I
105TH CONGRESS
2D SESSION
H. R. 3110
To amend the Internal Revenue Code of 1986 to allow small employers
a credit against income tax for certain expenses for long-term training
of employees in highly skilled metalworking trades.
IN THE HOUSE OF REPRESENTATIVES
JANUARY 27, 1998
Mr. TALENT (for himself, Mr. LATOURETTE, and Mr. PAUL) 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 certain ex-
penses for long-term training of employees in highly
skilled metalworking trades.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Skilled Workforce En-
hancement Act of 1998’’.
SEC. 2. CREDIT FOR EXPENSES FOR TRAINING EMPLOYEES
IN 
HIGHLY 
SKILLED 
METALWORKING
TRADES.
(a) IN GENERAL.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 (relating to business-related credits) is amended by
adding at the end the following new section:
‘‘SEC. 45D. EXPENSES FOR TRAINING EMPLOYEES IN HIGH-
LY SKILLED METALWORKING TRADES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the highly skilled metalworking trades training credit de-
termined under this section is an amount equal to 80 per-
cent of the training expenses paid or incurred by the tax-
payer during the training period with respect to each
qualified trained employee of the taxpayer. Twenty per-
cent of the credit determined under the preceding sentence
shall be taken into account under section 38 for each of
the first 5 taxable years after the taxable year in which
the training period ends.
‘‘(b) LIMITATIONS.—
‘‘(1) MAXIMUM CREDIT PER EMPLOYEE.—The
total amount of credit determined under this section
with respect to each qualified trained employee for
all taxable years shall not exceed $100,000.
‘‘(2) EMPLOYER MUST BE SMALL EMPLOYER.—
Training expenses may be taken into account under
subsection (a) only if the taxpayer is a small em-
ployer for the taxable year in which such expenses
are paid or incurred.
‘‘(c) DEFINITIONS.—For purposes of this section—
‘‘(1) QUALIFIED TRAINED EMPLOYEE.—
‘‘(A) IN
GENERAL.—The term ‘qualified
trained employee’ means any employee (or
former employee) of the taxpayer if—
‘‘(i) the employee received at least
8,000 hours of training (including on-the-
job training) from the taxpayer (or any
predecessor) during the training period as
an apprentice in any highly skilled metal-
working trade, and
‘‘(ii) the employee is employed by the
taxpayer in a journeyman capacity in any
highly skilled metalworking trade on a full-
time basis throughout at least the 1-year
period beginning at the end of such em-
ployee’s training period.
‘‘(B) HIGHLY
SKILLED
METALWORKING
TRADES.—For purposes of subparagraph (A),
the term ‘highly skilled metalworking trades’
means the trades traditionally recognized as
such, including precision machinists, die mak-
ers, mold makers, and tool and die designers in
the tooling and machining industry.
‘‘(2) TRAINING EXPENSES.—
‘‘(A) IN GENERAL.—The term ‘training ex-
penses’ means wages paid or incurred to an em-
ployee of the taxpayer for services performed in
a highly skilled metalworking trade while the
employee is an apprentice in such trade.
‘‘(B) WAGES.—The term ‘wages’ has the
meaning given such term by section 3401(a).
‘‘(3) TRAINING
PERIOD.—The term ‘training
period’ means the period of 4 years beginning on the
date that the employee begins employment with the
taxpayer as an apprentice in a highly skilled metal-
working trade.
‘‘(4) SMALL EMPLOYER.—
‘‘(A) IN GENERAL.—The term ‘small em-
ployer’ means, with respect to any taxable year,
any employer who employed an average of 500
or fewer employees on business days during
such taxable year.
‘‘(B) CONTROLLED
GROUPS.—For pur-
poses of subparagraph (A), all persons treated
as a single employer under subsection (b), (c),
(m), or (o) of section 414 shall be treated as 1
employer.
‘‘(d) COORDINATION
WITH
OTHER
CREDITS.—
Wages taken into account under subsection (a) shall not
be taken into account in determining the credits under
sections 51(a) and 1396(a).’’.
(b) CREDIT MADE PART OF GENERAL BUSINESS
CREDIT.—Subsection (b) of section 38 of such Code is
amended by striking ‘‘plus’’ at the end of paragraph (11),
by striking the period at the end of paragraph (12) and
inserting ‘‘, plus’’, and by adding at the end the following
new paragraph:
‘‘(13) the highly skilled metalworking trades
training credit determined under section 45D(a).’’.
(c) DENIAL OF DOUBLE BENEFIT.—Section 280C of
such Code is amended by adding at the end the following
new subsection:
‘‘(d) CREDIT FOR TRAINING EXPENSES FOR EM-
PLOYEES
IN
HIGHLY
SKILLED
METALWORKING
TRADES.—No deduction shall be allowed for that portion
of the expenses otherwise allowable as a deduction for the
taxable year which is equal to the amount of the credit
determined for such taxable year under section 45D(a).’’.
(d) CLERICAL AMENDMENT.—The table of sections
for subpart D of part IV of subchapter A of chapter 1
of such Code is amended by adding at the end the follow-
ing new item:
‘‘Sec. 45D. Expenses for training employees in highly skilled met-
alworking trades.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenses paid or incurred after
the date of the enactment of this Act in taxable years end-
ing after such date.
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