I
105TH CONGRESS
1ST SESSION
H. R. 2872
To amend the Internal Revenue Code of 1986 to allow employers a credit
for a portion of the expenses of providing dependent care services to
employees, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
NOVEMBER 7, 1997
Mr. FOX of Pennsylvania introduced the following bill; which was referred to
the Committee on Ways and Means, and in addition to the Committee
on Appropriations, for a period to be subsequently determined by the
Speaker, in each case for consideration of such provisions as fall within
the jurisdiction of the committee concerned
A BILL
To amend the Internal Revenue Code of 1986 to allow em-
ployers a credit for a portion of the expenses of providing
dependent care services to employees, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. PURPOSE.
The purpose of this Act is to reduce costs to employ-
ees for employer-provided on-site dependent care services
by providing employers with a credit against income tax
for a portion of the costs incurred by employers in provid-
ing those services.
SEC. 2. CREDIT FOR EMPLOYER EXPENSES IN PROVIDING
CERTAIN DEPENDENT CARE SERVICES.
(a) GENERAL RULE.—Subpart D of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code of
1986 is amended by adding at the end the following new
section:
‘‘SEC. 45D. EMPLOYER EXPENSES IN PROVIDING DEPEND-
ENT CARE SERVICES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
the employer day care center credit determined under this
section for the taxable year is the amount determined
under subsection (b) with respect to each qualified day
care center of the taxpayer.
‘‘(b) CREDIT PER FACILITY.—For purposes of this
section—
‘‘(1) IN
GENERAL.—The amount determined
under this subsection for any taxable year with re-
spect to any qualified day care facility of the tax-
payer is 50 percent of the excess (if any) of—
‘‘(A) the expenses paid or incurred by the
taxpayer during the taxable year in providing
dependent care services at such facility for em-
ployees, over
‘‘(B) the aggregate amount received or ac-
crued during the taxable year by the employer
for such services.
‘‘(2) DEPRECIATION
ALLOWANCES.—For pur-
poses of paragraph (1), depreciation allowances
under section 167 shall be treated as expenses.
‘‘(c) QUALIFIED DAY CARE CENTER.—For purposes
of this section, the term ‘qualified day care center’ means
any day care center—
‘‘(1) which is operated by or for the taxpayer
exclusively for purposes of providing affordable de-
pendent care services to a fair cross section of such
taxpayer’s employees,
‘‘(2) which is located on the business premises
of the taxpayer or on a site adjacent to such prem-
ises, and
‘‘(3) which complies with all applicable laws and
regulations of a State or unit of local government.
In the case of a day care center operated jointly by a
group of employers, the requirement of paragraph (1)
shall not fail to be treated as met if such requirement is
met with respect to each employer in such group.
‘‘(d) CREDIT MUST REDUCE EMPLOYEE COSTS.—No
credit shall be allowed under this section with respect to
any qualified day care center of the taxpayer for any tax-
able year unless the taxpayer certifies to the Secretary for
such year that the amount of such credit is passed on to
employees using such center in the form of reduced costs.’’
(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 employer day care center credit deter-
mined 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 EMPLOYER DAY CARE CENTER
EXPENSES.—No deduction shall be allowed for that por-
tion of the expenses referred to in section 45D(b)(1)(A)
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) EFFECTIVE DATE.—The amendments made by
this section shall apply to taxable years beginning after
the date of the enactment of this Act.
SEC. 3. REDUCTION OF SPENDING TO OFFSET REVENUE
COST OF EMPLOYER DAY CARE CREDIT.
(a) IN GENERAL.—Only 97.9 percent (99.5 percent
in the case of the Act referred to in subsection (b)(6))
of the amount appropriated by each Act referred to in sub-
section (b) may be obligated.
(b) APPROPRIATION ACTS.—The Acts referred to in
this subsection are—
(1) Military Construction Appropriations Act,
1998,
(2) the Energy and Water Development Appro-
priations Act, 1998,
(3) the Agriculture, Rural Development, Food
and Drug Administration, and Related Agencies Ap-
propriations Act, 1998,
(4) the Department of Transportation and Re-
lated Agencies Appropriations Act, 1998,
(5) the Treasury, Postal Service, and General
Government Appropriations Act, 1998,
(6) the Department of Defense Appropriations
Act, 1998, and
(7) the Legislative Branch Appropriations Act,
1998.
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