inserting “work opportunity credit”. (4) The headings for sections 41(b)(2)(D)(iii) and 1396(c)(3) are each amended by striking “targeted jobs credit” and inserting “work opportunity credit”. (5) The heading for subsection (j) of section 51 is amended by striking “Targeted Jobs Credit” and inserting “Work Opportunity Credit”. (f) Technical Amendment.— Paragraph (1) of section 51(c) is amended by striking “, subsection (d)(8)(D),”. (g) Effective Date.— The amendments made by this section shall apply to individuals who begin work for the employer after September 30, 1996.