[Congressional Record Volume 161, Number 87 (Tuesday, June 2, 2015)]
[Senate]
[Pages S3459-S3461]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. DURBIN (for himself, Mr. Brown, Mr. Reed, Ms. Warren, Mr. 
        Sanders, and Ms. Baldwin):
  S. 1486. A bill to amend the Internal Revenue Code of 1986 to provide 
a tax credit to Patriot employers, and for other purposes; to the 
Committee on Finance.
  Mr. DURBIN. Mr. President, I ask unanimous consent that the text of 
the bill be printed in the Record.
  There being no objection, the text of the bill was ordered to be 
printed in the Record, as follows:

                                S. 1486

       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 ``Patriot Employer Tax Credit 
     Act''.

     SEC. 2. PATRIOT EMPLOYER TAX CREDIT.

       (a) In General.--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 section:

     ``SEC. 45S. PATRIOT EMPLOYER TAX CREDIT.

       ``(a) Determination of Amount.--

[[Page S3460]]

       ``(1) In general.--For purposes of section 38, the Patriot 
     employer credit determined under this section with respect to 
     any taxpayer who is a Patriot employer for any taxable year 
     shall be equal to 10 percent of the qualified wages paid or 
     incurred by the Patriot employer.
       ``(2) Limitation.--The amount of qualified wages which may 
     be taken into account under paragraph (1) with respect to any 
     employee for any taxable year shall not exceed $15,000.
       ``(b) Patriot Employer.--
       ``(1) In general.--For purposes of subsection (a), the term 
     `Patriot employer' means, with respect to any taxable year, 
     any taxpayer--
       ``(A) which--
       ``(i) maintains its headquarters in the United States if 
     the taxpayer (or any predecessor) has ever been headquartered 
     in the United States, and
       ``(ii) is not (and no predecessor of which is) an 
     expatriated entity (as defined in section 7874(a)(2)) for the 
     taxable year or any preceding taxable year ending after March 
     4, 2003,
       ``(B) with respect to which no assessable payment has been 
     imposed under section 4980H with respect to any month 
     occurring during the taxable year, and
       ``(C) in the case of--
       ``(i) a taxpayer which employs an average of more than 50 
     employees on business days during the taxable year, which--

       ``(I) provides compensation for at least 90 percent of its 
     employees for services provided by such employees during the 
     taxable year at an hourly rate (or equivalent thereof) not 
     less than an amount equal to 156 percent of the Federal 
     poverty level for a family of three for the calendar year in 
     which the taxable year begins divided by 2,080,
       ``(II) meets the retirement plan requirements of subsection 
     (c) with respect to at least 90 percent of its employees 
     providing services during the taxable year who are not highly 
     compensated employees, and
       ``(III) meets the additional requirements of subparagraphs 
     (A) and (B) of paragraph (2), or

       ``(ii) any other taxpayer, which meets the requirements of 
     either subclause (I) or (II) of clause (i) for the taxable 
     year.
       ``(2) Additional requirements for large employers.--
       ``(A) United states employment.--The requirements of this 
     subparagraph are met for any taxable year if--
       ``(i) in any case in which the taxpayer increases the 
     number of employees performing substantially all of their 
     services for the taxable year outside the United States, the 
     taxpayer either--

       ``(I) increases the number of employees performing 
     substantially all of their services inside the United States 
     by an amount not less than the increase in such number for 
     employees outside the United States, or
       ``(II) has a percentage increase in such employees inside 
     the United States which is not less than the percentage 
     increase in such employees outside the United States,

       ``(ii) in any case in which the taxpayer decreases the 
     number of employees performing substantially all of their 
     services for the taxable year inside the United States, the 
     taxpayer either--

       ``(I) decreases the number of employees performing 
     substantially all of their services outside the United States 
     by an amount not less than the decrease in such number for 
     employees inside the United States, or
       ``(II) has a percentage decrease in employees outside the 
     United States which is not less than the percentage decrease 
     in such employees inside the United States, and

       ``(iii) there is not a decrease in the number of employees 
     performing substantially all of their services for the 
     taxable year inside the United States by reason of the 
     taxpayer contracting out such services to persons who are not 
     employees of the taxpayer.
       ``(B) Treatment of individuals in the uniformed services 
     and the disabled.--The requirements of this subparagraph are 
     met for any taxable year if--
       ``(i) the taxpayer provides differential wage payments (as 
     defined in section 3401(h)(2)) to each employee described in 
     section 3401(h)(2)(A) for any period during the taxable year 
     in an amount not less than the difference between the wages 
     which would have been received from the employer during such 
     period and the amount of pay and allowances which the 
     employee receives for service in the uniformed services 
     during such period, and
       ``(ii) the taxpayer has in place at all times during the 
     taxable year a written policy for the recruitment of 
     employees who have served in the uniformed services or who 
     are disabled.
       ``(3) Special rules for applying the minimum wage and 
     retirement plan requirements.--
       ``(A) Minimum wage.--In determining whether the minimum 
     wage requirements of paragraph (1)(C)(i)(I) are met with 
     respect to 90 percent of a taxpayer's employees for any 
     taxable year--
       ``(i) a taxpayer may elect to exclude from such 
     determination apprentices or learners that an employer may 
     exclude under the regulations under section 14(a) of the Fair 
     Labor Standards Act of 1938, and
       ``(ii) if a taxpayer meets the requirements of paragraph 
     (2)(B)(i) with respect to providing differential wage 
     payments to any employee for any period (without regard to 
     whether such requirements apply to the taxpayer), the hourly 
     rate (or equivalent thereof) for such payments shall be 
     determined on the basis of the wages which would have been 
     paid by the employer during such period if the employee had 
     not been providing service in the uniformed services.
       ``(B) Retirement plan.--In determining whether the 
     retirement plan requirements of paragraph (1)(C)(i)(II) are 
     met with respect to 90 percent of a taxpayer's employees for 
     any taxable year, a taxpayer may elect to exclude from such 
     determination--
       ``(i) employees not meeting the age or service requirements 
     under section 410(a)(1) (or such lower age or service 
     requirements as the employer provides), and
       ``(ii) employees described in section 410(b)(3).
       ``(c) Retirement Plan Requirements.--
       ``(1) In general.--The requirements of this subsection are 
     met for any taxable year with respect to an employee of the 
     taxpayer who is not a highly compensated employee if the 
     employee is eligible to participate in 1 or more applicable 
     eligible retirement plans maintained by the employer for a 
     plan year ending with or within the taxable year.
       ``(2) Applicable eligible retirement plan.--For purposes of 
     this subsection, the term `applicable eligible retirement 
     plan' means an eligible retirement plan which, with respect 
     to the plan year described in paragraph (1), is either--
       ``(A) a defined contribution plan which--
       ``(i) requires the employer to make nonelective 
     contributions of at least 5 percent of the compensation of 
     the employee, or
       ``(ii) both--

       ``(I) includes an eligible automatic contribution 
     arrangement (as defined in section 414(w)(3)) under which the 
     uniform percentage described in section 414(w)(3)(B) is at 
     least 5 percent, and
       ``(II) requires the employer to make matching contributions 
     of 100 percent of the elective deferrals (as defined in 
     section 414(u)(2)(C)) of the employee to the extent such 
     deferrals do not exceed the percentage specified by the plan 
     (not less than 5 percent) of the employee's compensation, or

       ``(B) a defined benefit plan--
       ``(i) with respect to which the accrued benefit of the 
     employee derived from employer contributions, when expressed 
     as an annual retirement benefit, is not less than the product 
     of--

       ``(I) the lesser of 2 percent multiplied by the employee's 
     years of service (determined under the rules of paragraphs 
     (4), (5), and (6) of section 411(a)) with the employer or 20 
     percent, multiplied by
       ``(II) the employee's final average pay, or

       ``(ii) which is an applicable defined benefit plan (as 
     defined in section 411(a)(13)(B))--

       ``(I) which meets the interest credit requirements of 
     section 411(b)(5)(B)(i) with respect to the plan year, and
       ``(II) under which the employee receives a pay credit for 
     the plan year which is not less than 5 percent of 
     compensation.

       ``(3) Definitions and special rules.--For purposes of this 
     subsection--
       ``(A) Eligible retirement plan.--The term `eligible 
     retirement plan' has the meaning given such term by section 
     402(c)(8)(B), except that in the case of an account or 
     annuity described in clause (i) or (ii) thereof, such term 
     shall only include an account or annuity which is a 
     simplified employee pension (as defined in section 408(k)).
       ``(B) Final average pay.--For purposes of paragraph 
     (2)(B)(i)(II), final average pay shall be determined using 
     the period of consecutive years (not exceeding 5) during 
     which the employee had the greatest compensation from the 
     taxpayer.
       ``(C) Alternative plan designs.--The Secretary may 
     prescribe regulations for a taxpayer to meet the requirements 
     of this subsection through a combination of defined 
     contribution plans or defined benefit plans described in 
     paragraph (1) or through a combination of both such types of 
     plans.
       ``(D) Plans must meet requirements without taking into 
     account social security and similar contributions and 
     benefits.--A rule similar to the rule of section 416(e) shall 
     apply.
       ``(d) Qualified Wages and Compensation.--For purposes of 
     this section--
       ``(1) In general.--The term `qualified wages' means wages 
     (as defined in section 51(c), determined without regard to 
     paragraph (4) thereof) paid or incurred by the Patriot 
     employer during the taxable year to employees--
       ``(A) who perform substantially all of their services for 
     such Patriot employer inside the United States, and
       ``(B) with respect to whom--
       ``(i) in the case of a Patriot employer which employs an 
     average of more than 50 employees on business days during the 
     taxable year, the requirements of subclauses (I) and (II) of 
     subsection (b)(1)(C)(i) are met, and
       ``(ii) in the case of any other Patriot employer, the 
     requirements of either subclause (I) or (II) of subsection 
     (b)(1)(C)(i) are met.
       ``(2) Special rules for agricultural labor and railway 
     labor.--Rules similar to the rules of section 51(h) shall 
     apply.
       ``(3) Compensation.--For purposes of subsections 
     (b)(1)(C)(i)(I) and (c), the term `compensation' has the same 
     meaning as qualified wages, except that section 51(c)(2) 
     shall be disregarded in determining the amount of such wages.
       ``(e) Aggregation Rules.--For purposes of this section--
       ``(1) In general.--All persons treated as a single employer 
     under subsection (a) or (b) of

[[Page S3461]]

     section 52 shall be treated as a single taxpayer.
       ``(2) Special rules for certain requirements.--For purposes 
     of applying paragraphs (1)(A) and (2)(A) of subsection (b)--
       ``(A) the determination under subsections (a) and (b) of 
     section 52 for purposes of paragraph (1) shall be made 
     without regard to section 1563(b)(2)(C) (relating to 
     exclusion of foreign corporations), and
       ``(B) if any person treated as a single taxpayer under this 
     subsection (after application of subparagraph (A)), or any 
     predecessor of such person, was an expatriated entity (as 
     defined in section 7874(a)(2)) for any taxable year ending 
     after March 4, 2003, then all persons treated as a single 
     taxpayer with such person shall be treated as expatriated 
     entities.
       ``(f) Election To Have Credit Not Apply.--
       ``(1) In general.--A taxpayer may elect to have this 
     section not apply for any taxable year.
       ``(2) Time for making election.--An election under 
     paragraph (1) for any taxable year may be made (or revoked) 
     at any time before the expiration of the 3-year period 
     beginning on the last date prescribed by law for filing the 
     return for such taxable year (determined without regard to 
     extensions).
       ``(3) Manner of making election.--An election under 
     paragraph (1) (or revocation thereof) shall be made in such 
     manner as the Secretary may by regulations prescribe.''.
       (b) Allowance as General Business Credit.--Section 38(b) of 
     the Internal Revenue Code of 1986 is amended by striking 
     ``plus'' at the end of paragraph (35), by striking the period 
     at the end of paragraph (36) and inserting ``, plus'', and by 
     adding at the end the following:
       ``(37) in the case of a Patriot employer (as defined in 
     section 45S(b)) for any taxable year, the Patriot employer 
     credit determined under section 45S(a).''.
       (c) Denial of Double Benefit.--Subsection (a) of section 
     280C of the Internal Revenue Code of 1986 is amended by 
     inserting ``45S(a),'' after ``45P(a)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2015.

     SEC. 3. DEFER DEDUCTION OF INTEREST EXPENSE RELATED TO 
                   DEFERRED INCOME.

       (a) In General.--Section 163 of the Internal Revenue Code 
     of 1986 (relating to deductions for interest expense) is 
     amended by redesignating subsection (n) as subsection (o) and 
     by inserting after subsection (m) the following new 
     subsection:
       ``(n) Deferral of Deduction for Interest Expense Related to 
     Deferred Income.--
       ``(1) General rule.--The amount of foreign-related interest 
     expense of any taxpayer allowed as a deduction under this 
     chapter for any taxable year shall not exceed an amount equal 
     to the applicable percentage of the sum of--
       ``(A) the taxpayer's foreign-related interest expense for 
     the taxable year, plus
       ``(B) the taxpayer's deferred foreign-related interest 
     expense.

     For purposes of the paragraph, the applicable percentage is 
     the percentage equal to the current inclusion ratio.
       ``(2) Treatment of deferred deductions.--If, for any 
     taxable year, the amount of the limitation determined under 
     paragraph (1) exceeds the taxpayer's foreign-related interest 
     expense for the taxable year, there shall be allowed as a 
     deduction for the taxable year an amount equal to the lesser 
     of--
       ``(A) such excess, or
       ``(B) the taxpayer's deferred foreign-related interest 
     expense.
       ``(3) Definitions and special rule.--For purposes of this 
     subsection--
       ``(A) Foreign-related interest expense.--The term `foreign-
     related interest expense' means, with respect to any taxpayer 
     for any taxable year, the amount which bears the same ratio 
     to the amount of interest expense for such taxable year 
     allocated and apportioned under sections 861, 864(e), and 
     864(f) to income from sources outside the United States as--
       ``(i) the value of all stock held by the taxpayer in all 
     section 902 corporations with respect to which the taxpayer 
     meets the ownership requirements of subsection (a) or (b) of 
     section 902, bears to
       ``(ii) the value of all assets of the taxpayer which 
     generate gross income from sources outside the United States.
       ``(B) Deferred foreign-related interest expense.--The term 
     `deferred foreign-related interest expense' means the excess, 
     if any, of the aggregate foreign-related interest expense for 
     all prior taxable years beginning after December 31, 2015, 
     over the aggregate amount allowed as a deduction under 
     paragraphs (1) and (2) for all such prior taxable years.
       ``(C) Value of assets.--Except as otherwise provided by the 
     Secretary, for purposes of subparagraph (A)(ii), the value of 
     any asset shall be the amount with respect to such asset 
     determined for purposes of allocating and apportioning 
     interest expense under sections 861, 864(e), and 864(f).
       ``(D) Current inclusion ratio.--The term `current inclusion 
     ratio' means, with respect to any domestic corporation which 
     meets the ownership requirements of subsection (a) or (b) of 
     section 902 with respect to one or more section 902 
     corporations for any taxable year, the ratio (expressed as a 
     percentage) of--
       ``(i) the sum of all dividends received by the domestic 
     corporation from all such section 902 corporations during the 
     taxable year plus amounts includible in gross income under 
     section 951(a) from all such section 902 corporations, in 
     each case computed without regard to section 78, divided by
       ``(ii) the aggregate amount of post-1986 undistributed 
     earnings.
       ``(E) Aggregate amount of post-1986 undistributed 
     earnings.--The term `aggregate amount of post-1986 
     undistributed earnings' means, with respect to any domestic 
     corporation which meets the ownership requirements of 
     subsection (a) or (b) of section 902 with respect to one or 
     more section 902 corporations, the domestic corporation's pro 
     rata share of the post-1986 undistributed earnings (as 
     defined in section 902(c)(1)) of all such section 902 
     corporations.
       ``(F) Foreign currency conversion.--For purposes of 
     determining the current inclusion ratio, and except as 
     otherwise provided by the Secretary, the aggregate amount of 
     post-1986 undistributed earnings for the taxable year shall 
     be determined by translating each section 902 corporation's 
     post-1986 undistributed earnings into dollars using the 
     average exchange rate for such year.
       ``(G) Section 902 corporation.--The term `section 902 
     corporation' has the meaning given to such term by section 
     909(d)(5).
       ``(4) Treatment of affiliated groups.--The current 
     inclusion ratio of each member of an affiliated group (as 
     defined in section 864(e)(5)(A)) shall be determined as if 
     all members of such group were a single corporation.
       ``(5) Application to separate categories of income.--This 
     subsection shall be applied separately with respect to the 
     categories of income specified in section 904(d)(1).
       ``(6) Regulations.--The Secretary may prescribe such 
     regulations or other guidance as is necessary or appropriate 
     to carry out the purposes of this subsection, including 
     regulations or other guidance providing--
       ``(A) for the proper application of this subsection with 
     respect to changes in ownership of a section 902 corporation,
       ``(B) that certain corporations that otherwise would not be 
     members of the affiliated group will be treated as members of 
     the affiliated group for purposes of this subsection,
       ``(C) for the proper application of this subsection with 
     respect to the taxpayer's share of a deficit in earnings and 
     profits of a section 902 corporation,
       ``(D) for appropriate adjustments to the determination of 
     the value of stock in any section 902 corporation for 
     purposes of this subsection or to the foreign-related 
     interest expense to account for income that is subject to tax 
     under section 882(a)(1), and
       ``(E) for the proper application of this subsection with 
     respect to interest expense that is directly allocable to 
     income with respect to certain assets.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to taxable years beginning after December 31, 
     2015.

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