I

104TH CONGRESS

2D SESSION H. R. 2998

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

in the worker retraining expenditures of employers.

IN THE HOUSE OF REPRESENTATIVES

FEBRUARY 29, 1996

Mr. TORRICELLI 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 for increases in the worker retraining expenditures

of employers.

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 ‘‘Tax Credit for Worker

5 Retraining Act of 1996’’.

6 SEC. 2. CREDIT FOR INCREASES IN WORKER RETRAINING

7 EXPENDITURES.

8 (a) IN GENERAL.—Subpart D of part IV of sub9 chapter A of chapter 1 of the Internal Revenue Code of
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1 1986 is amended by adding at the end the following new

2 section:

3 ‘‘SEC. 45C. WORKER RETRAINING INCREASE CREDIT.

4 ‘‘(a) IN GENERAL.—For purposes of section 38, the

5 worker retraining increase credit determined under this

6 section for the taxable year is, for any employer, the excess

7 (if any) of—

8 ‘‘(1) the qualified worker retraining expenses

9 paid or incurred by such employer in such taxable

10 year, over

11 ‘‘(2) the average of the qualified worker retrain12 ing expenses paid or incurred by such employer in

13 each of the 3 preceding taxable years.

14 ‘‘(b) LIMITATION.—In no event shall the amount de15 termined under subsection (a)(2) be treated as less than

16 50 percent of the amount determined under subsection

17 (a)(1).

18 ‘‘(c) QUALIFIED WORKER RETRAINING EXPENSES.—

19 For purposes of this section—

20 ‘‘(1) IN GENERAL.—The term ‘qualified worker

21 retraining expenses’ means expenses paid or in22 curred by an employer for—

23 ‘‘(A) a program provided by such employer

24 to train employees of such employer regarding
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1 skills directly related to the specific jobs of such

2 employees, or

3 ‘‘(B) courses provided by (or reimbursed

4 by) such employer to provide or improve the

5 skills necessary for employees of such employer

6 to advance in a career.

7 ‘‘(2) LIMITATION.—Such term does not include,

8 for any taxable year, any expenses paid or incurred

9 with respect to any employee who is a member of the

10 group consisting of the highest paid 5 percent of the

11 employees of such employer for such taxable year.

12 ‘‘(d) SPECIAL RULES.—Rules similar to the rules of

13 section 41(f) shall apply for purposes of this section.’’

14 (b) CARRYFORWARD, CARRYBACK, AND DEDUCTION

15 FOR UNUSED CREDITS.—

16 (1) CARRYFORWARD AND CARRYBACK.—Section

17 38 of such Code (relating to general business credit)

18 is amended by striking ‘‘plus’’ at the end of para19 graph (10), by striking the period at the end of

20 paragraph (11) and inserting ‘‘, plus’’, and by add21 ing at the end the following new paragraph:

22 ‘‘(12) the worker retraining increase credit de23 termined under section 45C.’’

24 (2) TRANSITIONAL RULE FOR CARRYBACKS.—

25 Subsection (d) of section 39 of such Code (relating
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1 to transitional rules) is amended by adding at the

2 end the following new paragraph:

3 ‘‘(7) NO CARRYBACK OF SECTION 45C CREDIT

4 ENACTMENT.—No portion of the unused business

5 credit for any taxable year which is attributable to

6 the worker retraining increase credit determined

7 under section 45C may be carried back to a taxable

8 year ending before the date of the enactment of sec9 tion 45C.’’

10 (3) DEDUCTION FOR UNUSED CREDITS.—Sub11 section (c) of section 196 of such Code (relating to

12 deduction for certain unused business credits) is

13 amended by striking ‘‘and’’ at the end of paragraph

14 (6), by striking the period at the end of paragraph

15 (7) and inserting ‘‘, and’’, and by adding at the end

16 the following new paragraph:

17 ‘‘(8) the worker retraining increase credit deter18 mined under section 45C.’’

19 (c) CLERICAL AMENDMENT.—The table of sections

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

21 of such Code is amended by adding at the end the follow22 ing new item:

‘‘Sec. 45C. Worker retraining increase credit.’’
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1 (d) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 the date of the enactment of this Act.

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