USA Workforce Tax Credit Act

I 116TH CONGRESS 1ST SESSION H. R. 1739 To amend the Internal Revenue Code of 1986 to allow a credit against tax for charitable donations to nonprofit organizations providing work- force training and education scholarships to qualified elementary and secondary students. IN THE HOUSE OF REPRESENTATIVES MARCH 13, 2019 Mr. SMUCKER (for himself, Mr. MOONEY of West Virginia, Ms. STEFANIK, Mr. BUDD, Mr. GAETZ, Mr. COLLINS of New York, Mrs. LESKO, and Mr. KUSTOFF of Tennessee) 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 allow a credit against tax for charitable donations to nonprofit organizations providing workforce training and education scholarships to qualified elementary and secondary stu- dents. 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 ‘‘USA Workforce Tax 4 Credit Act’’. 5 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 2 •HR 1739 IH SEC. 2. TAX CREDIT FOR CONTRIBUTIONS TO WORKFORCE 1 DEVELOPMENT AND APPRENTICESHIP 2 TRAINING ORGANIZATIONS. 3 (a) CREDIT FOR INDIVIDUALS.— 4 (1) IN GENERAL.—Subpart A of part IV of sub- 5 chapter A of chapter 1 of the Internal Revenue Code 6 of 1986 is amended by inserting after section 25D 7 the following new section: 8 ‘‘SEC. 25E. QUALIFIED WORKFORCE DEVELOPMENT AND 9 APPRENTICESHIP TRAINING PROGRAMS. 10 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in- 11 dividual, there shall be allowed as a credit against the tax 12 imposed by this chapter for the taxable year an amount 13 equal to the amount of qualified contributions made by 14 the taxpayer during the year. 15 ‘‘(b) DOLLAR LIMITATIONS.— 16 ‘‘(1) INCOME LIMITATION.—The amount al- 17 lowed as a credit under subsection (a) with respect 18 to any taxpayer shall not exceed 25 percent of the 19 tax liability of the taxpayer with a maximum value 20 of $250,000. 21 ‘‘(2) REDUCTION BASED ON STATE CREDIT.— 22 The amount allowed as a credit under subsection (a) 23 for a taxable year shall be reduced by the amount 24 allowed as a credit on any State tax return of the 25 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 3 •HR 1739 IH individual for qualified contributions made by the 1 taxpayer during the taxable year. 2 ‘‘(c) QUALIFIED CONTRIBUTIONS; OTHER DEFINI- 3 TIONS.—For purposes of this section— 4 ‘‘(1) QUALIFIED CONTRIBUTION.—The term 5 ‘qualified contribution’ means a charitable contribu- 6 tion (as defined by section 170(c)) to a workforce 7 development or apprenticeship training organization. 8 ‘‘(2) WORKFORCE DEVELOPMENT OR APPREN- 9 TICESHIP TRAINING ORGANIZATION.—The term 10 ‘workforce development or apprenticeship training 11 organization’ means any organization— 12 ‘‘(A) which— 13 ‘‘(i) is described in section 501(c)(3) 14 and exempt from tax under section 501(a), 15 and 16 ‘‘(ii) is not a private foundation, 17 ‘‘(B) whose exclusive purpose is to provide 18 workforce development and apprenticeship 19 training to eligible participants, including— 20 ‘‘(i) community colleges, 21 ‘‘(ii) workforce training programs, as 22 defined by State workforce agencies, 23 ‘‘(iii) organizations that provide career 24 and technical education, 25 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 4 •HR 1739 IH ‘‘(iv) organizations that provide train- 1 ing or apprenticeships operated by a collec- 2 tive bargaining organization, 3 ‘‘(v) community organizations that 4 provide full certified training, and 5 ‘‘(vi) private schools that confer diplo- 6 mas, degrees, or certify completion of cer- 7 tain grades, 8 ‘‘(C) that is in compliance with all applica- 9 ble State laws, including laws relating to unlaw- 10 ful discrimination, health and safety require- 11 ments, and criminal background checks of em- 12 ployees, and 13 ‘‘(D) which meets the requirements of sub- 14 section (d). 15 ‘‘(3) ELIGIBLE PARTICIPANTS.—The term ‘eli- 16 gible participant’ means an individual who is en- 17 rolled in a workforce development and apprentice- 18 ship training organization, as described in paragraph 19 (2)(B). 20 ‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 21 shall be allowed under any provision of this chapter for 22 any expense for which a credit is allowed under this sec- 23 tion. 24 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 5 •HR 1739 IH ‘‘(e) ELECTION.—This section shall apply to a tax- 1 payer for a taxable year only if such taxpayer elects to 2 have this section apply for such taxable year. 3 ‘‘(f) APPLICATION OF VOLUME CAP.—A contribution 4 shall be taken into account under this section only if such 5 contribution is recognized by the Secretary as applying 6 against the volume cap established under section 5 of the 7 USA Workforce Tax Credit Act.’’. 8 (2) CLERICAL AMENDMENT.—The table of sec- 9 tions for subpart A of part IV of subchapter A of 10 chapter 1 of such Code is amended by inserting 11 after the item relating to section 25D the following 12 new item: 13 ‘‘Sec. 25E. Qualified Workforce Development and Apprenticeship Training Pro- grams.’’. (b) CREDIT FOR CORPORATIONS.— 14 (1) IN GENERAL.—Subpart D of part IV of 15 subchapter A of chapter 1 of such Code is amended 16 by adding at the end the following new section: 17 ‘‘SEC. 45T. CONTRIBUTIONS TO WORKFORCE DEVELOP- 18 MENT OR APPRENTICESHIP TRAINING ORGA- 19 NIZATIONS. 20 ‘‘(a) GENERAL RULE.—For purposes of section 38, 21 in the case of a corporation, the workforce development 22 and apprenticeship training credit determined under this 23 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 6 •HR 1739 IH section for the taxable year is the aggregate amount of 1 qualified contributions for the taxable year. 2 ‘‘(b) LIMITATION.— 3 ‘‘(1) INCOME LIMITATION.—The amount of the 4 credit determined under this section for any taxable 5 year shall not exceed the lesser of— 6 ‘‘(A) 25 percent of the tax liability of the 7 taxpayer for the taxable year, and 8 ‘‘(B) $250,000. 9 ‘‘(2) REDUCTION BASED ON STATE CREDIT.— 10 The amount allowed as a credit under subsection (a) 11 for a taxable year shall be reduced by the amount 12 allowed as a credit on any State tax return of the 13 individual for qualified contributions made by the 14 taxpayer during the taxable year. 15 ‘‘(3) QUALIFIED CONTRIBUTIONS.—For pur- 16 poses of this section, the term ‘qualified contribu- 17 tion’ has the meaning given such term under section 18 25E. 19 ‘‘(c) DENIAL OF DOUBLE BENEFIT.—No deduction 20 shall be allowed under any provision of this chapter for 21 any expense for which a credit is allowed under this sec- 22 tion. 23 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 7 •HR 1739 IH ‘‘(d) ELECTION.—This section shall apply to a tax- 1 payer for a taxable year only if such taxpayer elects to 2 have this section apply for such taxable year. 3 ‘‘(e) APPLICATION OF VOLUME CAP.—A contribution 4 shall be taken into account under this section only if such 5 contribution is recognized by the Secretary as applying 6 against the volume cap established under section 5 of the 7 USA Workforce Tax Credit Act.’’. 8 (2) CONFORMING AMENDMENTS.—Section 9 38(b) of such Code is amended by striking ‘‘plus’’ at 10 the end of paragraph (31), by striking the period 11 and inserting ‘‘, plus’’ at the end of paragraph (32), 12 and by adding at the end the following new para- 13 graph: 14 ‘‘(33) the workforce development or apprentice- 15 ship training credit determined under section 16 45T(a).’’. 17 (3) CLERICAL AMENDMENT.—The table of sec- 18 tions for subpart D of part IV of subchapter A of 19 chapter 1 of such Code is amended by adding at the 20 end the following new item: 21 ‘‘Sec. 45T. Contributions to workforce development or apprenticeship training organizations.’’. SEC. 3. TAX CREDIT FOR CONTRIBUTIONS TO SCHOLAR- 22 SHIP GRANTING ORGANIZATIONS. 23 (a) CREDIT FOR INDIVIDUALS.— 24 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 8 •HR 1739 IH (1) IN GENERAL.—Subpart A of part IV of sub- 1 chapter A of chapter 1 of the Internal Revenue Code 2 of 1986, as amended by this Act, is amended by in- 3 serting after section 25E the following new section: 4 ‘‘SEC. 25F. QUALIFIED ELEMENTARY AND SECONDARY EDU- 5 CATION SCHOLARSHIPS. 6 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in- 7 dividual, there shall be allowed as a credit against the tax 8 imposed by this chapter for the taxable year an amount 9 equal to the amount of qualified contributions made by 10 the taxpayer during the taxable year. 11 ‘‘(b) DOLLAR LIMITATIONS.— 12 ‘‘(1) INCOME LIMITATION.—The amount al- 13 lowed as a credit under subsection (a) with respect 14 to any taxpayer shall not exceed the lesser of— 15 ‘‘(A) 25 percent of the tax liability of the 16 taxpayer, and 17 ‘‘(B) $250,000. 18 ‘‘(2) REDUCTION BASED ON STATE CREDIT.— 19 The amount allowed as a credit under subsection (a) 20 for a taxable year shall be reduced by the amount 21 allowed as a credit on any State tax return of the 22 individual for qualified contributions made by the 23 taxpayer during the taxable year. 24 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 9 •HR 1739 IH ‘‘(c) QUALIFIED CONTRIBUTIONS; OTHER DEFINI- 1 TIONS.—For purposes of this section— 2 ‘‘(1) QUALIFIED CONTRIBUTION.—The term 3 ‘qualified contribution’ means a charitable contribu- 4 tion (as defined by section 170(c)) to a scholarship 5 granting organization. 6 ‘‘(2) SCHOLARSHIP GRANTING ORGANIZA- 7 TION.—The term ‘scholarship granting organization’ 8 means any organization— 9 ‘‘(A) which— 10 ‘‘(i) is described in section 501(c)(3) 11 and exempt from tax under section 501(a), 12 and 13 ‘‘(ii) is not a private foundation, 14 ‘‘(B) whose exclusive purpose is to provide 15 scholarships for tuition for qualified elementary 16 and secondary education expenses of eligible 17 students, and 18 ‘‘(C) which meets the requirements of sub- 19 section (d). 20 ‘‘(d) REQUIREMENTS FOR SCHOLARSHIP GRANTING 21 ORGANIZATIONS.— 22 ‘‘(1) IN GENERAL.—An organization meets the 23 requirements of this subsection if— 24 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 10 •HR 1739 IH ‘‘(A) such organization provides scholar- 1 ships to— 2 ‘‘(i) more than 1 student, and 3 ‘‘(ii) different students attending more 4 than 1 school, 5 ‘‘(B) such organization does not provide 6 scholarships for any expenses other than quali- 7 fied elementary and secondary education ex- 8 penses, 9 ‘‘(C) such organization provides a scholar- 10 ship to eligible students with a priority for stu- 11 dents awarded a scholarship the previous school 12 year, 13 ‘‘(D) such organization does not earmark 14 or set aside contributions for scholarships on 15 behalf of any particular student, 16 ‘‘(E) such organization takes appropriate 17 steps to verify the annual household income and 18 family size of eligible students to whom it 19 awards scholarships, and limits them to a mem- 20 ber of a household with a total annual house- 21 hold income, which does not exceed 200 percent 22 of the median gross income, as determined by 23 the Secretary of Housing and Urban Develop- 24 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 11 •HR 1739 IH ment, for the purposes of the low-income hous- 1 ing credit under section 42, 2 ‘‘(F) such organization obtains from an 3 independent certified public accountant annual 4 financial and compliance audits and submits 5 such audits to the Secretary, 6 ‘‘(G) no officer or board member of such 7 organization has been convicted of a felony, and 8 ‘‘(H) such organization requires any eligi- 9 ble student who receives a scholarship to permit 10 such organization to share assessment informa- 11 tion and other data regarding the student for 12 the purpose of providing reports described in 13 subsection (e), and such other information as 14 necessary for the purposes of reporting on the 15 academic achievement of eligible students re- 16 ceiving a scholarship from such organization. 17 ‘‘(2) INDEPENDENT CERTIFIED PUBLIC AC- 18 COUNTANT.—For purposes of paragraph (1)(F), the 19 term ‘independent certified public accountant’ 20 means, with respect to an organization, a certified 21 public accountant who is not a related person (with- 22 in the meaning of section 465(b)(3)(C)) with respect 23 to such organization or any employee of such organi- 24 zation. 25 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 12 •HR 1739 IH ‘‘(e) ELIGIBLE SCHOOL REPORTING REQUIRE- 1 MENT.— 2 ‘‘(1) IN GENERAL.—The reports described in 3 this subsection include— 4 ‘‘(A) a report to the parents on the stu- 5 dent’s academic achievement, and 6 ‘‘(B) a report to each qualified scholarship 7 granting organization that provides scholarships 8 to students at the school, that includes the test 9 results, in the aggregate and disaggregated by 10 race or ethnicity and grade level, of the stu- 11 dents receiving such scholarships who are in 12 grades 3 through 12 on a grade-appropriate na- 13 tionally norm-referenced standardized test. 14 ‘‘(2) NO PERSONALLY IDENTIFIABLE INFORMA- 15 TION.—In preparing and submitting the report de- 16 scribed in paragraph (1)(B), a school shall not in- 17 clude any personally identifiable information regard- 18 ing a student. 19 ‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 20 shall be allowed under any provision of this chapter for 21 any expense for which a credit is allowed under this sec- 22 tion. 23 VerDate Sep 11 2014 01:27 Mar 30, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H1739.IH H1739 kjohnson on DSK79L0C42 with BILLS 13 •HR 1739 IH ‘‘(g) ELECTION.—This section shall apply to a tax- 1 payer for a taxable year only if such taxpayer ele [Text truncated for display. 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