Investing in American Workers Act

I 117TH CONGRESS 1ST SESSION H. R. 2984 To amend the Internal Revenue Code of 1986 to provide a credit for employer-provided worker training. IN THE HOUSE OF REPRESENTATIVES MAY 4, 2021 Mr. KRISHNAMOORTHI (for himself, Mr. VAN DREW, Mr. MEUSER, Mr. EMMER, Ms. SPANBERGER, Ms. WILD, and Mrs. AXNE) introduced the following bill; which was referred to the Committee on Ways and Means, and in addition to the Committee on Education and Labor, for a period to be subsequently determined by the Speaker, in each case for consider- ation of such provisions as fall within the jurisdiction of the committee concerned A BILL To amend the Internal Revenue Code of 1986 to provide a credit for employer-provided worker training. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Investing in American 4 Workers Act’’. 5 SEC. 2. EMPLOYER-PROVIDED WORKER TRAINING CREDIT. 6 (a) IN GENERAL.— 7 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 2 •HR 2984 IH (1) DETERMINATION OF CREDIT.—Subpart D 1 of part IV of subchapter A of chapter 1 of the Inter- 2 nal Revenue Code of 1986 is amended by adding at 3 the end the following new section: 4 ‘‘SEC. 45U. EMPLOYER-PROVIDED WORKER TRAINING 5 CREDIT. 6 ‘‘(a) IN GENERAL.—For purposes of section 38, the 7 employer-provided worker training credit under this sec- 8 tion for the taxable year is an amount equal to 20 percent 9 of the excess (if any) of— 10 ‘‘(1) the qualified training expenditures for the 11 taxable year, over 12 ‘‘(2) the average of the adjusted qualified train- 13 ing expenditures for the 3 taxable years preceding 14 the taxable year for which the credit is being deter- 15 mined. 16 ‘‘(b) QUALIFIED TRAINING EXPENDITURES.—For 17 purposes of this section— 18 ‘‘(1) IN GENERAL.—The term ‘qualified train- 19 ing expenditures’ means any expenditures for the 20 qualified training of any non-highly compensated 21 employee. Such term shall not include any amounts 22 paid for meals, lodging, transportation, or other 23 services incidental to such qualified training. 24 ‘‘(2) QUALIFIED TRAINING.— 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 3 •HR 2984 IH ‘‘(A) IN GENERAL.—For purposes of para- 1 graph (1), the term ‘qualified training’ means 2 training which results in the attainment of a 3 recognized postsecondary credential and which 4 is provided through— 5 ‘‘(i) an apprenticeship program reg- 6 istered under the Act of August 16, 1937 7 (commonly known as the ‘National Ap- 8 prenticeship Act’; 50 Stat. 664, chapter 9 663; 29 U.S.C. 50 et seq.); 10 ‘‘(ii)(I) a program of training services 11 which is listed under section 122(d) of the 12 Workforce Innovation and Opportunity Act 13 (29 U.S.C. 3152(d)), or 14 ‘‘(II) an apprenticeship program 15 which is registered or approved by a recog- 16 nized State apprenticeship agency (which 17 uses a State apprenticeship council) in ac- 18 cordance with section 1 of the Act referred 19 to in clause (i), 20 ‘‘(iii) a program which is conducted 21 by an area career and technical education 22 school, a community college, or a labor or- 23 ganization, or 24 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 4 •HR 2984 IH ‘‘(iv) a program which is sponsored 1 and administered by an employer, industry 2 trade association, industry or sector part- 3 nership, or labor organization. 4 ‘‘(B) RELATED DEFINITIONS.—In sub- 5 paragraph (A): 6 ‘‘(i) AREA CAREER AND TECHNICAL 7 EDUCATION SCHOOL.—The term ‘area ca- 8 reer and technical education school’ means 9 such a school, as defined in section 3 of 10 the Carl D. Perkins Career and Technical 11 Education Act of 2006 (20 U.S.C. 2302), 12 which participates in a program under that 13 Act (20 U.S.C. 2301 et seq.). 14 ‘‘(ii) COMMUNITY COLLEGE.—The 15 term ‘community college’ means an institu- 16 tion which— 17 ‘‘(I) is a junior or community col- 18 lege as defined in section 312(f) of the 19 Higher Education Act of 1965 (20 20 U.S.C. 1058(f)), except that the insti- 21 tution need not meet the requirements 22 of paragraph (1) of that section, and 23 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 5 •HR 2984 IH ‘‘(II) participates in a program 1 under title IV of that Act (20 U.S.C. 2 1070 et seq.). 3 ‘‘(iii) INDUSTRY OR SECTOR PARTNER- 4 SHIP.—The term ‘industry or sector part- 5 nership’ has the meaning given such term 6 under section 3 of the Workforce Innova- 7 tion and Opportunity Act (29 U.S.C. 8 3102). 9 ‘‘(iv) INDUSTRY TRADE ASSOCIA- 10 TION.—The term ‘industry trade associa- 11 tion’ means an organization which— 12 ‘‘(I) is described in paragraph (3) 13 or (6) of section 501(c) of the Inter- 14 nal Revenue Code of 1986 and exempt 15 from taxation under section 501(a) of 16 such Code, and 17 ‘‘(II) is representing an industry. 18 ‘‘(v) LABOR ORGANIZATION.—The 19 term ‘labor organization’ means a labor or- 20 ganization, within the meaning of the term 21 in section 501(c)(5) of the Internal Rev- 22 enue Code of 1986. 23 ‘‘(vi) RECOGNIZED POSTSECONDARY 24 CREDENTIAL.—The term ‘recognized post- 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 6 •HR 2984 IH secondary credential’ means a credential 1 consisting of an industry-recognized certifi- 2 cate or certification, a certificate of com- 3 pletion of an apprenticeship, a license rec- 4 ognized by the State involved or Federal 5 Government, or an associate or bacca- 6 laureate degree. 7 ‘‘(3) NON-HIGHLY COMPENSATED EMPLOYEE.— 8 For purposes of paragraph (1), the term ‘non-highly 9 compensated employee’ means an employee of the 10 taxpayer whose remuneration for the taxable year 11 for services provided to the taxpayer does not exceed 12 $82,000. 13 ‘‘(c) ADJUSTED QUALIFIED TRAINING EXPENDI- 14 TURES.—For purposes of this section, the term ‘adjusted 15 qualified training expenses’ means, with respect to any 16 taxable year— 17 ‘‘(1) the qualified training expenses for such 18 taxable year, multiplied by 19 ‘‘(2) the cost-of-living adjustment determined 20 under section 1(f)(3) for the calendar year in which 21 the taxable year for which the credit is being deter- 22 mined begins, except that section 1(f)(3)(A)(ii) shall 23 be applied by using the CPI for the calendar year 24 in which the taxable year in which qualified training 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 7 •HR 2984 IH expenses were paid or incurred begins in lieu of the 1 CPI for calendar year 1982. 2 ‘‘(d) SPECIAL RULES.—For purposes of this sec- 3 tion— 4 ‘‘(1) SPECIAL RULE IN CASE OF NO QUALIFIED 5 TRAINING EXPENDITURES IN ANY OF 3 PRECEDING 6 TAXABLE YEARS.— 7 ‘‘(A) TAXPAYERS TO WHICH PARAGRAPH 8 APPLIES.—The credit under this section shall 9 be determined under this paragraph if the tax- 10 payer has no qualified training expenditures in 11 any one of the 3 taxable years preceding the 12 taxable year for which the credit is being deter- 13 mined. 14 ‘‘(B) CREDIT RATE.—The credit deter- 15 mined under this paragraph shall be equal to 16 10 percent of the adjusted qualified training ex- 17 penditures for the taxable year. 18 ‘‘(2) AGGREGATION AND ALLOCATION OF EX- 19 PENDITURES, ETC.—Rules similar to the rules of 20 paragraphs (1), (2), (3), (4), and (5) of section 21 41(f) shall apply. 22 ‘‘(e) ELECTION TO APPLY CREDIT AGAINST PAY- 23 ROLL TAXES.— 24 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 8 •HR 2984 IH ‘‘(1) IN GENERAL.—At the election of a quali- 1 fied small business or a qualified tax-exempt organi- 2 zation (as defined in section 3111(e)(5)(A)) for any 3 taxable year, section 3111(g) shall apply to the pay- 4 roll tax credit portion of the credit otherwise deter- 5 mined under subsection (a) for the taxable year and 6 such portion shall not be treated (other than for 7 purposes of section 280C) as a credit determined 8 under subsection (a). 9 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 10 purposes of this subsection, the payroll tax credit 11 portion of the credit determined under subsection 12 (a) with respect to any qualified small business or 13 qualified tax-exempt organization for any taxable 14 year is the least of— 15 ‘‘(A) the amount specified in the election 16 made under this subsection, 17 ‘‘(B) the credit determined under sub- 18 section (a) for the taxable year (determined be- 19 fore the application of this subsection), or 20 ‘‘(C) in the case of a qualified small busi- 21 ness other than a partnership or S corporation, 22 the amount of the business credit carryforward 23 under section 39 carried from the taxable year 24 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 9 •HR 2984 IH (determined before the application of this sub- 1 section to the taxable year). 2 ‘‘(3) QUALIFIED SMALL BUSINESS.—For pur- 3 poses of this subsection— 4 ‘‘(A) IN GENERAL.—The term ‘qualified 5 small business’ means, with respect to any tax- 6 able year— 7 ‘‘(i) a corporation or partnership if 8 the gross receipts (as determined under the 9 rules of section 448(c)(3), without regard 10 to subparagraph (A) thereof) of such enti- 11 ty for the taxable year is less than 12 $5,000,000, and 13 ‘‘(ii) any person (other than a cor- 14 poration or partnership) who meets the re- 15 quirements of clause (i), determined— 16 ‘‘(I) by substituting ‘person’ for 17 ‘entity’, and 18 ‘‘(II) by only taking into account 19 the aggregate gross receipts received 20 by such person in carrying on all 21 trades or businesses of such person. 22 ‘‘(B) LIMITATION.—Such term shall not 23 include an organization which is exempt from 24 taxation under section 501. 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 10 •HR 2984 IH ‘‘(4) ELECTION.— 1 ‘‘(A) IN GENERAL.—Any election under 2 this subsection for any taxable year— 3 ‘‘(i) shall specify the amount of the 4 credit to which such election applies, 5 ‘‘(ii) shall be made on or before the 6 due date (including extensions) of— 7 ‘‘(I) in the case of a partnership, 8 the return required to be filed under 9 section 6031, 10 ‘‘(II) in the case of an S corpora- 11 tion, the return required to be filed 12 under section 6037, and 13 ‘‘(III) in the case of any other 14 qualified small business or qualified 15 tax-exempt organization, the return of 16 tax for the taxable year, and 17 ‘‘(iii) may be revoked only with the 18 consent of the Secretary. 19 ‘‘(B) LIMITATION.—The amount specified 20 in any election made under this subsection shall 21 not exceed $250,000. 22 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS 23 AND S CORPORATIONS.—In the case of a part- 24 nership or S corporation, the election made 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 11 •HR 2984 IH under this subsection shall be made at the enti- 1 ty level. 2 ‘‘(5) AGGREGATION RULES.— 3 ‘‘(A) IN GENERAL.—Except as provided in 4 subparagraph (B)— 5 ‘‘(i) all members of the same con- 6 trolled group of corporations shall be treat- 7 ed as a single taxpayer, and 8 ‘‘(ii) all trades or businesses (whether 9 or not incorporated) which are under com- 10 mon control shall be treated as a single 11 taxpayer. 12 ‘‘(B) SPECIAL RULES.—For purposes of 13 this subsection and section 3111(g)— 14 ‘‘(i) each of the persons treated as a 15 single taxpayer under subparagraph (A) 16 may separately make the election under 17 paragraph (1) for any taxable year, and 18 ‘‘(ii) the $250,000 amount under 19 paragraph (3)(B) shall be allocated among 20 all persons treated as a single taxpayer 21 under subparagraph (A) in the manner 22 provided by the Secretary which is similar 23 to the manner provided under section 24 41(f)(1). 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 12 •HR 2984 IH ‘‘(6) REGULATIONS.—The Secretary shall pre- 1 scribe such regulations as may be necessary to carry 2 out the purposes of this subsection, including— 3 ‘‘(A) regulations to prevent the avoidance 4 of the purposes of the limitations and aggrega- 5 tion rules under this subsection, 6 ‘‘(B) regulations to minimize compliance 7 and recordkeeping burdens under this sub- 8 section, 9 ‘‘(C) regulations for recapturing the ben- 10 efit of credits determined under section 3111(g) 11 in cases where there is a recapture or a subse- 12 quent adjustment to the payroll tax credit por- 13 tion of the credit determined under subsection 14 (a), including requiring amended income tax re- 15 turns in the cases where there is such an ad- 16 justment, and 17 ‘‘(D) regulations for the collection of demo- 18 graphic information with respect to the race, 19 ethnicity, and gender of the individuals with re- 20 spect to whom a taxpayer makes qualified train- 21 ing expenditures for which a credit is allowed 22 under this section.’’. 23 (2) CREDIT PART OF GENERAL BUSINESS 24 CREDIT.—Section 38(b) of the Internal Revenue 25 VerDate Sep 11 2014 00:03 Jun 19, 2021 Jkt 019200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H2984.IH H2984 pbinns on DSKJLVW7X2PROD with BILLS 13 •HR 2984 IH Code of 1986 is amended by striking ‘‘plus’’ at the 1 end of paragraph (32), by striking the period at the 2 end of paragraph (33) and inserting ‘‘, plus’’, and 3 by adding at the end the following new paragraph: 4 ‘‘(34) the employer-provided worker training 5 credit determined under section 45U(a).’’. 6 (3) COORDINATION WITH DEDUCTIONS.—Sec- 7 tion 280C of the Internal Revenue Code of 1986 is 8 amended by adding at the end the following new 9 subsection: 10 ‘‘(i) EMPLOYER-PROVIDED WORKER TRAINING 11 CREDIT.—No deduction shall be allowed for that portion 12 of the expenses otherwise allowable as a deduction taken 13 into account in determining the credit under section 45U 14 for the taxable year which is equal to the amount of t [Text truncated for display. 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