I

104TH CONGRESS

1ST SESSION H. R. 124

To amend the Internal Revenue Code of 1986 to allow a credit to employers

for the cost of providing English language training to their employees.

IN THE HOUSE OF REPRESENTATIVES

JANUARY 4, 1995

Mr. EMERSON introduced the following bill; which was referred to the

Committee on Ways and Means

A BILL

To amend the Internal Revenue Code of 1986 to allow a

credit to employers for the cost of providing English

language training to their employees.

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

3 SECTION 1. CREDIT FOR EXPENDITURES TO PROVIDE LAN4 GUAGE TRAINING TO EMPLOYEES.

5 (a) GENERAL RULE.—Subpart D of part IV of sub6 chapter A of chapter 1 of the Internal Revenue Code of

7 1986 (relating to business related credits) is amended by

8 adding at the end thereof the following new section:
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1 ‘‘SEC. 45A. EXPENDITURES TO PROVIDE LANGUAGE TRAIN2 ING TO EMPLOYEES.

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

4 the amount of the language training credit determined

5 under this section for the taxable year is 50 percent of

6 the qualified language training expenses paid or incurred

7 by the taxpayer during the taxable year.

8 ‘‘(b) QUALIFIED LANGUAGE TRAINING EXPENSES.—

9 For purposes of this section—

10 ‘‘(1) IN GENERAL.—Except as otherwise pro11 vided in this subsection, the term ‘qualified language

12 training expenses’ means—

13 ‘‘(A) amounts paid or incurred by the tax14 payer with respect to expenses incurred by or

15 on behalf of an employee for qualified language

16 training of such employee (including but not

17 limited to tuition, fees, and similar payments,

18 books and supplies); and

19 ‘‘(B) the following expenses paid or in20 curred by the taxpayer—

21 ‘‘(i) wages (as defined in section

22 41(b)(2)(D)) paid or incurred by the tax23 payer to an employee for services consist24 ing of providing qualified language training

25 to employees of the taxpayer, and
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1 ‘‘(ii) expenses of books and supplies

2 used in connection with the provision of

3 such training; and

4 ‘‘(C) wages (as so defined) paid to any em5 ployee receiving qualified language training to

6 the extent allocable to the time when such em7 ployee is receiving such training.

8 ‘‘(2) ONLY DOMESTIC EMPLOYMENT QUALI9 FIED.—Amounts may be taken into account under

10 paragraph (1) with respect to any employee receiv11 ing qualified language training only if substantially

12 all of the services performed by such employee dur13 ing the taxable year for the taxpayer are performed

14 in the United States or any possession of the United

15 States.

16 ‘‘(c) QUALIFIED LANGUAGE TRAINING.—For pur17 poses of this section, the term ‘qualified language training’

18 means—‘‘(1) training in English language and literacy to

19 individuals with limited English proficiency, and ‘‘(2) re20 medial training in English language and literacy.’’

21 (b) CREDIT MADE PART OF GENERAL BUSINESS

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

23 amended by striking ‘‘plus’’ at the end of paragraph (7),

24 by striking the period at the end of paragraph (8) and
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1 inserting ‘‘, plus’’, and by adding at the end thereof the

2 following new paragraph:

3 ‘‘(9) the language training credit determined

4 under section 45A(a).’’

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

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

7 following new subsection:

8 ‘‘(d) CREDIT FOR LITERACY ENHANCEMENT EX9 PENSES.—No deduction shall be allowed for that portion

10 of the qualified literacy education expenses (as defined in

11 section 45A(b)) otherwise allowable as a deduction for the

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

13 determined for such taxable year under section 45A(a).’’

14 (d) CREDIT ALLOWABLE AGAINST MINIMUM TAX.—

15 Subsection (c) of section 38 of such Code is amended by

16 redesignating paragraph (2) as paragraph (3) and by in17 serting after paragraph (1) the following new paragraph:

18 ‘‘(2) LANGUAGE TRAINING CREDIT ALLOWED

19 AGAINST MINIMUM TAX.—

20 ‘‘(A) IN GENERAL.—The amount deter21 mined under paragraph (1)(A) shall be reduced

22 by the portion of the language training credit

23 not used against the normal limitation.

24 ‘‘(B) PORTION OF LANGUAGE TRAINING

25 CREDIT NOT USED AGAINST NORMAL LIMITA-
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1 TION.—For purposes of subparagraph (A), the

2 portion of the language training credit not used

3 against the normal limitation is the excess (if

4 any) of—

5 ‘‘(i) the portion of the credit allowable

6 under subsection (a) which is attributable

7 to the language training credit, over

8 ‘‘(ii) the limitation of paragraph (1)

9 (determined without regard to this para10 graph) reduced by the portion of the credit

11 under subsection (a) which is not so attrib12 utable.’’

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

14 this section shall apply to taxable years beginning after

15 the date of the enactment of this Act.

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