I 
115TH CONGRESS 
2D SESSION 
H. R. 5153 
To amend the Internal Revenue Code of 1986 to allow a credit against 
tax for charitable donations to nonprofit organizations providing work-
force training and education scholarships to qualified elementary and 
secondary students. 
IN THE HOUSE OF REPRESENTATIVES 
MARCH 1, 2018 
Mr. SMUCKER (for himself and Mr. MOONEY of West Virginia) introduced the 
following bill; which was referred to the Committee on Ways and Means 
A BILL 
To amend the Internal Revenue Code of 1986 to allow a 
credit against tax for charitable donations to nonprofit 
organizations providing workforce training and education 
scholarships to qualified elementary and secondary stu-
dents. 
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE. 
This Act may be cited as the ‘‘USA Workforce Tax 
Credit Act’’. 
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SEC. 2. TAX CREDIT FOR CONTRIBUTIONS TO WORKFORCE 
DEVELOPMENT 
AND 
APPRENTICESHIP 
TRAINING ORGANIZATIONS. 
(a) CREDIT FOR INDIVIDUALS.— 
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code 
of 1986 is amended by inserting after section 25D 
the following new section: 
‘‘SEC. 25E. QUALIFIED WORKFORCE DEVELOPMENT AND 
APPRENTICESHIP TRAINING PROGRAMS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the amount of qualified contributions made by 
the taxpayer during the year. 
‘‘(b) DOLLAR LIMITATIONS.— 
‘‘(1) INCOME
LIMITATION.—The amount al-
lowed as a credit under subsection (a) with respect 
to any taxpayer shall not exceed 25 percent of the 
tax liability of the taxpayer with a maximum value 
of $250,000. 
‘‘(2) REDUCTION BASED ON STATE CREDIT.— 
The amount allowed as a credit under subsection (a) 
for a taxable year shall be reduced by the amount 
allowed as a credit on any State tax return of the 
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individual for qualified contributions made by the 
taxpayer during the taxable year. 
‘‘(c) QUALIFIED CONTRIBUTIONS; OTHER DEFINI-
TIONS.—For purposes of this section— 
‘‘(1) QUALIFIED
CONTRIBUTION.—The term 
‘qualified contribution’ means a charitable contribu-
tion (as defined by section 170(c)) to a workforce 
development or apprenticeship training organization. 
‘‘(2) WORKFORCE DEVELOPMENT OR APPREN-
TICESHIP
TRAINING
ORGANIZATION.—The 
term 
‘workforce development or apprenticeship training 
organization’ means any organization— 
‘‘(A) which— 
‘‘(i) is described in section 501(c)(3) 
and exempt from tax under section 501(a), 
and 
‘‘(ii) is not a private foundation, 
‘‘(B) whose exclusive purpose is provide 
workforce 
development 
and 
apprenticeship 
training to eligible participants, including— 
‘‘(i) community colleges, 
‘‘(ii) workforce training programs, as 
defined by State workforce agencies, 
‘‘(iii) organizations that provide career 
and technical education, 
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‘‘(iv) organizations that provide train-
ing or apprenticeships operated by a collec-
tive bargaining organization, 
‘‘(v) community organizations that 
provide full certified training, and 
‘‘(vi) private schools that confer diplo-
mas, degrees, or certify completion of cer-
tain grades, 
‘‘(C) that is in compliance with all applica-
ble State laws, including laws relating to unlaw-
ful discrimination, health and safety require-
ments, and criminal background checks of em-
ployees, and 
‘‘(D) which meets the requirements of sub-
section (d). 
‘‘(3) ELIGIBLE PARTICIPANTS.—The term ‘eli-
gible participant’ means an individual who is en-
rolled in workforce development and apprenticeship 
training organization, as described in paragraph 
(2)(B). 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under any provision of this chapter for 
any expense for which a credit is allowed under this sec-
tion. 
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‘‘(e) ELECTION.—This section shall apply to a tax-
payer for a taxable year only if such taxpayer elects to 
have this section apply for such taxable year.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subpart A of part IV of subchapter A of 
chapter 1 of such Code is amended by inserting aft 
the item relating to section 25D the following new 
item: 
‘‘Sec. 25E. Qualified Workforce Development and Apprenticeship Training Pro-
grams.’’. 
(b) CREDIT FOR CORPORATIONS.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of such Code is amended 
by adding at the end of the following new section: 
‘‘SEC. 45T. CONTRIBUTIONS TO WORKFORCE DEVELOP-
MENT OR APPRENTICESHIP TRAINING ORGA-
NIZATIONS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a corporation, the workforce development 
and apprenticeship training credit determined under this 
section for the taxable year is the aggregate amount of 
qualified contributions for the taxable year. 
‘‘(b) LIMITATION.— 
‘‘(1) INCOME LIMITATION.—The amount of the 
credit determined under this section for any taxable 
year shall not exceed the lesser of— 
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‘‘(A) 25 percent of the tax liability of the 
taxpayer for the taxable year, and 
‘‘(B) $250,000. 
‘‘(2) REDUCTION BASED ON STATE CREDIT.— 
The amount allowed as a credit under subsection (a) 
for a taxable year shall be reduced by the amount 
allowed as a credit on any State tax return of the 
individual for qualified contributions made by the 
taxpayer during the taxable year. 
‘‘(3) QUALIFIED
CONTRIBUTIONS.—For pur-
poses of this section, the term ‘qualified contribu-
tion’ has the meaning given such term under section 
25E. 
‘‘(c) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under any provision of this chapter for 
any expense for which a credit is allowed under this sec-
tion. 
‘‘(d) ELECTION.—This section shall apply to a tax-
payer for a taxable year only if such taxpayer elects to 
have this section apply for such taxable year.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
38(b) of such Code is amended by striking ‘‘plus’’ at 
the end of paragraph (36), by striking the period 
and inserting ‘‘, plus’’ at the end of paragraph (37), 
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and by adding at the end of the following new para-
graph: 
‘‘(38) the workforce development or apprentice-
ship training credit determined under section 
45T(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code is amended by adding at the 
end the following new item: 
‘‘Sec. 45T. Contributions to workforce development or apprenticeship training 
organizations.’’. 
SEC. 3. TAX CREDIT FOR CONTRIBUTIONS TO SCHOLAR-
SHIP GRANTING ORGANIZATIONS. 
(a) CREDIT FOR INDIVIDUALS.— 
(1) IN GENERAL.—Subpart A of part IV of sub-
chapter A of chapter 1 of the Internal Revenue Code 
of 1986, as amended by this Act, is amended by in-
serting after section 25E the following new section: 
‘‘SEC. 25F. QUALIFIED ELEMENTARY AND SECONDARY EDU-
CATION SCHOLARSHIPS. 
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an in-
dividual, there shall be allowed as a credit against the tax 
imposed by this chapter for the taxable year an amount 
equal to the amount of qualified contributions made by 
the taxpayer during the taxable year. 
‘‘(b) DOLLAR LIMITATIONS.— 
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‘‘(D) such organization does not earmark 
or set aside contributions for scholarships on 
behalf of any particular student, 
‘‘(E) such organization takes appropriate 
steps to verify the annual household income and 
family size of eligible students to whom it 
awards scholarships, and limits them to a mem-
ber of a household with a total annual house-
hold income, which does not exceed 200 percent 
of the median gross income, as determined by 
the Secretary of Housing and Urban Develop-
ment, for the purposes of the low-income hous-
ing credit under section 42, 
‘‘(F) such organization obtains from an 
independent certified public accountant annual 
financial and compliance audits and submits 
such audits to the Secretary, 
‘‘(G) no officer or board member of such 
organization has been convicted of a felony, and 
‘‘(H) such organization requires any eligi-
ble student who receives a scholarship to permit 
such organization to share assessment informa-
tion and other data regarding the student for 
the purpose of providing reports described in 
subsection (e), and such other information as 
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necessary for the purposes of reporting on the 
academic achievement of eligible students re-
ceiving a scholarship from such organization. 
‘‘(2) INDEPENDENT
CERTIFIED
PUBLIC
AC-
COUNTANT.—For purposes of paragraph (1)(F), the 
term 
‘independent 
certified 
public 
accountant’ 
means, with respect to an organization, a certified 
public accountant who is not a related person (with-
in the meaning of section 465(b)(3)(C)) with respect 
to such organization or any employee of such organi-
zation. 
‘‘(e) ELIGIBLE
SCHOOL
REPORTING
REQUIRE-
MENT.— 
‘‘(1) IN GENERAL.—The reports described in 
this subsection include— 
‘‘(A) a report to the parents on the stu-
dent’s academic achievement, and 
‘‘(B) a report to each qualified scholarship 
granting organization that provides scholarships 
to students at the school, that includes the test 
results, in the aggregate and disaggregated by 
race or ethnicity and grade level, of the stu-
dents receiving such scholarships who are in 
grades 3 through 12 on a grade-appropriate na-
tionally norm-referenced standardized test. 
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‘‘(2) NO PERSONALLY IDENTIFIABLE INFORMA-
TION.—In preparing and submitting the report de-
scribed in paragraph (1)(B), a school shall not in-
clude any personally identifiable information regard-
ing a student. 
‘‘(f) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under any provision of this chapter for 
any expense for which a credit is allowed under this sec-
tion. 
‘‘(g) ELECTION.—This section shall apply to a tax-
payer for a taxable year only if such taxpayer elects to 
have this section apply for such taxable year.’’. 
(2) CLERICAL AMENDMENT.—The table of sec-
tions for subpart A of part IV of subchapter A of 
chapter 1 of such Code, as amended by this Act, is 
amended by inserting after the item relating to sec-
tion 25E the following new item: 
‘‘Sec. 25F. Qualified elementary and secondary education scholarships.’’. 
(b) CREDIT FOR CORPORATIONS.— 
(1) IN GENERAL.—Subpart D of part IV of 
subchapter A of chapter 1 of such Code, as amended 
by this Act, is amended by adding after section 45T 
the following: 
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‘‘SEC. 45U. CONTRIBUTIONS TO SCHOLARSHIP GRANTING 
ORGANIZATIONS. 
‘‘(a) GENERAL RULE.—For purposes of section 38, 
in the case of a corporation, the education scholarship 
credit determined under this section for the taxable year 
is the aggregate amount of qualified contributions for the 
taxable year. 
‘‘(b) LIMITATION.— 
‘‘(1) INCOME LIMITATION.—The amount of the 
credit determined under this section for any taxable 
year shall not exceed the lesser of— 
‘‘(A) 25 percent of the tax liability of the 
taxpayer for the taxable year, and 
‘‘(B) $250,000. 
‘‘(2) REDUCTION BASED ON STATE CREDIT.— 
The amount allowed as a credit under subsection (a) 
for a taxable year shall be reduced by the amount 
allowed as a credit on any State tax return of the 
individual for qualified contributions made by the 
taxpayer during the taxable year. 
‘‘(c) QUALIFIED CONTRIBUTIONS.—For purposes of 
this section, the term ‘qualified contribution’ has the 
meaning given such term under section 25F. 
‘‘(d) DENIAL OF DOUBLE BENEFIT.—No deduction 
shall be allowed under any provision of this chapter for 
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any expense for which a credit is allowed under this sec-
tion. 
‘‘(e) ELECTION.—This section shall apply to a tax-
payer for a taxable year only if such taxpayer elects to 
have this section apply for such taxable year.’’. 
(2) 
CONFORMING
AMENDMENTS.—Section 
38(b) of such Code, as amended by this Act, is 
amended by striking ‘‘plus’’ at the end of paragraph 
(37), by striking the period and inserting ‘‘, plus’’ 
at the end of paragraph (38), and by adding at the 
end of the following new paragraph: 
‘‘(39) the education scholarship credit deter-
mined under section 45U(a).’’. 
(3) CLERICAL AMENDMENT.—The table of sec-
tions for subpart D of part IV of subchapter A of 
chapter 1 of such Code, as amended by this Act, is 
amended by adding at the end the following new 
item: 
‘‘Sec. 45U. Contributions to scholarship granting organizations.’’. 
(c) EXCISE TAX
ON FAILURE
OF SCHOLARSHIP 
GRANTING ORGANIZATIONS TO MAKE DISTRIBUTIONS.— 
(1) IN GENERAL.—Chapter 42 of such Code is 
amended by adding at the end the following new 
subchapter: 
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‘‘Subchapter 
I—Organizations 
Providing 
Workforce Development, Apprenticeship 
Training, or Scholarships 
‘‘Sec. 4969. Tax on failure to distribute receipts. 
‘‘SEC. 4969. TAX ON FAILURE TO DISTRIBUTE RECEIPTS. 
‘‘(a) TAX IMPOSED.—There is hereby imposed a tax 
on the failure of a workforce development or apprentice-
ship training organization (as defined in section 25E) or 
a scholarship granting organization (as defined in section 
25F) to make distributions in any taxable year in an 
amount equal to or in excess of the required distribution 
amount before the distribution deadline relating to a tax-
able year. 
‘‘(b) AMOUNT OF TAX.—The tax imposed by sub-
section (a) with respect to a taxable year shall be equal 
to 15 percent of the greater of— 
‘‘(1) the required distribution amount with re-
spect to the taxable year, or 
‘‘(2) the amount of receipts of the qualified 
scholarship granting organization for each taxable 
year which are distributed before the distribution 
deadline with respect to such receipts. 
‘‘(c) DEFINITIONS.—For purposes of this section— 
‘‘(1) REQUIRED DISTRIBUTION AMOUNT.— 
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the preceding sentence may include contributions set 
aside for eligible students or participants for more 
than one year. 
‘‘(3) DISTRIBUTION DEADLINE.—The distribu-
tion deadline with respect to receipts for a taxable 
year is the first day of the second taxable year fol-
lowing the taxable year in which such receipts are 
received by the scholarship granting organization. 
‘‘(d) REASONABLE CAUSE EXCEPTION.—The tax im-
posed by subsection (a) shall not apply with respect to any 
failure to make required distributions before the distribu-
tion deadline which is not willful and is due to reasonable 
cause.’’. 
(2) ABATEMENT OF TAX.— 
(A) GENERAL
RULE.—Subsection (b) of 
section 4962 of such Code is amended by strik-
ing ‘‘or G’’ and inserting ‘‘G, or I’’. 
(B) FIRST TIER TAX.—Subsection (a) of 
section 4963 of such Code is amended by in-
serting ‘‘4969,’’ after ‘‘4967,’’. 
(C) TAXABLE EVENT.—Subsection (c) of 
section 4963 of such Code is amended by in-
serting ‘‘4969,’’ after ‘‘4967,’’. 
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(3) CORRECTION PERIOD.—Subparagraph (A) 
of section 4963(e)(2) of such Code is amended by in-
serting ‘‘or 4969’’ after ‘‘4942’’. 
(4) CLERICAL AMENDMENT.—The table of sub-
chapters for chapter 42 of such Code is amended by 
adding at the end the following new item: 
‘‘SUBCHAPTER I. ORGANIZATIONS PROVIDING WORKFORCE DEVELOPMENT, 
APPRENTICESHIP TRAINING, OR SCHOLARSHIPS’’. 
SEC. 4. ORGANIZATIONAL AUTONOMY. 
A participating eligible organization or entity under 
the programs established pursuant to the Education, 
Workforce, and Apprenticeship Tax Credit Act are auton-
omous and not agents of the State or Federal Government 
and therefore— 
(1) a Federal or State agency may not in any 
way regulate the program of a participating, entity 
that accepts a contribution or a scholarship under 
this Act, 
(2) the provision of tax credits under this Act 
does not expand the regulatory authority of the Fed-
eral Government, the State, its officers, or any 
school district to impose any additional regulation of 
an entity beyond those necessary to enforce the re-
quirements of this Act, and 
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(3) participating eligible entities shall be given 
the maximum freedom to provide for the needs of 
their participants without government control. 
SEC. 5. VOLUME CAP. 
(a) AMOUNT.—The volume cap amount available for 
tax 
credits 
for 
purposes 
of 
this 
Act 
shall 
be 
$2,000,000,000 annually, beginning for taxable year 2018 
and for each succeeding taxable year thereafter. 
(b) APPLICATION
FOR
CREDITS.—The Secretary 
shall develop a system to track and make available infor-
mation in real time, regarding availability of tax credits 
to donors which will be available on a first-come, first- 
serve basis. 
(c) DISTRIBUTION.—Fifty percent of the annual 
amount made available shall be allotted by the Secretary 
for donations to workforce development and apprentice-
ship training organizations and 50 percent for donations 
to scholarship granting organizations. 
SEC. 6. EFFECTIVE DATE. 
The amendments made by this Act shall apply to tax-
able years ending on or after December 31, 2017. 
Æ 
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