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S. 2648 - Economic Modernization Act

Sponsor: Bill Nelson (D)
Introduced: 2018-04-11
Bill Status: Read twice and referred to the Committee on Finance.
 
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Full Text


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.


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