H.R.1914 - Helping Increase Realtime Employment for Communities Recovering from Emergency Disasters for an Interim Time Act; HIRE CREDIT Act (119th Congress)
Summary
H.R. 1914, also known as the HIRE CREDIT Act, aims to amend the Internal Revenue Code of 1986 to include 'displaced disaster victims' as eligible for the Work Opportunity Tax Credit (WOTC). This bill intends to incentivize businesses to hire individuals who have lost their homes or jobs due to major disasters declared by the President.
The bill defines 'displaced disaster victim' and sets specific conditions for eligibility, including residency in a qualified disaster zone, job loss due to the disaster, and unemployment status. It also includes provisions to prevent abuse of the credit by limiting it to the first year after the disaster and excluding full-time employment outside the disaster zone.
The effective date is set for individuals beginning work on or after January 1, 2024, with transition rules for disasters occurring before the enactment of the Act.
Expected Effects
The primary effect of this bill would be to provide a tax incentive for businesses to hire individuals displaced by major disasters. This could lead to increased employment opportunities for disaster victims and faster economic recovery in affected areas.
It could also reduce the financial burden on disaster relief programs by encouraging private sector involvement in disaster recovery. The bill's provisions aim to target assistance to those most affected by disasters and prevent misuse of the tax credit.
Potential Benefits
- Increased Employment Opportunities: Incentivizes businesses to hire disaster victims.
- Economic Recovery: Supports faster recovery in disaster-stricken areas.
- Reduced Reliance on Public Assistance: Encourages private sector involvement in disaster relief.
- Targeted Assistance: Focuses aid on those directly affected by disasters (residents and employees).
- Potential for Reduced Unemployment: Aims to lower unemployment rates among disaster victims.
Potential Disadvantages
- Complexity: Adds complexity to the tax code, potentially increasing compliance costs for businesses.
- Potential for Abuse: Although safeguards are included, there's still potential for fraudulent claims.
- Limited Scope: The credit is temporary (one year), which may not be sufficient for long-term recovery.
- Administrative Burden: Requires certification by local agencies, potentially creating administrative bottlenecks.
- Uncertain Effectiveness: The actual impact on employment rates may be limited depending on business participation.
Constitutional Alignment
The bill appears to align with the Constitution's general welfare clause (Preamble). By incentivizing employment after disasters, it aims to promote economic stability and support individuals in need.
Congress's power to lay and collect taxes (Article I, Section 8) is the constitutional basis for enacting tax credits such as the Work Opportunity Tax Credit. The bill does not appear to infringe on any specific constitutional rights or limitations.
However, the bill's reliance on presidential disaster declarations could raise questions about the delegation of legislative authority, although such delegations are generally upheld if Congress provides clear standards, which this bill attempts to do by referencing the Stafford Act.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).