To amend the Internal Revenue Code of 1986 to allow a credit against income for certain education and training expenses, and for other purposes.

Summary: Technology Retraining And Investment Now Act of 2004 (TRAIN Act of 2004) - Amends the Internal Revenue Code to allow businesses and individuals a tax credit for 50 percent of their information and communications technology education and training expenses up to $8,000 for a taxable year. Increases the allowable amount of the credit to $10,000 for expenses for a program operated: (1) in an empowerment zone, enterprise community, or renewal community; (2) in a school district in which at least 50 percent of the students are eligible for free or reduced-cost lunches under the National School Lunch Act; (3) in an area designated as a disaster area under the Disaster Relief and Emergency Assistance Act; (4) in a designated rural enterprise community; (5) in an area designated as a Rural Economic Area Partnership Zone; (6) in an area over which an Indian tribal government has jurisdiction; (7) by an employer who has 200 or fewer employees for each business day in each of 20 or more calendar weeks in the current or preceding calendar year; or (8) for an individual with a disability.

Defines "information technology education and training program expenses" to include: (1) course work: (2) certification testing; (3) apprenticeship programs registered by the Department of Labor; and (4) other expenses that are essential to assessing skill acquisition.

Redefines" eligible educational institution" to include a commercial information and communications technology training provider.

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Technology Retraining And Investment 
Now Act of 2004'' or the ``TRAIN Act of 2004''.

SEC. 2. FINDINGS AND PURPOSE.

    (a) Findings.--The Congress hereby finds:
            (1) The value added by workers in the United States and in 
        other countries is increasingly a function of the aggregate 
        knowledge acquired by workers through the aggregate educational 
        and training investments of both governments and businesses.
            (2) The aggregate investment by governments of many of the 
        United States's trading partners in the education and training 
        of knowledge workers in those countries has exceeded the 
        aggregate per-worker investment by Federal, State, and local 
        governments in the United States.
            (3) The disparity is evidenced by the declining educational 
        performance of students in the United States compared to their 
        counterparts in other countries.
            (4) In an increasingly global and competitive marketplace 
        it is becoming increasingly difficult for United States-based 
        businesses to fund worker education and training that is 
        provided at no cost for similar workers in other countries by 
        their governments.
            (5) The current global workforce environment creates 
        increasing competitive pressures on domestic companies to 
        utilize highly educated knowledge workers in other countries.
            (6) It is in the interest of the United States government, 
        national security, the preservation of a strong middle class, 
        and the welfare of our Nation's workers to reverse this trend 
        in a fashion that is consistent with trade obligations and the 
        ability of domestic companies to compete globally.
    (b) Purpose.--It is the purpose of this Act to encourage businesses 
and individuals to support the educational development of knowledge 
workers in the United States by providing incentives for information 
and communications technology education and training investments, for 
workers requiring the use of those skills in professions such as 
information or communications technology, engineering, manufacturing 
and other fields, and for other purposes.

SEC. 3. CREDIT FOR INFORMATION AND COMMUNICATIONS TECHNOLOGY EDUCATION 
              AND TRAINING PROGRAM EXPENSES.

    (a) In General.--Subpart B of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986 is amended by adding at the end 
the following:

``SEC. 30B. INFORMATION AND COMMUNICATIONS TECHNOLOGY EDUCATION AND 
              TRAINING PROGRAM EXPENSES.

    ``(a) Allowance of Credit.--
            ``(1) In general.--There shall be allowed as a credit 
        against the tax imposed by this chapter for the taxable year an 
        amount equal to 50 percent of information and communications 
        technology education and training program expenses paid or 
        incurred by the taxpayer for the benefit of--
                    ``(A) in the case of a taxpayer engaged in a trade 
                or business, an employee of the taxpayer, or
                    ``(B) in the case of a taxpayer who is an 
                individual not so engaged, such individual.
            ``(2) Coordination of credits.--Credit shall be allowable 
        to the employer with respect to an employee only to the extent 
        that the employee assigns some or all of the limitation 
        applicable to such employee under subsection (b) to such 
        employer.
    ``(b) Limitations.--
            ``(1) In general.--The amount of expenses with respect to 
        any individual which may be taken into account under subsection 
        (a) for the taxable year shall not exceed $8,000.
            ``(2) Increase in credit amount for participation in 
        certain programs and for certain individuals.--Paragraph (1) 
        shall be applied by substituting `$10,000' for `$8,000' in the 
        case of expenses--
                    ``(A) with respect to a program operated--
                            ``(i) in an empowerment zone or enterprise 
                        community designated under part I of subchapter 
                        U or a renewal community designated under part 
                        I of subchapter X,
                            ``(ii) in a school district in which at 
                        least 50 percent of the students attending 
                        schools in such district are eligible for free 
                        or reduced-cost lunches under the school lunch 
                        program established under the National School 
                        Lunch Act,
                            ``(iii) in an area designated as a disaster 
                        area by the Secretary of Agriculture or by the 
                        President under the Disaster Relief and 
                        Emergency Assistance Act in the taxable year or 
                        the 4 preceding taxable years,
                            ``(iv) in a rural enterprise community 
                        designated under section 766 of the 
                        Agriculture, Rural Development, Food and Drug 
                        Administration, and Related Agencies 
                        Appropriations Act, 1999,
                            ``(v) in an area designated by the 
                        Secretary of Agriculture as a Rural Economic 
                        Area Partnership Zone,
                            ``(vi) in an area over which an Indian 
                        tribal government (as defined in section 
                        7701(a)(40)) has jurisdiction, or
                            ``(vii) by an employer who has 200 or fewer 
                        employees for each business day in each of 20 
                        or more calendar weeks in the current or 
                        preceding calendar year, or
                    ``(B) in the case of an individual with a 
                disability.
    ``(c) Information Technology Education and Training Program 
Expenses.--For purposes of this section--
            ``(1) In general.--The term `information technology 
        education and training program expenses' means expenses paid or 
        incurred by reason of the participation of the taxpayer (or any 
        employee of the taxpayer) in any information and communications 
        technology education and training program. Such expenses shall 
        include expenses paid in connection with--
                    ``(A) course work,
                    ``(B) certification testing,
                    ``(C) programs carried out under the Act of August 
                16, 1937 (50 Stat. 664, chapter 663; 29 U.S.C. 50 et 
                seq) which are registered by the Department of Labor, 
                and
                    ``(D) other expenses that are essential to 
                assessing skill acquisition.
            ``(2) Information technology education and training 
        program.--The term `information technology education and 
        training program' means a training program in information and 
        communications technology workplace disciplines or other skill 
        sets which is provided in the United States by an accredited 
        college, university, private career school, postsecondary 
        educational institution, a commercial information technology 
        provider, or an employer-owned information technology training 
        organization.
            ``(3) Commercial information technology training 
        provider.--The term `commercial information technology training 
        provider' means a private sector organization providing an 
        information and communications technology education and 
        training program.
            ``(4) Employer-owned information technology training 
        organization.--The term `employer-owned information technology 
        training organization' means a private sector organization that 
        provides information technology training to its employees using 
        internal training development and delivery personnel. The 
        training programs must use industry-recognized training 
        disciplines and evaluation methods, comparable to institutional 
        and commercial training providers.
    ``(d) Denial of Double Benefit.--
            ``(1) Disallowance of other credits and deductions.--No 
        deduction or credit shall be allowed under any other provision 
        of this chapter for expenses taken into account in determining 
        the credit under this section.
            ``(2) Reduction for hope and lifetime learning credits.--
        The amount taken into account under subsection (a) shall be 
        reduced by the information technology education and training 
        program expenses taken into account in determining the credits 
        under section 25A.
    ``(e) Certain Rules Made Applicable.--For purposes of this section, 
rules similar to the rules of section 45A(e)(2) and subsections (c), 
(d), and (e) of section 52 shall apply.
    ``(f) Application With Other Credits.--The credit allowed by 
subsection (a) for any taxable year shall not exceed the excess (if 
any) of--
            (1) the regular tax for the taxable year reduced by the sum 
        of the credits allowable under the subpart A and the previous 
        sections of this subpart, over
            (2) the tentative minimum tax for the taxable year.''
    (b) Clerical Amendment.--The table of sections for subpart B of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following:

                              ``Sec. 30B. Information and 
                                        communications technology 
                                        education and training program 
                                        expenses.''
    (c) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after 
December 31, 2004.

SEC. 4. ELIGIBLE EDUCATIONAL INSTITUTION.

    (a) In General.--Section 25A(f)(2) of the Internal Revenue Code of 
1986 (relating to eligible educational institution) is amended to read 
as follows:
            ``(2) Eligible educational institution.--The term `eligible 
        educational institution' means--
                    ``(A) an institution--
                            ``(i) which is described in section 101(b) 
                        or 102(a) of the Higher Education Act of 1965, 
                        and
                            ``(ii) which is eligible to participate in 
                        a program under title IV of such Act, or
                    ``(B) a commercial information and communications 
                technology training provider (as defined in section 
                30B(c)(3)).''
    (b) Conforming Amendment.--The second sentence of section 221(e)(2) 
of the Internal Revenue Code of 1986 is amended by striking ``section 
25A(f)(2)'' and inserting ``section 25A(f)(2)(A)''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2003.