II

106TH CONGRESS

1ST SESSION S. 1934

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

business-provided student education and training.

IN THE SENATE OF THE UNITED STATES

NOVEMBER 16, 1999

Mr. DODD (for himself and Mr. BENNETT) 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 allow a

tax credit for business-provided student education and

training.

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 ‘‘Businesses Educating

5 Students in Technology (BEST) Act’’.

6 SEC. 2. FINDINGS.

7 Congress finds the following:

8 (1) Technological progress is the single most

9 important determining factor in sustaining growth in

10 the Nation’s economy. It is estimated that techno-
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1 logical innovation has accounted for as much as half

2 the Nation’s long-term economic growth over the

3 past 50 years and will account for an even higher

4 percentage in the next 50 years.

5 (2) The number of jobs requiring technological

6 expertise is growing rapidly. For example, it is esti7 mated that 1,300,000 new computer engineers, pro8 grammers, and systems analysts will be needed over

9 the next decade in the United States economy. Yet,

10 our Nation’s computer science programs are only

11 graduating 25,000 students with bachelor’s degrees

12 yearly.

13 (3) There are more than 350,000 information

14 technology positions currently unfilled throughout

15 the United States, and the number of students grad16 uating from colleges with computer science degrees

17 has declined dramatically.

18 (4) In order to help alleviate the shortage of

19 graduates with technology-based education and

20 skills, businesses in a number of States have formed

21 partnerships with colleges, universities, community22 technical schools, and other institutions of higher

23 learning to give lectures, donate equipment, plan

24 curricula, and perform other activities designed to
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1 help students acquire the skills and knowledge need2 ed to fill jobs in technology-based industries.

3 (5) Congress should encourage these partner4 ships by providing a tax credit to businesses that

5 enter into them. Such a tax credit will help students

6 obtain the knowledge and skills they need to obtain

7 jobs in technology-based industries which are among

8 the best paying jobs being created in the economy.

9 The credit will also assist businesses in their efforts

10 to develop a more highly-skilled, better trained work11 force that can fill the technology jobs such busi12 nesses are creating.

13 SEC. 3. ALLOWANCE OF CREDIT FOR BUSINESS-PROVIDED

14 STUDENT EDUCATION AND TRAINING.

15 (a) IN GENERAL.—Subpart D of part IV of sub16 chapter A of chapter 1 of the Internal Revenue Code of

17 1986 (relating to business related credits) is amended by

18 adding at the end the following:

19 ‘‘SEC. 45D. BUSINESS-PROVIDED STUDENT EDUCATION AND

20 TRAINING.

21 ‘‘(a) ALLOWANCE OF CREDIT.—For purposes of sec22 tion 38, the business-provided student education and

23 training credit determined under this section for the tax24 able year is an amount equal to 40 percent of the qualified
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1 student education and training expenditures of the tax2 payer for such taxable year.

3 ‘‘(b) DOLLAR LIMITATION.—The credit allowable

4 under subsection (a) for any taxable year shall not exceed

5 $100,000.

6 ‘‘(c) DEFINITIONS.—For purposes of this section—

7 ‘‘(1) QUALIFIED STUDENT EDUCATION AND

8 TRAINING EXPENDITURE.—

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

10 student education and training expenditure’

11 means—

12 ‘‘(i) any amount paid or incurred by

13 the taxpayer for the qualified student edu14 cation and training services provided by

15 any employee of the taxpayer, and

16 ‘‘(ii) the basis of the taxpayer in any

17 tangible personal property contributed by

18 the taxpayer and used in connection with

19 the provision of any qualified student edu20 cation and training services.

21 ‘‘(B) EXCLUSION FOR AMOUNTS FUNDED

22 BY GRANTS, ETC.—The term ‘qualified student

23 education and training expenditure’ shall not

24 include any amount to the extent such amount
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1 is funded by any grant, contract, or otherwise

2 by another person (or any governmental entity).

3 ‘‘(2) QUALIFIED STUDENT EDUCATION AND

4 TRAINING SERVICES.—

5 ‘‘(A) IN GENERAL.—For purposes of para6 graph (1), the term ‘qualified student education

7 and training services’ means technology-based

8 education and training of students in any eligi9 ble educational institution in employment skills

10 related to the trade or business of the taxpayer.

11 ‘‘(B) TECHNOLOGY-BASED EDUCATION

12 AND TRAINING.—

13 ‘‘(i) IN GENERAL.—For purposes of

14 subparagraph (A), the term ‘technology15 based education and training’ means edu16 cation and training in—

17 ‘‘(I) aerospace technology,

18 ‘‘(II) biotechnology,

19 ‘‘(III) electronic device tech20 nology,

21 ‘‘(IV) environmental technology,

22 ‘‘(V) medical device technology,

23 ‘‘(VI) computer technology or

24 equipment, or

25 ‘‘(VII) advanced materials.
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1 ‘‘(ii) DEFINITIONS.—For purposes of

2 clause (i)—

3 ‘‘(I) AEROSPACE TECHNOLOGY.—

4 The term ‘aerospace technology’

5 means technology used in the manu6 facture, design, maintenance, or serv7 icing of aircraft, aircraft components,

8 or other aeronautics, including space

9 craft or space craft components.

10 ‘‘(II) BIOTECHNOLOGY.—The

11 term ‘biotechnology’ means technology

12 (including products and services) de13 veloped as the result of the study of

14 the functioning of biological systems

15 from the macro level to the molecular

16 and sub-atomic levels.

17 ‘‘(III) ELECTRONIC DEVICE

18 TECHNOLOGY.—The term ‘electronic

19 device technology’ means technology

20 involving microelectronics, semi21 conductors, electronic equipment, in22 strumentation, radio frequency, micro23 wave, millimeter electronics, optical

24 and optic-electrical devices, or data
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1 and digital communications and imag2 ing devices.

3 ‘‘(IV) ENVIRONMENTAL TECH4 NOLOGY.—The term ‘environmental

5 technology’ means technology involv6 ing the assessment and prevention of

7 threats or damage to human health or

8 the environment, environmental clean9 up, or the development of alternative

10 energy sources.

11 ‘‘(V) MEDICAL DEVICE TECH12 NOLOGY.—The term ‘medical device

13 technology’ means technology involv14 ing any medical equipment or product

15 (other than a pharmaceutical product)

16 which has therapeutic value, diag17 nostic value, or both, and is regulated

18 by the Federal Food and Drug Ad19 ministration.

20 ‘‘(VI) COMPUTER TECHNOLOGY

21 OR EQUIPMENT.—The term ‘computer

22 technology or equipment’ has the

23 meaning given such term in section

24 170(e)(6)(E)(i).
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1 ‘‘(VII) ADVANCED MATERIALS.—

2 The term ‘advanced materials’ means

3 materials with engineered properties

4 created through the development of

5 specialized processing and synthesis

6 technology, including ceramics, high

7 value-added metals, electronics mate8 rials, composites, polymers, and bio9 materials.

10 ‘‘(C) ELIGIBLE EDUCATIONAL INSTITU11 TION.—For purposes of subparagraph (A), the

12 term ‘eligible educational institution’ has the

13 meaning given such term by section 529(e)(5).

14 ‘‘(d) SPECIAL RULES.—For purposes of this

15 section—

16 ‘‘(1) AGGREGATION RULES.—All persons which

17 are treated as a single employer under subsections

18 (a) and (b) of section 52 shall be treated as a single

19 taxpayer.

20 ‘‘(2) PASS-THRU IN THE CASE OF ESTATES AND

21 TRUSTS.—Under regulations prescribed by the Sec22 retary, rules similar to the rules of subsection (d) of

23 section 52 shall apply.

24 ‘‘(3) ALLOCATION IN THE CASE OF PARTNER25 SHIPS.—In the case of partnerships, the credit shall
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1 be allocated among partners under regulations pre2 scribed by the Secretary.

3 ‘‘(f) NO DOUBLE BENEFIT.—No deduction or credit

4 shall be allowed under any other provision of this chapter

5 with respect to any expenditure taken into account in com6 puting the amount of the credit determined under this sec7 tion.’’

8 (b) CONFORMING AMENDMENTS.—

9 (1) Section 38(b) of the Internal Revenue Code

10 of 1986 is amended—

11 (A) by striking out ‘‘plus’’ at the end of

12 paragraph (11),

13 (B) by striking out the period at the end

14 of paragraph (12), and inserting a comma and

15 ‘‘plus’’, and

16 (C) by adding at the end the following:

17 ‘‘(13) the business-provided student education

18 and training credit determined under section 45D.’’

19 (2) The table of sections for subpart D of part

20 IV of subchapter A of chapter 1 of such Code is

21 amended by adding at the end the following:

‘‘Sec. 45D. Business-provided student education and training

credit.’’
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1 (c) EFFECTIVE DATE.—The amendments made by

2 this section shall apply to taxable years beginning after

3 December 31, 1999.

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