[Congressional Bills 109th Congress]
[From the U.S. Government Publishing Office]
[S. 3745 Introduced in Senate (IS)]








109th CONGRESS
  2d Session
                                S. 3745

 To amend the Internal Revenue Code of 1986 to allow a tax credit for 
 certain employer-provided retiree health care coverage, and for other 
                               purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                July 27 (legislative day, July 26), 2006

Ms. Stabenow (for herself and Mr. Levin) 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 a tax credit for 
 certain employer-provided retiree health care coverage, 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. CREDIT FOR CERTAIN EMPLOYER-PROVIDED RETIREE HEALTH CARE 
              COVERAGE.

    (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:

``SEC. 45N. EMPLOYER-PROVIDED RETIREE HEALTH CARE COVERAGE.

    ``(a) General Rule.--For purposes of section 38, in the case of an 
eligible employer, the retiree health care coverage credit determined 
under this section for the taxable year is an amount equal to 10 
percent of qualified retiree health care expenses paid or incurred by 
the taxpayer during such taxable year in connection with the provision 
of qualified retiree health care coverage.
    ``(b) Eligible Employer.--For purposes of this section, the term 
`eligible employer' means for a taxable year any employer--
            ``(1) which is eligible for the deduction under section 199 
        for such taxable year, or
            ``(2) at least 50 percent of the gross receipts of which 
        derived from activities within the United States for such 
        taxable year are domestic production gross receipts (as defined 
        in section 199(c)(4)).
    ``(c) Qualified Retiree Health Care Expenses.--For purposes of this 
section, the term `qualified retiree health care expenses' means any 
amount paid or incurred by an eligible employer for qualified retiree 
health care coverage to the extent such amount is attributable to 
coverage provided to any employee and such employee's spouse and 
dependents while such employee is a qualified employee.
    ``(d) Qualified Employee.--For purposes of this section--
            ``(1) In general.--The term `qualified employee' means any 
        retired employee of an employer who, with respect to any 
        period--
                    ``(A) has attained 55 but not 66 years of age, and
                    ``(B) is not provided health insurance coverage 
                under title XVIII of the Social Security Act.
            ``(2) Employee.--The term `employee' does not include an 
        employee within the meaning of section 401(c)(1).
    ``(e) Qualified Retiree Health Care Coverage.--For purposes of this 
section, the term `qualified retiree health care coverage' means health 
care coverage, through the purchase of insurance or otherwise, the 
value of which meets or exceeds on an actuarial basis the value of any 
service benefit plan (standard option with preferred provider 
organization) offered under chapter 89 of title 5, United States Code.
    ``(f) Certain Rules Made Applicable.--For purposes of this section, 
rules similar to the rules of section 52 shall apply.
    ``(g) Denial of Double Benefits.--
            ``(1) Other credits.--No credit under any other provision 
        of this chapter shall be allowed with respect to qualified 
        retiree health care expenses taken into account under 
        subsection (a).
            ``(2) Deduction.--The amount of any deduction allowable 
        under this chapter with respect to any qualified retiree health 
        care expenses paid or incurred during the taxable year shall be 
        reduced by the amount of the credit allowed under subsection 
        (a) with respect to such expenses for such taxable year.
    ``(h) Election.--This section shall apply to any taxpayer for any 
taxable year only if such taxpayer elects (at such time and in such 
manner as the Secretary may by regulations prescribe) to have this 
section apply for such taxable year.
    ``(i) Termination.--This section shall not apply to premiums paid 
or incurred after December 31, 2009.''.
    (b) Credit To Be Part of General Business Credit.--Section 38(b) of 
the Internal Revenue Code of 1986 (relating to current year business 
credit) is amended by striking ``and'' at the end of paragraph (29), by 
striking the period at the end of paragraph (30) and inserting ``, 
plus'', and by adding at the end the following:
            ``(31) the retiree health care coverage credit determined 
        under section 45N.''.
    (c) Credit Allowed Against the Alternative Minimum Tax.--Section 
38(c)(4)(B) of the Internal Revenue Code of 1986 (defining specified 
credits) is amended by striking the period at the end of clause 
(ii)(II) and inserting ``, and'', and by adding at the end the 
following new clause:
                            ``(iii) the credit determined under section 
                        45N.''.
    (d) 10-Year Carryback and Unlimited Carryforward of Credit.--
Subsection (a) of section 39 of the Internal Revenue Code of 1986 is 
amended by adding at the end the following new paragraph:
            ``(4) 10-year carryback and unlimited carryforward for 
        premiums credit.--In the case of the retiree health care 
        coverage credit under section 45N--
                    ``(A) this section shall be applied separately from 
                the business credit (other than such retiree health 
                care coverage credit),
                    ``(B) paragraph (1) shall be applied by 
                substituting `10 taxable years' for `1 taxable years' 
                in subparagraph (A) thereof and by striking `20' in 
                subparagraph (B) thereof, and
                    ``(C) paragraph (2) shall be applied by striking 
                `21' in subparagraph (A) thereof and by striking `20' 
                in subparagraph (B) thereof.''.
    (e) Conforming Amendments.--
            (1) Section 6501(m) of the Internal Revenue Code of 1986 is 
        amended by inserting ``45N(h),'' after ``45C(d)(4),''.
            (2) 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:

``Sec. 45N. Employer-provided retiree health care insurance 
                            premiums.''.
    (f) Effective Date.--The amendments made by this section shall 
apply to amounts paid or incurred in taxable years beginning after the 
date of the enactment of this Act.
                                 <all>