II 

113TH CONGRESS 

2D SESSION S. 2792 

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

purposes. 

IN THE SENATE OF THE UNITED STATES 

SEPTEMBER 11, 2014 

Ms. CANTWELL (for herself and Ms. COLLINS) 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 2014’’. 

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 with respect to each qualified individual 

8 in a qualified apprenticeship program is an amount 

9 equal to the lesser of— 

10 ‘‘(A) the amount of any wages (as defined 

11 in section 51(c)(1)) paid or incurred by the em12 ployer with respect to such qualified individual 

13 during the taxable year, or 

14 ‘‘(B) $5,000. 

15 ‘‘(2) ESTABLISHED APPRENTICESHIP PRO16 GRAMS.— 

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

18 program credit determined under this section 

19 for the taxable year shall only be applicable to 

20 the number of qualified individuals in a quali21 fied apprenticeship program which are in excess 

22 of the apprenticeship participation average for 

23 such employer (as determined under subpara24 graph (B)). 

25 ‘‘(B) APPRENTICESHIP PARTICIPATION AV26 ERAGE.—For purposes of subparagraph (A), 


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1 the apprenticeship participation average shall 

2 be equal to the average of the total number of 

3 qualified individuals in the qualified apprentice4 ship program of the employer for— 

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

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

7 which the qualified apprenticeship program 

8 was in existence, whichever is less. 

9 ‘‘(3) DENIAL OF DOUBLE BENEFIT.—No deduc10 tion or any other credit shall be allowed under this 

11 chapter for any amount taken into account in deter12 mining the credit under this section. 

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

14 section shall not apply to a taxpayer for any taxable 

15 year if such taxpayer elects to have this section not 

16 apply for such taxable year. 

17 ‘‘(5) LIMITATION.—The apprenticeship pro18 gram credit under this section shall not be allowed 

19 for more than 3 taxable years with respect to any 

20 qualified individual. 

21 ‘‘(b) QUALIFIED INDIVIDUAL.— 

22 ‘‘(1) IN GENERAL.—For purposes of this sec23 tion, the term ‘qualified individual’ means, with re24 spect to any taxable year, an individual who is an 

25 apprentice and— 


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1 ‘‘(A) is participating in a qualified appren2 ticeship program with an employer that is sub3 ject to the terms of a valid apprenticeship 

4 agreement (as defined in section 29.7 of title 29 

5 of the Code of Federal Regulations), 

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

7 apprenticeship program for a period of not less 

8 than 7 months that ends within the taxable 

9 year, 

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

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

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

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

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

15 ARMED FORCES.—An employer shall consider and 

16 may accept, in the case of a qualified individual par17 ticipating in a qualified apprenticeship program, any 

18 relevant training or instruction received by such in19 dividual while serving in the Armed Forces of the 

20 United States, for the purpose of satisfying the ap21 plicable training and instruction requirements under 

22 such qualified apprenticeship program. 

23 ‘‘(3) INELIGIBILITY OF CERTAIN INDIVID24 UALS.—For purposes of this subsection, paragraphs 

25 (1) and (2) of section 51(i) shall apply. 


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1 ‘‘(c) QUALIFIED APPRENTICESHIP PROGRAM.— 

2 ‘‘(1) IN GENERAL.—For purposes of this sec3 tion, the term ‘qualified apprenticeship program’ 

4 means an apprenticeship program (as defined in sec5 tion 29.2 of title 29 of the Code of Federal Regula6 tions), whether or not such program is administered 

7 by the employer, which— 

8 ‘‘(A) provides qualified individuals with on9 the-job training and instruction for a qualified 

10 occupation with the employer, 

11 ‘‘(B) is registered with the Office of Ap12 prenticeship of the Employment and Training 

13 Administration of the Department of Labor or 

14 a State apprenticeship agency recognized by 

15 such Office of Apprenticeship, 

16 ‘‘(C) maintains records relating to the 

17 qualified individual, in such manner as the Sec18 retary, after consultation with the Secretary of 

19 Labor, may prescribe, and 

20 ‘‘(D) satisfies such other requirements as 

21 the Secretary, after consultation with the Sec22 retary of Labor, may prescribe. 

23 ‘‘(2) QUALIFIED OCCUPATION.—For purposes 

24 of paragraph (1)(A), the term ‘qualified occupation’ 

25 means a skilled trade occupation in a high-demand 


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1 mechanical, technical, healthcare, or technology field 

2 (or such other occupational field as the Secretary, 

3 after consultation with the Secretary of Labor, may 

4 prescribe) that satisfies the criteria for an 

5 apprenticeable occupation under section 29.4 of title 

6 29 of the Code of Federal Regulations. 

7 ‘‘(d) APPRENTICESHIP AGREEMENT.— 

8 ‘‘(1) IN GENERAL.—For purposes of this sec9 tion, the term ‘apprenticeship agreement’ means an 

10 agreement between a qualified individual and an em11 ployer that satisfies the criteria under section 29.7 

12 of title 29 of the Code of Federal Regulations. 

13 ‘‘(2) CREDIT FOR TRAINING RECEIVED UNDER

14 APPRENTICESHIP AGREEMENT.—If a qualified indi15 vidual has received training or instruction through a 

16 qualified apprenticeship program with an employer 

17 which is subsequently unable to satisfy its obliga18 tions under the apprenticeship agreement, such indi19 vidual may transfer any completed training or in20 struction for purposes of satisfying any applicable 

21 training and instruction requirements under a sepa22 rate apprenticeship agreement with a different em23 ployer. 

24 ‘‘(e) APPLICATION OF CERTAIN RULES.—For pur25 poses of this section, all persons treated as a single emVerDate Mar 15 2010 01:55 Sep 12, 2014 Jkt 039200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S2792.IS S2792

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1 ployer under subsection (a) or (b) of section 52, or sub2 section (m) or (o) of section 414, shall be treated as a 

3 single person. 

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

5 such regulations as may be necessary to carry out the pro6 visions of this section, including regulations to provide for 

7 application of paragraphs (1) and (2) of subsection (a) 

8 with respect to qualified individuals in a qualified appren9 ticeship program who are employed by more than 1 em10 ployer.’’. 

11 (b) CREDIT TO BE PART OF GENERAL BUSINESS

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

13 1986 is amended by striking ‘‘plus’’ at the end of para14 graph (35), by striking the period at the end of paragraph 

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

16 following new paragraph: 

17 ‘‘(37) the apprenticeship program expenses 

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

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

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

21 of the Internal Revenue Code of 1986 is amended by add22 ing at the end the following new item: 

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

23 (d) CONFORMING AMENDMENTS.— 


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1 (1) RULE FOR EMPLOYMENT CREDITS.—Sec2 tion 280C(a) of the Internal Revenue Code of 1986 

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

4 (2) EXCLUSION FOR DETERMINATION OF CRED5 IT FOR INCREASING RESEARCH ACTIVITIES.—Clause 

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

7 by inserting ‘‘the apprenticeship program credit 

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

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

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

11 the Comptroller General of the United States shall submit 

12 a report to the Committees on Finance and Health, Edu13 cation, Labor, and Pensions of the Senate and the Com14 mittees on Ways and Means and Education and the Work15 force of the House of Representatives that contains an 

16 evaluation of the activities authorized under this Act, in17 cluding— 

18 (1) the extent to which qualified individuals 

19 completed qualified apprenticeship programs; 

20 (2) whether qualified individuals remained em21 ployed by an employer that received an apprentice22 ship program credit under section 45S of the Inter23 nal Revenue Code of 1986 and the length of such 

24 employment following expiration of the apprentice25 ship period; 


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1 (3) whether qualified individuals who completed 

2 a qualified apprenticeship program remained em3 ployed in the same occupation or field; and 

4 (4) recommendations for legislative and admin5 istrative actions to improve the effectiveness of the 

6 apprenticeship program credit under section 45S of 

7 the Internal Revenue Code of 1986. 

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

9 this Act shall apply to taxable years beginning after De10 cember 31, 2014. 

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

12 (a) EARLY DISTRIBUTIONS FROM QUALIFIED RE13 TIREMENT PLANS.—Section 72(t)(2) of the Internal Rev14 enue Code of 1986 is amended— 

15 (1) in subparagraph (A)— 

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

17 (vii); 

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

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

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

21 clause: 

22 ‘‘(ix) made to an employee who is 

23 serving as a mentor.’’; and 

24 (2) by adding at the end the following new sub25 paragraph: 


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

2 purposes of this paragraph, the term ‘mentor’ 

3 means an individual who— 

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

5 ‘‘(ii) is not separated from their em6 ployment with a company, corporation, or 

7 institution of higher education, 

8 ‘‘(iii) in accordance with such require9 ments and standards as the Secretary de10 termines to be necessary, has substantially 

11 reduced their hours of employment with 

12 their employer, with the individual to be 

13 engaged in mentoring activities described 

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

15 of the hours of employment after such re16 duction, and 

17 ‘‘(iv) is responsible for the training 

18 and education of employees or students in 

19 an area of expertise for which the indi20 vidual has a professional credential, certifi21 cate, or degree.’’. 

22 (b) DISTRIBUTIONS DURING WORKING RETIRE23 MENT.—Paragraph (36) of section 401(a) of the Internal 

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


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1 ‘‘(36) DISTRIBUTIONS DURING WORKING RE2 TIREMENT.— 

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

4 of a pension plan shall not be treated as failing 

5 to constitute a qualified trust under this section 

6 solely because the plan provides that a distribu7 tion may be made from such trust to an em8 ployee who— 

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

10 not separated from employment at the 

11 time of such distribution, or 

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

13 serving as a mentor (as such term is de14 fined in section 72(t)(2)(H)). 

15 ‘‘(B) LIMITATION ON DISTRIBUTIONS TO

16 MENTORS.—For purposes of subparagraph 

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

18 an employee who is serving as a mentor shall 

19 not be greater than the amount equal to the 

20 product obtained by multiplying— 

21 ‘‘(i) the amount of the distribution 

22 that would have been payable to the em23 ployee if such employee had separated 

24 from employment instead of reducing their 

25 hours of employment with their employer 


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1 and engaging in mentoring activities, in ac2 cordance with clauses (iii) and (iv) of sec3 tion 72(t)(2)(H), by 

4 ‘‘(ii) the percentage equal to the 

5 quotient obtained by dividing— 

6 ‘‘(I) the sum of— 

7 ‘‘(aa) the number of hours 

8 per pay period by which the em9 ployee’s hours of employment are 

10 reduced, and 

11 ‘‘(bb) the number of hours 

12 of employment that such em13 ployee is engaging in mentoring 

14 activities, by 

15 ‘‘(II) the total number of hours 

16 per pay period worked by the em17 ployee before such reduction in hours 

18 of employment.’’. 

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

20 Employee Retirement Income Security Act of 1974 (29 

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

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

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

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

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


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1 (d) EFFECTIVE DATE.—The amendments made by 

2 this section shall apply to distributions made in taxable 

3 years beginning after December 31, 2014. 

Æ 


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