text: 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.
target: 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.
feat_title: To amend the Internal Revenue Code of 1986 to exclude certain severance payments from gross income and to allow a refundable credit for job training expenses of older long-time employees who are laid off.