II 

114TH CONGRESS 

1ST SESSION S. 2020 

To establish a tax credit for on-site apprenticeship programs, and for other 

purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 9, 2015 

Ms. CANTWELL (for herself, Ms. COLLINS, Mr. KAINE, and Mrs. GILLIBRAND) 

introduced the following bill; which was read twice and referred to the 

Committee on Finance 

A BILL 

To establish a tax credit for on-site apprenticeship programs, 

and for other purposes. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Apprenticeship and 

5 Jobs Training Act of 2015’’. 

6 SEC. 2. TAX CREDIT FOR APPRENTICESHIP PROGRAMS. 

7 (a) IN GENERAL.—Subpart D of part IV of sub8 chapter A of chapter 1 of the Internal Revenue Code of 

9 1986 is amended by adding at the end the following new 

10 section: 


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1 ‘‘SEC. 45S. CREDIT FOR APPRENTICESHIP PROGRAM EX2 PENSES. 

3 ‘‘(a) TAX CREDIT.— 

4 ‘‘(1) IN GENERAL.—For purposes of section 38, 

5 in the case of an employer, the apprenticeship pro6 gram credit determined under this section for any 

7 taxable year is an amount equal to— 

8 ‘‘(A) with respect to each qualified indi9 vidual in a qualified apprenticeship program, 

10 the lesser of— 

11 ‘‘(i) the amount of any wages (as de12 fined in section 51(c)(1)) paid or incurred 

13 by the employer with respect to such quali14 fied individual during the taxable year, or 

15 ‘‘(ii) $5,000, and 

16 ‘‘(B) with respect to each qualified indi17 vidual in a qualified multi-employer apprentice18 ship program, the lesser of— 

19 ‘‘(i) an amount equal to the product 

20 of— 

21 ‘‘(I) the total number of hours of 

22 work performed by such qualified in23 dividual for such employer during 

24 such taxable year, multiplied by 

25 ‘‘(II) $3, or 

26 ‘‘(ii) $5,000. 


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1 ‘‘(2) ESTABLISHED APPRENTICESHIP PRO2 GRAMS.— 

3 ‘‘(A) IN GENERAL.—The apprenticeship 

4 program credit determined under this section 

5 for the taxable year shall only be applicable to 

6 the number of qualified individuals employed by 

7 the employer through a qualified apprenticeship 

8 program or a qualified multi-employer appren9 ticeship program which are in excess of the ap10 prenticeship participation average for such em11 ployer (as determined under subparagraph (B)). 

12 ‘‘(B) APPRENTICESHIP PARTICIPATION AV13 ERAGE.—For purposes of subparagraph (A), 

14 the apprenticeship participation average shall 

15 be equal to the average of the total number of 

16 qualified individuals employed by the employer 

17 through a qualified apprenticeship program or 

18 qualified multi-employer apprenticeship pro19 gram for— 

20 ‘‘(i) the 3 preceding taxable years, or 

21 ‘‘(ii) the number of taxable years in 

22 which the qualified apprenticeship program 

23 or the qualified multi-employer apprentice24 ship program was in existence, whichever 

25 is less. 


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1 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—No deduc2 tion or any other credit shall be allowed under this 

3 chapter for any amount taken into account in deter4 mining the credit under this section. 

5 ‘‘(4) ELECTION NOT TO CLAIM CREDIT.—This 

6 section shall not apply to a taxpayer for any taxable 

7 year if such taxpayer elects to have this section not 

8 apply for such taxable year. 

9 ‘‘(5) LIMITATION.—The apprenticeship pro10 gram credit under this section shall not be allowed 

11 for more than 3 taxable years with respect to any 

12 qualified individual. 

13 ‘‘(b) QUALIFIED INDIVIDUAL.— 

14 ‘‘(1) IN GENERAL.—For purposes of this sec15 tion, the term ‘qualified individual’ means, with re16 spect to any taxable year, an individual who is an 

17 apprentice and— 

18 ‘‘(A) is participating in a qualified appren19 ticeship program or a qualified multi-employer 

20 apprenticeship program with an employer that 

21 is subject to the terms of a valid apprenticeship 

22 agreement (as defined in the Act of August 16, 

23 1937 (commonly known as the ‘National Ap24 prenticeship Act’; 50 Stat. 664, chapter 663; 29 

25 U.S.C. 50 et seq.)), 


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1 ‘‘(B) has been employed under a qualified 

2 apprenticeship program or a qualified multi-em3 ployer apprenticeship program for a period of 

4 not less than 7 months that ends within the 

5 taxable year, 

6 ‘‘(C) is not a highly compensated employee 

7 (as defined in section 414(q)), and 

8 ‘‘(D) is not a seasonal worker (as defined 

9 in section 45R(d)(5)(B)). 

10 ‘‘(2) TRAINING RECEIVED BY MEMBERS OF THE

11 ARMED FORCES.—An employer shall consider and 

12 may accept, in the case of a qualified individual par13 ticipating in a qualified apprenticeship program or a 

14 qualified multi-employer apprenticeship program, 

15 any relevant training or instruction received by such 

16 individual while serving in the Armed Forces of the 

17 United States, for the purpose of satisfying the ap18 plicable training and instruction requirements under 

19 such qualified apprenticeship program. 

20 ‘‘(c) QUALIFIED APPRENTICESHIP PROGRAM AND

21 QUALIFIED MULTI-EMPLOYER APPRENTICESHIP PRO22 GRAM.— 

23 ‘‘(1) QUALIFIED APPRENTICESHIP PROGRAM.— 

24 ‘‘(A) IN GENERAL.—For purposes of this 

25 section, the term ‘qualified apprenticeship proVerDate Sep 11 2014 03:32 Sep 10, 2015 Jkt 049200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S2020.IS S2020

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1 gram’ means a program registered under the 

2 National Apprenticeship Act, whether or not 

3 such program is sponsored by an employer, 

4 which— 

5 ‘‘(i) provides qualified individuals with 

6 on-the-job training and instruction for a 

7 qualified occupation with the employer, 

8 ‘‘(ii) is registered with the Office of 

9 Apprenticeship of the Employment and 

10 Training Administration of the Depart11 ment of Labor or a State apprenticeship 

12 agency recognized by such Office of Ap13 prenticeship, 

14 ‘‘(iii) maintains records relating to the 

15 qualified individual, in such manner as the 

16 Secretary, after consultation with the Sec17 retary of Labor, may prescribe, and 

18 ‘‘(iv) satisfies such other requirements 

19 as the Secretary, after consultation with 

20 the Secretary of Labor, may prescribe. 

21 ‘‘(B) QUALIFIED OCCUPATION.—For pur22 poses of subparagraph (A)(i), the term ‘quali23 fied occupation’ means a skilled trade occupa24 tion in a high-demand mechanical, technical, 

25 healthcare, or technology field (or such other 


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1 occupational field as the Secretary, after con2 sultation with the Secretary of Labor, may pre3 scribe) that satisfies the criteria for an 

4 apprenticeable occupation under the National 

5 Apprenticeship Act. 

6 ‘‘(2) QUALIFIED MULTI-EMPLOYER APPREN7 TICESHIP PROGRAM.—The term ‘qualified multi-em8 ployer apprenticeship program’ means an apprentice9 ship program described in paragraph (1) in which 

10 multiple employers are required to contribute and 

11 that is maintained pursuant to one or more collective 

12 bargaining agreements between one or more em13 ployee organizations and such employers. 

14 ‘‘(d) APPRENTICESHIP AGREEMENT.— 

15 ‘‘(1) IN GENERAL.—For purposes of this sec16 tion, the term ‘apprenticeship agreement’ means an 

17 agreement between a qualified individual and an em18 ployer that satisfies the criteria under the National 

19 Apprenticeship Act. 

20 ‘‘(2) CREDIT FOR TRAINING RECEIVED UNDER

21 APPRENTICESHIP AGREEMENT.—If a qualified indi22 vidual has received training or instruction through a 

23 qualified apprenticeship program or a qualified 

24 multi-employer apprenticeship program with an em25 ployer which is subsequently unable to satisfy its obVerDate Sep 11 2014 03:32 Sep 10, 2015 Jkt 049200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S2020.IS S2020

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1 ligations under the apprenticeship agreement, such 

2 individual may transfer any completed training or 

3 instruction for purposes of satisfying any applicable 

4 training and instruction requirements under a sepa5 rate apprenticeship agreement with a different em6 ployer. 

7 ‘‘(e) APPLICATION OF CERTAIN RULES.—For pur8 poses of this section, all persons treated as a single em9 ployer under subsection (a) or (b) of section 52, or sub10 sections (m) or (o) of section 414, shall be treated as a 

11 single person. 

12 ‘‘(f) REGULATIONS.—The Secretary shall prescribe 

13 such regulations as may be necessary to carry out the pro14 visions of this section.’’. 

15 (b) CREDIT TO BE PART OF GENERAL BUSINESS

16 CREDIT.—Section 38(b) of the Internal Revenue Code of 

17 1986 is amended by striking ‘‘plus’’ at the end of para18 graph (35), by striking the period at the end of paragraph 

19 (36) and inserting ‘‘, plus’’, and by adding at the end the 

20 following new paragraph: 

21 ‘‘(37) the apprenticeship program expenses 

22 credit determined under section 45S(a).’’. 

23 (c) CLERICAL AMENDMENT.—The table of sections 

24 for subpart D of part IV of subchapter A of chapter 1 


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1 of the Internal Revenue Code of 1986 is amended by add2 ing at the end the following new item: 

‘‘Sec. 45S. Credit for apprenticeship program expenses.’’. 

3 (d) CONFORMING AMENDMENTS.— 

4 (1) RULE FOR EMPLOYMENT CREDITS.—Sec5 tion 280C(a) of the Internal Revenue Code of 1986 

6 is amended by inserting ‘‘45S(a),’’ after ‘‘45P(a),’’. 

7 (2) EXCLUSION FOR DETERMINATION OF CRED8 IT FOR INCREASING RESEARCH ACTIVITIES.—Clause 

9 (iii) of section 41(b)(2)(D) of such Code is amended 

10 by inserting ‘‘the apprenticeship program credit 

11 under section 45S(a) or’’ after ‘‘in determining’’. 

12 (e) EVALUATION.—Not later than 3 years after the 

13 date of the enactment of this Act, and annually thereafter, 

14 the Comptroller General of the United States shall submit 

15 a report to the Committees on Finance and Health, Edu16 cation, Labor, and Pensions of the Senate and the Com17 mittees on Ways and Means and Education and the Work18 force of the House of Representatives that contains an 

19 evaluation of the activities authorized under this Act, in20 cluding— 

21 (1) the extent to which qualified individuals 

22 completed qualified apprenticeship programs and 

23 qualified multi-employer apprenticeship programs; 

24 (2) whether qualified individuals remained em25 ployed by an employer that received an apprenticeVerDate Sep 11 2014 03:32 Sep 10, 2015 Jkt 049200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S2020.IS S2020

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1 ship program credit under section 45S of the Inter2 nal Revenue Code of 1986 and the length of such 

3 employment following expiration of the apprentice4 ship period; 

5 (3) whether qualified individuals who completed 

6 a qualified apprenticeship program or a qualified 

7 multi-employer apprenticeship program remained 

8 employed in the same occupation or field; and 

9 (4) recommendations for legislative and admin10 istrative actions to improve the effectiveness of the 

11 apprenticeship program credit under section 45S of 

12 the Internal Revenue Code of 1986. 

13 (f) EFFECTIVE DATE.—The amendments made by 

14 this section shall apply to taxable years beginning after 

15 December 31, 2015. 

16 SEC. 3. ENCOURAGING MENTORS TO TRAIN THE FUTURE. 

17 (a) EARLY DISTRIBUTIONS FROM QUALIFIED RE18 TIREMENT PLANS.—Section 72(t)(2) of the Internal Rev19 enue Code of 1986 is amended— 

20 (1) in subparagraph (A)— 

21 (A) by striking ‘‘or’’ at the end of clause 

22 (vii); 

23 (B) by striking the period at the end of 

24 clause (viii) and inserting ‘‘, or’’; and 


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1 (C) by adding at the end the following new 

2 clause: 

3 ‘‘(ix) made to an employee who is 

4 serving as a mentor.’’; and 

5 (2) by adding at the end the following new sub6 paragraph: 

7 ‘‘(H) DISTRIBUTIONS TO MENTORS.—For 

8 purposes of this paragraph, the term ‘mentor’ 

9 means an individual who— 

10 ‘‘(i) has attained 55 years of age, 

11 ‘‘(ii) is not separated from their em12 ployment with a company, corporation, or 

13 institution of higher education, 

14 ‘‘(iii) in accordance with such require15 ments and standards as the Secretary de16 termines to be necessary, has substantially 

17 reduced their hours of employment with 

18 their employer, with the individual to be 

19 engaged in mentoring activities described 

20 in clause (iv) for not less than 20 percent 

21 of the hours of employment after such re22 duction, and 

23 ‘‘(iv) is responsible for the training 

24 and education of employees or students in 

25 an area of expertise for which the indiVerDate Sep 11 2014 03:32 Sep 10, 2015 Jkt 049200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6201 E:\BILLS\S2020.IS S2020

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1 vidual has a professional credential, certifi2 cate, or degree.’’. 

3 (b) DISTRIBUTIONS DURING WORKING RETIRE4 MENT.—Paragraph (36) of section 401(a) of the Internal 

5 Revenue Code of 1986 is amended to read as follows: 

6 ‘‘(36) DISTRIBUTIONS DURING WORKING RE7 TIREMENT.— 

8 ‘‘(A) IN GENERAL.—A trust forming part 

9 of a pension plan shall not be treated as failing 

10 to constitute a qualified trust under this section 

11 solely because the plan provides that a distribu12 tion may be made from such trust to an em13 ployee who— 

14 ‘‘(i) has attained age 62 and who is 

15 not separated from employment at the 

16 time of such distribution, or 

17 ‘‘(ii) subject to subparagraph (B), is 

18 serving as a mentor (as such term is de19 fined in section 72(t)(2)(H)). 

20 ‘‘(B) LIMITATION ON DISTRIBUTIONS TO

21 MENTORS.—For purposes of subparagraph 

22 (A)(ii), the amount of the distribution made to 

23 an employee who is serving as a mentor shall 

24 not be greater than the amount equal to the 

25 product obtained by multiplying— 


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1 ‘‘(i) the amount of the distribution 

2 that would have been payable to the em3 ployee if such employee had separated 

4 from employment instead of reducing their 

5 hours of employment with their employer 

6 and engaging in mentoring activities, in ac7 cordance with clauses (iii) and (iv) of sec8 tion 72(t)(2)(H), by 

9 ‘‘(ii) the percentage equal to the 

10 quotient obtained by dividing— 

11 ‘‘(I) the sum of— 

12 ‘‘(aa) the number of hours 

13 per pay period by which the em14 ployee’s hours of employment are 

15 reduced, and 

16 ‘‘(bb) the number of hours 

17 of employment that such em18 ployee is engaging in mentoring 

19 activities, by 

20 ‘‘(II) the total number of hours 

21 per pay period worked by the em22 ployee before such reduction in hours 

23 of employment.’’. 

24 (c) ERISA.—Subparagraph (A) of section 3(2) of the 

25 Employee Retirement Income Security Act of 1974 (29 


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1 U.S.C. 1002(2)) is amended by striking the period at the 

2 end and inserting the following: ‘‘, or solely because such 

3 distribution is made to an employee who is serving as a 

4 mentor (as such term is defined in section 72(t)(2)(H) of 

5 the Internal Revenue Code of 1986).’’. 

6 (d) APPLICATION.—The amendments made by this 

7 section shall apply to distributions made in taxable years 

8 beginning after December 31, 2015. 

Æ 


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