[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 272 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 272

To amend the Internal Revenue Code of 1986 to allow defense contractors 
 a credit against income tax for 20 percent of the defense conversion 
   employee retraining expenses paid or incurred by the contractors.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                            February 5, 1997

   Ms. Snowe 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 allow defense contractors 
 a credit against income tax for 20 percent of the defense conversion 
   employee retraining expenses paid or incurred by the contractors.

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

SECTION 1. DEFENSE CONVERSION EMPLOYEE RETRAINING CREDIT.

    (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. 45C. DEFENSE CONVERSION EMPLOYEE RETRAINING EXPENSES.

    ``(a) General Rule.--For purposes of section 38, in the case of a 
defense contractor, the defense conversion employee retraining credit 
determined under this section in an amount equal to 20 percent of the 
defense conversion employee retraining expenses paid or incurred by the 
taxpayer during the taxable year.
    ``(b) Limitation.--The amount of defense conversion employee 
retraining expenses with respect to an employee which may be taken into 
account under subsection (a) for the taxable year shall not exceed 
$____________.
    ``(c) Defense Conversion Employee Retraining Expenses.--For 
purposes of this section--
            ``(1) In General.--The term `defense conversion employee 
        retraining expenses' includes all amounts paid or incurred with 
        respect to educational or training programs in which a 
        qualified conversion employee participates to learn or improve 
        skills necessary or useful to such employee's employment in the 
        defense contractor's nondefense-related business.
            ``(2) Defense contractor.--The term `defense contractor' 
        means any taxpayer if not less than 80 percent of its gross 
        receipts for the taxable year is derived from defense-related 
        business.
            ``(3) Qualified conversion employee.--The term `qualified 
        conversion employee' means an employee of a defense contractor 
        who had been employed by the defense contractor or another 
        defense contractor in a defense-related business and who is 
        employed by the defense contractor in a nondefense-related 
        business during the taxable year.
            ``(4) Defense-related business.--The term `defense-related 
        business' means an activity to provide material or defense-
        related operations pursuant to a contract or subcontract 
        entered into (whether or not by the taxpayer) with a defense 
        agency of the United States.
            ``(5) Nondefense-related business.--The term `nondefense-
        related business' means any activity which is not a defense-
        related business.
    ``(d) Denial of Double Benefit.--No deduction shall be allowed 
under this chapter for any amount taken into account in determining the 
credit under this section.''
    (b) Credit To Be Part of General Business Credit.--Subsection (b) 
of section 38 of the Internal Revenue Code of 1986 (relating to general 
business credit) is amended by striking ``plus'' at the end of 
paragraph (10), by striking the period at the end of paragraph (11) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(12) in the case of a defense contractor, the defense 
        conversion employee retraining credit determined under section 
        45C.''
    (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. 45C. Defense conversion employee 
                                        retraining expenses.''
    (d) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred after the date of the enactment of 
this Act in taxable years ending after such date.
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