II 

115TH CONGRESS 

2D SESSION S. 2648 

To amend the Internal Revenue Code of 1986 to encourage employers to 

hire individuals working in dying industries or occupations made obsolete 

by technology, and for other purposes. 

IN THE SENATE OF THE UNITED STATES 

APRIL 11, 2018 

Mr. NELSON 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 encourage 

employers to hire individuals working in dying industries 

or occupations made obsolete by technology, and for 

other purposes. 

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 ‘‘Economic Moderniza5 tion Act’’. 

6 SEC. 2. ECONOMIC TRANSITION CREDIT. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 


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1 1986, as amended by section 13403(a) of Public Law 

2 115–97, is amended by adding at the end the following 

3 new section: 

4 ‘‘SEC. 45T. ECONOMIC TRANSITION CREDIT. 

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

6 amount of the economic transition credit determined 

7 under this section for the taxable year shall be equal to 

8 the sum of any applicable payroll taxes paid by an em9 ployer during the taxable year with respect to employment 

10 of any qualified employee. 

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

12 ‘‘(1) APPLICABLE PAYROLL TAXES.— 

13 ‘‘(A) IN GENERAL.—The term ‘applicable 

14 payroll taxes’ means, with respect to any em15 ployer for any taxable year, the amount of the 

16 taxes imposed by— 

17 ‘‘(i) section 3111 on wages paid by an 

18 employer with respect to employment of 

19 qualified employee during the applicable 

20 period, and 

21 ‘‘(ii) section 3221(a) on compensation 

22 paid by an employer with respect to serv23 ices rendered by a qualified employee dur24 ing the applicable period. 


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1 ‘‘(B) APPLICABLE PERIOD.—For purposes 

2 of subparagraph (A), the term ‘applicable pe3 riod’ means the 3-year period beginning with 

4 the day the qualified employee begins work for 

5 the employer. 

6 ‘‘(2) DECLINING FIELD.— 

7 ‘‘(A) IN GENERAL.—The term ‘declining 

8 field’ means any occupation or field of work 

9 which has been determined by the Secretary, in 

10 consultation with the Bureau of Labor Statis11 tics of the Department of Labor, to have experi12 enced a decline in the level of average employ13 ment in such occupation or field in the United 

14 States of not less than 8 percent over the most 

15 recent 3-year period for which such information 

16 is available. 

17 ‘‘(B) DETERMINATION AND PUBLICA18 TION.—The Secretary, in consultation with the 

19 Bureau of Labor Statistics of the Department 

20 of Labor, shall annually— 

21 ‘‘(i) determine which occupations or 

22 fields of work satisfy the requirements de23 scribed in subparagraph (A), and 

24 ‘‘(ii) publish and make available on 

25 the website of the Department of the 


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1 Treasury a complete list of such occupa2 tions and fields of work. 

3 ‘‘(3) QUALIFIED EMPLOYEE.— 

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

5 employee’ means an individual who— 

6 ‘‘(i) is provided wages for employment 

7 by the employer (as such terms are defined 

8 in section 3121), provided that such em9 ployment is not in a declining field, 

10 ‘‘(ii) is not a covered employee (as de11 fined in section 162(m)(3)), and 

12 ‘‘(iii) was employed in a declining field 

13 for any period during the 12-month period 

14 preceding the applicable period under para15 graph (1)(B). 

16 ‘‘(B) NONQUALIFYING REHIRES.—The 

17 term ‘qualifying employee’ shall not include any 

18 individual who, prior to the beginning of the ap19 plicable period under paragraph (1)(B), had 

20 been employed by the employer at any time.’’. 

21 (b) CREDIT PART OF GENERAL BUSINESS CREDIT.— 

22 Section 38(b) of the Internal Revenue Code of 1986, as 

23 amended by section 13403(b) of Public Law 115–97, is 

24 amended by striking ‘‘plus’’ at the end of paragraph (36), 

25 by striking the period at the end of paragraph (37) and 


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

2 new paragraph: 

3 ‘‘(38) the economic transition credit determined 

4 under section 45T(a).’’. 

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

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

7 of the Internal Revenue Code of 1986 is amended by add8 ing at the end the following new item: 

‘‘Sec. 45T. Economic Transition Credit.’’. 

9 (d) EFFECTIVE DATE.—The amendments made by 

10 this section shall apply to taxable years beginning after 

11 the date of the enactment of this Act. 

12 SEC. 3. ENHANCEMENTS TO CERTAIN EDUCATION TAX BEN13 EFITS FOR PROFESSIONALS IN SHORT SUP14 PLY. 

15 (a) IN GENERAL.— 

16 (1) PUBLICATION.—For each calendar year be17 ginning after the date of the enactment of this Act, 

18 the Secretary of the Treasury, in consultation with 

19 the Secretary of Labor, shall publish and make 

20 available on the website of the Department of the 

21 Treasury a list of any occupation or field of work 

22 which qualifies as a short supply field for such cal23 endar year. 

24 (2) SHORT SUPPLY FIELD.—The term ‘‘short 

25 supply field’’ means an occupation or field of work 


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1 which the Secretary of the Treasury, in consultation 

2 with the Secretary of Labor, has determined— 

3 (A) requires— 

4 (i) theoretical and practical applica5 tion of a body of highly specialized knowl6 edge; and 

7 (ii)(I) attainment of a bachelor’s or 

8 higher degree in the specific specialty (or 

9 its equivalent); or 

10 (II) experience in the specialty equiva11 lent to the completion of such degree; and 

12 (B) has an insufficient number of individ13 uals who are citizens or residents of the United 

14 States and are qualified, willing, and able to 

15 satisfy the demand for labor in such occupation 

16 or field of work. 

17 (b) ENHANCEMENTS TO CERTAIN EDUCATION TAX

18 BENEFITS.— 

19 (1) IN GENERAL.— 

20 (A) EDUCATIONAL ASSISTANCE PRO21 GRAMS.—Paragraph (2) of section 127(a) of 

22 the Internal Revenue Code of 1986 is amended 

23 by inserting ‘‘(or, in the case of an individual 

24 employed in an occupation or field of work 

25 which has been designated as a short supply 


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1 field for such calendar year pursuant to section 

2 3(a) of the Economic Modernization Act, the 

3 first $15,000 of such assistance so furnished)’’ 

4 before the period at the end. 

5 (B) INTEREST ON EDUCATION LOANS.— 

6 Paragraph (1) of section 221(b) of the Internal 

7 Revenue Code of 1986 is amended by inserting 

8 ‘‘(or, in the case of a individual employed in an 

9 occupation or field of work which has been des10 ignated, pursuant to section 3(a) of the Eco11 nomic Modernization Act, as a short supply 

12 field for the calendar year in which such taxable 

13 year began, shall not exceed $8,000)’’ before 

14 the period at the end. 

15 (C) QUALIFIED TUITION AND RELATED

16 EXPENSES.—Paragraph (1) of section 222(b) of 

17 the Internal Revenue Code of 1986 is amended 

18 by inserting ‘‘(or, in the case of an individual 

19 employed in an occupation or field of work 

20 which has been designated, pursuant to section 

21 3(a) of the Economic Modernization Act, as a 

22 short supply field for the calendar year in which 

23 such taxable year began, an amount equal to 

24 the applicable dollar limit multiplied by 2)’’ be25 fore the period at the end. 


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1 (2) EXCLUSION FOR CERTAIN EMPLOYER PAY2 MENTS OF STUDENT LOANS.— 

3 (A) IN GENERAL.—Paragraph (1) of sec4 tion 127(c) of the Internal Revenue Code of 

5 1986 is amended by striking ‘‘and’’ at the end 

6 of subparagraph (A), by redesignating subpara7 graph (B) as subparagraph (C), and by insert8 ing after subparagraph (A) the following new 

9 subparagraph: 

10 ‘‘(B) in the case of an employee employed 

11 in an occupation or field of work which has 

12 been designated as a short supply field for a 

13 calendar year pursuant to section 3(a) of the 

14 Economic Modernization Act, the payment by 

15 an employer during such calendar year, whether 

16 paid to the employee or to a lender, of principal 

17 or interest on any qualified education loan (as 

18 defined in section 221(d)(1)) incurred by the 

19 employee, and’’. 

20 (B) CONFORMING AMENDMENT; DENIAL

21 OF DOUBLE BENEFIT.—Paragraph (1) of sec22 tion 221(e) of the Internal Revenue Code of 

23 1986 is amended by inserting before the period 

24 the following: ‘‘, or for which an exclusion is al25 lowable under section 127 to the taxpayer’s emVerDate Sep 11 2014 01:54 Apr 13, 2018 Jkt 079200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2648.IS S2648

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1 ployer by reason of the payment by such em2 ployer of any indebtedness on a qualified edu3 cation loan of the taxpayer’’. 

4 (3) EFFECTIVE DATE.—The amendments made 

5 by this subsection shall apply to taxable years begin6 ning after the date of the enactment of this Act. 

7 SEC. 4. DEDUCTION OF QUALIFIED ENTERPRISE INCOME. 

8 (a) IN GENERAL.—Part VI of subchapter B of chap9 ter 1 of the Internal Revenue Code of 1986 is amended 

10 by inserting after section 181 the following new section: 

11 ‘‘SEC. 182. QUALIFIED ENTERPRISE INCOME. 

12 ‘‘(a) IN GENERAL.—In the case of a qualified tax13 payer, there shall be allowed as a deduction an amount 

14 equal to any qualified enterprise income of such taxpayer. 

15 ‘‘(b) LIMITATION.—The amount of the deduction al16 lowed under subsection (a) for any taxable year shall not 

17 exceed an amount equal to 50 percent of the W–2 wages 

18 paid by the qualified taxpayer during such taxable year. 

19 ‘‘(c) DEFINITIONS.—In this section: 

20 ‘‘(1) QUALIFIED ENTERPRISE INCOME.— 

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

22 enterprise income’ means the amount equal to 

23 the excess (if any) of— 

24 ‘‘(i) the gross receipts of the qualified 

25 taxpayer for the taxable year which are 


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1 properly allocable to a qualified facility, 

2 over 

3 ‘‘(ii) an amount equal to the sum of— 

4 ‘‘(I) the cost of goods sold which 

5 are allocable to such receipts, and 

6 ‘‘(II) any other expenses, losses 

7 or deductions (with the exception of 

8 the deduction allowed under this sec9 tion) which are allocable to such re10 ceipts. 

11 ‘‘(B) LIMITATION.—The term ‘qualified 

12 enterprise income’ shall apply only to gross re13 ceipts described in subparagraph (A) for the 3- 

14 taxable-year period beginning after the qualified 

15 facility is placed in service. 

16 ‘‘(C) METHOD OF ALLOCATION.—The Sec17 retary shall prescribe regulations for ensuring 

18 proper allocation of amounts under subpara19 graph (A). 

20 ‘‘(2) QUALIFIED FACILITY.— 

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

22 facility’ means any nonresidential building (and 

23 its structural components) which— 

24 ‘‘(i) prior to 2000, was placed in serv25 ice and used in the active conduct of a 


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1 trade or business by a person other than 

2 the qualified taxpayer, 

3 ‘‘(ii) after being acquired by the quali4 fied taxpayer, has been substantially reha5 bilitated, 

6 ‘‘(iii) during the 2-year period prior to 

7 commencement of rehabilitation by the 

8 qualified taxpayer, was not used in the ac9 tive conduct of a trade or business, and 

10 ‘‘(iv) is located within a State. 

11 ‘‘(B) SUBSTANTIAL REHABILITATION.— 

12 For purposes of this paragraph, a building shall 

13 be deemed to have been substantially rehabili14 tated only if— 

15 ‘‘(i) not less than 50 percent of the 

16 existing external walls of such building are 

17 retained in place as external walls, 

18 ‘‘(ii) not less than 75 percent of the 

19 existing internal structural framework of 

20 such building is retained in place, and 

21 ‘‘(iii) the amount properly chargeable 

22 to the capital account for any addition to 

23 or improvement of the building is in excess 

24 of an amount equal to the greater of— 


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1 ‘‘(I) the adjusted basis of such 

2 building (and its structural compo3 nents), or 

4 ‘‘(II) $20,000. 

5 ‘‘(3) QUALIFIED TAXPAYER.—The term ‘quali6 fied taxpayer’ means the person that owns the quali7 fied facility and directly incurs not less than 50 per8 cent of the expenses for substantially rehabilitating 

9 such facility (under rules similar to the rules appli10 cable to self-rehabilitated buildings under section 

11 47(d)(4)). 

12 ‘‘(4) STATE.—The term ‘State’ means any 

13 State of the United States or the District of Colum14 bia or any Territory or possession of the United 

15 States. 

16 ‘‘(5) W–2 WAGES.— 

17 ‘‘(A) IN GENERAL.—The term ‘W–2 

18 wages’ means, with respect to any person for 

19 any taxable year of such person, the amounts 

20 described in paragraphs (3) and (8) of section 

21 6051(a) paid by such person with respect to 

22 employment of employees by such person during 

23 the calendar year ending during such taxable 

24 year. 


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1 ‘‘(B) LIMITATION TO WAGES ATTRIB2 UTABLE TO QUALIFIED ENTERPRISE INCOME.— 

3 Such term shall not include any amount which 

4 is not properly allocable to qualified enterprise 

5 income for purposes of subsection (c)(1). 

6 ‘‘(C) RETURN REQUIREMENT.—Such term 

7 shall not include any amount which is not prop8 erly included in a return filed with the Social 

9 Security Administration on or before the 60th 

10 day after the due date (including extensions) 

11 for such return.’’. 

12 (b) CLERICAL AMENDMENT.—The table of sections 

13 for part VI of subchapter B of chapter 1 of the Internal 

14 Revenue Code of 1986 is amended by adding at the end 

15 the following new item: 

‘‘Sec. 182. Qualified Enterprise Income.’’. 

16 (c) EFFECTIVE DATE.—The amendments made by 

17 this section shall apply to taxable years beginning after 

18 the date of the enactment of this Act. 

Æ 


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