Senate Finance Committee leaders publicly released a draft Thursday of the widely anticipated jobs bill they plan to introduce, including payroll tax provisions and the extension of a number of tax breaks that expired last year.

The draft began circulating privately earlier in the week (see Senate Democrats’ Jobs Bill Includes Tax Breaks). However, the bill is not yet in the form in which it will be introduced. Senate Majority Leader Harry Reid, D-Nev., said late last week that he planned to introduce the bill as early as Monday and hold early votes this week, but the snowstorm and disagreements over the details have delayed the process. The House narrowly approved its own jobs bill in December, but the Senate legislation, known as the Hiring Incentives to Restore Employment (HIRE) Act, differs widely from that bill.

“Today, we are presenting draft legislative language to address the current economic conditions,” said Senate Finance Committee Chairman Max Baucus, D-Mont., and ranking member Charles Grassley, R-Iowa, in a joint statement. “The draft contains proposals we would expect to be included in an initial bill. We offer it as the first step in the Senate process for consideration of these time-sensitive proposals.”

They said they would allow at least 72 hours for other members of the Senate and the public to comment on the package before the Senate begins voting because the bill has not gone through the regular committee process. They noted that the draft emerged after several weeks of bipartisan discussion, and that they plan to continue the consultations in a bipartisan, transparent spirit.

The draft currently does not contain provisions for extending the estate tax, which expired at the end of last year, but the Finance Committee leaders said they are “committed to timely consideration of permanent bipartisan estate and gift tax reform.”

The tax provisions in the draft legislation include a payroll tax exemption proposed by Charles Schumer, D-N.Y., and Orrin Hatch, R-Utah. The provision would offer an exemption from Social Security payroll taxes for every worker hired in 2010 who has been unemployed for at least 60 days. The maximum value would be equal to 6.2 percent of wages up to the FICA wage cap of $106,800. There would also be an additional $1,000 income tax credit for every new employee retained for 52 weeks to be taken on the employer’s 2011 income tax return. Another provision would provide an election to convert tax credit bonds to Build America Bonds.

The draft bill would also extend several business and individual tax breaks that expired at the end of 2009, including the Research and Development Credit; the 15‐year recovery period for leasehold, restaurant, and retail improvements; the New Markets Tax Credit; the active finance exception under Subpart F; and the controlled foreign corporation look‐through rules.

The draft HIRE Act would also extend several energy tax provisions, including credits for home efficiency and alternative fuel vehicles, as well as for biodiesel, renewable diesel and other alternative fuels. The draft bill also includes several disaster relief provisions.

The draft legislation would extend the 2008 and 2009 Section 179 expensing thresholds allowing taxpayers to elect to write off up to $250,000 of certain capital expenditures (subject to a phase‐out once the expenditures exceed $800,000) in 2010, in lieu of depreciating those costs over time.

Other provisions would extend unemployment benefits and the 65 percent COBRA premium subsidy for terminated workers through May 31. The draft bill would also provide temporary funding relief for single-employer and multi-employer pension plans that suffered significant losses in asset value due to the steep market slide in 2008, as well as extending funding for highway and transit programs. There would also be a seven-month extension in a reimbursement formula for physicians who participate in Medicare to prevent a 21 percent reduction in their payments.

To pay for the tax breaks and other provisions, the draft legislation contains a set of measures to reduce offshore tax evasion by giving the IRS new administrative tools to detect, deter and discourage such abuses. The proposals include 30 percent withholding on U.S. source payments to foreign financial institutions, foreign trusts, and foreign corporations that do not agree to disclose their U.S. account holders and owners to the IRS; requiring taxpayers to disclose their foreign accounts on their U.S. tax returns; increasing the statute of limitations to six years for failure to report certain offshore transactions and income; clarifying when a foreign trust is considered to have a U.S. beneficiary; and treating substitute dividend and dividend equivalent payments to foreign persons as dividends for purposes of U.S. withholding.

Other revenue-raising provisions would modify the $1.01 per gallon cellulosic biofuel producer credit to exclude fuels with significant water, sediment, or ash content, such as black liquor. This provision would primarily affect paper manufacturers who had been claiming the credit.

Another revenue-raising provision would clarify the economic substance doctrine to deny tax transactions lacking economic substance, and increase the penalty for underpayments attributable to transactions that lack economic substance. The provision would impose a 40 percent strict liability penalty on underpayments attributable to a transaction lacking economic substance (unless the transaction was disclosed, in which case the penalty would be 20 percent). Another provision would reduce the funding available in the Medicare Improvement Fund by $8 billion over 10 years.

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