I 

113TH CONGRESS 

2D SESSION H. R. 4473 

To amend the Internal Revenue Code of 1986 to allow small employers 

a credit against income tax for the cost of on-the-job training expenses, 

to make the research credit permanent, and to increase the simplified 

research credit. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 10, 2014 

Mr. FOSTER (for himself, Ms. TSONGAS, Mr. OWENS, Mr. ENYART, and Mr. 

CA ́RDENAS) 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 

employers a credit against income tax for the cost of 

on-the-job training expenses, to make the research credit 

permanent, and to increase the simplified research credit. 

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 ‘‘Small Business Growth 

5 in Manufacturing Act of 2014’’. 


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1 SEC. 2. CREDIT FOR ON-THE-JOB TRAINING. 

2 (a) IN GENERAL.—Subpart D of part IV of sub3 chapter A of chapter 1 of the Internal Revenue Code of 

4 1986 is amended by adding at the end the following new 

5 section: 

6 ‘‘SEC. 45S. ON-THE-JOB TRAINING CREDIT. 

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

8 in the case of a small business employer, the job training 

9 credit determined under this section for the taxable year 

10 is an amount equal to 50 percent of the qualified training 

11 expenses paid or incurred by the taxpayer during the tax12 able year. 

13 ‘‘(b) LIMITATIONS.— 

14 ‘‘(1) IN GENERAL.—The credit allowed under 

15 subsection (a) with respect to any eligible trainee 

16 shall not exceed the excess (if any) of $5,000 over 

17 the aggregate credit allowed to such taxpayer under 

18 this section with respect to such eligible trainee for 

19 all prior taxable years. 

20 ‘‘(2) 3-YEAR LIMITATION ON EXPENSES PER

21 TRAINEE.—Qualified training expenses may be taken 

22 into account under this section with respect to any 

23 eligible trainee only during the 3-year period begin24 ning on the date that such expenses were first in25 curred by the taxpayer with respect to such trainee. 


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1 ‘‘(c) SMALL BUSINESS EMPLOYER.—For purposes of 

2 this section— 

3 ‘‘(1) IN GENERAL.—The term ‘small business 

4 employer’ means any employer if such employer em5 ployed an average of 500 or fewer employees on 

6 business days during the most recent calendar year 

7 ending before the beginning of the taxable year. For 

8 purposes of the preceding sentence, a preceding cal9 endar year may be taken into account only if the 

10 employer was in existence throughout such year. 

11 ‘‘(2) EMPLOYERS NOT IN EXISTENCE IN PRE12 CEDING YEAR.—In the case of an employer which 

13 was not in existence throughout the calendar year 

14 otherwise taken into account under paragraph (1), 

15 the determination under paragraph (1) shall be 

16 based on the average number of employees that it is 

17 reasonably expected such employer will employ on 

18 business days in the current calendar year. 

19 ‘‘(d) DEFINITIONS.—For purposes of this section— 

20 ‘‘(1) QUALIFIED TRAINING EXPENSES.—The 

21 term ‘qualified training expenses’ means amounts 

22 paid or incurred to an unrelated party for— 

23 ‘‘(A) the purchase or use of instructional 

24 materials and equipment used exclusively for 

25 the training of eligible trainees, 


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1 ‘‘(B) the use of classroom or other space 

2 so used, and 

3 ‘‘(C) teachers, trainers, and consultants 

4 engaged in carrying out such training program. 

5 ‘‘(2) ELIGIBLE TRAINEE.—The term ‘eligible 

6 trainee’ means any employee of the taxpayer who 

7 performs services for the employer for at least 30 

8 hours per week while receiving the training for 

9 which the qualified training expenses are incurred. 

10 ‘‘(e) SPECIAL RULES.— 

11 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No deduc12 tion shall be allowed for that portion of the qualified 

13 training expenses (otherwise allowable as a deduc14 tion for the taxable year) which is equal to the 

15 amount of the credit determined for such taxable 

16 year under this section. 

17 ‘‘(2) AGGREGATION.—For purposes of this sec18 tion, all persons treated as a single employer under 

19 subsection (a) or (b) or section 52, or subsection (m) 

20 or (o) of section 414, shall be treated as one person. 

21 ‘‘(f) ELECTION TO HAVE CREDIT NOT APPLY.—A 

22 taxpayer may elect (at such time and in such manner as 

23 the Secretary may by regulations prescribe) to have this 

24 section not apply for any taxable year.’’. 


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1 (b) CREDIT TO BE PART OF GENERAL BUSINESS

2 CREDIT.—Subsection (b) of section 38 of the Internal 

3 Revenue Code of 1986 is amended by striking ‘‘plus’’ at 

4 the end of paragraph (35), by striking the period at the 

5 end of paragraph (36) and inserting ‘‘, plus’’, and by add6 ing at the end the following new paragraph: 

7 ‘‘(37) in the case of a small business employer 

8 (as defined in section 45S(c)), the job training credit 

9 determined under section 45S(a).’’. 

10 (c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN11 IMUM TAX.—Section 38(c)(4)(B) of such Code is amended 

12 by redesignating clauses (vii), (viii), and (ix) as clauses 

13 (viii), (ix), and (x), respectively, and by inserting after 

14 clause (vi) the following new clause: 

15 ‘‘(vii) the credit determined under sec16 tion 45S,’’. 

17 (d) TECHNICAL AMENDMENT.—Section 6501(m) of 

18 such Code is amended by inserting ‘‘45S(e),’’ after 

19 ‘‘45H(g),’’. 

20 (e) CLERICAL AMENDMENT.—The table of sections 

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

22 of such Code is amended by adding at the end the fol23 lowing new item: 

‘‘Sec. 45S. On-the-job training credit.’’. 

24 (f) EFFECTIVE DATES.— 


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1 (1) IN GENERAL.—The amendments made by 

2 this section shall apply to expenses paid or incurred 

3 after the date of the enactment of this Act, in tax4 able years ending after such date. 

5 (2) MINIMUM TAX.—The amendment made by 

6 subsection (c) shall apply to credits determined 

7 under section 45S of the Internal Revenue Code of 

8 1986 in taxable years ending after the date of the 

9 enactment of this Act, and to carrybacks of such 

10 credits. 

11 SEC. 3. RESEARCH CREDIT MADE PERMANENT; INCREASE 

12 IN ALTERNATIVE SIMPLIFIED RESEARCH 

13 CREDIT. 

14 (a) RESEARCH CREDIT MADE PERMANENT.— 

15 (1) IN GENERAL.—Section 41 of the Internal 

16 Revenue Code of 1986 is amended by striking sub17 section (h). 

18 (2) CONFORMING AMENDMENTS.— 

19 (A) Subsection (c) of section 41 of such 

20 Code is amended by striking paragraph (4). 

21 (B) Paragraph (1) of section 45C(b) of 

22 such Code is amended by striking subparagraph 

23 (D). 


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1 (3) EFFECTIVE DATE.—The amendments made 

2 by this subsection shall apply to amounts paid or in3 curred after December 31, 2013. 

4 (b) INCREASE IN ALTERNATIVE SIMPLIFIED RE5 SEARCH CREDIT.— 

6 (1) IN GENERAL.—Subparagraph (A) of section 

7 41(c)(5) of such Code (relating to election of alter8 native simplified credit) is amended by striking ‘‘14 

9 percent (12 percent in the case of taxable years end10 ing before January 1, 2009)’’ and inserting ‘‘20 per11 cent’’. 

12 (2) EFFECTIVE DATE.—The amendment made 

13 by this subsection shall apply to taxable years end14 ing after the date of the enactment of this Act. 

Æ 


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