[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 223 Introduced in Senate (IS)]
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116th CONGRESS
1st Session
S. 223
To amend the Internal Revenue Code of 1986 to provide a tax credit to
Patriot employers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
January 24, 2019
Mr. Durbin (for himself and Mr. Brown) 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 provide a tax credit to
Patriot employers, 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 ``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. 45T. PATRIOT EMPLOYER TAX CREDIT.
``(a) Determination of Amount.--
``(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,
``(C) provides employees with--
``(i) paid sick leave, or
``(ii) paid family and medical leave, and
``(D) 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 218 percent of
the Federal poverty level for an
individual for the calendar year in
which the taxable year begins divided
by 1,750,
``(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)(D)(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)(D)(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)(C))--
``(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)(D)(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)(D)(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)(D)(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 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 (31), by striking the period at the end of paragraph
(32) and inserting ``, plus'', and by adding at the end the following:
``(33) in the case of a Patriot employer (as defined in
section 45T(b)) for any taxable year, the Patriot employer
credit determined under section 45T(a).''.
(c) Denial of Double Benefit.--Subsection (a) of section 280C of
the Internal Revenue Code of 1986 is amended by inserting ``45T(a),''
after ``45S(a)''.
(d) Effective Date.--The amendments made by this section shall
apply to taxable years beginning after December 31, 2019.
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