article: SECTION 1. SHORT TITLE. This Act may be cited as the ``Flexible Family Leave Tax Credit Act of 1993''. TITLE I--FAMILY LEAVE CREDIT SEC. 101. CREDIT CREATED. 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. 45A. FAMILY LEAVE CREDIT. ``(a) Amount of Credit.-- ``(1) In general.--For purposes of section 38, the amount of the family leave credit for any employer for any taxable year is 20 percent of the qualified compensation with respect to an employee who is on family leave. ``(2) Limitations on availability and amount of credit.-- ``(A) Fewer than 500 employees.--An employer is not entitled to a family leave credit for any taxable year unless-- ``(i) in the case of an employer that is in its first taxable year, the employer had fewer than 500 employees at the close of that year, and ``(ii) in the case of other employers, the employer averaged fewer than 500 employees for its preceding taxable year. An employer is considered to average fewer than 500 employees for a taxable year if the sum of its employees on the last day of each quarter in that year divided by the number of quarters is fewer than 500. ``(B) Dollar cap on qualified compensation.--The amount of qualified compensation that may be taken into account with respect to an employee may not exceed $100 per business day. ``(C) Maximum period of family leave.--No family leave credit will be available to the extent that the period of family leave for an employee exceeds 12 weeks, defined as 60 business days, in any 12-month period. ``(D) Additional limitation on leave for personal serious health conditions.--Leave from an employer in connection with a qualified purpose described in subsection (b)(2)(D) will qualify as family leave only if the employee on leave has no unused sick, disability or similar leave. ``(b) Family Leave.--For purposes of this section-- ``(1) In general.--Except as otherwise provided in this section, an employee is considered to be on `family leave' if the employee is on leave from the employer in connection with any qualified purpose. ``(2) Qualified purposes.--The term `qualified purposes' means-- ``(A) the birth of a child, ``(B) the placement of a child with the employee for adoption or foster care, ``(C) the care of a child, parent or spouse with a serious health condition, or ``(D) the treatment of a serious health condition which makes the employee unable to perform the functions of his or her position. ``(3) Definitions of child, parent and serious health condition.-- ``(A) Child.--The term `child' means an individual who is a son, stepson, daughter, stepdaughter, eligible foster child as described in sections 32(c)(3)(B)(iii) (I) and (II), or legal ward of the employee or employee's spouse, or a child of a person standing in loco parentis and who either has not reached the age of 19 by the commencement of the period of family leave or is physically or mentally incapable of caring for himself or herself. ``(B) Parent.--The term `parent' means an individual with respect to whom the employee would be considered a `child' within the meaning of subsection (b)(2)(A) without regard to the age limitation. ``(C) Serious health condition.--The term `serious health condition' means an illness, injury, impairment, or physical or mental condition that involves the inpatient care in a hospital, hospice or residential health care facility, or substantial and continuing treatment by a health care provider. ``(c) Credit Refundable.--In the case of so much of the section 38 credit as is attributable to the family leave credit-- ``(1) section 38(c) will not apply, and ``(2) for purposes of this section, such credit will be treated as if it were allowed under section 103 of the Flexible Family Leave Tax Credit Act of 1993. ``(d) Nondiscrimination Requirement.--The family leave credit is available to an employer for a taxable year only if the employer provides family leave to its employees for that year on a nondiscriminatory basis. ``(e) Other Definitions and Special Rules.-- ``(1) In general.--For purposes of this section-- ``(A) Employer.--Except as otherwise provided in this subpart, the term `employer' has the meaning provided by section 3306(a)(1) and (3). ``(B) Employee.--The term `employee' includes only permanent employees who have been employed by the employer for at least 12 months and have provided over 1000 hours of service to the employer during the 12 months preceding commencement of the family leave. ``(C) Qualified compensation.--The term `qualified compensation' means the greater of-- ``(i) cash wages paid or incurred by the employer to or on behalf of the employee as remuneration for services during the period of family leave, and ``(ii) cash wages that would have been paid or incurred by the employer to or on behalf of the employee as remuneration for services during the period of family leave had the employee not taken the leave. ``(D) Computation.--For purposes of subsection (e)(1)(C)(ii), the amount of cash wages that would have been paid to the employee for any business day the employee is on family leave is the average daily cash wages of that employee for the four calendar quarters preceding the commencement of the family leave. ``(E) Average daily cash wages.--For purposes of the computation described in subsection (e)(1)(D), an employee's average daily cash wages is his or her total cash wages for the period described in such subsection divided by the number of business days in that period. ``(F) Business day.--The term `business day' includes any day other than a Saturday, Sunday or legal holiday. ``(2) Employment and benefits protection.-- ``(A) In general.--Leave taken under this section shall qualify an employer for a family leave credit only if-- ``(i) upon return from such leave, the employee is entitled to be restored by the employer to the position of employment held by the employee when the leave commenced, or to be restored to an equivalent position with equivalent employment benefits, pay, and other terms and conditions of employment; ``(ii) the taking of such leave does not result in the loss of any employment benefit accrued prior to the date on which the leave commenced; and ``(iii) the employer maintains coverage under any `group health plan' (as defined in section 5000(b)(1)) for the duration of such leave, at the level and under the conditions coverage would have been provided if the employee had continued in employment continuously during the leave period. ``(B) Limitation.--Nothing in this paragraph shall be construed to require an employer, as a condition of qualifying for a family leave credit, to entitle any employee taking leave to-- ``(i) the accrual of any seniority or employment benefits during any period of leave; or ``(ii) any right, benefit, or position of employment other than any right, benefit, or position to which the employee would have been entitled had the employee not taken the leave. ``(3) Expectation that employee will return to work.--No family leave credit will be available for any portion of a period of family leave during which the employer does not reasonably believe that the employee will return from leave to work for the employer. ``(4) Special rules.--Rules similar to the rules of section 52 shall apply for purposes of this section. ``(5) Regulatory authority.--The Secretary may prescribe such regulations or other guidance as may be necessary or appropriate to carry out the purposes of this section, including guidance relating to ensuring adequate employment and benefits protection and guidance to prevent abuse of this section.''. SEC. 102. COORDINATION WITH REFUND PROVISION. For purposes of section 1324(b)(2) of title 31 of the United States Code, section 45A of the Internal Revenue Code of 1986 (as added by this Act) will be considered to be a credit provision of the Internal Revenue Code of 1954 enacted before January 1, 1978. SEC. 103. CONFORMING AMENDMENTS. (a) Section 38 is amended by deleting the ``plus'' after subsection (b)(7) and ``.'' after subsection (b)(8), by inserting ``, plus'' after subsection (b)(8), and by adding a new subsection (b)(9) to read as follows: ``(9) the family leave credit under section 45A.'' (b) 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. 45A. Family leave credit.'' SEC. 104. EFFECTIVE DATE. The amendments made by this title shall apply to family leave that commences 90 days after the date of the enactment of this Act. TITLE II--DEFICIT NEUTRAL REVENUE OFFSET SEC. 201. CORPORATE ESTIMATED TAX PROVISIONS. (a) Increase in Estimated Tax.-- (1) In general.--Subsection (d) of section 6655 of the Internal Revenue Code of 1986 (relating to amount of required installments) is amended-- (A) by striking ``91 percent'' each place it appears in paragraph (1)(B)(i) and inserting ``100 percent'', (B) by striking ``91 percent'' in the heading of paragraph (2) and inserting ``100 percent'', and (C) by striking paragraph (3). (2) Conforming amendments.-- (A) Clause (ii) of section 6655(e)(2)(B) of such Code is amended by striking the table contained therein and inserting the following new table: The ``In the case of the following applicable required installments: percentage is: 1st...................... 254 2nd...................... 504 3rd...................... 754 4th...................... 100.'' (B) Clause (i) of section 6655(e)(3)(A) of such Code is amended by striking ``91 percent'' and inserting ``100 percent''. (b) Modification of Periods for Applying Annualization.-- (1) Clause (i) of section 6655(e)(2)(A) of such Code is amended-- (A) by striking ``or for the first 5 months'' in subclause (II), (B) by striking ``or for the first 8 months'' in subclause (III), and (C) by striking ``or for the first 11 months'' in subclause (IV). (2) Paragraph (2) of section 6655(e) of such Code is amended by adding at the end thereof the following new subparagraph: ``(C) Election for different annualization periods.-- ``(i) If the taxpayer makes an election under this clause-- ``(I) subclause (II) of subparagraph (A)(i) shall be applied by substituting `4 months' for `3 months', ``(II) subclause (III) of subparagraph (A)(i) shall be applied by substituting `7 months' for `6 months', and ``(III) subclause (IV) of subparagraph (A)(i) shall be applied by substituting `10 months' for `9 months'. ``(ii) If the taxpayer makes an election under this clause-- ``(I) subclause (II) of subparagraph (A)(i) shall be applied by substituting `5 months' for `3 months', ``(II) subclause (III) of subparagraph (A)(i) shall be applied by substituting `8 months' for `6 months', and ``(III) subclause (IV) of subparagraph (A)(i) shall be applied by substituting `11 months' for `9 months'. ``(iii) An election under clause (i) or (ii) shall apply to the taxable year for which made and such an election shall be effective only if made on or before the date required for the payment of the second required installment for such taxable year.'' (3) The last sentence of section 6655(g)(3) of such Code is amended by striking ``and subsection (e)(2)(A)'' and inserting ``and, except in the case of an election under subsection (e)(2)(C), subsection (e)(2)(A)''. (c) Effective Date.--The amendments made by this section shall apply to any installment due date occurring more than 90 days after the date of enactment of this Act.
summary: Flexible Family Leave Tax Credit Act of 1993 - Title I: Family Leave Credit - Amends the Internal Revenue Code to allow an employer an income tax credit for 20 percent of qualified employee compensation with respect to an employee who is on family leave. Limits such credit to employers with 500 or fewer employees, the amount of qualified compensation, and the maximum period for the use of such leave. Provides that employees qualify for such program if they have no unused sick, disability, or similar leave. Title II: Deficit Neutral Revenue Offset - Increases corporate estimated tax payments for corporations that do not use the previous year's liability safe harbor. Modifies the rules for income annualization for such tax payments.