II 

109TH CONGRESS 

2D SESSION S. 3977 

To provide a Federal income tax credit for Patriot employers, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 28, 2006 

Mr. DURBIN (for himself and Mr. OBAMA) introduced the following bill; which 

was read twice and referred to the Committee on Finance 

A BILL 

To provide a Federal income tax credit for Patriot employers, 

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. REDUCED TAXES FOR PATRIOT EMPLOYERS. 

4 (a) IN GENERAL.—Subpart D of part IV of sub5 chapter A of chapter 1 of the Internal Revenue Code of 

6 1986 is amended by adding at the end the following new 

7 section: 

8 ‘‘SEC. 45N. REDUCTION IN TAX OF PATRIOT EMPLOYERS. 

9 ‘‘(a) IN GENERAL.—In the case of any taxable year 

10 with respect to which a taxpayer is certified by the SecVerDate Aug 31 2005 07:30 Sep 30, 2006 Jkt 049196 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3977.IS S3977

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1 retary as a Patriot employer, the Patriot employer credit 

2 determined under this section for purposes of section 38 

3 shall be equal to 1 percent of the taxable income of the 

4 taxpayer which is properly allocable to all trades or busi5 nesses with respect to which the taxpayer is certified as 

6 a Patriot employer for the taxable year. 

7 ‘‘(b) PATRIOT EMPLOYER.—For purposes of sub8 section (a), the term ‘Patriot employer’ means, with re9 spect to any taxable year, any taxpayer which— 

10 ‘‘(1) maintains its headquarters in the United 

11 States if the taxpayer has ever been headquartered 

12 in the United States, 

13 ‘‘(2) pays at least 60 percent of each employee’s 

14 health care premiums, 

15 ‘‘(3) if such taxpayer employs at least 50 em16 ployees on average during the taxable year— 

17 ‘‘(A) maintains or increases the number of 

18 full-time workers in the United States relative 

19 to the number of full-time workers outside of 

20 the United States, 

21 ‘‘(B) compensates each employee of the 

22 taxpayer at an hourly rate (or equivalent there23 of) not less than an amount equal to the Fed24 eral poverty level for a family of three for the 


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1 calendar year in which the taxable year begins 

2 divided by 2,080, 

3 ‘‘(C) provides either— 

4 ‘‘(i) a defined contribution plan which 

5 for any plan year— 

6 ‘‘(I) requires the employer to 

7 make nonelective contributions of at 

8 least 5 percent of compensation for 

9 each employee who is not a highly 

10 compensated employee, or 

11 ‘‘(II) requires the employer to 

12 make matching contributions of 100 

13 percent of the elective contributions of 

14 each employee who is not a highly 

15 compensated employee to the extent 

16 such contributions do not exceed the 

17 percentage specified by the plan (not 

18 less than 5 percent) of the employee’s 

19 compensation, or 

20 ‘‘(ii) a defined benefit plan which for 

21 any plan year requires the employer to 

22 make contributions on behalf of each em23 ployee who is not a highly compensated 

24 employee in an amount which will provide 

25 an accrued benefit under the plan for the 


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1 plan year which is not less than 5 percent 

2 of the employee’s compensation, and 

3 ‘‘(D) provides full differential salary and 

4 insurance benefits for all National Guard and 

5 Reserve employees who are called for active 

6 duty, and 

7 ‘‘(4) if such taxpayer employs less than 50 em8 ployees on average during the taxable year, either— 

9 ‘‘(A) compensates each employee of the 

10 taxpayer at an hourly rate (or equivalent there11 of) not less than an amount equal to the Fed12 eral poverty level for a family of 3 for the cal13 endar year in which the taxable year begins di14 vided by 2,080, or 

15 ‘‘(B) provides either— 

16 ‘‘(i) a defined contribution plan which 

17 for any plan year— 

18 ‘‘(I) requires the employer to 

19 make nonelective contributions of at 

20 least 5 percent of compensation for 

21 each employee who is not a highly 

22 compensated employee, or 

23 ‘‘(II) requires the employer to 

24 make matching contributions of 100 

25 percent of the elective contributions of 


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•S 3977 IS

1 each employee who is not a highly 

2 compensated employee to the extent 

3 such contributions do not exceed the 

4 percentage specified by the plan (not 

5 less than 5 percent) of the employee’s 

6 compensation, or 

7 ‘‘(ii) a defined benefit plan which for 

8 any plan year requires the employer to 

9 make contributions on behalf of each em10 ployee who is not a highly compensated 

11 employee in an amount which will provide 

12 an accrued benefit under the plan for the 

13 plan year which is not less than 5 percent 

14 of the employee’s compensation.’’. 

15 (b) ALLOWANCE AS GENERAL BUSINESS CREDIT.— 

16 Section 38(b) of the Internal Revenue Code or 1986 is 

17 amended by striking ‘‘and’’ at the end of paragraph (25), 

18 by striking the period at the end of paragraph (26) and 

19 inserting ‘‘, and’’, and by adding at the end the following: 

20 ‘‘(27) the Patriot employer credit determined 

21 under section 45N.’’. 

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

23 this section shall apply to taxable years beginning after 

24 December 31, 2006. 

Æ 


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