II

106TH CONGRESS

1ST SESSION S. 1291

To amend the Internal Revenue Code of 1986 to allow small business employers a credit against income tax for certain expenses for long-term training

of employees in highly skilled small business trades.

IN THE SENATE OF THE UNITED STATES

JUNE 28, 1999

Mr. DEWINE introduced the following bill; which was read twice and referred

to the Committee on Finance

A BILL

To amend the Internal Revenue Code of 1986 to allow small

business employers a credit against income tax for certain expenses for long-term training of employees in

highly skilled small business trades.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Skilled Workforce En5 hancement Act of 1999’’.
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•S 1291 IS

1 SEC. 2. CREDIT FOR EXPENSES FOR LONG-TERM TRAINING

2 OF EMPLOYEES IN HIGHLY SKILLED SMALL

3 BUSINESS TRADES.

4 (a) IN GENERAL.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of

6 1986 (relating to business-related credits) is amended by

7 adding at the end the following new section:

8 ‘‘SEC. 45D. EXPENSES FOR LONG-TERM TRAINING OF EM9 PLOYEES IN HIGHLY SKILLED SMALL BUSI10 NESS TRADES.

11 ‘‘(a) GENERAL RULE.—For purposes of section 38,

12 in the case of a small business employer, the highly skilled

13 trades training credit determined under this section for

14 the taxable year is $15,000 for each employee having a

15 qualified training year ending with or within such taxable

16 year (whether or not such employee is an employee of the

17 taxpayer as of the close of such taxable year).

18 ‘‘(b) DEFINITIONS.—For purposes of this section—

19 ‘‘(1) SMALL BUSINESS EMPLOYER.—

20 ‘‘(A) IN GENERAL.—The term ‘small busi21 ness employer’ means, with respect to any tax22 able year, any employer who employed an aver23 age of 250 or fewer employees on business days

24 during such taxable year.

25 ‘‘(B) CONTROLLED GROUPS.—For pur26 poses of subparagraph (A), all persons treated
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1 as a single employer under subsection (b), (c),

2 (m), or (o) of section 414 shall be treated as a

3 single employer.

4 ‘‘(2) QUALIFIED TRAINING YEAR.—

5 ‘‘(A) IN GENERAL.—The term ‘qualified

6 training year’ means each year during the

7 training period in which the employee received

8 at least 2,000 hours of training (including on9 the-job training) from the taxpayer (or any

10 predecessor) as an apprentice in any highly

11 skilled trade.

12 ‘‘(B) HIGHLY SKILLED TRADES.—For pur13 poses of subparagraph (A), the term ‘highly

14 skilled trades’ means—

15 ‘‘(i) precision machinists,

16 ‘‘(ii) die makers,

17 ‘‘(iii) mold makers,

18 ‘‘(iv) tool and die designers,

19 ‘‘(v) heating, ventilating, air condi20 tioning, refrigeration, plumbing, pipe21 fitting, and roofing contractors,

22 ‘‘(vi) the trade of masonry, and

23 ‘‘(vii) other highly skilled trades speci24 fied in regulations prescribed by the Sec25 retary.
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1 Such term shall not include any trade if the

2 customary apprenticeship period for such trade

3 is less than 2 years.

4 ‘‘(3) TRAINING PERIOD.—The term ‘training

5 period’ means, with respect to an employee, the

6 period—

7 ‘‘(A) beginning on the date that the em8 ployee begins employment with the taxpayer as

9 an apprentice in the highly skilled trade, and

10 ‘‘(B) ending on the earlier of—

11 ‘‘(i) the date that such apprenticeship

12 with the employer ends, or

13 ‘‘(ii) the date which is 4 years after

14 the date referred to in subparagraph (A).

15 ‘‘(c) COORDINATION WITH OTHER CREDITS.—The

16 amount of credit otherwise allowable under sections 51(a)

17 and 1396(a) with respect to any employee shall be reduced

18 by the credit allowed by this section with respect to such

19 employee.’’.

20 (b) CREDIT MADE PART OF GENERAL BUSINESS

21 CREDIT.—Subsection (b) of section 38 of such Code is

22 amended by striking ‘‘plus’’ at the end of paragraph (11),

23 by striking the period at the end of paragraph (12) and

24 inserting ‘‘, plus’’, and by adding at the end the following

25 new paragraph:
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1 ‘‘(13) in the case of a small business employer

2 (as defined in section 45D(b)), the highly skilled

3 trades training credit determined under section

4 45D(a).’’.

5 (c) DENIAL OF DOUBLE BENEFIT.—Section 280C of

6 such Code is amended by adding at the end the following

7 new subsection:

8 ‘‘(d) CREDIT FOR TRAINING EXPENSES FOR EM9 PLOYEES IN HIGHLY SKILLED SMALL BUSINESS

10 TRADES.—No deduction shall be allowed for that portion

11 of the expenses otherwise allowable as a deduction for the

12 taxable year which is equal to the amount of the credit

13 determined for the taxable year under section 45D(a).’’.

14 (d) CLERICAL AMENDMENT.—The table of sections

15 for subpart D of part IV of subchapter A of chapter 1

16 of such Code is amended by adding at the end the fol17 lowing new item:

‘‘Sec. 45D. Expenses for long-term training of employees in highly

skilled small business trades.’’.

18 (e) EFFECTIVE DATE.—The amendments made by

19 this section shall apply to expenses paid or incurred in

20 the taxable years ending after the date of the enactment

21 of this Act.

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