Better Education and Skills Training for America’s Workforce Act

II 116TH CONGRESS 1ST SESSION S. 2676 To amend the Internal Revenue Code of 1986 to provide a credit for employer-provided job training, and for other purposes. IN THE SENATE OF THE UNITED STATES OCTOBER 23, 2019 Mr. MENENDEZ introduced the following bill; which was read twice and referred to the Committee on Finance A BILL To amend the Internal Revenue Code of 1986 to provide a credit for employer-provided job training, 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 ‘‘Better Education and 4 Skills Training for America’s Workforce Act’’. 5 SEC. 2. JOB TRAINING TAX CREDIT. 6 (a) IN GENERAL.—Subpart D of part IV of sub- 7 chapter A of chapter 1 of the Internal Revenue Code of 8 1986 is amended by adding at the end the following new 9 section: 10 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 2 •S 2676 IS ‘‘SEC. 45T. JOB TRAINING CREDIT. 1 ‘‘(a) IN GENERAL.—For the purposes of section 38, 2 the job training credit determined under this section for 3 the taxable year is an amount equal to 100 percent of the 4 qualified training expenses paid by the qualifying taxpayer 5 during the taxable year. 6 ‘‘(b) LIMITATION.—The credit allowed under sub- 7 section (a) with respect to any eligible trainee of the quali- 8 fying taxpayer shall not exceed the excess (if any) of 9 $4,000 over the aggregate credit allowed to such taxpayer 10 under this section with respect to such eligible trainee for 11 all prior taxable years. 12 ‘‘(c) DEFINITIONS.—For purposes of this section— 13 ‘‘(1) QUALIFIED TRAINING EXPENSES.— 14 ‘‘(A) IN GENERAL.—The term ‘qualified 15 training expenses’ means, with respect to any 16 eligible trainee of the qualifying taxpayer, ex- 17 penses paid or incurred by such taxpayer for 18 qualified tuition costs of such eligible trainee. 19 ‘‘(B) QUALIFIED TUITION COSTS.—The 20 term ‘qualified tuition costs’ means costs for 21 books and enrollment in a training program at 22 a qualified educational organization, the out- 23 come of which, if completed, will provide the eli- 24 gible trainee a certificate or credential recog- 25 nized by a State accrediting body, Federal Ap- 26 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 3 •S 2676 IS prenticeship Agency, or any other national ac- 1 crediting body recognized by the Department of 2 Education as an independent, third-party ac- 3 crediting body. Such training program— 4 ‘‘(i) may include a single course, mul- 5 tiple courses, or a combination of work 6 training and study, and 7 ‘‘(ii) must be reasonably necessary for 8 employment with the qualifying taxpayer. 9 ‘‘(C) QUALIFIED EDUCATIONAL ORGANIZA- 10 TION.—The term ‘qualified educational organi- 11 zation’ means any institution of higher edu- 12 cation described in section 101 of the Higher 13 Education Act of 1965. 14 ‘‘(2) QUALIFYING TAXPAYER.—The term ‘quali- 15 fying taxpayer’ means any taxpayer who— 16 ‘‘(A) with respect to any eligible trainee, is 17 training and hiring individuals for positions 18 based in the United States, and 19 ‘‘(B) provides, with respect to any eligible 20 trainee, such documentation as required by the 21 Secretary regarding qualified training expenses 22 and proof of unemployment status as described 23 in paragraph (3)(A). 24 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 4 •S 2676 IS ‘‘(3) ELIGIBLE TRAINEE.—The term ‘eligible 1 trainee’ means any individual who— 2 ‘‘(A) has been unemployed for at least 90 3 days before the date of enrollment in a training 4 program described in paragraph (1)(B), and 5 ‘‘(B) had not been employed by the quali- 6 fying taxpayer at any time during the 2-year 7 period preceding the date on which such trainee 8 was hired. 9 ‘‘(d) SPECIAL RULES.— 10 ‘‘(1) DENIAL OF DOUBLE BENEFIT.—No credit 11 shall be allowed under subsection (a) for any quali- 12 fied training expense for which a deduction or other 13 credit is allowed to the taxpayer under any other 14 provision of this chapter. 15 ‘‘(2) AGGREGATION.—For purposes of this sec- 16 tion, all persons treated as a single employer under 17 subsection (a) or (b) or section 52, or subsection (m) 18 or (o) of section 414, shall be treated as one person. 19 ‘‘(e) ELECTION TO HAVE CREDIT NOT APPLY.—A 20 taxpayer may elect (at such time and in such manner as 21 the Secretary may by regulations prescribe) to have this 22 section not apply for any taxable year. 23 ‘‘(f) TERMINATION.—This section shall not apply to 24 expenses paid after December 31, 2030.’’. 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 5 •S 2676 IS (b) CREDIT TO BE PART OF GENERAL BUSINESS 1 CREDIT.—Section 38(b) of such Code is amended by strik- 2 ing ‘‘plus’’ at the end of paragraph (31), by striking the 3 period at the end of paragraph (32) and inserting ‘‘, plus’’, 4 and by adding at the end the following new paragraph: 5 ‘‘(33) the job training credit determined under 6 section 45T(a).’’. 7 (c) CREDIT ALLOWED AGAINST ALTERNATIVE MIN- 8 IMUM TAX.—Section 38(c)(4)(B) of such Code is amended 9 by redesignating clauses (x), (xi), and (xii) as clauses (xi), 10 (xii), and (xiii), respectively, and by inserting after clause 11 (ix) the following new clause: 12 ‘‘(x) the credit determined under sec- 13 tion 45T,’’. 14 (d) TECHNICAL AMENDMENT.—Section 6501(m) of 15 the Internal Revenue Code of 1986 is amended by insert- 16 ing ‘‘45T(e),’’ after ‘‘45H(g),’’. 17 (e) CLERICAL AMENDMENT.—The table of sections 18 for subpart D of part IV of subchapter A of chapter 1 19 of such Code is amended by adding at the end the fol- 20 lowing new item: 21 ‘‘Sec. 45T. Job training credit.’’. (f) REPORT.—Not later than January 1, 2029, the 22 Secretary of the Treasury (or the Secretary’s delegate) 23 shall report to the Committee on Ways and Means of the 24 House of Representatives and the Committee on Finance 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 6 •S 2676 IS of the Senate on the economic impact of the job training 1 credit under section 45T of the Internal Revenue Code 2 of 1986 (as added under subsection (a)). 3 (g) EFFECTIVE DATES.— 4 (1) IN GENERAL.—The amendments made by 5 this section shall apply to expenses paid or incurred 6 after the date of the enactment of this Act, in tax- 7 able years ending after such date. 8 (2) MINIMUM TAX.—The amendments made by 9 subsection (c) shall apply to credits determined 10 under section 45T of the Internal Revenue Code of 11 1986 in taxable years ending after the date of the 12 enactment of this Act, and to carrybacks of such 13 credits. 14 SEC. 3. QUALIFIED JOB TRAINING PARTNERSHIP CREDIT. 15 (a) IN GENERAL.—Subpart E of part IV of sub- 16 chapter A of chapter 1 of the Internal Revenue Code of 17 1986 is amended by inserting after section 48C the fol- 18 lowing new section: 19 ‘‘SEC. 48D. QUALIFIED JOB TRAINING PARTNERSHIP CRED- 20 IT. 21 ‘‘(a) IN GENERAL.—For purposes of section 46, the 22 Qualified Job Training Partnership credit for any taxable 23 year is an amount equal to the percentage determined by 24 the Secretary (not to exceed 100 percent) of the qualified 25 VerDate Sep 11 2014 22:33 Oct 28, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 7 •S 2676 IS investment for such taxable year with respect to any 1 Qualified Job Training Partnership. 2 ‘‘(b) QUALIFIED INVESTMENT.— 3 ‘‘(1) IN GENERAL.—For purposes of subsection 4 (a), the qualified investment for any taxable year is 5 the aggregate amount of the costs paid or incurred 6 in such taxable year for expenses necessary for and 7 directly related to the conduct of a Qualified Job 8 Training Partnership in the form of contributions of 9 cash, cash equivalent, equipment, or any combina- 10 tion of the three where 100 percent of the invest- 11 ment is used for the planning, implementation, or 12 operation of a Qualified Job Training Partnership 13 and the training financed through the investment 14 must result in a type of certificate or credential rec- 15 ognized by a State accrediting body, Federal Ap- 16 prenticeship Agency, or any other national accred- 17 iting body recognized by the Department of Edu- 18 cation as an independent, third-party accrediting 19 body. 20 ‘‘(2) LIMITATION.—The amount which is treat- 21 ed as qualified investment for all taxable years with 22 respect to any Qualified Job Training Partnership 23 shall not exceed the amount certified by the Sec- 24 retary as eligible for the credit under this section. 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 8 •S 2676 IS ‘‘(3) EXCLUSIONS.—The qualified investment 1 for any taxable year with respect to any Qualified 2 Job Training Partnership shall not take into account 3 any cost for student tuition or for any other expense 4 as determined by the Secretary as appropriate to 5 carry out the purposes of this section. 6 ‘‘(4) CERTAIN PROGRESS EXPENDITURE RULES 7 MADE APPLICABLE.—In the case of costs described 8 in paragraph (1) that are paid for property of a 9 character subject to an allowance for depreciation, 10 rules similar to the rules of subsections (c)(4) and 11 (d) of section 46 (as in effect on the day before the 12 date of the enactment of the Revenue Reconciliation 13 Act of 1990) shall apply for purposes of this section. 14 ‘‘(c) QUALIFIED JOB TRAINING PARTNERSHIP.— 15 ‘‘(1) IN GENERAL.—The term ‘Qualified Job 16 Training Partnership’ means a formal or informal 17 partnership between at least 1 eligible private busi- 18 ness employer and— 19 ‘‘(A) 1 qualified educational institution, or 20 ‘‘(B) 1 labor organization (as defined in 21 section 2(5) of the National Labor Relations 22 Act), 23 where the stated goal of the partnership is to train 24 students in job-ready skills. 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 9 •S 2676 IS ‘‘(2) ELIGIBLE PRIVATE BUSINESS EM- 1 PLOYER.—The term ‘eligible private business em- 2 ployer’ means— 3 ‘‘(A) a business entity at least 50 percent 4 of the gross income of which is derived from 5 qualified production activities (within the mean- 6 ing of section 199(c) (as in effect on December 7 31, 2017)), or 8 ‘‘(B) any type of domestic business entity 9 the average number of employees of which for 10 any taxable year is not more than 500 employ- 11 ees. 12 ‘‘(3) QUALIFIED EDUCATIONAL ORGANIZA- 13 TION.—The term ‘qualified educational organization’ 14 means any educational organization described in sec- 15 tion 101 of the Higher Education Act of 1965 which 16 provides a 2-year program that culminates in an as- 17 sociate degree. 18 ‘‘(d) QUALIFIED JOB TRAINING PARTNERSHIP PRO- 19 GRAM.— 20 ‘‘(1) ESTABLISHMENT.— 21 ‘‘(A) IN GENERAL.—Not later than 60 22 days after the date of the enactment of this sec- 23 tion, the Secretary, in consultation with the 24 Secretary of Labor, shall establish a Qualified 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 10 •S 2676 IS Job Training Partnership program to consider 1 and award certifications for qualified invest- 2 ments eligible for credits under this section to 3 Qualified Job Training Partnerships. 4 ‘‘(B) LIMITATION.—The total amount of 5 credits that may be allocated under the pro- 6 gram shall not exceed $1,000,000,000. 7 ‘‘(2) CERTIFICATION.— 8 ‘‘(A) APPLICATION PERIOD.—Each appli- 9 cant for certification under this paragraph shall 10 submit an application containing such informa- 11 tion as the Secretary may require during the 12 period beginning on the date the Secretary es- 13 tablishes the program under paragraph (1). 14 ‘‘(B) TIME FOR REVIEW OF APPLICA- 15 TIONS.—The Secretary shall take action to ap- 16 prove or deny any application under subpara- 17 graph (A) within 30 days of the submission of 18 such application. 19 ‘‘(C) MULTI-YEAR APPLICATIONS.—An ap- 20 plication for certification under subparagraph 21 (A) may include a request for an allocation of 22 credits for more than 1 year. 23 ‘‘(3) SELECTION CRITERIA.—In determining 24 the Qualified Job Training Partnerships with re- 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 11 •S 2676 IS spect to which qualified investments may be certified 1 under this section, the Secretary— 2 ‘‘(A) shall give priority to those applica- 3 tions which demonstrate— 4 ‘‘(i) the greatest probability that those 5 who complete the program will secure em- 6 ployment, 7 ‘‘(ii) the greatest potential for pro- 8 viding workers who complete the program 9 with skills that can provide long-term job 10 and income security, 11 ‘‘(iii) the strongest market demand 12 for the type of training offered, 13 ‘‘(iv) the greatest probability that the 14 program would create a net increase in job 15 training opportunities, 16 ‘‘(v) a strong need in the community 17 for skills training, 18 ‘‘(vi) the ability to allow nontradi- 19 tional learners to complete the training, 20 ‘‘(vii) the ability and capacity to im- 21 plement the program in a reasonable pe- 22 riod of time, and 23 ‘‘(viii) the greatest ability to offer 24 training programs that result in a certifi- 25 VerDate Sep 11 2014 01:33 Oct 26, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2676.IS S2676 kjohnson on DSK79L0C42 with BILLS 12 •S 2676 IS cate or credential (within the meaning of 1 subsection (b)(1)) that is stackable or port- 2 able or both, and 3 ‘‘(B) shall take into additional consider- 4 ation which applications show the ability to le- 5 verage additional sources of capital. 6 ‘‘(4) DISCLOSURE OF ALLOCATIONS.—The Sec- 7 retary shall, upon making a certification under this 8 subsection, publicly disclose the identity of the appli- 9 cant and the amount of the credit with respect to 10 such applicant. 11 ‘‘(e) SPECIAL RULES.— 12 ‘‘(1) BASIS ADJUSTMENT.—For purposes of 13 this subtitle, if a credit is allowed under this section 14 for an expenditure relat [Text truncated for display. 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