[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[H.R. 1656 Introduced in House (IH)]
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118th CONGRESS
1st Session
H. R. 1656
To amend the Internal Revenue Code of 1986 to allow a credit against
tax for charitable donations to nonprofit organizations providing
workforce training.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
March 17, 2023
Mr. Smucker 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.
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 ``USA Workforce Tax Credit Act''.
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 subchapter A of
chapter 1 of the Internal Revenue Code of 1986 is amended by
inserting after section 25E the following new section:
``SEC. 25F. QUALIFIED WORKFORCE DEVELOPMENT AND APPRENTICESHIP TRAINING
PROGRAMS.
``(a) Allowance of Credit.--In the case of an individual, 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 allowed 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 individual for qualified contributions made by
the taxpayer during the taxable year.
``(c) Qualified Contributions; Other Definitions.--For purposes of
this section--
``(1) Qualified contribution.--The term `qualified
contribution' means a charitable contribution (as defined by
section 170(c)) to a workforce development or apprenticeship
training organization.
``(2) Workforce development or apprenticeship 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) the exclusive purpose if which is--
``(i) to 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,
``(IV) organizations that provide
training or apprenticeships operated by
a collective bargaining organization,
``(V) community organizations that
provide full certified training, and
``(VI) private schools that confer
diplomas, degrees, or certify
completion of certain grades, or
``(ii) to provide scholarships for use in
obtaining workforce development and
apprenticeship training described in clause (i)
at an organization which is exempt from tax
under section 501(a) (other than a private
foundation), and
``(C) that is in compliance with all applicable
State laws, including laws relating to unlawful
discrimination, health and safety requirements, and
criminal background checks of employees.
``(3) Eligible participants.--The term `eligible
participant' means an individual who is enrolled in a 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 section.
``(e) Election.--This section shall apply to a taxpayer for a
taxable year only if such taxpayer elects to have this section apply
for such taxable year.
``(f) Application of Volume Cap.--A contribution shall be taken
into account under this section only if such contribution is recognized
by the Secretary as applying against the volume cap established under
section 4 of the USA Workforce Tax Credit Act.''.
(2) Clerical amendment.--The table of sections for subpart
A of part IV of subchapter A of chapter 1 of such Code is
amended by inserting after the item relating to section 25E the
following new item:
``Sec. 25F. Qualified Workforce Development and Apprenticeship Training
Programs.''.
(b) Business Credit.--
(1) In general.--Subpart D of part IV of subchapter A of
chapter 1 of such Code is amended by adding at the end the
following new section:
``SEC. 45BB. CONTRIBUTIONS TO WORKFORCE DEVELOPMENT OR APPRENTICESHIP
TRAINING ORGANIZATIONS.
``(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--
``(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 purposes of this
section, the term `qualified contribution' has the meaning
given such term under section 25F.
``(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 section.
``(d) Election.--This section shall apply to a taxpayer for a
taxable year only if such taxpayer elects to have this section apply
for such taxable year.
``(e) Application of Volume Cap.--A contribution shall be taken
into account under this section only if such contribution is recognized
by the Secretary as applying against the volume cap established under
section 4 of the USA Workforce Tax Credit Act.''.
(2) Conforming amendments.--Section 38(b) of such Code is
amended by striking ``plus'' at the end of paragraph (40), by
striking the period and inserting ``, plus'' at the end of
paragraph (41), and by adding at the end the following new
paragraph:
``(42) the workforce development or apprenticeship training
credit determined under section 45BB(a).''.
(3) Clerical amendment.--The table of sections 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. 45BB. Contributions to workforce development or apprenticeship
training 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:
``Subchapter I--Organizations Providing Workforce Development or
Apprenticeship Training
``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 apprenticeship training organization (as
defined in section 25F(c)) 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 taxable year.
``(b) Amount of Tax.--The tax imposed by subsection (a) with
respect to a taxable year shall be equal to 15 percent of the excess
(if any) of--
``(1) the required distribution amount with respect to the
taxable year, over
``(2) the amount of receipts of the workforce development
or apprenticeship training 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.--
``(A) In general.--The required distribution amount
with respect to a taxable year is the amount equal to
100 percent of the total receipts of the workforce
development or apprenticeship training organization for
such taxable year--
``(i) reduced by the sum of such receipts
that are retained for administrative expenses
for the taxable year or are carried to the
succeeding taxable year under subparagraph (C),
and
``(ii) increased by the amount of the
carryover under subparagraph (C) from the
preceding taxable year.
``(B) Administrative expenses.--For purposes of
this paragraph, not more than 10 percent of total
receipts of a qualified workforce development or
apprenticeship training organization for a taxable year
may be used for administrative purposes.
``(C) Carryover.--Receipts of a qualified workforce
development or apprenticeship training organization
that are not disbursed for the taxable year or retained
for administrative purposes for the taxable year shall
be carried to the succeeding taxable year. The amount
carried to the taxable year under the preceding
sentence shall not exceed 15 percent of total receipts
of the qualified workforce development or
apprenticeship training organization for the taxable
year.
``(2) Distributions.--The term `distribution' includes
amounts which are formally committed but not distributed. A
formal commitment described in the preceding sentence may
include contributions set aside for eligible students or
participants for more than one year.
``(3) Distribution deadline.--The distribution deadline
with respect to receipts for a taxable year is the first day of
the second taxable year following the taxable year in which
such receipts are received by the scholarship granting
organization.
``(d) Reasonable Cause Exception.--The tax imposed by subsection
(a) shall not apply with respect to any failure to make required
distributions before the distribution 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 striking ``or G'' and
inserting ``G, or I''.
(B) First tier tax.--Subsection (a) of section 4963
of such Code is amended by inserting ``4969,'' after
``4967,''.
(C) Taxable event.--Subsection (c) of section 4963
of such Code is amended by inserting ``4969,'' after
``4967,''.
(3) Correction period.--Subparagraph (A) of section
4963(e)(2) of such Code is amended by inserting ``or 4969''
after ``4942''.
(4) Clerical amendment.--The table of subchapters 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''.
(c) Effective Date.--The amendments made by this Act shall apply to
taxable years beginning after December 31, 2023.
SEC. 3. ORGANIZATIONAL AUTONOMY.
A participating eligible organization or entity under the programs
established pursuant to this Act are autonomous 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 under this Act;
(2) the provision of tax credits under this Act does not
expand the regulatory authority of the Federal Government, the
State, its officers, or any school district to impose any
additional regulation of an entity beyond those necessary to
enforce the requirements of this Act; and
(3) participating eligible entities shall be given the
maximum freedom to provide for the needs of their participants
without government control.
SEC. 4. VOLUME CAP.
(a) Amount.--The volume cap amount available for tax credits
allowed under sections 25F and 45BB of the Internal Revenue Code of
1986, as added by this Act, shall be $2,000,000,000 annually, beginning
for taxable years beginning in 2024 and for each succeeding calendar
year thereafter.
(b) Application for Credits.--The Secretary shall develop a system
to track and make available information in real time, regarding
availability of such tax credits to donors which will be available on a
first-come, first-serve basis.
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