Investing in American Workers Act

I 116TH CONGRESS 1ST SESSION H. R. 5012 To amend the Internal Revenue Code of 1986 to provide a credit for employer-provided worker training. IN THE HOUSE OF REPRESENTATIVES NOVEMBER 8, 2019 Mr. KRISHNAMOORTHI (for himself, Mrs. AXNE, Mr. SCHIFF, Ms. WILD, Ms. DELBENE, Mr. BERA, Mrs. DINGELL, Ms. KUSTER of New Hampshire, and Mr. SOTO) 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 consideration 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 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 2 •HR 5012 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. 45T. EMPLOYER-PROVIDED WORKER TRAINING 5 CREDIT. 6 ‘‘(a) IN GENERAL.—For purposes of section 38, ex- 7 cept as provided in subsection (d), the employer-provided 8 worker training credit under this section for the taxable 9 year is an amount equal to 20 percent of the excess (if 10 any) of— 11 ‘‘(1) the qualified training expenditures for 12 such taxable year, over 13 ‘‘(2) the average of the qualified training ex- 14 penditures (if any) for the 3 taxable years preceding 15 such taxable year. 16 ‘‘(b) QUALIFIED TRAINING EXPENDITURES.—For 17 purposes of this section— 18 ‘‘(1) QUALIFIED TRAINING EXPENDITURES DE- 19 FINED.— 20 ‘‘(A) IN GENERAL.—The term ‘qualified 21 training expenditures’ means any expenditures 22 by an employer for qualified training for any 23 non-highly compensated employee. 24 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 3 •HR 5012 IH ‘‘(B) EXCLUSIONS.—The term ‘qualified 1 training expenditures’ shall not include any 2 amounts paid for meals, lodging, transpor- 3 tation, or other services incidental to expendi- 4 tures described in subparagraph (A). 5 ‘‘(2) QUALIFIED TRAINING.— 6 ‘‘(A) IN GENERAL.—The term ‘qualified 7 training’ means training which results in the at- 8 tainment of a recognized postsecondary creden- 9 tial and which is provided pursuant to one of 10 the following: 11 ‘‘(i) An apprenticeship program which 12 is registered under the Act of August 16, 13 1937 (commonly known as the ‘National 14 Apprenticeship Act’; 50 Stat. 664, chapter 15 663) and is in an emerging industry. 16 ‘‘(ii) An apprenticeship program 17 which is registered or approved by a recog- 18 nized State apprenticeship agency in ac- 19 cordance with section 1 of such Act and 20 which is in an emerging industry. 21 ‘‘(iii) A program of training services 22 listed pursuant to section 122(d) of the 23 Workforce Innovation and Opportunity 24 Act. 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 4 •HR 5012 IH ‘‘(iv) A program which is conducted 1 by an area career and technical education 2 school, a community college, or a labor or- 3 ganization. 4 ‘‘(v) A program which is sponsored 5 and administered by an employer, industry 6 trade association, industry or sector part- 7 nership, or labor organization. 8 ‘‘(B) EMERGING INDUSTRY.—The term 9 ‘emerging industry’ means, for a taxable year, 10 an industry that comprises less than 30 percent 11 of all civilian apprentices registered with the 12 Department of Labor for the fiscal year ending 13 in such taxable year. 14 ‘‘(C) COMMUNITY COLLEGE.—The term 15 ‘community college’ means an institution which 16 is a junior or community college as defined in 17 section 312(f) of the Higher Education Act of 18 1965. 19 ‘‘(D) LABOR ORGANIZATION.—The term 20 ‘labor organization’ means a labor organization, 21 within the meaning of the term in section 22 501(c)(5) of the Internal Revenue Code of 23 1986. 24 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 5 •HR 5012 IH ‘‘(E) INDUSTRY TRADE ASSOCIATION.— 1 The term ‘industry trade association’ means an 2 organization which— 3 ‘‘(i) is described in paragraph (3) or 4 (6) of section 501(c) of the Internal Rev- 5 enue Code of 1986 and exempt from tax- 6 ation under section 501(a) of such Code, 7 and 8 ‘‘(ii) is representing an industry. 9 ‘‘(F) OTHER TERMS.—The terms ‘area ca- 10 reer and technical education school’, ‘recognized 11 postsecondary credential’, and ‘industry or sec- 12 tor partnership’ have the meanings given such 13 terms, respectively, by section 3 of the Work- 14 force Innovation and Opportunity Act. 15 ‘‘(3) NON-HIGHLY COMPENSATED EMPLOYEE.— 16 The term ‘non-highly compensated employee’ means, 17 with respect to an employer, an employee whose— 18 ‘‘(A) compensation (as such term is de- 19 fined in section 415(c)(3)) from such employer 20 for services provided for the taxable year does 21 not exceed $82,000, and 22 ‘‘(B) rate of compensation, if applied to a 23 full-time employee for a year, would not exceed 24 $82,000. 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 6 •HR 5012 IH ‘‘(c) SPECIAL RULES.— 1 ‘‘(1) SPECIAL RULE IN CASE OF NO QUALIFIED 2 TRAINING EXPENDITURES IN ANY OF 3 PRECEDING 3 TAXABLE YEARS.— 4 ‘‘(A) TAXPAYERS TO WHICH PARAGRAPH 5 APPLIES.—The credit under this section shall 6 be determined under this paragraph if the tax- 7 payer has no qualified training expenditures in 8 any one of the 3 taxable years preceding the 9 taxable year for which the credit is being deter- 10 mined. 11 ‘‘(B) CREDIT RATE.—The credit deter- 12 mined under this paragraph shall be equal to 13 10 percent of the adjusted qualified training ex- 14 penditures for the taxable year. 15 ‘‘(2) AGGREGATION AND ALLOCATION OF EX- 16 PENDITURES, ETC.—In determining the amount of 17 the credit under this section, rules similar to the 18 rules of paragraphs (1), (2), (3), (4), and (5) of sec- 19 tion 41(f) shall apply. 20 ‘‘(d) ELECTION TO APPLY CREDIT AGAINST PAY- 21 ROLL TAXES.— 22 ‘‘(1) IN GENERAL.—At the election of a quali- 23 fied small business (as defined in section 41(h)) or 24 a qualified tax-exempt organization (as defined in 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 7 •HR 5012 IH section 3111(e)(5)(A)) for any taxable year, section 1 3111(g) shall apply to the payroll tax credit portion 2 of the credit otherwise determined under subsection 3 (a) for the taxable year and such portion shall not 4 be treated (other than for purposes of section 280C) 5 as a credit determined under subsection (a). 6 ‘‘(2) PAYROLL TAX CREDIT PORTION.—For 7 purposes of this subsection, the payroll tax credit 8 portion of the credit determined under subsection 9 (a) with respect to any taxpayer for any taxable year 10 is the least of— 11 ‘‘(A) the amount specified in the election 12 made under this subsection, 13 ‘‘(B) the credit determined under sub- 14 section (a) for the taxable year (determined be- 15 fore the application of this subsection), or 16 ‘‘(C) in the case of a qualified small busi- 17 ness other than a partnership or S corporation, 18 the amount of the business credit carryforward 19 under section 39 carried from the taxable year 20 (determined before the application of this sub- 21 section to the taxable year). 22 ‘‘(3) ELECTION.— 23 ‘‘(A) IN GENERAL.—Any election under 24 this subsection for any taxable year— 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 8 •HR 5012 IH ‘‘(i) shall specify the amount of the 1 credit to which such election applies, 2 ‘‘(ii) shall be made on or before the 3 due date (including extensions) of— 4 ‘‘(I) in the case of a partnership, 5 the return required to be filed under 6 section 6031, 7 ‘‘(II) in the case of an S corpora- 8 tion, the return required to be filed 9 under section 6037, and 10 ‘‘(III) in the case of any other 11 taxpayer, the return of tax for the 12 taxable year, and 13 ‘‘(iii) may be revoked only with the 14 consent of the Secretary. 15 ‘‘(B) LIMITATIONS.— 16 ‘‘(i) AMOUNT.—The amount specified 17 in any election made under this subsection 18 shall not exceed $250,000. 19 ‘‘(ii) NUMBER OF TAXABLE YEARS.— 20 A person may not make an election under 21 this subsection if such person (or any other 22 person treated as a single taxpayer with 23 such person under paragraph (5)(A)) has 24 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 9 •HR 5012 IH made an election under this subsection for 1 five or more preceding taxable years. 2 ‘‘(C) SPECIAL RULE FOR PARTNERSHIPS 3 AND S CORPORATIONS.—In the case of a part- 4 nership or S corporation, the election made 5 under this subsection shall be made at the enti- 6 ty level. 7 ‘‘(4) AGGREGATION RULES.— 8 ‘‘(A) IN GENERAL.—Except as provided in 9 subparagraph (B)— 10 ‘‘(i) all members of the same con- 11 trolled group of corporations shall be treat- 12 ed as a single taxpayer, and 13 ‘‘(ii) all trades or businesses (whether 14 or not incorporated) which are under com- 15 mon control shall be treated as a single 16 taxpayer. 17 ‘‘(B) SPECIAL RULES.—For purposes of 18 this subsection and section 3111(g)— 19 ‘‘(i) each of the persons treated as a 20 single taxpayer under subparagraph (A) 21 may separately make the election under 22 paragraph (1) for any taxable year, and 23 ‘‘(ii) the $250,000 amount under 24 paragraph (4)(B)(i) shall be allocated 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 10 •HR 5012 IH among all persons treated as a single tax- 1 payer under subparagraph (A) in the same 2 manner as under section 41(f)(1). 3 ‘‘(5) REGULATIONS.—The Secretary shall pre- 4 scribe such regulations as may be necessary to carry 5 out the purposes of this subsection, including— 6 ‘‘(A) regulations to prevent the avoidance 7 of the purposes of the limitations and aggrega- 8 tion rules under this subsection, 9 ‘‘(B) regulations to minimize compliance 10 and recordkeeping burdens under this sub- 11 section, and 12 ‘‘(C) regulations for recapturing the ben- 13 efit of credits determined under section 3111(g) 14 in cases where there is a recapture or a subse- 15 quent adjustment to the payroll tax credit por- 16 tion of the credit determined under subsection 17 (a), including requiring amended income tax re- 18 turns in the cases where there is such an ad- 19 justment.’’. 20 (2) CREDIT PART OF GENERAL BUSINESS 21 CREDIT.—Section 38(b) of the Internal Revenue 22 Code of 1986 is amended by striking ‘‘plus’’ at the 23 end of paragraph (31), by striking the period at the 24 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 11 •HR 5012 IH end of paragraph (32) and inserting ‘‘, plus’’, and 1 by adding at the end the following new paragraph: 2 ‘‘(33) the employer-provided worker training 3 credit determined under section 45T(a).’’. 4 (3) COORDINATION WITH DEDUCTIONS.—Sec- 5 tion 280C of the Internal Revenue Code of 1986 is 6 amended by adding at the end the following new 7 subsection: 8 ‘‘(i) EMPLOYER-PROVIDED WORKER TRAINING 9 CREDIT.—No deduction shall be allowed for that portion 10 of the expenses otherwise allowable as a deduction taken 11 into account in determining the credit under section 45T 12 for the taxable year which is equal to the amount of the 13 credit determined for such taxable year under section 14 45T(a).’’. 15 (4) CLERICAL AMENDMENT.—The table of sec- 16 tions for subpart D of part IV of subchapter A of 17 chapter 1 of the Internal Revenue Code of 1986 is 18 amended by adding at the end the following new 19 item: 20 ‘‘Sec. 45T. Employer-provided worker training credit.’’. (b) CREDIT ALLOWED AGAINST ALTERNATIVE MIN- 21 IMUM TAX.—Subparagraph (B) of section 38(c)(4) of the 22 Internal Revenue Code of 1986 is amended— 23 (1) by redesignating clauses (x), (xi), and (xii) 24 as clauses (xi), (xii), and (xiii), respectively, and 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 12 •HR 5012 IH (2) by inserting after clause (ix) the following 1 new clause: 2 ‘‘(x) the credit determined under sec- 3 tion 45T with respect to an eligible small 4 business (as defined in paragraph (5)(A), 5 after application of rules similar to the 6 rules of paragraph (5)(B)),’’. 7 (c) PAYROLL TAX CREDIT.—Section 3111 of the In- 8 ternal Revenue Code of 1986 is amended by adding at the 9 end the following new subsection: 10 ‘‘(g) CREDIT FOR WORKER TRAINING EXPENSES.— 11 ‘‘(1) IN GENERAL.—In the case of a taxpayer 12 who has made an election under section 45T(d) for 13 a taxable year, there shall be allowed as a credit 14 against the tax imposed by subsection (a) for the 15 first calendar quarter which begins after the date on 16 which the taxpayer files the return specified in sec- 17 tion 45T(d)(3)(A)(ii) an amount equal to the payroll 18 tax credit portion determined under section 19 45T(d)(2). 20 ‘‘(2) LIMITATION.—The credit allowed by para- 21 graph (1) shall not exceed the tax imposed by sub- 22 section (a) for any calendar quarter on the wages 23 paid with respect to the employment of all individ- 24 uals in the employ of the employer. 25 VerDate Sep 11 2014 04:14 Nov 19, 2019 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6201 E:\BILLS\H5012.IH H5012 kjohnson on DSK79L0C42 with BILLS 13 •HR 5012 IH ‘‘(3) CARRYOVER OF UNUSED CREDIT.—If the 1 amount of the credit under paragraph (1) exceeds 2 the limitation of paragraph (2) for any calendar 3 quarter, such excess shall be carried to the suc- 4 ceeding calendar quarter and allowed as a credit 5 under [Text truncated for display. 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