[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[H.R. 615 Introduced in House (IH)]
<DOC>
117th CONGRESS
1st Session
H. R. 615
To provide a payroll credit for certain fixed expenses of employers
subject to closure by reason of COVID-19.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
January 28, 2021
Mr. Thompson of California (for himself, Mr. Horsford, Mr. Kelly of
Pennsylvania, and Mr. Panetta) introduced the following bill; which was
referred to the Committee on Ways and Means, and in addition to the
Committee on Small Business, 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 provide a payroll credit for certain fixed expenses of employers
subject to closure by reason of COVID-19.
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 ``Keeping the Lights On Act of 2021''.
SEC. 2. PAYROLL CREDIT FOR CERTAIN FIXED EXPENSES OF EMPLOYERS SUBJECT
TO CLOSURE BY REASON OF COVID-19.
(a) In General.--In the case of an eligible employer, there shall
be allowed as a credit against applicable employment taxes for each
calendar quarter an amount equal to 50 percent of the qualified fixed
expenses paid or incurred by such employer during such calendar
quarter.
(b) Limitations and Refundability.--
(1) Limitation.--The qualified fixed expenses which may be
taken into account under subsection (a) by any eligible
employer for any calendar quarter shall not exceed the least
of--
(A) the qualified fixed expenses paid by the
eligible employer in the same calendar quarter of
calendar year 2019,
(B) $50,000; or
(C) the greater of--
(i) 25 percent of the wages paid with
respect to the employment of all the employees
of the eligible employer for such calendar
quarter; or
(ii) 6.25 percent of the gross receipts of
the eligible employer for calendar year 2019.
(2) Credit limited to certain employment taxes.--The credit
allowed by subsection (a) with respect to any calendar quarter
shall not exceed the applicable employment taxes for such
calendar quarter (reduced by any credits allowed under
subsections (e) and (f) of section 3111 of such Code, sections
7001 and 7003 of the Families First Coronavirus Response Act,
section 2301 of the CARES Act, and sections 101, 102, and 304
of this division, for such quarter) on the wages paid with
respect to the employment of all the employees of the eligible
employer for such calendar quarter.
(3) Refundability of excess credit.--
(A) In general.--If the amount of the credit under
subsection (a) exceeds the limitation of paragraph (2)
for any calendar quarter, such excess shall be treated
as an overpayment that shall be refunded under sections
6402(a) and 6413(b) of the Internal Revenue Code of
1986.
(B) Treatment of payments.--For purposes of section
1324 of title 31, United States Code, any amounts due
to an employer under this paragraph shall be treated in
the same manner as a refund due from a credit provision
referred to in subsection (b)(2) of such section.
(c) Definitions.--For purposes of this section--
(1) Applicable employment taxes.--The term ``applicable
employment taxes'' means the following:
(A) The taxes imposed under section 3111(a) of the
Internal Revenue Code of 1986.
(B) So much of the taxes imposed under section
3221(a) of such Code as are attributable to the rate in
effect under section 3111(a) of such Code.
(2) Eligible employer.--
(A) In general.--The term ``eligible employer''
means any employer--
(i) which was carrying on a trade or
business immediately prior to the suspension
described in clause (iii)(i) or immediately
prior to the period described in subparagraph
(B);
(ii) which had either--
(I) not more than 1,500 full-time
equivalent employees (as determined for
purposes of determining whether an
employer is an applicable large
employer for purposes of section
4980H(c)(2) of the Internal Revenue
Code of 1986) for calendar year 2019;
or
(II) not more than $41,500,000 of
gross receipts in the last taxable year
ending in 2019; and
(iii) with respect to any calendar quarter,
for which--
(I) the operation of the trade or
business described in clause (i) is
fully or partially suspended during the
calendar quarter due to orders from an
appropriate governmental authority
limiting commerce, travel, or group
meetings (for commercial, social,
religious, or other purposes) due to
the coronavirus disease 2019 (COVID-
19); or
(II) such calendar quarter is
within the period described in
subparagraph (B).
(B) Significant decline in gross receipts.--The
period described in this subparagraph is the period--
(i) beginning with the first calendar
quarter beginning after December 31, 2019, for
which gross receipts (within the meaning of
section 448(c) of the Internal Revenue Code of
1986) for the calendar quarter are less than 80
percent of gross receipts for the same calendar
quarter in the prior year; and
(ii) ending with the calendar quarter
following the first calendar quarter beginning
after a calendar quarter described in clause
(i) for which gross receipts of such employer
are greater than 80 percent of gross receipts
for the same calendar quarter in the prior
year.
(C) Tax-exempt organizations.--In the case of an
organization which is described in section 501(c) of
the Internal Revenue Code of 1986 and exempt from tax
under section 501(a) of such Code--
(i) clauses (i) and (iii)(I) of
subparagraph (A) shall apply to all operations
of such organization; and
(ii) any reference in this section to gross
receipts shall be treated as a reference to
gross receipts within the meaning of section
6033 of the Internal Revenue Code of 1986.
(D) Phase-in of credit where business not suspended
and reduction in gross receipts less than 50 percent.--
(i) In general.--In the case of any
calendar quarter with respect to which an
eligible employer would not be an eligible
employer if subparagraph (B)(i) were applied by
substituting ``50 percent'' for ``80 percent'',
the amount of the credit allowed under
subsection (a) shall be reduced by the amount
which bears the same ratio to the amount of
such credit (determined without regard to this
subparagraph) as--
(I) the excess gross receipts
percentage point amount; bears to
(II) 30 percentage points.
(ii) Excess gross receipts percentage point
amount.--For purposes of this subparagraph, the
term ``excess gross receipts percentage point
amount'' means, with respect to any calendar
quarter, the excess of--
(I) the lowest of the gross
receipts percentage point amounts
determined with respect to any calendar
quarter during the period ending with
such calendar quarter and beginning
with the first calendar quarter during
the period described in subparagraph
(B); over
(II) 50 percentage points.
(iii) Gross receipts percentage point
amounts.--For purposes of this subparagraph,
the term ``gross receipts percentage point
amount'' means, with respect to any calendar
quarter, the percentage (expressed as a number
of percentage points) obtained by dividing--
(I) the gross receipts (within the
meaning of subparagraph (B)) for such
calendar quarter; by
(II) the gross receipts for the
same calendar quarter in calendar year
2019.
(3) Qualified fixed expenses.--
(A) In general.--The term ``qualified fixed
expenses'' means the payment or accrual of any covered
mortgage obligation, covered rent obligation, or
covered utility payment. Such term shall not include
the prepayment of any obligation for a period in excess
of a month unless the payment for such period is
customarily due in advance.
(B) Application of definitions.--The terms
``covered mortgage obligation'', ``covered rent
obligation'', and ``covered utility payment'' shall
each have the same meaning as when used in section 1106
of the CARES Act.
(4) Secretary.--The term ``Secretary'' means the Secretary
of the Treasury or the Secretary's delegate.
(5) Wages.--
(A) In general.--The term ``wages'' means wages (as
defined in section 3121(a) of the Internal Revenue Code
of 1986) and compensation (as defined in section
3231(e) of such Code). For purposes of the preceding
sentence (other than for purposes of subsection
(b)(2)), wages as defined in section 3121(a) of such
Code shall be determined without regard to paragraphs
(1), (8), (10), (13), (18), (19), and (22) of section
3121(b) of such Code.
(B) Allowance for certain health plan expenses.--
(i) In general.--Such term shall include
amounts paid or incurred by the eligible
employer to provide and maintain a group health
plan (as defined in section 5000(b)(1) of the
Internal Revenue Code of 1986), but only to the
extent that such amounts are excluded from the
gross income of employees by reason of section
106(a) of such Code.
(ii) Allocation rules.--For purposes of
this section, amounts treated as wages under
clause (i) shall be treated as paid with
respect to any employee (and with respect to
any period) to the extent that such amounts are
properly allocable to such employee (and to
such period) in such manner as the Secretary
may prescribe. Except as otherwise provided by
the Secretary, such allocation shall be treated
as properly made if made on the basis of being
pro rata among periods of coverage.
(6) Other terms.--Except as otherwise provided in this
section, any term used in this section which is also used in
chapter 21 or 22 of the Internal Revenue Code of 1986 shall
have the same meaning as when used in such chapter.
(d) Aggregation Rule.--All persons treated as a single employer
under subsection (a) or (b) of section 52 of the Internal Revenue Code
of 1986, or subsection (m) or (o) of section 414 of such Code, shall be
treated as one employer for purposes of this section.
(e) Denial of Double Benefit.--For purposes of chapter 1 of such
Code, the gross income of any eligible employer, for the taxable year
which includes the last day of any calendar quarter with respect to
which a credit is allowed under this section, shall be increased by the
amount of such credit.
(f) Certain Governmental Employers.--
(1) In general.--The credit under this section shall not be
allowed to the Federal Government, the government of any State,
of the District of Columbia, or of any possession of the United
States, any tribal government, or any political subdivision,
agency, or instrumentality of any of the foregoing.
(2) Exception.--Paragraph (1) shall not apply to any
organization described in section 501(c)(1) of the Internal
Revenue Code of 1986 and exempt from tax under section 501(a)
of such Code.
(g) Election To Not Take Certain Expenses Into Account.--
(1) In general.--If an eligible employer elects (at such
time and in such manner as the Secretary may prescribe) to not
take into account any amount of qualified fixed expensees for
purposes of determining the credit under this section, such
amount of qualified fixed expenses shall not be so taken into
account.
(2) Coordination with paycheck protection program.--The
Secretary, in consultation with the Administrator of the Small
Business Administration, shall issue guidance providing that
covered mortgage obligations, covered rent obligations, and
covered utility payments paid or incurred during the covered
period shall not fail to be taken into account as qualified
fixed expenses for purposes of determining the credit under
this section by reason of an election under paragraph (1) to
the extent that a covered loan of the eligible employer is not
forgiven by reason of a decision under section 1106(g). Terms
used in the preceding sentence which are also used in section
1106 shall have the same meaning as when used in such section.
(h) Transfers to Certain Trust Funds.--There are hereby
appropriated to the Federal Old-Age and Survivors Insurance Trust Fund
and the Federal Disability Insurance Trust Fund established under
section 201 of the Social Security Act (42 U.S.C. 401) and the Social
Security Equivalent Benefit Account established under section 15A(a) of
the Railroad Retirement Act of 1974 (45 U.S.C. 231n-1(a)) amounts equal
to the reduction in revenues to the Treasury by reason of this section
(without regard to this subsection). Amounts appropriated by the
preceding sentence shall be transferred from the general fund at such
times and in such manner as to replicate to the extent possible the
transfers which would have occurred to such Trust Fund or Account had
this section not been enacted.
(i) Treatment of Deposits.--The Secretary shall waive any penalty
under section 6656 of such Code for any failure to make a deposit of
applicable employment taxes if the Secretary determines that such
failure was due to the anticipation of the credit allowed under this
section.
(j) Third-Party Payors.--Any credit allowed under this section
shall be treated as a credit described in section 3511(d)(2) of such
Code.
(k) Regulations and Guidance.--The Secretary shall issue such
forms, instructions, regulations, and guidance as are necessary--
(1) to allow the advance payment of the credit under
subsection (a), subject to the limitations provided in this
section, based on such information as the Secretary shall
require;
(2) regulations or other guidance to provide for the
reconciliation of such advance payment with the amount of the
credit at the time of filing the return of tax for the
applicable quarter or taxable year;
(3) with respect to the application of the credit under
subsection (a) to third-party payors (including professional
employer organizations, certified professional employer
organizations, or agents under section 3504 of the Internal
Revenue Code of 1986), including regulations or guidance
allowing such payors to submit documentation necessary to
substantiate the eligible employer status of employers that use
such payors;
(4) for application of subsection (b)(1)(A) and
subparagraphs (A)(ii)(II) and (B) of subsection (c)(2) in the
case of any employer which was not carrying on a trade or
business for all or part of the same calendar quarter in the
prior year; and
(5) for recapturing the benefit of credits determined under
this section in cases where there is a subsequent adjustment to
the credit determined under subsection (a).
(l) Application of Section.--This section shall apply only to
qualified fixed expenses paid or accrued after March 12, 2020, and
before January 1, 2022.
(m) Amendment to Paycheck Protection Program to Coordination With
Credit for Qualified Fixed Expenses.--Section 1106 of the CARES Act is
amended by adding at the end the following new subsection:
``(l) Coordination With Payroll Tax Credit for Qualified Fixed
Expenses.--For purposes of this section, any payment of interest on any
covered mortgage obligation, any payment on any covered rent
obligation, and any covered utility payment shall not include any
qualified fixed expenses which are taken into account in determining
the credit allowed under section 2 of the Keeping the Lights On Act of
2021.''.
<all>