Apprenticeship and Jobs Training Act of 2019

I 116TH CONGRESS 1ST SESSION H. R. 3368 To establish a tax credit for on-site apprenticeship programs, and for other purposes. IN THE HOUSE OF REPRESENTATIVES JUNE 19, 2019 Ms. SA´NCHEZ (for herself and Mr. FITZPATRICK) introduced the following bill; which was referred to the Committee on Ways and Means, and in addi- tion to the Committee on Education and Labor, for a period to be subse- quently determined by the Speaker, in each case for consideration of such provisions as fall within the jurisdiction of the committee concerned A BILL To establish a tax credit for on-site apprenticeship programs, and for other purposes. 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 ‘‘Apprenticeship and 4 Jobs Training Act of 2019’’. 5 SEC. 2. TAX CREDIT FOR APPRENTICESHIP PROGRAMS. 6 (a) IN GENERAL.—Subpart D of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 2 •HR 3368 IH 1986 is amended by adding at the end the following new 1 section: 2 ‘‘SEC. 45T. CREDIT FOR APPRENTICESHIP PROGRAM EX- 3 PENSES. 4 ‘‘(a) TAX CREDIT.— 5 ‘‘(1) IN GENERAL.—For purposes of section 38, 6 in the case of an employer, the apprenticeship pro- 7 gram credit determined under this section for any 8 taxable year is an amount equal to— 9 ‘‘(A) with respect to each qualified indi- 10 vidual in a qualified apprenticeship program, 11 the lesser of— 12 ‘‘(i) the amount of any wages (as de- 13 fined in section 51(c)(1)) paid or incurred 14 by the employer with respect to such quali- 15 fied individual during the taxable year, or 16 ‘‘(ii) $5,000, and 17 ‘‘(B) with respect to each qualified indi- 18 vidual in a qualified multi-employer apprentice- 19 ship program, the lesser of— 20 ‘‘(i) an amount equal to the product 21 of— 22 ‘‘(I) the total number of hours of 23 work performed by such qualified in- 24 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 3 •HR 3368 IH dividual for such employer during 1 such taxable year, multiplied by 2 ‘‘(II) $3, or 3 ‘‘(ii) $5,000. 4 ‘‘(2) ESTABLISHED APPRENTICESHIP PRO- 5 GRAMS.— 6 ‘‘(A) IN GENERAL.—The apprenticeship 7 program credit determined under this section 8 for the taxable year shall only be applicable to 9 the number of qualified individuals employed by 10 the employer through a qualified apprenticeship 11 program or a qualified multi-employer appren- 12 ticeship program which are in excess of the ap- 13 prenticeship participation average for such em- 14 ployer (as determined under subparagraph (B)). 15 ‘‘(B) APPRENTICESHIP PARTICIPATION AV- 16 ERAGE.—For purposes of subparagraph (A), 17 the apprenticeship participation average shall 18 be equal to the average of the total number of 19 qualified individuals employed by the employer 20 through a qualified apprenticeship program or 21 qualified multi-employer apprenticeship pro- 22 gram for— 23 ‘‘(i) the 3 preceding taxable years, or 24 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 4 •HR 3368 IH ‘‘(ii) the number of taxable years in 1 which the qualified apprenticeship program 2 or the qualified multi-employer apprentice- 3 ship program was in existence, whichever 4 is less. 5 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—No deduc- 6 tion or any other credit shall be allowed under this 7 chapter for any amount taken into account in deter- 8 mining the credit under this section. 9 ‘‘(4) ELECTION NOT TO CLAIM CREDIT.—This 10 section shall not apply to a taxpayer for any taxable 11 year if such taxpayer elects to have this section not 12 apply for such taxable year. 13 ‘‘(5) LIMITATION.—The apprenticeship pro- 14 gram credit under this section shall not be allowed 15 for more than 3 taxable years with respect to any 16 qualified individual. 17 ‘‘(b) QUALIFIED INDIVIDUAL.— 18 ‘‘(1) IN GENERAL.—For purposes of this sec- 19 tion, the term ‘qualified individual’ means, with re- 20 spect to any taxable year, an individual who is an 21 apprentice and— 22 ‘‘(A) is participating in a qualified appren- 23 ticeship program or a qualified multi-employer 24 apprenticeship program with an employer that 25 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 5 •HR 3368 IH is subject to the terms of a valid apprenticeship 1 agreement (as defined in the Act of August 16, 2 1937 (commonly known as the ‘National Ap- 3 prenticeship Act’; 50 Stat. 664, chapter 663; 29 4 U.S.C. 50 et seq.)), 5 ‘‘(B) has been employed under a qualified 6 apprenticeship program or a qualified multi-em- 7 ployer apprenticeship program for a period of 8 not less than 7 months that ends within the 9 taxable year, 10 ‘‘(C) is not a highly compensated employee 11 (as defined in section 414(q)), and 12 ‘‘(D) is not a seasonal worker (as defined 13 in section 45R(d)(5)(B)). 14 ‘‘(2) TRAINING RECEIVED BY MEMBERS OF THE 15 ARMED FORCES.—An employer shall consider and 16 may accept, in the case of a qualified individual par- 17 ticipating in a qualified apprenticeship program or a 18 qualified multi-employer apprenticeship program, 19 any relevant training or instruction received by such 20 individual while serving in the Armed Forces of the 21 United States, for the purpose of satisfying the ap- 22 plicable training and instruction requirements under 23 such qualified apprenticeship program. 24 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 6 •HR 3368 IH ‘‘(c) QUALIFIED APPRENTICESHIP PROGRAM AND 1 QUALIFIED MULTI-EMPLOYER APPRENTICESHIP PRO- 2 GRAM.— 3 ‘‘(1) QUALIFIED APPRENTICESHIP PROGRAM.— 4 ‘‘(A) IN GENERAL.—For purposes of this 5 section, the term ‘qualified apprenticeship pro- 6 gram’ means a program registered under the 7 National Apprenticeship Act, whether or not 8 such program is sponsored by an employer, 9 which— 10 ‘‘(i) provides qualified individuals with 11 on-the-job training and instruction for a 12 qualified occupation with the employer, 13 ‘‘(ii) is registered with the Office of 14 Apprenticeship of the Employment and 15 Training Administration of the Depart- 16 ment of Labor or a State apprenticeship 17 agency recognized by such Office of Ap- 18 prenticeship, 19 ‘‘(iii) maintains records relating to the 20 qualified individual, in such manner as the 21 Secretary, after consultation with the Sec- 22 retary of Labor, may prescribe, and 23 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 7 •HR 3368 IH ‘‘(iv) satisfies such other requirements 1 as the Secretary, after consultation with 2 the Secretary of Labor, may prescribe. 3 ‘‘(B) QUALIFIED OCCUPATION.—For pur- 4 poses of subparagraph (A)(i), the term ‘quali- 5 fied occupation’ means a skilled trade occupa- 6 tion in a high-demand mechanical, technical, 7 healthcare, or technology field (or such other 8 occupational field as the Secretary, after con- 9 sultation with the Secretary of Labor, may pre- 10 scribe) that satisfies the criteria for an 11 apprenticeable occupation under the National 12 Apprenticeship Act. 13 ‘‘(2) QUALIFIED MULTI-EMPLOYER APPREN- 14 TICESHIP PROGRAM.—The term ‘qualified multi-em- 15 ployer apprenticeship program’ means an apprentice- 16 ship program described in paragraph (1) in which 17 multiple employers are required to contribute and 18 that is maintained pursuant to one or more collective 19 bargaining agreements between one or more em- 20 ployee organizations and such employers. 21 ‘‘(d) APPRENTICESHIP AGREEMENT.— 22 ‘‘(1) IN GENERAL.—For purposes of this sec- 23 tion, the term ‘apprenticeship agreement’ means an 24 agreement between a qualified individual and an em- 25 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 8 •HR 3368 IH ployer that satisfies the criteria under the National 1 Apprenticeship Act. 2 ‘‘(2) CREDIT FOR TRAINING RECEIVED UNDER 3 APPRENTICESHIP AGREEMENT.—If a qualified indi- 4 vidual has received training or instruction through a 5 qualified apprenticeship program or a qualified 6 multi-employer apprenticeship program with an em- 7 ployer which is subsequently unable to satisfy its ob- 8 ligations under the apprenticeship agreement, such 9 individual may transfer any completed training or 10 instruction for purposes of satisfying any applicable 11 training and instruction requirements under a sepa- 12 rate apprenticeship agreement with a different em- 13 ployer. 14 ‘‘(e) APPLICATION OF CERTAIN RULES.—For pur- 15 poses of this section, all persons treated as a single em- 16 ployer under subsection (a) or (b) of section 52, or sub- 17 sections (m) or (o) of section 414, shall be treated as a 18 single person. 19 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 20 such regulations as may be necessary to carry out the pro- 21 visions of this section.’’. 22 (b) CREDIT TO BE PART OF GENERAL BUSINESS 23 CREDIT.—Section 38(b) of the Internal Revenue Code of 24 1986 is amended by striking ‘‘plus’’ at the end of para- 25 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 9 •HR 3368 IH graph (31), by striking the period at the end of paragraph 1 (32) and inserting ‘‘, plus’’, and by adding at the end the 2 following new paragraph: 3 ‘‘(33) the apprenticeship program expenses 4 credit determined under section 45T(a).’’. 5 (c) CLERICAL AMENDMENT.—The table of sections 6 for subpart D of part IV of subchapter A of chapter 1 7 of the Internal Revenue Code of 1986 is amended by add- 8 ing at the end the following new item: 9 ‘‘Sec. 45T. Credit for apprenticeship program expenses.’’. (d) CONFORMING AMENDMENTS.— 10 (1) RULE FOR EMPLOYMENT CREDITS.—Sec- 11 tion 280C(a) of the Internal Revenue Code of 1986 12 is amended by inserting ‘‘45T(a),’’ after ‘‘45S(a),’’. 13 (2) EXCLUSION FOR DETERMINATION OF CRED- 14 IT FOR INCREASING RESEARCH ACTIVITIES.—Clause 15 (iii) of section 41(b)(2)(D) of such Code is amended 16 by inserting ‘‘the apprenticeship program credit 17 under section 45T(a) or’’ after ‘‘in determining’’. 18 (e) EVALUATION.—Not later than 3 years after the 19 date of the enactment of this Act, and annually thereafter, 20 the Comptroller General of the United States shall submit 21 a report to the Committees on Finance and Health, Edu- 22 cation, Labor, and Pensions of the Senate and the Com- 23 mittees on Ways and Means and Education and Labor of 24 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 10 •HR 3368 IH the House of Representatives that contains an evaluation 1 of the activities authorized under this Act, including— 2 (1) the extent to which qualified individuals 3 completed qualified apprenticeship programs and 4 qualified multi-employer apprenticeship programs; 5 (2) whether qualified individuals remained em- 6 ployed by an employer that received an apprentice- 7 ship program credit under section 45T of the Inter- 8 nal Revenue Code of 1986 and the length of such 9 employment following expiration of the apprentice- 10 ship period; 11 (3) whether qualified individuals who completed 12 a qualified apprenticeship program or a qualified 13 multi-employer apprenticeship program remained 14 employed in the same occupation or field; and 15 (4) recommendations for legislative and admin- 16 istrative actions to improve the effectiveness of the 17 apprenticeship program credit under section 45T of 18 the Internal Revenue Code of 1986. 19 (f) EFFECTIVE DATE.—The amendments made by 20 this section shall apply to taxable years beginning after 21 December 31, 2019. 22 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 11 •HR 3368 IH SEC. 3. ENCOURAGING MENTORS TO TRAIN THE FUTURE. 1 (a) EARLY DISTRIBUTIONS FROM QUALIFIED RE- 2 TIREMENT PLANS.—Section 72(t)(2) of the Internal Rev- 3 enue Code of 1986 is amended— 4 (1) in subparagraph (A)— 5 (A) by striking ‘‘or’’ at the end of clause 6 (vii); 7 (B) by striking the period at the end of 8 clause (viii) and inserting ‘‘, or’’; and 9 (C) by adding at the end the following new 10 clause: 11 ‘‘(ix) made to an employee who is 12 serving as a mentor.’’; and 13 (2) by adding at the end the following new sub- 14 paragraph: 15 ‘‘(H) DISTRIBUTIONS TO MENTORS.—For 16 purposes of this paragraph, the term ‘mentor’ 17 means an individual who— 18 ‘‘(i) has attained 55 years of age, 19 ‘‘(ii) is not separated from their em- 20 ployment with a company, corporation, or 21 institution of higher education, 22 ‘‘(iii) in accordance with such require- 23 ments and standards as the Secretary de- 24 termines to be necessary, has substantially 25 reduced their hours of employment with 26 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 12 •HR 3368 IH their employer, with the individual to be 1 engaged in mentoring activities described 2 in clause (iv) for not less than 20 percent 3 of the hours of employment after such re- 4 duction, and 5 ‘‘(iv) is responsible for the training 6 and education of employees or students in 7 an area of expertise for which the indi- 8 vidual has a professional credential, certifi- 9 cate, or degree.’’. 10 (b) DISTRIBUTIONS DURING WORKING RETIRE- 11 MENT.—Paragraph (36) of section 401(a) of the Internal 12 Revenue Code of 1986 is amended to read as follows: 13 ‘‘(36) DISTRIBUTIONS DURING WORKING RE- 14 TIREMENT.— 15 ‘‘(A) IN GENERAL.—A trust forming part 16 of a pension plan shall not be treated as failing 17 to constitute a qualified trust under this section 18 solely because the plan provides that a distribu- 19 tion may be made from such trust to an em- 20 ployee who— 21 ‘‘(i) has attained age 62 and who is 22 not separated from employment at the 23 time of such distribution, or 24 VerDate Sep 11 2014 20:12 Jun 26, 2019 Jkt 089200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H3368.IH H3368 jbell on DSK3GLQ082PROD with BILLS 13 •HR 3368 IH ‘‘(ii) subject to subparagraph (B), is 1 ser [Text truncated for display. 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