Title: Economic Modernization Act
Policy area: Taxation

Summary:
Economic Modernization Act
This bill amends the Internal Revenue Code to allow additional tax credits and deductions to assist employees who work in declining or short-supply fields.
A "declining field" has experienced a decline in the level of average employment of at least 8% over the most recent 3-year period.
A "short-supply" field: (1) requires theoretical and practical application of a body of highly specialized knowledge and certain degrees or experience in the specialty; and (2) has an insufficient number of U.S. citizens or residents who are qualified, willing, and able to satisfy the demand for labor in the occupation or field of work.
For employers, the bill allows an economic transition tax credit for payroll taxes paid over a three-year period with respect to employees who previously worked in a declining field.
For individuals employed in short-supply fields, the bill:
The bill also allows a deduction for companies that rehabilitate certain abandoned buildings. The deduction is equal to a portion of the income attributable to the rehabilitated building and may not exceed 50% of the wages paid by the company.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 2648 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 2648

 To amend the Internal Revenue Code of 1986 to encourage employers to 
   hire individuals working in dying industries or occupations made 
            obsolete by technology, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             April 11, 2018

  Mr. Nelson 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 encourage employers to 
   hire individuals working in dying industries or occupations made 
            obsolete by technology, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Economic Modernization Act''.

SEC. 2. ECONOMIC TRANSITION CREDIT.

    (a) In General.--Subpart D of part IV of subchapter A of chapter 1 
of the Internal Revenue Code of 1986, as amended by section 13403(a) of 
Public Law 115-97, is amended by adding at the end the following new 
section:

``SEC. 45T. ECONOMIC TRANSITION CREDIT.

    ``(a) In General.--For purposes of section 38, the amount of the 
economic transition credit determined under this section for the 
taxable year shall be equal to the sum of any applicable payroll taxes 
paid by an employer during the taxable year with respect to employment 
of any qualified employee.
    ``(b) Definitions.--For purposes of this section:
            ``(1) Applicable payroll taxes.--
                    ``(A) In general.--The term `applicable payroll 
                taxes' means, with respect to any employer for any 
                taxable year, the amount of the taxes imposed by--
                            ``(i) section 3111 on wages paid by an 
                        employer with respect to employment of 
                        qualified employee during the applicable 
                        period, and
                            ``(ii) section 3221(a) on compensation paid 
                        by an employer with respect to services 
                        rendered by a qualified employee during the 
                        applicable period.
                    ``(B) Applicable period.--For purposes of 
                subparagraph (A), the term `applicable period' means 
                the 3-year period beginning with the day the qualified 
                employee begins work for the employer.
            ``(2) Declining field.--
                    ``(A) In general.--The term `declining field' means 
                any occupation or field of work which has been 
                determined by the Secretary, in consultation with the 
                Bureau of Labor Statistics of the Department of Labor, 
                to have experienced a decline in the level of average 
                employment in such occupation or field in the United 
                States of not less than 8 percent over the most recent 
                3-year period for which such information is available.
                    ``(B) Determination and publication.--The 
                Secretary, in consultation with the Bureau of Labor 
                Statistics of the Department of Labor, shall annually--
                            ``(i) determine which occupations or fields 
                        of work satisfy the requirements described in 
                        subparagraph (A), and
                            ``(ii) publish and make available on the 
                        website of the Department of the Treasury a 
                        complete list of such occupations and fields of 
                        work.
            ``(3) Qualified employee.--
                    ``(A) In general.--The term `qualified employee' 
                means an individual who--
                            ``(i) is provided wages for employment by 
                        the employer (as such terms are defined in 
                        section 3121), provided that such employment is 
                        not in a declining field,
                            ``(ii) is not a covered employee (as 
                        defined in section 162(m)(3)), and
                            ``(iii) was employed in a declining field 
                        for any period during the 12-month period 
                        preceding the applicable period under paragraph 
                        (1)(B).
                    ``(B) Nonqualifying rehires.--The term `qualifying 
                employee' shall not include any individual who, prior 
                to the beginning of the applicable period under 
                paragraph (1)(B), had been employed by the employer at 
                any time.''.
    (b) Credit Part of General Business Credit.--Section 38(b) of the 
Internal Revenue Code of 1986, as amended by section 13403(b) of Public 
Law 115-97, is amended by striking ``plus'' at the end of paragraph 
(36), by striking the period at the end of paragraph (37) and inserting 
``, plus'', and by adding at the end the following new paragraph:
            ``(38) the economic transition credit determined under 
        section 45T(a).''.
    (c) Clerical Amendment.--The table of sections for subpart D of 
part IV of subchapter A of chapter 1 of the Internal Revenue Code of 
1986 is amended by adding at the end the following new item:

``Sec. 45T. Economic Transition Credit.''.
    (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. ENHANCEMENTS TO CERTAIN EDUCATION TAX BENEFITS FOR 
              PROFESSIONALS IN SHORT SUPPLY.

    (a) In General.--
            (1) Publication.--For each calendar year beginning after 
        the date of the enactment of this Act, the Secretary of the 
        Treasury, in consultation with the Secretary of Labor, shall 
        publish and make available on the website of the Department of 
        the Treasury a list of any occupation or field of work which 
        qualifies as a short supply field for such calendar year.
            (2) Short supply field.--The term ``short supply field'' 
        means an occupation or field of work which the Secretary of the 
        Treasury, in consultation with the Secretary of Labor, has 
        determined--
                    (A) requires--
                            (i) theoretical and practical application 
                        of a body of highly specialized knowledge; and
                            (ii)(I) attainment of a bachelor's or 
                        higher degree in the specific specialty (or its 
                        equivalent); or
                            (II) experience in the specialty equivalent 
                        to the completion of such degree; and
                    (B) has an insufficient number of individuals who 
                are citizens or residents of the United States and are 
                qualified, willing, and able to satisfy the demand for 
                labor in such occupation or field of work.
    (b) Enhancements to Certain Education Tax Benefits.--
            (1) In general.--
                    (A) Educational assistance programs.--Paragraph (2) 
                of section 127(a) of the Internal Revenue Code of 1986 
                is amended by inserting ``(or, in the case of an 
                individual employed in an occupation or field of work 
                which has been designated as a short supply field for 
                such calendar year pursuant to section 3(a) of the 
                Economic Modernization Act, the first $15,000 of such 
                assistance so furnished)'' before the period at the 
                end.
                    (B) Interest on education loans.--Paragraph (1) of 
                section 221(b) of the Internal Revenue Code of 1986 is 
                amended by inserting ``(or, in the case of a individual 
                employed in an occupation or field of work which has 
                been designated, pursuant to section 3(a) of the 
                Economic Modernization Act, as a short supply field for 
                the calendar year in which such taxable year began, 
                shall not exceed $8,000)'' before the period at the 
                end.
                    (C) Qualified tuition and related expenses.--
                Paragraph (1) of section 222(b) of the Internal Revenue 
                Code of 1986 is amended by inserting ``(or, in the case 
                of an individual employed in an occupation or field of 
                work which has been designated, pursuant to section 
                3(a) of the Economic Modernization Act, as a short 
                supply field for the calendar year in which such 
                taxable year began, an amount equal to the applicable 
                dollar limit multiplied by 2)'' before the period at 
                the end.
            (2) Exclusion for certain employer payments of student 
        loans.--
                    (A) In general.--Paragraph (1) of section 127(c) of 
                the Internal Revenue Code of 1986 is amended by 
                striking ``and'' at the end of subparagraph (A), by 
                redesignating subparagraph (B) as subparagraph (C), and 
                by inserting after subparagraph (A) the following new 
                subparagraph:
                    ``(B) in the case of an employee employed in an 
                occupation or field of work which has been designated 
                as a short supply field for a calendar year pursuant to 
                section 3(a) of the Economic Modernization Act, the 
                payment by an employer during such calendar year, 
                whether paid to the employee or to a lender, of 
                principal or interest on any qualified education loan 
                (as defined in section 221(d)(1)) incurred by the 
                employee, and''.
                    (B) Conforming amendment; denial of double 
                benefit.--Paragraph (1) of section 221(e) of the 
                Internal Revenue Code of 1986 is amended by inserting 
                before the period the following: ``, or for which an 
                exclusion is allowable under section 127 to the 
                taxpayer's employer by reason of the payment by such 
                employer of any indebtedness on a qualified education 
                loan of the taxpayer''.
            (3) Effective date.--The amendments made by this subsection 
        shall apply to taxable years beginning after the date of the 
        enactment of this Act.

SEC. 4. DEDUCTION OF QUALIFIED ENTERPRISE INCOME.

    (a) In General.--Part VI of subchapter B of chapter 1 of the 
Internal Revenue Code of 1986 is amended by inserting after section 181 
the following new section:

``SEC. 182. QUALIFIED ENTERPRISE INCOME.

    ``(a) In General.--In the case of a qualified taxpayer, there shall 
be allowed as a deduction an amount equal to any qualified enterprise 
income of such taxpayer.
    ``(b) Limitation.--The amount of the deduction allowed under 
subsection (a) for any taxable year shall not exceed an amount equal to 
50 percent of the W-2 wages paid by the qualified taxpayer during such 
taxable year.
    ``(c) Definitions.--In this section:
            ``(1) Qualified enterprise income.--
                    ``(A) In general.--The term `qualified enterprise 
                income' means the amount equal to the excess (if any) 
                of--
                            ``(i) the gross receipts of the qualified 
                        taxpayer for the taxable year which are 
                        properly allocable to a qualified facility, 
                        over
                            ``(ii) an amount equal to the sum of--
                                    ``(I) the cost of goods sold which 
                                are allocable to such receipts, and
                                    ``(II) any other expenses, losses 
                                or deductions (with the exception of 
                                the deduction allowed under this 
                                section) which are allocable to such 
                                receipts.
                    ``(B) Limitation.--The term `qualified enterprise 
                income' shall apply only to gross receipts described in 
                subparagraph (A) for the 3-taxable-year period 
                beginning after the qualified facility is placed in 
                service.
                    ``(C) Method of allocation.--The Secretary shall 
                prescribe regulations for ensuring proper allocation of 
                amounts under subparagraph (A).
            ``(2) Qualified facility.--
                    ``(A) In general.--The term `qualified facility' 
                means any nonresidential building (and its structural 
                components) which--
                            ``(i) prior to 2000, was placed in service 
                        and used in the active conduct of a trade or 
                        business by a person other than the qualified 
                        taxpayer,
                            ``(ii) after being acquired by the 
                        qualified taxpayer, has been substantially 
                        rehabilitated,
                            ``(iii) during the 2-year period prior to 
                        commencement of rehabilitation by the qualified 
                        taxpayer, was not used in the active conduct of 
                        a trade or business, and
                            ``(iv) is located within a State.
                    ``(B) Substantial rehabilitation.--For purposes of 
                this paragraph, a building shall be deemed to have been 
                substantially rehabilitated only if--
                            ``(i) not less than 50 percent of the 
                        existing external walls of such building are 
                        retained in place as external walls,
                            ``(ii) not less than 75 percent of the 
                        existing internal structural framework of such 
                        building is retained in place, and
                            ``(iii) the amount properly chargeable to 
                        the capital account for any addition to or 
                        improvement of the building is in excess of an 
                        amount equal to the greater of--
                                    ``(I) the adjusted basis of such 
                                building (and its structural 
                                components), or
                                    ``(II) $20,000.
            ``(3) Qualified taxpayer.--The term `qualified taxpayer' 
        means the person that owns the qualified facility and directly 
        incurs not less than 50 percent of the expenses for 
        substantially rehabilitating such facility (under rules similar 
        to the rules applicable to self-rehabilitated buildings under 
        section 47(d)(4)).
            ``(4) State.--The term `State' means any State of the 
        United States or the District of Columbia or any Territory or 
        possession of the United States.
            ``(5) W-2 wages.--
                    ``(A) In general.--The term `W-2 wages' means, with 
                respect to any person for any taxable year of such 
                person, the amounts described in paragraphs (3) and (8) 
                of section 6051(a) paid by such person with respect to 
                employment of employees by such person during the 
                calendar year ending during such taxable year.
                    ``(B) Limitation to wages attributable to qualified 
                enterprise income.--Such term shall not include any 
                amount which is not properly allocable to qualified 
                enterprise income for purposes of subsection (c)(1).
                    ``(C) Return requirement.--Such term shall not 
                include any amount which is not properly included in a 
                return filed with the Social Security Administration on 
                or before the 60th day after the due date (including 
                extensions) for such return.''.
    (b) Clerical Amendment.--The table of sections for part VI of 
subchapter B of chapter 1 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new item:

``Sec. 182. Qualified Enterprise Income.''.
    (c) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
                                 <all>