,,ii #aacth ,,congress #b;d ,session ,s4 #bedj ,,in ,,the ,,senate ,,of ,,the ,,united ,,states ,june #bf1 #bjad ,mr4 ,durbin 7for himself1 ,mr4 ,brown1 ,mr4 ,reed1 ,ms4 ,warren1 ,ms4 ,baldwin1 and ,mr4 ,sanders7 introduced the following bill2 which was read twice and referred to the ,committee on ,finance ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to provide a tax credit to ,patriot employers1 and for other purposes4 #a4 ,short title ,this ,act may be cited as the ,patriot ,employer ,tax ,credit ,act4 #b4 ,patriot employer tax credit 7a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by adding at the end the following new section3 #de,s4 ,patriot employer tax credit 7a7 ,determination of amount 7#a7 ,in general ,for purposes of section #ch1 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 #aj percent of the qualified wages paid or incurred by the ,patriot employer4 7#b7 ,limitation ,the amount of qualified wages which may be taken into account under paragraph 7#a7 with respect to any employee for any taxable year shall not exceed #ae1jjj4 7b7 ,patriot employer 7#a7 ,in general ,for purposes of subsection 7a71 the term ,patriot employer means1 with respect to any taxable year1 any taxpayer-- 7,a7 which-- 7i7 maintains its headquarters in the ,united ,states if the taxpayer 7or any predecessor7 has ever been headquartered in the ,united ,states1 and 7ii7 is not 7and no predecessor of which is7 an expatriated entity 7as defined in section #ghgd7;a77#b77 for the taxable year or any preceding taxable year ending after ,march #d1 #bjjc1 7,b7 with respect to which no assessable payment has been imposed under section #dihj;,h with respect to any month occurring during the taxable year1 and 7,c7 in the case of-- 7i7 a taxpayer which employs an average of more than #ej employees on business days during the taxable year1 which-- 7,i7 provides compensation for at least #ij percent of its employees for services provided by such employees during the taxable year at an hourly rate 7or equivalent thereof7 not less than an amount equal to #aej percent of the ,federal poverty level for a family of three for the calendar year in which the taxable year begins divided by #b1jhj1 7,,ii7 meets the retirement plan requirements of subsection 7c7 with respect to at least #ij percent of its employees providing services during the taxable year who are not highly compensated employees1 and 7,,iii7 meets the additional requirements of subparagraphs 7,a7 and 7,b7 of paragraph 7#b71 or 7ii7 any other taxpayer1 which meets the requirements of either subclause 7,i7 or 7,,ii7 of clause 7i7 for the taxable year4 7#b7 ,additional requirements for large employers 7,a7 ,united ,states employment ,the requirements of this subparagraph are met for any taxable year if-- 7i7 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 ,states1 the taxpayer either-- 7,i7 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 ,states1 or 7,,ii7 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 ,states1 7ii7 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 ,states1 the taxpayer either-- 7,i7 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 ,states1 or 7,,ii7 has a percentage decrease in employees outside the ,united ,states which is not less than the percentage decrease in such employees inside the ,united ,states1 and 7iii7 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 taxpayer4 7,b7 ,treatment of individuals in the uniformed services and the disabled ,the requirements of this subparagraph are met for any taxable year if-- 7i7 the taxpayer provides differential wage payments 7as defined in section #cdja7;h77#b77 to each employee described in section #cdja7;h77#b77;,a7 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 period1 and 7ii7 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 disabled4 7#c7 ,special rules for applying the minimum wage and retirement plan requirements 7,a7 ,minimum wage ,in determining whether the minimum wage requirements of paragraph 7#a77;,c77i77,i7 are met with respect to #ij percent of a taxpayer's employees for any taxable year-- 7i7 a taxpayer may elect to exclude from such determination apprentices or learners that an employer may exclude under the regulations under section #ad7;a7 of the ,fair ,labor ,standards ,act of #aich1 and 7ii7 if a taxpayer meets the requirements of paragraph 7#b77;,b77i7 with respect to providing differential wage payments to any employee for any period 7without regard to whether such requirements apply to the taxpayer71 the hourly rate 7or equivalent thereof7 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 services4 7,b7 ,retirement plan ,in determining whether the retirement plan requirements of paragraph 7#a77;,c77i77,,ii7 are met with respect to #ij percent of a taxpayer's employees for any taxable year1 a taxpayer may elect to exclude from such determination-- 7i7 employees not meeting the age or service requirements under section #daj7;a77#a7 7or such lower age or service requirements as the employer provides71 and 7ii7 employees described in section #daj7;b77#c74 7c7 ,retirement plan requirements 7#a7 ,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 #a or more applicable eligible retirement plans maintained by the employer for a plan year ending with or within the taxable year4 7#b7 ,applicable eligible retirement plan ,for purposes of this subsection1 the term applicable eligible retirement plan means an eligible retirement plan which1 with respect to the plan year described in paragraph 7#a71 is either-- 7,a7 a defined contribution plan which-- 7i7 requires the employer to make nonelective contributions of at least #e percent of the compensation of the employee1 or 7ii7 both-- 7,i7 includes an eligible automatic contribution arrangement 7as defined in section #dad7w77#c77 under which the uniform percentage described in section #dad7w77#c77;,b7 is at least #e percent1 and 7,,ii7 requires the employer to make matching contributions of #ajj percent of the elective deferrals 7as defined in section #dad7u77#b77;,c77 of the employee to the extent such deferrals do not exceed the percentage specified by the plan 7not less than #e percent7 of the employee's compensation1 or 7,b7 a defined benefit plan-- 7i7 with respect to which the accrued benefit of the employee derived from employer contributions1 when expressed as an annual retirement benefit1 is not less than the product of-- 7,i7 the lesser of #b percent multiplied by the employee's years of service 7determined under the rules of paragraphs 7#d71 7#e71 and 7#f7 of section #daa7;a77 with the employer or #bj percent1 multiplied by 7,,ii7 the employee's final average pay1 or 7ii7 which is an applicable defined benefit plan 7as defined in section #daa7;a77#ac77;,b77-- 7,i7 which meets the interest credit requirements of section #daa7;b77#e77;,b77i7 with respect to the plan year1 and 7,,ii7 under which the employee receives a pay credit for the plan year which is not less than #e percent of compensation4 7#c7 ,definitions and special rules ,for purposes of this subsection-- 7,a7 ,eligible retirement plan ,the term eligible retirement plan has the meaning given such term by section #djb7;c77#h77;,b71 except that in the case of an account or annuity described in clause 7i7 or 7ii7 thereof1 such term shall only include an account or annuity which is a simplified employee pension 7as defined in section #djh7k774 7,b7 ,final average pay ,for purposes of paragraph 7#b77;,b77i77,,ii71 final average pay shall be determined using the period of consecutive years 7not exceeding #e7 during which the employee had the greatest compensation from the taxpayer4 7,c7 ,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 7#a7 or through a combination of both such types of plans4 7,d7 ,plans must meet requirements without taking into account ,social ,security and similar contributions and benefits ,a rule similar to the rule of section #daf7;e7 shall apply4 7d7 ,qualified wages and compensation ,for purposes of this section-- 7#a7 ,in general ,the term qualified wages means wages 7as defined in section #ea7;c71 determined without regard to paragraph 7#d7 thereof7 paid or incurred by the ,patriot employer during the taxable year to employees-- 7,a7 who perform substantially all of their services for such ,patriot employer inside the ,united ,states1 and 7,b7 with respect to whom-- 7i7 in the case of a ,patriot employer which employs an average of more than #ej employees on business days during the taxable year1 the requirements of subclauses 7,i7 and 7,,ii7 of subsection 7b77#a77;,c77i7 are met1 and 7ii7 in the case of any other ,patriot employer1 the requirements of either subclause 7,i7 or 7,,ii7 of subsection 7b77#a77;,c77i7 are met4 7#b7 ,special rules for agricultural labor and railway labor ,rules similar to the rules of section #ea7;h7 shall apply4 7#c7 ,compensation ,for purposes of subsections 7b77#a77;,c77i77,i7 and 7c71 the term compensation has the same meaning as qualified wages1 except that section #ea7;c77#b7 shall be disregarded in determining the amount of such wages4 7e7 ,aggregation ,rules ,for purposes of this section-- 7#a7 ,in general ,all persons treated as a single employer under subsection 7a7 or 7b7 of section #eb shall be treated as a single taxpayer4 7#b7 ,special rules for certain requirements ,for purposes of applying paragraphs 7#a77;,a7 and 7#b77;,a7 of subsection 7b7-- 7,a7 the determination under subsections 7a7 and 7b7 of section #eb for purposes of paragraph 7#a7 shall be made without regard to section #aefc7;b77#b77;,c7 7relating to exclusion of foreign corporations71 and 7,b7 if any person treated as a single taxpayer under this subsection 7after application of subparagraph 7,a771 or any predecessor of such person1 was an expatriated entity 7as defined in section #ghgd7;a77#b77 for any taxable year ending after ,march #d1 #bjjc1 then all persons treated as a single taxpayer with such person shall be treated as expatriated entities4 7f7 ,election ,to have credit not apply 7#a7 ,in general ,a taxpayer may elect to have this section not apply for any taxable year4 7#b7 ,time for making election ,an election under paragraph 7#a7 for any taxable year may be made 7or revoked7 at any time before the expiration of the #c-year period beginning on the last date prescribed by law for filing the return for such taxable year 7determined without regard to extensions74 7#c7 ,manner of making election ,an election under paragraph 7#a7 7or revocation thereof7 shall be made in such manner as the ,secretary may by regulations prescribe4 4 7b7 ,allowance as general business credit ,section #ch7;b7 of the ,internal ,revenue ,code of #aihf is amended by striking plus at the end of paragraph 7#ce71 by striking the period at the end of paragraph 7#cf7 and inserting 1 plus1 and by adding at the end the following3 7#cg7 in the case of a ,patriot employer 7as defined in section #de,s7b77 for any taxable year1 the ,patriot employer credit determined under section #de,s7a74 4 7c7 ,denial of double benefit ,subsection 7a7 of section #bhj;,c of the ,internal ,revenue ,code of #aihf is amended by inserting #de,s7a71 after #de,p7a74 7d7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4 #c4 ,defer deduction of interest expense related to deferred income 7a7 ,in general ,section #afc of the ,internal ,revenue ,code of #aihf 7relating to deductions for interest expense7 is amended by redesignating subsection 7n7 as subsection 7o7 and by inserting after subsection 7m7 the following new subsection3 7n7 ,deferral of deduction for interest expense related to deferred income 7#a7 ,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-- 7,a7 the taxpayer's foreign-related interest expense for the taxable year1 plus 7,b7 the taxpayer's deferred foreign-related interest expense4 ,for purposes of the paragraph1 the applicable percentage is the percentage equal to the current inclusion ratio4 7#b7 ,treatment of deferred deductions ,if1 for any taxable year1 the amount of the limitation determined under paragraph 7#a7 exceeds the taxpayer's foreign-related interest expense for the taxable year1 there shall be allowed as a deduction for the taxable year an amount equal to the lesser of-- 7,a7 such excess1 or 7,b7 the taxpayer's deferred foreign-related interest expense4 7#c7 ,definitions and special rule ,for purposes of this subsection-- 7,a7 ,foreign-related interest expense ,the term foreign-related interest expense means1 with respect to any taxpayer for any taxable year1 the amount which bears the same ratio to the amount of interest expense for such taxable year allocated and apportioned under sections #hfa1 #hfd7;e71 and #hfd7;f7 to income from sources outside the ,united ,states as-- 7i7 the value of all stock held by the taxpayer in all section #ijb corporations with respect to which the taxpayer meets the ownership requirements of subsection 7a7 or 7b7 of section #ijb1 bears to 7ii7 the value of all assets of the taxpayer which generate gross income from sources outside the ,united ,states4 7,b7 ,deferred foreign-related interest expense ,the term deferred foreign-related interest expense means the excess1 if any1 of the aggregate foreign-related interest expense for all prior taxable years beginning after ,december #ca1 #bjad1 over the aggregate amount allowed as a deduction under paragraphs 7#a7 and 7#b7 for all such prior taxable years4 7,c7 ,value of assets ,except as otherwise provided by the ,secretary1 for purposes of subparagraph 7,a77ii71 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 #hfa1 #hfd7;e71 and #hfd7;f74 7,d7 ,current inclusion ratio ,the term current inclusion ratio means1 with respect to any domestic corporation which meets the ownership requirements of subsection 7a7 or 7b7 of section #ijb with respect to one or more section #ijb corporations for any taxable year1 the ratio 7expressed as a percentage7 of-- 7i7 the sum of all dividends received by the domestic corporation from all such section #ijb corporations during the taxable year plus amounts includible in gross income under section #iea7;a7 from all such section #ijb corporations1 in each case computed without regard to section #gh1 divided by 7ii7 the aggregate amount of post-#aihf undistributed earnings4 7,e7 ,aggregate amount of post-#aihf undistributed earnings ,the term aggregate amount of post-#aihf undistributed earnings means1 with respect to any domestic corporation which meets the ownership requirements of subsection 7a7 or 7b7 of section #ijb with respect to one or more section #ijb corporations1 the domestic corporation's pro rata share of the post-#aihf undistributed earnings 7as defined in section #ijb7;c77#a77 of all such section #ijb corporations4 7,f7 ,foreign currency conversion ,for purposes of determining the current inclusion ratio1 and except as otherwise provided by the ,secretary1 the aggregate amount of post-#aihf undistributed earnings for the taxable year shall be determined by translating each section #ijb corporation's post-#aihf undistributed earnings into dollars using the average exchange rate for such year4 7,g7 ,section #ijb corporation ,the term section #ijb corporation has the meaning given to such term by section #iji7;d77#e74 7#d7 ,treatment of affiliated groups ,the current inclusion ratio of each member of an affiliated group 7as defined in section #hfd7;e77#e77;,a77 shall be determined as if all members of such group were a single corporation4 7#e7 ,application to separate categories of income ,this subsection shall be applied separately with respect to the categories of income specified in section #ijd7;d77#a74 7#f7 ,regulations ,the ,secretary may prescribe such regulations or other guidance as is necessary or appropriate to carry out the purposes of this subsection1 including regulations or other guidance providing-- 7,a7 for the proper application of this subsection with respect to changes in ownership of a section #ijb corporation1 7,b7 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 subsection1 7,c7 for the proper application of this subsection with respect to the taxpayer's share of a deficit in earnings and profits of a section #ijb corporation1 7,d7 for appropriate adjustments to the determination of the value of stock in any section #ijb corporation for purposes of this subsection or to the foreign-related interest expense to account for income that is subject to tax under section #hhb7;a77#a71 and 7,e7 for the proper application of this subsection with respect to interest expense that is directly allocable to income with respect to certain assets4 4 7b7 ,effective date ,the amendments made by this section shall apply to taxable years beginning after ,december #ca1 #bjad4