To amend the Internal Revenue Code of 1986 to allow small business employers a credit against income tax for certain expenses for long-term training of employees in highly skilled small business trades.

September 17, 2003

Mr. ALLARD introduced the following bill; which was read twice and referred to the Committee on Finance

To amend the Internal Revenue Code of 1986 to allow small business employers a credit against income tax for certain expenses for long-term training of employees in highly skilled small business trades.

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 `Apprenticeship, Training, and Employment Act of 2003'.

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 subchapter 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. 45G. EXPENSES FOR LONG-TERM TRAINING OF EMPLOYEES IN HIGHLY SKILLED SMALL BUSINESS 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 $10,000 for each employee (not to exceed 3 employees) 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 business employer' means, with respect to any taxable year, any employer who qualifies during such taxable year as a specialty trade contractor under subsector 238 of sector 23 contained in the table under section 121.201 of title 13, Code of Federal Regulations, as in effect on the date of the enactment of this section.

`(B) CONTROLLED GROUPS- For purposes of subparagraph (A), all persons treated as a single employer under subsection (b), (c), (m), or (o) of section 414 shall be treated as a single employer.

`(2) QUALIFIED TRAINING YEAR-

`(A) IN GENERAL- The term `qualified training year' means each year during the training period in which the employee received at least 1,500 hours of training (including on-the-job training and training at multi-employer training facilities) from the taxpayer (or any predecessor) under a qualified training program as an apprentice in any highly skilled trade.

`(B) HIGHLY SKILLED TRADES- For purposes of subparagraph (A), the term `highly skilled trades' means any specialty trade specified under subsector 238 of sector 23 contained in the table under section 121.201 of title 13, Code of Federal Regulations, as in effect on the date of the enactment of this section. Such term shall not include any trade if the customary apprenticeship period for such trade is less than 2 years.

`(C) QUALIFIED TRAINING PROGRAM-

`(i) IN GENERAL- The term `qualified training program' means a written plan of study and training for individuals in, or entering into, highly skilled trades.

`(ii) DESCRIPTION OF PROGRAMS- A plan under clause (i) must be a program which meets the requirements of clause (iii) and is either--

`(I) an apprenticeship program registered and certified with the Secretary of Labor under section 1 of the National Apprenticeship Act (29 U.S.C. 50), or

`(II) a program licensed, registered, or certified by the workforce investment board or apprenticeship agency or council of a State or administered in compliance with apprenticeship laws of a State.

`(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 modern developments in such trade,

`(III) provides related instruction 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 trade specific safety and health training,

`(VII) provides on-the-job training which allows performance of work under close supervision of an instructor or skilled worker, and

`(VIII) provides periodic review and evaluation of participants to demonstrate proficiency in skills, including the use of tests and assessment of individual 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 employee 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 2 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 (14), by striking the period at the end of paragraph (15) and inserting `, plus', and by adding at the end the following new paragraph:

`(16) in the case of a small business employer (as defined in section 45G(b)), the highly skilled trades training credit determined under section 45G(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 EMPLOYEES 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 45G(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 following new item:

`Sec. 45G. 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.

END