article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Displaced Older Worker Assistance Act of 2001''. SEC. 2. EXCLUSION FROM INCOME OF SEVERANCE PAYMENT AMOUNTS. (a) In General.--Part III of subchapter B of chapter 1 of the Internal Revenue Code of 1986 (relating to items specifically excluded from gross income) is amended by redesignating section 139 as section 139A and by inserting after section 138 the following new section: ``SEC. 139. SEVERANCE PAYMENTS. ``(a) In General.--In the case of an individual, gross income shall not include any qualified severance payment. ``(b) Limitations.-- ``(1) Amount.--The amount to which the exclusion under subsection (a) applies shall not exceed-- ``(A) $15,000, with respect to any separation from employment, reduced by ``(B) the aggregate amount excluded from gross income under subsection (a) in prior taxable years. ``(2) Years to which exclusion applies.--No qualified severance payment shall be excluded from gross income under subsection (a) unless such payment is received in the taxable year in which separation from employment occurs or in one of the two succeeding taxable years. ``(c) Qualified Severance Payment.--For purposes of this section, the term `qualified severance payment' means any payment received by an individual if-- ``(1) such payment was paid by such individual's employer on account of such individual's separation from employment, and ``(2) such individual received a written notice from such employer indicating that such payment is a severance payment.'' (b) Clerical Amendment.--The table of sections for part III of subchapter B of chapter 1 of such Code is amended by striking the item relating to section 139 and inserting the following new items: ``Sec. 139. Severance payments. ``Sec. 139A. Cross references to other Acts.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years ending after the date of the enactment of this Act. SEC. 3. REFUNDABLE CREDIT FOR RETRAINING EXPENSES FOR CERTAIN OLDER LONG-TIME EMPLOYEES WHO ARE LAID OFF. (a) In General.--Subpart C of part IV of subchapter A of chapter 1 of the Internal Revenue Code of 1986 (relating to refundable credits) is amended by redesignating section 35 as section 36 and by inserting after section 34 the following new section: ``SEC. 35. RETRAINING EXPENSES FOR CERTAIN OLDER LONG-TIME EMPLOYEES WHO ARE LAID OFF. ``(a) Allowance of Credit.--In the case of an eligible individual, there shall be allowed as a credit against the tax imposed by this subtitle an amount equal to the qualified job training expenses which are paid or incurred during the taxable year. ``(b) Maximum Credit.--The amount of qualified job training expenses of an individual which may be taken into account under subsection (a) with respect to a reduction in a work force for the taxable year shall not exceed $2,000, reduced by the amount of such expenses which were taken into account under subsection (a) (or would have been so taken into account but for subsection (c)) with respect to such reduction for all prior taxable years. ``(c) Limitation Based on Adjusted Gross Income.-- ``(1) In general.--The dollar amount contained in subsection (b) shall be reduced (but not below zero) by an amount which bears the same ratio to such limitation as-- ``(A) the excess of-- ``(i) the taxpayer's adjusted gross income for such taxable year, over ``(ii) the applicable dollar amount, bears to ``(B) $20,000. ``(2) Rounding.--Any amount determined under paragraph (1) which is not a multiple of $10 shall be rounded to the next lowest $10. ``(3) Applicable dollar amount.--For purposes of this subsection, the term `applicable dollar amount' means-- ``(A) in the case of a taxpayer filing a joint return, $100,000, ``(B) in the case of any other taxpayer (other than a married individual filing a separate return), $75,000, and ``(C) in the case of a married individual filing a separate return, $50,000. A rule similar to the rule of section 219(g)(4) shall apply for purposes of this paragraph. ``(d) Definitions.--For purposes of this section-- ``(1) Eligible individual.--The term `eligible individual' means any individual if-- ``(A) during the taxable year or the preceding taxable year, such individual separated from employment in connection with a reduction in the work force of such individual's employer (other than a seasonal reduction), and ``(B) as of the date of such separation, such individual had attained age 50. ``(2) Qualified job training expenses.-- ``(A) In general.--The term `qualified job training expenses' means-- ``(i) tuition and fees required for the enrollment or attendance of the eligible individual-- ``(I) at an eligible educational institution, or ``(II) in an applicable training program, ``(ii) fees, books, supplies, and equipment required for an eligible individual for-- ``(I) courses of instruction at an eligible educational institution, or ``(II) an applicable training program, and ``(iii) a reasonable allowance for meals and lodging while attending an eligible educational institution or an applicable training program. ``(B) Eligible educational institution.--The term `eligible educational institution' means-- ``(i) an institution of higher education (as defined in section 101 or 102 of the Higher Education Act of 1965), or ``(ii) an area vocational technical education school (as defined in subparagraph (C) or (D) of section 3(3) of the Carl D. Perkins Vocational and Technical Education Act of 1998) to the extent such school is located within any State (as defined in section 3 of such Act). ``(C) Applicable training program.--The term `applicable training program' means-- ``(i) any program under the Carl D. Perkins Vocational and Technical Education Act of 1998, chapter 5 of subtitle B of title I of the Workforce Investment Act of 1998, or the Wagner-Peyser Act, and ``(ii) any training program approved under section 236 of the Trade Act of 1974.'' (b) Technical Amendments.-- (1) Paragraph (2) of section 1324(b) of title 31, United States Code, is amended by inserting ``from section 35 of such Code, or'' after ``1978,''. (2) The table of sections for subpart C of part IV of subchapter A of chapter 1 of such Code is amended by striking the last item and inserting the following new items: ``Sec. 35. Retraining expenses for certain older long-time employees who are laid off. ``Sec. 36. Overpayments of tax.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 2000. SEC. 4. STUDY ON SPECIAL NEEDS OF DISPLACED OLDER WORKERS. (a) In General.--The Comptroller General of the United States, in collaboration with the Secretary of Labor and the head of any other Federal agency offering a job training or retraining program, shall conduct a study on the special needs of displaced older workers. The study shall-- (1) examine the unique differences in needs and challenges that older workers face when finding a new job after a layoff or work separation in comparison to younger workers facing such challenges; (2) include an assessment of whether existing Federal job training or retraining programs adequately serve and meet the special needs and challenges of older workers; (3) include an assessment of whether older workers are disproportionately impacted by job losses attributable to international trade; and (4) include an assessment of the financial incentives for typical private firms to invest in worker training for older workers in comparison to such incentives for younger workers. (b) Submission of Reports to Congress.-- (1) Final report.--Not later than 2 years after the date of the enactment of this Act, the Comptroller General shall submit to the Congress a report on the study required by subsection (a). The report shall include such legislative and administrative recommendations as the Comptroller General determines are necessary or appropriate to improve the effectiveness of existing Federal programs in serving the needs of displaced older workers. (2) Interim report.--Not later than 6 months after the date of the enactment of this Act, the Comptroller General shall submit to the Congress an interim report with respect to the study required by this section. (c) Older Worker Defined.--For purposes of this section, the term ``older worker'' means an individual who is in or desires to be in the workforce and who has attained age 50.
summary: Displaced Older Worker Assistance Act of 2001-Amends the Internal Revenue Code to: (1) exclude certain severance payments from income; and (2) allow as a credit qualified job retraining expenses for certain older long-time employees who are laid off.Directs the Comptroller General of the United States to study the special needs of displaced older workers.