H.R.1706 - Child Care Infrastructure Act of 1997105th Congress (1997-1998)
|Sponsor:||Rep. Maloney, Carolyn B. [D-NY-14] (Introduced 05/22/1997)|
|Committees:||House - Ways and Means|
|Latest Action:||House - 05/22/1997 Referred to the House Committee on Ways and Means. (All Actions)|
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Text: H.R.1706 — 105th Congress (1997-1998)All Information (Except Text)
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Introduced in House (05/22/1997)
[Congressional Bills 105th Congress] [From the U.S. Government Printing Office] [H.R. 1706 Introduced in House (IH)] 105th CONGRESS 1st Session H. R. 1706 To amend the Internal Revenue Code of 1986 to provide a credit against tax for employers who provide child care assistance for dependents of their employees, and for other purposes. _______________________________________________________________________ IN THE HOUSE OF REPRESENTATIVES May 22, 1997 Mrs. Maloney of New York (for herself and Ms. Ros-Lehtinen) introduced the following bill; which was referred to the Committee on Ways and Means _______________________________________________________________________ A BILL To amend the Internal Revenue Code of 1986 to provide a credit against tax for employers who provide child care assistance for dependents of their 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 ``Child Care Infrastructure Act of 1997''. SEC. 2. ALLOWANCE OF CREDIT FOR EMPLOYER EXPENSES FOR CHILD CARE ASSISTANCE. (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. 45D. EMPLOYER-PROVIDED CHILD CARE CREDIT. ``(a) In General.--For purposes of section 38, the employer- provided child care credit determined under this section for the taxable year is an amount equal to 50 percent of the qualified child care expenditures of the taxpayer for such taxable year. ``(b) Dollar Limitation.--The credit allowable under subsection (a) for any taxable year shall not exceed $150,000. ``(c) Definitions.--For purposes of this section-- ``(1) Qualified child care expenditure.--The term `qualified child care expenditure' means any amount paid or incurred-- ``(A) to acquire, construct, rehabilitate, or expand property-- ``(i) which is to be used as part of a qualified child care facility of the taxpayer, ``(ii) with respect to which a deduction for depreciation (or amortization in lieu of depreciation) is allowable, and ``(iii) which does not constitute part of the principal residence (within the meaning of section 1034) of the taxpayer or any employee of the taxpayer, ``(B) for the operating costs of a qualified child care facility of the taxpayer, including costs related to the training of employees, to scholarship programs, and to the providing of increased compensation to employees with higher levels of child care training, ``(C) under a contract with a qualified child care facility to provide child care services to employees of the taxpayer, or ``(D) under a contract to provide child care resource and referral services to employees of the taxpayer. ``(2) Qualified child care facility.-- ``(A) In general.--The term `qualified child care facility' means a facility-- ``(i) the principal use of which is to provide child care assistance, and ``(ii) which meets the requirements of all applicable laws and regulations of the State or local government in which it is located, including, but not limited to, the licensing of the facility as a child care facility. Clause (i) shall not apply to a facility which is the principal residence (within the meaning of section 1034) of the operator of the facility. ``(B) Special rules with respect to a taxpayer.--A facility shall not be treated as a qualified child care facility with respect to a taxpayer unless-- ``(i) enrollment in the facility is open to employees of the taxpayer during the taxable year, ``(ii) the facility is not the principal trade or business of the taxpayer unless at least 30 percent of the enrollees of such facility are dependents of employees of the taxpayer, and ``(iii) the use of such facility (or the eligibility to use such facility) does not discriminate in favor of employees of the taxpayer who are highly compensated employees (within the meaning of section 414(q)). ``(d) Recapture of Acquisition and Construction Credit.-- ``(1) In general.--If, as of the close of any taxable year, there is a recapture event with respect to any qualified child care facility of the taxpayer, then the tax of the taxpayer under this chapter for such taxable year shall be increased by an amount equal to the product of-- ``(A) the applicable recapture percentage, and ``(B) the aggregate decrease in the credits allowed under section 38 for all prior taxable years which would have resulted if the qualified child care expenditures of the taxpayer described in subsection (c)(1)(A) with respect to such facility had been zero. ``(2) Applicable recapture percentage.-- ``(A) In general.--For purposes of this subsection, the applicable recapture percentage shall be determined from the following table: The applicable recapture ``If the recapture event occurs in: percentage is: Years 1-3............................ 100 Year 4............................... 85 Year 5............................... 70 Year 6............................... 55 Year 7............................... 40 Year 8............................... 25 Years 9 and 10....................... 10 Years 11 and thereafter.............. 0. ``(B) Years.--For purposes of subparagraph (A), year 1 shall begin on the first day of the taxable year in which the qualified child care facility is placed in service by the taxpayer. ``(3) Recapture event defined.--For purposes of this subsection, the term `recapture event' means-- ``(A) Cessation of operation.--The cessation of the operation of the facility as a qualified child care facility. ``(B) Change in ownership.-- ``(i) In general.--Except as provided in clause (ii), the disposition of a taxpayer's interest in a qualified child care facility with respect to which the credit described in subsection (a) was allowable. ``(ii) Agreement to assume recapture liability.--Clause (i) shall not apply if the person acquiring such interest in the facility agrees in writing to assume the recapture liability of the person disposing of such interest in effect immediately before such disposition. In the event of such an assumption, the person acquiring the interest in the facility shall be treated as the taxpayer for purposes of assessing any recapture liability (computed as if there had been no change in ownership). ``(4) Special rules.-- ``(A) Tax benefit rule.--The tax for the taxable year shall be increased under paragraph (1) only with respect to credits allowed by reason of this section which were used to reduce tax liability. In the case of credits not so used to reduce tax liability, the carryforwards and carrybacks under section 39 shall be appropriately adjusted. ``(B) No credits against tax.--Any increase in tax under this subsection shall not be treated as a tax imposed by this chapter for purposes of determining the amount of any credit under subpart A, B, or D of this part. ``(C) No recapture by reason of casualty loss.--The increase in tax under this subsection shall not apply to a cessation of operation of the facility as a qualified child care facility by reason of a casualty loss to the extent such loss is restored by reconstruction or replacement within a reasonable period established by the Secretary. ``(e) Special Rules.--For purposes of this section-- ``(1) Aggregation rules.--All persons which are treated as a single employer under subsections (a) and (b) of section 52 shall be treated as a single taxpayer. ``(2) Pass-thru in the case of estates and trusts.--Under regulations prescribed by the Secretary, rules similar to the rules of subsection (d) of section 52 shall apply. ``(3) Allocation in the case of partnerships.--In the case of partnerships, the credit shall be allocated among partners under regulations prescribed by the Secretary. ``(f) No Double Benefit.-- ``(1) Reduction in basis.--For purposes of this subtitle-- ``(A) In general.--If a credit is determined under this section with respect to any property by reason of expenditures described in subsection (c)(1)(A), the basis of such property shall be reduced by the amount of the credit so determined. ``(B) Certain dispositions.--If during any taxable year there is a recapture amount determined with respect to any property the basis of which was reduced under subparagraph (A), the basis of such property (immediately before the event resulting in such recapture) shall be increased by an amount equal to such recapture amount. For purposes of the preceding sentence, the term `recapture amount' means any increase in tax (or adjustment in carrybacks or carryovers) determined under subsection (d). ``(2) Other deductions and credits.--No deduction or credit shall be allowed under any other provision of this chapter with respect to the amount of the credit determined under this section. ``(g) Termination.--This section shall not apply to taxable years beginning after December 31, 1999.'' (b) Conforming Amendments.-- (1) Section 38(b) of the Internal Revenue Code of 1986 is amended-- (A) by striking out ``plus'' at the end of paragraph (11), (B) by striking out the period at the end of paragraph (12), and inserting a comma and ``plus'', and (C) by adding at the end the following new paragraph: ``(13) the employer-provided child care credit determined under section 45D.'' (2) The table of sections for subpart D of part IV of subchapter A of chapter 1 is amended by adding at the end the following new item: ``Sec. 45D. Employer-provided child care credit.'' (c) Effective Date.--The amendments made by this section shall apply to taxable years beginning after December 31, 1996. <all>