I
107TH CONGRESS
1ST SESSION
H. R. 877
To amend the Internal Revenue Code of 1986 to allow small business employ-
ers a credit against income tax for certain expenses for long-term training
of employees in highly skilled small business trades.
IN THE HOUSE OF REPRESENTATIVES
MARCH 6, 2001
Mr. FOLEY (for himself, Ms. VELA´ZQUEZ, Mr. MANZULLO, Mr. LATOURETTE,
Mr. JONES of North Carolina, Mr. KOLBE, Mr. LATHAM, Mr. ISAKSON,
Mr. MOORE, Mr. TOWNS, Mr. PETERSON of Pennsylvania, Mr. BONILLA,
Mr. SAXTON, Mr. GREENWOOD, Ms. HART, Mr. WYNN, Mr. PENCE, Mrs.
JONES of Ohio, Mr. ARMEY, Mr. BOEHLERT, Mr. CLEMENT, Mr. HALL
of Ohio, Mrs. CHRISTENSEN, Mr. RUSH, Mr. HASTINGS of Washington,
Mr. EHLERS, Mr. HEFLEY, Mrs. NORTHUP, and Mr. GARY MILLER of
California) introduced the following bill; which was referred to the Com-
mittee on Ways and Means
A BILL
To amend the Internal Revenue Code of 1986 to allow small
business employers a credit against income tax for cer-
tain expenses for long-term training of employees in
highly skilled small business 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 2001’’.
SEC. 2. CREDIT FOR EXPENSES FOR LONG-TERM TRAINING
OF EMPLOYEES IN HIGHLY SKILLED SMALL
BUSINESS 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. 45E. EXPENSES FOR LONG-TERM TRAINING OF EM-
PLOYEES IN HIGHLY SKILLED SMALL BUSI-
NESS TRADES.
‘‘(a) GENERAL RULE.—For purposes of section 38,
in the case of a small business employer, the highly skilled
trades training credit determined under this section for
the taxable year is $15,000 for each employee having a
qualified training year ending with or within such taxable
year (whether or not such employee is an employee of the
taxpayer as of the close of such taxable year).
‘‘(b) DEFINITIONS.—For purposes of this section—
‘‘(1) SMALL BUSINESS EMPLOYER.—
‘‘(A) IN GENERAL.—The term ‘small busi-
ness employer’ means, with respect to any tax-
able year, any employer who employed an aver-
age of 250 or fewer employees on business days
during such taxable year.
‘‘(B) CONTROLLED
GROUPS.—For pur-
poses of subparagraph (A), all persons treated
described in one of the following sub-
clauses:
‘‘(I) An apprenticeship program
registered and certified with the Sec-
retary of Labor under section 1 of the
National 
Apprenticeship 
Act 
(29
U.S.C. 50).
‘‘(II) A program licensed, reg-
istered, or certified by the workforce
investment board or apprenticeship
agency or council of a State or admin-
istered in compliance with apprentice-
ship laws of a State.
‘‘(III) A program conducted by a
vocational 
or 
technical 
education
school, community college, or indus-
trial or trade training organization.
‘‘(IV) A program which conforms
to apprentice training programs devel-
oped or administered by an employer
trade group or committee.
‘‘(V) An industry sponsored or
administered program which is clearly
identified and commonly recognized
within an industry and which meets
the requirements of clause (iii).
‘‘(iii) REQUIREMENTS.—A program
meets the requirements of this clause if
such program—
‘‘(I) is accessible to individuals
without discrimination on the basis of
race, sex, color, religion, or national
origin,
‘‘(II) provides an overview of the
trade, including the history and mod-
ern developments in such trade,
‘‘(III) provides related instruc-
tion of the fundamental, intermediate,
and advanced skills, techniques, and
materials of the trade,
‘‘(IV) provides training in math,
measurement, and blueprint reading
skills, if such skills are required in the
trade,
‘‘(V) provides training on trade
specific tools and equipment,
‘‘(VI) provides on-the-job train-
ing which allows performance of work
under close supervision of an instruc-
tor or skilled worker, and
‘‘(VII) provides periodic review
and evaluation of participants to dem-
onstrate proficiency in skills, including
the use of tests and assessment of in-
dividual and group projects.
‘‘(3) TRAINING
PERIOD.—The term ‘training
period’ means, with respect to an employee, the
period—
‘‘(A) beginning on the date that the em-
ployee begins employment with the taxpayer as
an apprentice in the highly skilled trade, and
‘‘(B) ending on the earlier of—
‘‘(i) the date that such apprenticeship
with the employer ends, or
‘‘(ii) the date which is 4 years after
the date referred to in subparagraph (A).
‘‘(c) COORDINATION WITH OTHER CREDITS.—The
amount of credit otherwise allowable under sections 51(a)
and 1396(a) with respect to any employee shall be reduced
by the credit allowed by this section with respect to such
employee.’’.
(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 (12),
by striking the period at the end of paragraph (13) and
inserting ‘‘, plus’’, and by adding at the end the following
new paragraph:
‘‘(14) in the case of a small business employer
(as defined in section 45E(b)), the highly skilled
trades training credit determined under section
45E(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
SMALL
BUSINESS
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 the taxable year under section 45E(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 fol-
lowing new item:
‘‘Sec. 45E. Expenses for long-term training of employees in highly
skilled small business trades.’’.
(e) EFFECTIVE DATE.—The amendments made by
this section shall apply to expenses paid or incurred in
the taxable years ending after the date of the enactment
of this Act.
Æ