H.R. 4238 - Leveraging and Energizing America’s Apprenticeship Programs (LEAP) Act

116TH CONGRESS
1ST SESSION

H.R. 4238

To amend the Internal Revenue Code of 1986 to allow employers
a credit against income tax for employees who participate
in qualified apprenticeship programs.

IN THE HOUSE OF REPRESENTATIVES

SEPTEMBER 6, 2019

Mr. REED (for himself and Ms. SÁNCHEZ) 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 employers a credit against income tax for employees who participate in qualified apprenticeship programs.

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 "Leveraging and Energizing America's Apprenticeship Programs Act" or the "LEAP Act".

SEC. 2. CREDIT FOR EMPLOYEES PARTICIPATING IN QUALIFIED APPRENTICESHIP PROGRAMS.

(a) IN GENERAL. — 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. EMPLOYEES PARTICIPATING IN QUALIFIED APPRENTICESHIP PROGRAMS.

"(a) IN GENERAL. — For purposes of section 38, the apprenticeship credit determined under this section for the taxable year is an amount equal to the sum of the applicable credit amounts (as determined under subsection (b)) for each apprentice of the employer that exceeds the applicable apprenticeship level (as determined under subsection (e)) during such taxable year.

"(b) APPLICABLE CREDIT AMOUNT. — For purposes of subsection (a), the applicable credit amount for each apprentice for each taxable year is equal to —

"(1) in the case of an apprentice who has not attained 25 years of age at the close of the taxable year, $1,500, or

"(2) in the case of an apprentice who has attained 25 years of age at the close of the taxable year, $1,000.

"(c) LIMITATION ON NUMBER OF YEARS WHICH CREDIT MAY BE TAKEN INTO ACCOUNT. — The apprenticeship credit shall not be allowed for more than 2 taxable years with respect to any apprentice.

"(d) APPRENTICE. — For purposes of this section, the term 'apprentice' means any employee who is employed by the employer —

"(1) in an officially recognized apprenticeable occupation, as determined by the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor, and

"(2) pursuant to an apprentice agreement registered with —

"(A) the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor, or

"(B) a recognized State apprenticeship agency, as determined by the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor.

"(e) APPLICABLE APPRENTICESHIP LEVEL. —

"(1) IN GENERAL. — For purposes of this section, the applicable apprenticeship level shall be equal to —

“(A) in the case of any apprentice described in subsection (b)(1), the amount equal to 80 percent of the average number of such apprentices of the employer for the 3 taxable years preceding the taxable year for which the credit is being determined, rounded to the next lower whole number, and

"(B) in the case of any apprentices described in subsection (b)(2), the amount equal to 80 percent of the average number of such apprentices of the employer for the 3 taxable years preceding the taxable year for which the credit is being determined, rounded to the next lower whole number.

"(2) FIRST YEAR OF NEW APPRENTICESHIP PROGRAMS. — In the case of an employer which did not have any apprentices during any taxable year in the 3 taxable years preceding the taxable year for which the credit is being determined, the applicable apprenticeship level shall be equal to zero.

"(f) COORDINATION WITH OTHER CREDITS. — The amount of credit otherwise allowable under sections 45A, 51(a), and 1396(a) with respect to any employee shall be reduced by the credit allowed by this section with respect to such employee.

“(g) CERTAIN RULES TO APPLY. — Rules similar to the rules of subsections (i)(1) and (k) of section 51 shall apply for purposes of this section.”.

(b) CREDIT MADE PART OF GENERAL BUSINESS CREDIT. — Subsection (b) of section 38 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 apprenticeship credit determined under section 45T(a).".

(c) DENIAL OF DOUBLE BENEFIT. — Subsection (a) of section 280C of the Internal Revenue Code of 1986 is amended by inserting "45T(a)," after "45S(a),".

(d) 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. Employees participating in qualified apprenticeship programs.".

(e) EFFECTIVE DATE. — The amendments made by this section shall apply to individuals commencing apprenticeship programs after the date of the enactment of this Act.