I

107TH CONGRESS

1ST SESSION H. R. 877

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 HOUSE OF REPRESENTATIVES

MARCH 6, 2001

Mr. FOLEY (for himself, Ms. VELA ́ZQUEZ, Mr. MANZULLO, Mr. LATOURETTE,

Mr. JONES of North Carolina, Mr. KOLBE, Mr. LATHAM, Mr. ISAKSON,

Mr. MOORE, Mr. TOWNS, Mr. PETERSON of Pennsylvania, Mr. BONILLA,

Mr. SAXTON, Mr. GREENWOOD, Ms. HART, Mr. WYNN, Mr. PENCE, Mrs.

JONES of Ohio, Mr. ARMEY, Mr. BOEHLERT, Mr. CLEMENT, Mr. HALL

of Ohio, Mrs. CHRISTENSEN, Mr. RUSH, Mr. HASTINGS of Washington,

Mr. EHLERS, Mr. HEFLEY, Mrs. NORTHUP, and Mr. GARY MILLER of

California) 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 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 2001’’.
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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. 45E. 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 1,500 hours of training (including on9 the-job training and training at multi-employer

10 training facilities) from the taxpayer (or any

11 predecessor) under a qualified training program

12 as an apprentice in any highly skilled trade.

13 ‘‘(B) HIGHLY SKILLED TRADES.—For pur14 poses of subparagraph (A), the term ‘highly

15 skilled trades’ means—

16 ‘‘(i) precision machinists,

17 ‘‘(ii) die makers,

18 ‘‘(iii) mold makers,

19 ‘‘(iv) tool and die designers,

20 ‘‘(v) heating, ventilating, air condi21 tioning, refrigeration, and roofing contrac22 tors,

23 ‘‘(vi) the trade of masonry,

24 ‘‘(vii) plumbers,

25 ‘‘(viii) pipefitters,
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1 ‘‘(ix) patternmakers,

2 ‘‘(x) foundry technicians,

3 ‘‘(xi) electricians,

4 ‘‘(xii) recreational marine production

5 and design workers,

6 ‘‘(xiii) 2-way radio technicians,

7 ‘‘(xiv) welders,

8 ‘‘(xv) shipfitters,

9 ‘‘(xvi) propellor machinists,

10 ‘‘(xvii) electronic instrumentation spe11 cialists, and

12 ‘‘(xviii) other highly skilled trades

13 specified in regulations prescribed by the

14 Secretary.

15 Such term shall not include any trade if the

16 customary apprenticeship period for such trade

17 is less than 2 years.

18 ‘‘(C) QUALIFIED TRAINING PROGRAM.—

19 ‘‘(i) IN GENERAL.—The term ‘quali20 fied training program’ means a written

21 plan of study and training for individuals

22 in, or entering into, highly skilled trades.

23 ‘‘(ii) DESCRIPTION OF PROGRAMS.—A

24 plan under clause (i) must be a program
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1 described in one of the following sub2 clauses:

3 ‘‘(I) An apprenticeship program

4 registered and certified with the Sec5 retary of Labor under section 1 of the

6 National Apprenticeship Act (29

7 U.S.C. 50).

8 ‘‘(II) A program licensed, reg9 istered, or certified by the workforce

10 investment board or apprenticeship

11 agency or council of a State or admin12 istered in compliance with apprentice13 ship laws of a State.

14 ‘‘(III) A program conducted by a

15 vocational or technical education

16 school, community college, or indus17 trial or trade training organization.

18 ‘‘(IV) A program which conforms

19 to apprentice training programs devel20 oped or administered by an employer

21 trade group or committee.

22 ‘‘(V) An industry sponsored or

23 administered program which is clearly

24 identified and commonly recognized
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1 within an industry and which meets

2 the requirements of clause (iii).

3 ‘‘(iii) REQUIREMENTS.—A program

4 meets the requirements of this clause if

5 such program—

6 ‘‘(I) is accessible to individuals

7 without discrimination on the basis of

8 race, sex, color, religion, or national

9 origin,

10 ‘‘(II) provides an overview of the

11 trade, including the history and mod12 ern developments in such trade,

13 ‘‘(III) provides related instruc14 tion of the fundamental, intermediate,

15 and advanced skills, techniques, and

16 materials of the trade,

17 ‘‘(IV) provides training in math,

18 measurement, and blueprint reading

19 skills, if such skills are required in the

20 trade,

21 ‘‘(V) provides training on trade

22 specific tools and equipment,

23 ‘‘(VI) provides on-the-job train24 ing which allows performance of work
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1 under close supervision of an instruc2 tor or skilled worker, and

3 ‘‘(VII) provides periodic review

4 and evaluation of participants to dem5 onstrate proficiency in skills, including

6 the use of tests and assessment of in7 dividual and group projects.

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

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

10 period—

11 ‘‘(A) beginning on the date that the em12 ployee begins employment with the taxpayer as

13 an apprentice in the highly skilled trade, and

14 ‘‘(B) ending on the earlier of—

15 ‘‘(i) the date that such apprenticeship

16 with the employer ends, or

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

18 the date referred to in subparagraph (A).

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

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

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

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

23 employee.’’.

24 (b) CREDIT MADE PART OF GENERAL BUSINESS

25 CREDIT.—Subsection (b) of section 38 of such Code is
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1 amended by striking ‘‘plus’’ at the end of paragraph (12),

2 by striking the period at the end of paragraph (13) and

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

4 new paragraph:

5 ‘‘(14) in the case of a small business employer

6 (as defined in section 45E(b)), the highly skilled

7 trades training credit determined under section

8 45E(a).’’.

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

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

11 new subsection:

12 ‘‘(d) CREDIT FOR TRAINING EXPENSES FOR EM13 PLOYEES IN HIGHLY SKILLED SMALL BUSINESS

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

15 of the expenses otherwise allowable as a deduction for the

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

17 determined for the taxable year under section 45E(a).’’.

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

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

20 of such Code is amended by adding at the end the fol21 lowing new item:

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

skilled small business trades.’’.

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

23 this section shall apply to expenses paid or incurred in
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1 the taxable years ending after the date of the enactment

2 of this Act.

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