[Congressional Bills 105th Congress]
[From the U.S. Government Publishing Office]
[S. 978 Introduced in Senate (IS)]







105th CONGRESS
  1st Session
                                 S. 978

To amend the Internal Revenue Code of 1986 to allow employers a credit 
 for a portion of the expenses of providing dependent care services to 
                   employees, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             June 27, 1997

  Mr. Specter 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 employers a credit 
 for a portion of the expenses of providing dependent care services to 
                   employees, 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 ``Affordable Child Care Act''.

SEC. 2. PURPOSE.

    The purpose of this Act is to reduce costs to employees for 
employer-provided on-site dependent care services by providing 
employers with a credit against income tax for a portion of the costs 
incurred by employers in providing those services.

SEC. 3. CREDIT FOR EMPLOYER EXPENSES IN PROVIDING CERTAIN DEPENDENT 
              CARE SERVICES.

    (a) General Rule.--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. 45D. EMPLOYER EXPENSES IN PROVIDING DEPENDENT CARE SERVICES.

    ``(a) General Rule.--For purposes of section 38, the employer day 
care center credit determined under this section for the taxable year 
is the amount determined under subsection (b) with respect to each 
qualified day care center of the taxpayer.
    ``(b) Credit Per Facility.--For purposes of this section--
            ``(1) In general.--The amount determined under this 
        subsection for any taxable year with respect to any qualified 
        day care facility of the taxpayer is 50 percent of the excess 
        (if any) of--
                    ``(A) the expenses paid or incurred by the taxpayer 
                during the taxable year in providing dependent care 
                services at such facility for employees, over
                    ``(B) the aggregate amount received or accrued 
                during the taxable year by the employer for such 
                services.
            ``(2) Depreciation allowances.--For purposes of paragraph 
        (1), depreciation allowances under section 167 shall be treated 
        as expenses.
    ``(c) Qualified Day Care Center.--For purposes of this section, the 
term `qualified day care center' means any day care center--
            ``(1) which is operated by or for the taxpayer exclusively 
        for purposes of providing affordable dependent care services to 
        a fair cross section of such taxpayer's employees,
            ``(2) which is located on the business premises of the 
        taxpayer or on a site adjacent to such premises, and
            ``(3) which complies with all applicable laws and 
        regulations of a State or unit of local government.
In the case of a day care center operated jointly by a group of 
employers, the requirement of paragraph (1) shall not fail to be 
treated as met if such requirement is met with respect to each employer 
in such group.
    ``(d) Credit Must Reduce Employee Costs.--No credit shall be 
allowed under this section with respect to any qualified day care 
center of the taxpayer for any taxable year unless the taxpayer 
certifies to the Secretary for such year that the amount of such credit 
is passed on to employees using such center in the form of reduced 
costs.''
    (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 (11), by striking the period at the end of paragraph (12) and 
inserting ``, plus'', and by adding at the end the following new 
paragraph:
            ``(13) the employer day care center credit determined under 
        section 45D(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 Employer Day Care Center Expenses.--No deduction 
shall be allowed for that portion of the expenses referred to in 
section 45D(b)(1)(A) otherwise allowable as a deduction for the taxable 
year which is equal to the amount of the credit determined for such 
taxable year under section 45D(a).''
    (d) Conforming 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. 45D. Employer expenses in 
                                        providing dependent care 
                                        services.''
    (e) 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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