FLEX Act

I 116TH CONGRESS 2D SESSION H. R. 7721 To amend the Internal Revenue Code of 1986 to allow a refundable credit against tax for farmers who hire unemployed workers. IN THE HOUSE OF REPRESENTATIVES JULY 22, 2020 Mr. CRAWFORD 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 allow a refundable credit against tax for farmers who hire unem- ployed workers. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Farm Labor Expan- 4 sion Act of 2020’’ or the ‘‘FLEX Act’’. 5 SEC. 2. DISPLACED FARM WORKER CREDIT. 6 (a) IN GENERAL.—Subpart C of part IV of sub- 7 chapter A of chapter 1 is amended by inserting before sec- 8 tion 37 the following new section: 9 VerDate Sep 11 2014 23:32 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H7721.IH H7721 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 7721 IH ‘‘SEC. 36C. DISPLACED FARM WORKER CREDIT. 1 ‘‘(a) IN GENERAL.—In the case of a taxpayer en- 2 gaged in the trade or business of farming, there shall be 3 allowed as a credit against the tax imposed by this subtitle 4 an amount equal to 40 percent of the qualified first-year 5 wages of an eligible replacement worker. 6 ‘‘(b) DEFINITIONS AND SPECIAL RULES.—For pur- 7 poses of this section— 8 ‘‘(1) QUALIFIED FIRST-YEAR WAGES.— 9 ‘‘(A) IN GENERAL.—The term ‘qualified 10 first-year wages’ means, with respect to an eli- 11 gible replacement worker, wages attributable to 12 service rendered during the 1-year period begin- 13 ning with the day the individual begins work for 14 the employer. 15 ‘‘(B) WAGES.—The term ‘wages’ has the 16 meaning given to such term by section 3306(b) 17 (determined without regard to any dollar limita- 18 tion contained in such section). 19 ‘‘(C) LIMITATION.—The amount of wages 20 taken into account with respect to any employee 21 for all taxable years shall not exceed $25,000. 22 ‘‘(2) ELIGIBLE REPLACEMENT WORKER.—For 23 purposes of this section, the term ‘eligible replace- 24 ment worker’ means any individual who— 25 VerDate Sep 11 2014 23:32 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H7721.IH H7721 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 7721 IH ‘‘(A) began a period of unemployment 1 after March 27, 2020, and during which time 2 the individual was receiving unemployment com- 3 pensation under State or Federal law, and 4 ‘‘(B) performs for the employer substan- 5 tially the same job functions as an H–2A work- 6 er taken into account under paragraph (4). 7 ‘‘(3) H–2A WORKER.—The term ‘H–2A worker’ 8 means a nonimmigrant described in section 9 101(a)(15)(H)(ii)(a) of the Immigration and Nation- 10 ality Act (8 U.S.C. 1101(a)(15)(H)(ii)(a)). 11 ‘‘(4) LIMITATION ON NUMBER OF WORKERS 12 TAKEN INTO ACCOUNT.—The number of eligible re- 13 placement workers taken into account under this 14 section, shall not exceed the average number of H– 15 2A workers employed by the taxpayer during the 16 preceding taxable year. 17 ‘‘(5) CONTROLLED GROUPS AND COMMON CON- 18 TROL.—All persons which are treated as a single 19 employer under subsections (a) and (b) of section 52 20 shall be treated as a single taxpayer for purposes of 21 this section. 22 ‘‘(6) APPLICATION OF OTHER RULES.—Rules 23 similar to the following rules shall apply for pur- 24 poses of this section: 25 VerDate Sep 11 2014 23:32 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H7721.IH H7721 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 7721 IH ‘‘(A) Section 51(i) (relating to certain indi- 1 viduals ineligible). 2 ‘‘(B) Section 51(k) (relating to treatment 3 of successor employers; treatment of employees 4 performing services for other persons). 5 ‘‘(c) TERMINATION.—No credit shall be allowed 6 under this section with respect to any wages paid more 7 than 2 years after the date of the enactment of this sec- 8 tion.’’. 9 (b) CONFORMING AMENDMENTS.— 10 (1) Section 6211(b)(4)(A) is amended by insert- 11 ing ‘‘36C,’’ after ‘‘36B,’’. 12 (2) Paragraph (2) of section 1324(b) of title 13 31, United States Code, is amended by inserting 14 ‘‘36C,’’ after ‘‘36B,’’. 15 (c) CLERICAL AMENDMENT.—The table of sections 16 for subpart C of part IV of subchapter A of chapter 1 17 of such Code is amended by inserting before section 37 18 the following new item: 19 ‘‘Sec. 36C. Displaced farm worker credit.’’. (d) EFFECTIVE DATE.—The amendments made by 20 this section shall apply wages paid in taxable years ending 21 after the date of the enactment of this Act. 22 Æ VerDate Sep 11 2014 23:32 Aug 09, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6301 E:\BILLS\H7721.IH H7721 pbinns on DSKJLVW7X2PROD with BILLS