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[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[S. 538 Introduced in Senate (IS)]

<DOC>

116th CONGRESS
  1st Session
                                 S. 538

  To amend the Internal Revenue Code of 1986 to provide a credit for 
                   employer-provided worker training.

_______________________________________________________________________

                   IN THE SENATE OF THE UNITED STATES

                           February 25, 2019

 Mr. Warner (for himself, Ms. Stabenow, and Mr. Casey) 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 worker training.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Investing in American Workers Act''.

SEC. 2. EMPLOYER-PROVIDED WORKER TRAINING CREDIT.

    (a) In General.--
            (1) Determination of credit.--Subpart D of part IV of 
        subchapter A of chapter 1 of the Internal Revenue Code of 1986 
        is amended by adding at the end the following new section:

``SEC. 45T. EMPLOYER-PROVIDED WORKER TRAINING CREDIT.

    ``(a) In General.--For purposes of section 38, the employer-
provided worker training credit under this section for the taxable year 
is an amount equal to 20 percent of the excess (if any) of--
            ``(1) the qualified training expenditures for the taxable 
        year, over
            ``(2) the average of the adjusted qualified training 
        expenditures for the 3 taxable years preceding the taxable year 
        for which the credit is being determined.
    ``(b) Qualified Training Expenditures.--For purposes of this 
section--
            ``(1) In general.--The term `qualified training 
        expenditures' means any expenditures for the qualified training 
        of any non-highly compensated employee. Such term shall not 
        include any amounts paid for meals, lodging, transportation, or 
        other services incidental to such qualified training.
            ``(2) Qualified training.--
                    ``(A) In general.--For purposes of paragraph (1), 
                the term `qualified training' means training which 
                results in the attainment of a recognized postsecondary 
                credential and which is provided through--
                            ``(i) an apprenticeship program registered 
                        under the Act of August 16, 1937 (commonly 
                        known as the `National Apprenticeship Act'; 50 
                        Stat. 664, chapter 663; 29 U.S.C. 50 et seq.);
                            ``(ii)(I) a program of training services 
                        which is listed under section 122(d) of the 
                        Workforce Innovation and Opportunity Act (29 
                        U.S.C. 3152(d)); or
                            ``(II) an apprenticeship program which is 
                        registered or approved by a recognized State 
                        apprenticeship agency (which uses a State 
                        apprenticeship council) in accordance with 
                        section 1 of the Act referred to in clause (i);
                            ``(iii) a program which is conducted by an 
                        area career and technical education school, a 
                        community college, or a labor organization; or
                            ``(iv) a program which is sponsored and 
                        administered by an employer, industry trade 
                        association, industry or sector partnership, or 
                        labor organization.
                    ``(B) Related definitions.--In subparagraph (A):
                            ``(i) Area career and technical education 
                        school.--The term `area career and technical 
                        education school' means such a school, as 
                        defined in section 3 of the Carl D. Perkins 
                        Career and Technical Education Act of 2006 (20 
                        U.S.C. 2302), which participates in a program 
                        under that Act (20 U.S.C. 2301 et seq.).
                            ``(ii) Community college.--The term 
                        `community college' means an institution 
                        which--
                                    ``(I) is a junior or community 
                                college as defined in section 312(f) of 
                                the Higher Education Act of 1965 (20 
                                U.S.C. 1058(f)), except that the 
                                institution need not meet the 
                                requirements of paragraph (1) of that 
                                section; and
                                    ``(II) participates in a program 
                                under title IV of that Act (20 U.S.C. 
                                1070 et seq.).
                            ``(iii) Industry or sector partnership.--
                        The term `industry or sector partnership' has 
                        the meaning given such term under section 3 of 
                        the Workforce Innovation and Opportunity Act 
                        (29 U.S.C. 3102).
                            ``(iv) Industry trade association.--The 
                        term `industry trade association' means an 
                        organization which--
                                    ``(I) is described in paragraph (3) 
                                or (6) of section 501(c) of the 
                                Internal Revenue Code of 1986 and 
                                exempt from taxation under section 
                                501(a) of such Code; and
                                    ``(II) is representing an industry.
                            ``(v) Labor organization.--The term `labor 
                        organization' means a labor organization, 
                        within the meaning of the term in section 
                        501(c)(5) of the Internal Revenue Code of 1986.
                            ``(vi) Recognized postsecondary 
                        credential.--The term `recognized postsecondary 
                        credential' means a credential consisting of an 
                        industry-recognized certificate or 
                        certification, a certificate of completion of 
                        an apprenticeship, a license recognized by the 
                        State involved or Federal Government, or an 
                        associate or baccalaureate degree.
            ``(3) Non-highly compensated employee.--For purposes of 
        paragraph (1), the term `non-highly compensated employee' means 
        an employee of the taxpayer whose remuneration for the taxable 
        year for services provided to the taxpayer does not exceed 
        $82,000.
    ``(c) Adjusted Qualified Training Expenditures.--For purposes of 
this section, the term `adjusted qualified training expenses' means, 
with respect to any taxable year--
            ``(1) the qualified training expenses for such taxable 
        year, multiplied by
            ``(2) the cost-of-living adjustment determined under 
        section 1(f)(3) for the calendar year in which the taxable year 
        for which the credit is being determined begins, except that 
        section 1(f)(3)(A)(ii) shall be applied by using the CPI for 
        the calendar year in which the taxable year in which qualified 
        training expenses were paid or incurred begins in lieu of the 
        CPI for calendar year 1982.
    ``(d) Special Rules.--For purposes of this section--
            ``(1) Special rule in case of no qualified training 
        expenditures in any of 3 preceding taxable years.--
                    ``(A) Taxpayers to which paragraph applies.--The 
                credit under this section shall be determined under 
                this paragraph if the taxpayer has no qualified 
                training expenditures in any one of the 3 taxable years 
                preceding the taxable year for which the credit is 
                being determined.
                    ``(B) Credit rate.--The credit determined under 
                this paragraph shall be equal to 10 percent of the 
                adjusted qualified training expenditures for the 
                taxable year.
            ``(2) Aggregation and allocation of expenditures, etc.--
        Rules similar to the rules of paragraphs (1), (2), (3), (4), 
        and (5) of section 41(f) shall apply.
    ``(e) Election To Apply Credit Against Payroll Taxes.--
            ``(1) In general.--At the election of a qualified small 
        business or a qualified tax-exempt organization (as defined in 
        section 3111(e)(5)(A)) for any taxable year, section 3111(g) 
        shall apply to the payroll tax credit portion of the credit 
        otherwise determined under subsection (a) for the taxable year 
        and such portion shall not be treated (other than for purposes 
        of section 280C) as a credit determined under subsection (a).
            ``(2) Payroll tax credit portion.--For purposes of this 
        subsection, the payroll tax credit portion of the credit 
        determined under subsection (a) with respect to any qualified 
        small business or qualified tax-exempt organization for any 
        taxable year is the least of--
                    ``(A) the amount specified in the election made 
                under this subsection,
                    ``(B) the credit determined under subsection (a) 
                for the taxable year (determined before the application 
                of this subsection), or
                    ``(C) in the case of a qualified small business 
                other than a partnership or S corporation, the amount 
                of the business credit carryforward under section 39 
                carried from the taxable year (determined before the 
                application of this subsection to the taxable year).
            ``(3) Qualified small business.--For purposes of this 
        subsection--
                    ``(A) In general.--The term `qualified small 
                business' means, with respect to any taxable year--
                            ``(i) a corporation or partnership, if--
                                    ``(I) the gross receipts (as 
                                determined under the rules of section 
                                448(c)(3), without regard to 
                                subparagraph (A) thereof) of such 
                                entity for the taxable year is less 
                                than $5,000,000, and
                                    ``(II) such entity did not have 
                                gross receipts (as so determined) for 
                                any taxable year preceding the 5-
                                taxable-year period ending with such 
                                taxable year, and
                            ``(ii) any person (other than a corporation 
                        or partnership) who meets the requirements of 
                        subclauses (I) and (II) of clause (i), 
                        determined--
                                    ``(I) by substituting `person' for 
                                `entity' each place it appears, and
                                    ``(II) by only taking into account 
                                the aggregate gross receipts received 
                                by such person in carrying on all 
                                trades or businesses of such person.
                    ``(B) Limitation.--Such term shall not include an 
                organization which is exempt from taxation under 
                section 501.
            ``(4) Election.--
                    ``(A) In general.--Any election under this 
                subsection for any taxable year--
                            ``(i) shall specify the amount of the 
                        credit to which such election applies,
                            ``(ii) shall be made on or before the due 
                        date (including extensions) of--
                                    ``(I) in the case of a partnership, 
                                the return required to be filed under 
                                section 6031,
                                    ``(II) in the case of an S 
                                corporation, the return required to be 
                                filed under section 6037, and
                                    ``(III) in the case of any other 
                                qualified small business or qualified 
                                tax-exempt organization, the return of 
                                tax for the taxable year, and
                            ``(iii) may be revoked only with the 
                        consent of the Secretary.
                    ``(B) Limitations.--
                            ``(i) Amount.--The amount specified in any 
                        election made under this subsection shall not 
                        exceed $250,000.
                            ``(ii) Number of taxable years.--A person 
                        may not make an election under this subsection 
                        if such person (or any other person treated as 
                        a single taxpayer with such person under 
                        paragraph (5)(A)) has made an election under 
                        this subsection for five or more preceding 
                        taxable years.
                    ``(C) Special rule for partnerships and s 
                corporations.--In the case of a partnership or S 
                corporation, the election made under this subsection 
                shall be made at the entity level.
            ``(5) Aggregation rules.--
                    ``(A) In general.--Except as provided in 
                subparagraph (B)--
                            ``(i) all members of the same controlled 
                        group of corporations shall be treated as a 
                        single taxpayer, and
                            ``(ii) all trades or businesses (whether or 
                        not incorporated) which are under common 
                        control shall be treated as a single taxpayer.
                    ``(B) Special rules.--For purposes of this 
                subsection and section 3111(g)--
                            ``(i) each of the persons treated as a 
                        single taxpayer under subparagraph (A) may 
                        separately make the election under paragraph 
                        (1) for any taxable year, and
                            ``(ii) the $250,000 amount under paragraph 
                        (3)(B)(i) shall be allocated among all persons 
                        treated as a single taxpayer under subparagraph 
                        (A) in the manner provided by the Secretary 
                        which is similar to the manner provided under 
                        section 41(f)(1).
            ``(6) Regulations.--The Secretary shall prescribe such 
        regulations as may be necessary to carry out the purposes of 
        this subsection, including--
                    ``(A) regulations to prevent the avoidance of the 
                purposes of the limitations and aggregation rules under 
                this subsection,
                    ``(B) regulations to minimize compliance and 
                recordkeeping burdens under this subsection, and
                    ``(C) regulations for recapturing the benefit of 
                credits determined under section 3111(g) in cases where 
                there is a recapture or a subsequent adjustment to the 
                payroll tax credit portion of the credit determined 
                under subsection (a), including requiring amended 
                income tax returns in the cases where there is such an 
                adjustment.''.
            (2) Credit part of general business credit.--Section 38(b) 
        of the Internal Revenue Code of 1986 is amended by striking 
        ``plus'' at the end of paragraph (31), by striking the period 
        at the end of paragraph (32) and inserting ``, plus'', and by 
        adding at the end the following new paragraph:
            ``(33) the employer-provided worker training credit 
        determined under section 45T(a).''.
            (3) Coordination with deductions.--Section 280C of the 
        Internal Revenue Code of 1986 is amended by adding at the end 
        the following new subsection:
    ``(i) Employer-Provided Worker Training Credit.--No deduction shall 
be allowed for that portion of the expenses otherwise allowable as a 
deduction taken into account in determining the credit under section 
45T for the taxable year which is equal to the amount of the credit 
determined for such taxable year under section 45T(a).''.
            (4) Clerical amendment.--The table of sections for subpart 
        D of part IV of subchapter A of chapter 1 of the Internal 
        Revenue Code of 1986 is amended by adding at the end the 
        following new item:

``Sec. 45T. Employer-provided worker training credit.''.
    (b) Credit Allowed Against Alternative Minimum Tax.--Subparagraph 
(B) of section 38(c)(4) of the Internal Revenue Code of 1986 is 
amended--
            (1) by redesignating clauses (x), (xi), and (xii) as 
        clauses (xi), (xii), and (xiii), respectively, and
            (2) by inserting after clause (ix) the following new 
        clause:
                            ``(x) the credit determined under section 
                        45T with respect to an eligible small business 
                        (as defined in paragraph (5)(C), after 
                        application of rules similar to the rules of 
                        paragraph (5)(D)),''.
    (c) Payroll Tax Credit.--Section 3111 of the Internal Revenue Code 
of 1986 is amended by adding at the end the following new subsection:
    ``(g) Credit for Worker Training Expenses.--
            ``(1) In general.--In the case of a taxpayer who has made 
        an election under section 45T(e) for a taxable year, there 
        shall be allowed as a credit against the tax imposed by 
        subsection (a) for the first calendar quarter which begins 
        after the date on which the taxpayer files the return specified 
        in section 45T(e)(4)(A)(ii) an amount equal to the payroll tax 
        credit portion determined under section 45T(e)(2).
            ``(2) Limitation.--The credit allowed by paragraph (1) 
        shall not exceed the tax imposed by subsection (a) for any 
        calendar quarter on the wages paid with respect to the 
        employment of all individuals in the employ of the employer.
            ``(3) Carryover of unused credit.--If the amount of the 
        credit under paragraph (1) exceeds the limitation of paragraph 
        (2) for any calendar quarter, such excess shall be carried to 
        the succeeding calendar quarter and allowed as a credit under 
        paragraph (1) for such quarter.
            ``(4) Deduction allowed for credited amounts.--The credit 
        allowed under paragraph (1) shall not be taken into account for 
        purposes of determining the amount of any deduction allowed 
        under chapter 1 for taxes imposed under subsection (a).''.
    (d) Simplified Filing for Certain Small Businesses.--The Secretary 
of the Treasury shall provide for a method of filing returns of tax and 
information returns required under the Internal Revenue Code of 1986 in 
a simplified format, to the extent possible, for employers with less 
than $5,000,000 in annual gross receipts (as determined under guidance 
provided by the Secretary).
    (e) Regulations Relating to Postsecondary Credentials.--Not later 
than 1 year after the date of the enactment of this Act, the Secretary 
of Labor, in consultation with the Secretary of the Treasury, shall 
issue regulations or other guidance applying the definition of the term 
``recognized postsecondary credential'' as provided in section 3 of the 
Workforce Innovation and Opportunity Act (29 U.S.C. 3102).
    (f) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after the date of the enactment of 
this Act.
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