Skills Renewal Act

II 116TH CONGRESS 2D SESSION S. 3779 To amend the Internal Revenue Code of 1986 to establish a tax credit for training services received by individuals who are unemployed as a result of the coronavirus pandemic. IN THE SENATE OF THE UNITED STATES MAY 20, 2020 Ms. KLOBUCHAR (for herself, Mr. SASSE, Mr. BOOKER, and Mr. SCOTT of South Carolina) 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 establish a tax credit for training services received by individuals who are unemployed as a result of the coronavirus pan- demic. 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 ‘‘Skills Renewal Act’’. 4 SEC. 2. ESTABLISHMENT OF SKILLS TRAINING CREDIT. 5 (a) IN GENERAL.—Subpart C of part IV of sub- 6 chapter A of chapter 1 of the Internal Revenue Code of 7 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 2 •S 3779 IS 1986 is amended by inserting after section 36 the fol- 1 lowing new section: 2 ‘‘SEC. 36A. SKILLS TRAINING CREDIT. 3 ‘‘(a) ALLOWANCE OF CREDIT.—In the case of an eli- 4 gible individual, there shall be allowed as a credit against 5 the tax imposed by this subtitle for the taxable year an 6 amount equal to the lesser of— 7 ‘‘(1) the amount of expenses paid or incurred 8 by such individual during such taxable year for 9 qualified training services which are provided by a 10 qualified entity, or 11 ‘‘(2) an amount equal to— 12 ‘‘(A) $4,000, minus 13 ‘‘(B) an amount equal to the sum of any 14 credits allowed to the taxpayer under this sec- 15 tion for any preceding taxable year. 16 ‘‘(b) DEFINITIONS.—For purposes of this section— 17 ‘‘(1) ELIGIBLE INDIVIDUAL.— 18 ‘‘(A) IN GENERAL.—The term ‘eligible in- 19 dividual’ means an individual who— 20 ‘‘(i) became unemployed or furloughed 21 during calendar year 2020 but was other- 22 wise able to work and available for work 23 within the meaning of applicable State law 24 (as defined in section 205 of the Federal- 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 3 •S 3779 IS State Extended Unemployment Compensa- 1 tion Act of 1970 (26 U.S.C. 3304 note)), 2 ‘‘(ii) during the period in which any 3 qualified training service is provided to 4 such individual by a qualified entity— 5 ‘‘(I) is not employed and has ap- 6 plied for or is receiving compensation 7 (as defined in section 3306(h)), in- 8 cluding pandemic emergency unem- 9 ployment compensation under section 10 2107 of subtitle A of title II of divi- 11 sion A of the CARES Act, and 12 ‘‘(II) informs such entity of their 13 intent to claim the credit allowed 14 under subsection (a) with respect to 15 such service. 16 ‘‘(B) EXCLUSION.—For purposes of sub- 17 paragraph (A), the term ‘eligible individual’ 18 shall not include an individual whose employer 19 has reduced their hours of work and who re- 20 ceives compensation pursuant to a short-time 21 compensation program (as defined in section 22 3306(v)). 23 ‘‘(2) QUALIFIED ENTITY.—The term ‘qualified 24 entity’ means an entity that is— 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 4 •S 3779 IS ‘‘(A) a provider included on a State list de- 1 scribed in section 122(d) of the Workforce In- 2 novation and Opportunity Act (29 U.S.C. 3 3152(d)); or 4 ‘‘(B) a provider of qualified training serv- 5 ices that has been precertified by the Secretary 6 of Labor under section 3 of the Skills Renewal 7 Act. 8 ‘‘(3) QUALIFIED TRAINING SERVICE.—The term 9 ‘qualified training service’ means a course or pro- 10 gram of study that— 11 ‘‘(A) is included on a list described in sec- 12 tion 122(d) of the Workforce Innovation and 13 Opportunity Act (29 U.S.C. 3152(d)) for a 14 State, or 15 ‘‘(B) is a course or program of study relat- 16 ing to computer science, technology, or another 17 high-need area, such as a coding boot camp, 18 that has been precertified by the Secretary of 19 Labor under section 3 of the Skills Renewal 20 Act. 21 ‘‘(c) COORDINATION WITH AMERICAN OPPORTUNITY 22 AND LIFETIME LEARNING CREDITS.—For purposes of 23 subsection (a)(1), the amount of expenses paid or incurred 24 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 5 •S 3779 IS by an eligible individual during such taxable year for quali- 1 fied training services shall be reduced— 2 ‘‘(1) as provided in section 25A(g)(2), and 3 ‘‘(2) by the amount of such expenses which 4 were taken into account in determining the credit al- 5 lowed to the taxpayer or any other person under sec- 6 tion 25A. 7 ‘‘(d) REGULATIONS.—The Secretary shall prescribe 8 such regulations as may be necessary to carry out the pro- 9 visions of this section. 10 ‘‘(e) TERMINATION.—This section shall not apply to 11 expenses paid or incurred during taxable years beginning 12 after December 31, 2021.’’. 13 (b) INFORMATION REPORTING RELATING TO QUALI- 14 FIED TRAINING SERVICES.—Subpart B of part III of sub- 15 chapter A of chapter 61 of the Internal Revenue Code of 16 1986 is amended by adding at the end the following new 17 section: 18 ‘‘SEC. 6050Z. RETURNS RELATING TO QUALIFIED TRAINING 19 SERVICES. 20 ‘‘(a) REQUIREMENT OF REPORTING.—Any qualified 21 entity which, in the course of a trade or business and for 22 any calendar year, receives payments from any electing in- 23 dividual with respect to qualified training services pro- 24 vided by such entity shall make the return described in 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 6 •S 3779 IS subsection (b) with respect to each such individual at such 1 time as the Secretary may by regulations prescribe. 2 ‘‘(b) RETURN.—A return is described in this sub- 3 section if such return— 4 ‘‘(1) is in such form as the Secretary may pre- 5 scribe, and 6 ‘‘(2) contains— 7 ‘‘(A) the name, address, and TIN of each 8 electing individual from whom a payment de- 9 scribed in subsection (a) was received during 10 the calendar year, 11 ‘‘(B) the aggregate amount of such pay- 12 ments received by such individual during such 13 calendar year and the date and amount of each 14 such payment, and 15 ‘‘(C) such other information as the Sec- 16 retary may require. 17 ‘‘(c) ELECTING INDIVIDUAL.—The term ‘electing in- 18 dividual’ means an individual who has indicated to the 19 qualified entity their intention to claim the credit allowed 20 under section 36A with respect to the qualified training 21 services provided by such entity. 22 ‘‘(d) STATEMENT TO BE FURNISHED TO INDIVID- 23 UALS WITH RESPECT TO WHOM INFORMATION IS RE- 24 QUIRED.— 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 7 •S 3779 IS ‘‘(1) IN GENERAL.—Every qualified entity re- 1 quired to make a return under subsection (a) shall 2 furnish to each electing individual whose name is re- 3 quired to be set forth in such return a written state- 4 ment showing— 5 ‘‘(A) the name, address, and phone num- 6 ber of the information contact of the qualified 7 entity required to make such a return, and 8 ‘‘(B) the aggregate amount of payments 9 made by the individual to the qualified entity 10 required to be shown on the return. 11 ‘‘(2) FURNISHING OF INFORMATION.—The 12 written statement required under paragraph (1) 13 shall be furnished to the individual on or before Jan- 14 uary 31 of the year following the calendar year for 15 which the return under subsection (a) is required to 16 be made. 17 ‘‘(e) DEFINITIONS.—The terms ‘qualified entity’ and 18 ‘qualified training services’ have the same meaning given 19 such terms under section 36A(b). 20 ‘‘(f) REGULATIONS AND GUIDANCE.—The Secretary 21 may prescribe such regulations and other guidance as may 22 be appropriate or necessary to carry out the purpose of 23 this section.’’. 24 (c) CLERICAL AMENDMENTS.— 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 8 •S 3779 IS (1) Section 6211(b)(4)(A) of the Internal Rev- 1 enue Code of 1986 is amended by inserting ‘‘36A,’’ 2 after ‘‘36,’’. 3 (2) The table of sections for subpart C of part 4 IV of subchapter A of chapter 1 of such Code is 5 amended by inserting after the item relating to sec- 6 tion 36 the following new item: 7 ‘‘Sec. 36A. Skills Training Credit.’’. (3) The table of sections for subchapter A of 8 chapter 61 of such Code is amended by adding at 9 the end the following new item: 10 ‘‘Sec. 6050Z. Returns relating to qualified training services.’’. (d) EFFECTIVE DATE.—The amendments made by 11 this section shall apply to expenses paid or incurred during 12 taxable years beginning after December 31, 2019. 13 SEC. 3. PRECERTIFICATION BY SECRETARY OF LABOR. 14 (a) IN GENERAL.—The Secretary of Labor shall es- 15 tablish a process through which the Secretary shall 16 precertify providers of courses or programs of training 17 services as qualified entities providing qualified training 18 services (as such terms are defined in section 36A(b) of 19 the Internal Revenue Code of 1986), to enable the pro- 20 viders and courses or programs to qualify for the tax cred- 21 it provided under such section 36A. 22 (b) ESTABLISHMENT OF PRECERTIFICATION RE- 23 QUIREMENTS.— 24 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 9 •S 3779 IS (1) IN GENERAL.—By not later than 60 days 1 after the date of enactment of this Act, the Sec- 2 retary of Labor shall create and publish the precerti- 3 fication requirements— 4 (A) for a provider to be a qualified entity 5 for purposes of section 36A(b)(2)(B) of the In- 6 ternal Revenue Code of 1986; and 7 (B) for a course or program of study re- 8 lated to a high-need area, as determined by the 9 Secretary of Labor, to be a qualified training 10 service for purposes of section 36A(b)(3)(B) of 11 such Code. 12 (2) CONSIDERATIONS OF HIGH-NEED AREAS.— 13 In determining the high-need areas for purposes of 14 paragraph (1)(B), the Secretary of Labor shall— 15 (A) include computer science and tech- 16 nology; and 17 (B) consider— 18 (i) the graduate areas of national 19 need designated by the Secretary of Edu- 20 cation under section 712(b) of the Higher 21 Education Act of 1965 (20 U.S.C. 22 1135a(b)); and 23 (ii) the STEM Designated Degree 24 Program list issued by the Department of 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 10 •S 3779 IS Homeland Security for purposes of the 24- 1 month optional practical training extension 2 described in section 214.2(f)(10)(ii) (C) of 3 title 8, Code of Federal Regulations. 4 (3) PRECERTIFICATION PERIOD.—If the Sec- 5 retary of Labor precertifies a provider and a course 6 or program of study under this section, such pro- 7 vider and course or program of study shall be con- 8 sidered to be a qualified entity for purposes of sec- 9 tion 36A(b)(2)(B) of the Internal Revenue Code of 10 1986 and a qualified training service for purposes of 11 section 36(A)(b)(3)(B) of such Code, for the entire 12 period— 13 (A) beginning on the date of this Act; and 14 (B) ending on December 31, 2021. 15 (c) APPLICATION FOR PRECERTIFICATION.— 16 (1) IN GENERAL.—A provider of training serv- 17 ices that desires to be precertified as a qualified pro- 18 vider that offers a qualified training service shall 19 submit an application to the Secretary of Labor at 20 such time, in such manner, and containing such in- 21 formation as the Secretary may require. 22 (2) CONTENTS.—The Secretary shall ensure 23 that the application required under this paragraph— 24 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 11 •S 3779 IS (A) is streamlined and easy to complete; 1 and 2 (B) includes, at a minimum, information 3 and data regarding— 4 (i) the credential earned through the 5 course or program; 6 (ii) the average student completion 7 rate for the program for the 3-year period 8 preceding the date of application; 9 (iii) the costs of enrollment in the pro- 10 gram; 11 (iv) the average employment rate for 12 individuals who complete the program dur- 13 ing such period; and 14 (v) the average earnings for individ- 15 uals who complete the program during 16 such period. 17 (3) NOTIFICATION.—In any case where an indi- 18 vidual enrolling in a training service notifies a pro- 19 vider of training services that the individual intends 20 to claim the credit allowed under section 36A of the 21 Internal Revenue Code of 1986 with respect to the 22 training service, the provider shall— 23 (A) inform the individual if the provider 24 and the service qualify as a qualified training 25 VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS 12 •S 3779 IS provider and qualified training service for pur- 1 poses of such section; and 2 (B) if the provider has applied but has not 3 yet received precertification for the provider or 4 program from the Secretary of Labor under 5 this section, alert the individual that the pro- 6 vider and program has not yet been precerti- 7 fied. 8 Æ VerDate Sep 11 2014 23:14 Jun 11, 2020 Jkt 099200 PO 00000 Frm 00012 Fmt 6652 Sfmt 6301 E:\BILLS\S3779.IS S3779 kjohnson on DSK79L0C42PROD with BILLS