119-hr3871

[Congressional Bills 119th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3871 Introduced in House

    (IH) ]

<DOC>

119th CONGRESS
 1st Session
 H. R. 3871

 To amend the Internal Revenue Code of 1986 to allow a credit to 
 employers who hire individuals through an apprenticeship program.

_______________________________________________________________________

 IN THE HOUSE OF REPRESENTATIVES

 June 10, 2025

 Mr. Ellzey 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 to 
 employers who hire individuals through an apprenticeship program.

 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 ``Apprenticeship Infrastructure Tax 
Credit Act of 2025''.

SEC. 2. APPRENTICESHIP INFRASTRUCTURE TAX CREDIT FOR EMPLOYERS.

    (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. 45BB. APPRENTICESHIP INFRASTRUCTURE TAX CREDIT FOR EMPLOYERS.

 ``

    (a) In General.--For purposes of 

section 38, the apprenticeship 
infrastructure tax credit determined under this section for the taxable 
year is an amount equal to the sum of the applicable credit amounts 
determined during the apprenticeship credit period with respect to each 
apprenticeship employee of the employer.
 ``

    (b) Applicable Credit Amount.--For purposes of this section, the 
applicable credit amount with respect to an apprenticeship employee 
shall be an amount equal to--
 ``

    (1) in the case of an apprenticeship employee not 
 described in paragraph

    (2) , $3,000, and
 ``

    (2) in the case of a recently separated veteran, a member 
 of the National Guard or reserve component of the Armed Forces, 
 or a military spouse, $6,000.
The applicable credit amount with respect to an apprenticeship employee 
for taxable years beginning after the end of the apprenticeship credit 
period (determined without regard to subsection
            (c) (2) ) shall be zero.
 ``
            (c) Apprenticeship Credit Period.--For purposes of this section--
 ``

    (1) In general.--The apprenticeship credit period with 
 respect to an apprenticeship employee shall be--
 ``
        (A) the taxable year during which such employee 
 first enrolls in the employer's qualified registered 
 apprenticeship program, and
 ``
        (B) the succeeding taxable year if the qualified 
 registered apprenticeship program in which such 
 employee is enrolled is--
 ``
            (i) is a time-based or hybrid program 
 that requires 3,000 or more on-the-job learning 
 hours, or
 ``
            (ii) is a competency-based program with 
 3,000 or more on-the-job learning hours.
 ``

    (2) Carryforward year.--The apprenticeship credit period 
 with respect to an apprenticeship employee shall include the 
 taxable year succeeding the taxable year described in 
 subparagraph
        (A) or
        (B) , as the case may be, in the case a 
 credit carryforward to such succeeding taxable year with 
 respect to an apprentice employee under subsection
            (d) (7) .
 ``
            (d) Definitions and Special Rules.--For purposes of this 
section--
 ``

    (1) Apprenticeship employee.--
 ``
        (A) In general.--The term `apprenticeship 
 employee' means an individual who--
 ``
            (i) is a new hire employed by an 
 apprenticeship employer, and
 ``
            (ii) enrolled under a written agreement 
 in a qualified registered apprenticeship 
 program with respect to an infrastructure-
 related occupation.
 ``
        (B) Infrastructure-related occupation.--
 ``
            (i) In general.--The term 
 `infrastructure-related occupation' means an 
 occupation identified by the Secretary of Labor 
 as eligible for the credit determined under 
 this section.
 ``
            (ii) Initial list applicable to 2026.--
 For taxable years beginning in 2026, such term 
 shall include occupations within the following 
 major groups as defined in the Occupational 
 Information Network

    (ONET) :
 ``
            (I) 47-0000 Construction and 
 Extraction Occupations.
 ``
            (II) 49-0000 Installation, 
 Maintenance, and Repair Occupations.
 ``
            (III) 51-0000 Production 
 Occupations.
 ``
            (IV) 15-1200 Computer, 
 Information Technology, and Security 
 Occupations.
 ``
            (iii) Subsequent years.--Occupations 
 shall be identified under this subparagraph by 
 utilizing standardized and occupation specific 
 descriptors listed in the Occupational Network

    (ONET) , and such occupations shall be updated 
 annually consistent with customary tax document 
 deadlines.
 ``
            (C) Exceptions.--The term `apprenticeship 
 employee' shall not include any apprentice--
 ``
            (i) hired more than 90 days prior to 
 enrollment into the qualified registered 
 apprenticeship program, or
 ``
            (ii) reported via a 1099 contractor 
 rather than Form W-2, based on Internal Revenue 
 Service standards.
 ``

    (2) Apprenticeship employer.--
 ``
        (A) In general.--The term `apprenticeship 
 employer' means an employer that has entered into an 
 agreement with a qualified registered apprenticeship 
 program for the placement of apprenticeship employees.
 ``
        (B) Exceptions.--Such term shall not include an 
 employer--
 ``
            (i) which is exempt from income tax under 
 this chapter, or
 ``
            (ii) which is the sponsor of the 
 registered apprenticeship program, or is 
 related to the sponsor for which the 
 apprenticeship employee is enrolled.
 ``

    (3) Qualified registered apprenticeship program.--The 
 term `qualified registered apprenticeship program' means an 
 apprenticeship registered under the Act of August 16, 1937 
 (commonly known as the `National Apprenticeship Act'; 50 Stat. 
 664, chapter 663; 29 U.S.C. 50 et seq.) that meets the 
 standards of subpart A of part 29 and part 30 of title 29, Code 
 of Federal Regulations.
 ``

    (4) Recently separated veteran.--The term `recently 
 separated veteran' means any veteran who is enrolled into the 
 qualified registered apprenticeship program to which the credit 
 relates not more than 4 years after having been discharged or 
 released from active duty in the Armed Forces of the United 
 States.
 ``

    (5) Member of national guard or reserve component of 
 armed forces.--The term member of the National Guard or reserve 
 component of the Armed Forces means any member of a reserve 
 component of the Armed Forces (as defined in 

section 10101 of 
 title 10, United States Code).
 ``

    (6) Military spouse.--The term `military spouse' means an 
 individual who is legally married to--
 ``
        (A) a member of the Armed Forces on active duty,
 ``
        (B) a member of the National Guard or reserve 
 component, or
 ``
            (C) a veteran who was discharged or released from 
 active duty in the Armed Forces of the United States 
 not before the 4-year period ending on the date the 
 individual enrolls in the qualified registered 
 apprenticeship program to which the credit relates.
 ``

    (7) New hire.--The term `new hire' means an individual 
 who first begins work as an employee for the employer not more 
 than 90 days before such individual's enrollment in qualified 
 registered apprenticeship program to which the credit 
 determined under this section with respect to the employee 
 relates.
 ``

    (8) Reduced credit where apprentice employed for fewer 
 than 180 days.--
 ``
        (A) In general.--In the case of a taxable year 
 during which the apprenticeship employee is employed 
 under a qualified apprenticeship program of the 
 employer for at least 90 days, but fewer than 180 days, 
 the applicable credit amount with respect to such 
 employee for such taxable year shall be reduced to the 
 amount which bears the same ratio to the applicable 
 credit amount with respect to such employee (determined 
 without regard to this subparagraph) as--
 ``
            (i) the number of calendar days during 
 the taxable year that the apprenticeship 
 employee is so employed, bears to
 ``
            (ii) 180.
 ``
        (B) Fewer than 90 days.--In the case of a taxable 
 year during which the apprenticeship employee is 
 employed under a qualified apprenticeship program of 
 the employer for fewer than 90 days, the applicable 
 credit amount with respect to such employee for such 
 taxable year shall be zero.
 ``
            (C) Carryforward.--The amount by which the credit 
 amount is reduced under subparagraph
        (A) or
        (B) with 
 respect to an apprenticeship employee for any taxable 
 year may be carried forward to increase the applicable 
 credit amount otherwise determined with respect to the 
 employee under this section for the succeeding taxable 
 year (determined without regard to this subparagraph 
 and subsection
            (c) (2) ). Any amount carried forward 
 under the preceding sentence shall be subject to any 
 reduction applicable with respect to the employee under 
 subparagraphs
        (A) and
        (B) .
 ``

    (9) Coordination with other credits.--The amount of 
 credit otherwise allowable under this chapter with respect to 
 compensation paid to any apprenticeship employee shall be 
 reduced by the credit determined under this section with 
 respect to such employee.
 ``

    (10) No credit allowed in case laid-off apprentice.--No 
 credit shall be allowed under this section with respect to an 
 apprenticeship employee if during the taxable year such 
 employee is involuntary terminated by reason of a reduction in 
 workforce or job elimination, business closure, downsizing, or 
 restructuring, or any other non disciplinary termination 
 initiated by the employer.
 ``

    (11) No credit allowed in case of remuneration from 
 apprenticeship employee.--
 ``
        (A) In general.--No credit shall be allowed under 
 this section with respect to an apprenticeship employee 
 if such apprenticeship employee provides any 
 remuneration (including tuition, application fees, or 
 other payments) to either the apprenticeship employer 
 or the sponsor of the qualified registered 
 apprenticeship program in connection with the 
 apprenticeship employee's participation in such 
 program.
 ``
        (B) Exception for public or non-profit funding.--
 Subparagraph
        (A) shall not apply to remuneration 
 provided by the apprenticeship employee if such 
 remuneration is sourced from public funding or private 
 non-profit or foundational organizations intended to 
 serve or support apprenticeship employees, including 
 funding from the Workforce Innovation and Opportunity 
 Act, Pell Grants, the Supplemental Nutrition Assistance 
 Program, Temporary Assistance for Needy Families, or 
 other similar public or private non-profit or 
 foundational organizations.
 ``

    (e) Apprenticeship Tax Credit Eligibility Certificate.--
 ``

    (1) In general.--No credit shall be allowed to an 
 employer under this section with respect to an apprenticeship 
 employee under an apprenticeship program, unless the employer 
 has received an apprenticeship tax credit eligibility 
 certificate with respect to such apprenticeship employee.
 ``

    (2) Issuance.--The Secretary of Labor shall use data from 
 the Registered Apprenticeship Partners Information Database 
 System (hereinafter in this subsection referred to as `RAPIDS') 
 to issue an apprenticeship tax credit eligibility certificates 
 to apprenticeship employers not later than 31 days after the 
 end of each calendar quarter. Such certificate shall include 
 the following:
 ``
        (A) Information identifying to the sponsor of the 
 qualified registered apprenticeship program, 
 including--
 ``
            (i) the name of the sponsor,
 ``
            (ii) the registration agency responsible 
 for monitoring the sponsor,
 ``
            (iii) the registration number of the 
 registered apprenticeship program,
 ``
            (iv) the O-Net Code for occupation of 
 training, and
 ``
            (v) the RAPIDS Code for the 
 apprenticeable occupation approved by the 
 Department of Labor Office of Apprenticeship.
 ``
        (B) Information identifying the apprenticeship 
 employer, including--
 ``
            (i) the full legal name of the 
 apprenticeship employer,
 ``
            (ii) the mailing address of the 
 apprenticeship employer,
 ``
            (iii) the employer registration number 
 assigned in RAPIDS, and
 ``
            (iv) the apprenticeship employer's 
 Federal Employer Identification Number.
 ``
            (C) Information identifying the apprenticeship 
 employee, including--
 ``
            (i) the full legal name of such employee,
 ``
            (ii) the social security number or 
 taxpayer identification number of such 
 employee,
 ``
            (iii) the dates of apprenticeship, 
 including the enrollment date, expected 
 completion date, the actual completion date (if 
 applicable), the date hired by the 
 apprenticeship employer, the termination date 
 (if any), and the reason for exit if such 
 employee is not employed on the last day of the 
 period to which such certificate relates, and
 ``
            (iv) confirmation that the apprenticeship 
 employee is a new hire with respect to the 
 employer and is reported via Form W-2.
 ``

    (3) Updating apprentice status rules.--
 ``
        (A) Reporting requirements.--The Secretary of 
 Labor shall update the reporting requirements set forth 
 in part 29 of title 29, Code of Federal Regulations, 
 which otherwise require a sponsor to update the status 
 of an apprentice within 45 days of any change in such 
 status, to further require that the sponsor ensure all 
 employment status updates are completed within 30 days 
 after the close of a calendar quarter in order to 
 facilitate the issuance of the apprenticeship tax 
 credit eligibility certificate not later than 31 days 
 after the end of the calendar quarter. The Secretary of 
 Labor may prescribe regulations to ensure compliance 
 with this reporting requirement.
 ``
        (B) Apprenticeship agreements.--The Secretary of 
 Labor shall update apprenticeship agreement forms to 
 include the following:
 ``
            (i) The date the apprenticeship employee 
 was hired by the apprenticeship employer.
 ``
            (ii) The apprenticeship employer 
 confirmation that the apprenticeship employee 
 is reported via Form W-2.
 ``
            (iii) The assigned registration number of 
 the apprenticeship employer verifying the 
 apprenticeship employer has a formal agreement 
 with the sponsor of the qualified registered 
 apprenticeship program.
 ``

    (f) Termination of Credit Based on Volume Cap.--
 ``

    (1) In general.--This section shall not apply for any 
 taxable year beginning after the date on which the Secretary 
 (in consultation with the Secretary of Labor) certifies that 
 the amount of credit determined under this section has reached 
 an amount equal to $5,000,000,000.
 ``

    (2) Tracking and reporting.--
 ``
        (A) Secretary of treasury.--
 ``
            (i) In general.--The Secretary shall for 
 purposes of paragraph

    (1) monitor and regularly 
 calculate the amount of credit determined under 
 this section and publicly certify when the 
 limitation under paragraph

    (1) has been 
 reached.
 ``
            (ii) Annual reporting.--The Secretary 
 shall not later than March 31, 2027, and 
 annually thereafter, publish an report that 
 details the total amount of credits determined 
 under this section for taxable years ending in 
 the preceding calendar year, the amount of any 
 under-allocated credits identified under 
 paragraph

    (4)
        (A) , the take-up rate of 
 certificates issued under this section for the 
 preceding calendar year, and the total number 
 of certificates issued under this section for 
 the preceding calendar year.
 ``
            (iii) Take-up rate.--For purposes of 
 clause
            (ii) , the term `take-up rate' means the 
 percentage of apprenticeship tax credit 
 eligibility certificates issued under 
 subsection

    (e) that result in credits 
 determined under this section, as determined by 
 the Secretary.
 ``
        (B) Secretary of labor.--
 ``
            (i) In general.--The Secretary of Labor, 
 in consultation with the Secretary, shall 
 annually review the determinations made by the 
 Secretary under subparagraph
        (A) and estimate 
 the extent to which credit limitation under 
 paragraph

    (1) remains available.
 ``
            (ii) Commensurate adjustment of 
 qualifying infrastructure-related 
 occupations.--Based on such review and 
 estimates, the Secretary of Labor may adjust 
 the list of qualifying infrastructure-related 
 occupations identified under section subsection

    (e) to limit the issuance of additional 
 apprenticeship tax credit eligibility 
 certificates if necessary to ensure, to the 
 extent practicable, the limitation under 
 paragraph

    (1) is not exceeded before December 
 31, 2035.
 ``
            (iii) Annual reporting.--For taxable 
 years beginning after December 31, 2026, any 
 adjustments to the list of qualifying 
 infrastructure-related occupations for a year 
 shall be published by the Secretary not later 
 than September 30 of the preceding year.
 ``

    (3) Limitation or prioritization when remaining balance 
 is low.--
 ``
        (A) In general.--When the remaining balance of 
 credits allowable under this section, as determined by 
 the Secretary under paragraph

    (2)
        (A) , is less than 
 $1,000,000,000, the Secretary, in consultation with the 
 Secretary of Labor, may prescribe any of the following:
 ``
            (i) Limiting the qualifying 
 infrastructure-related occupations identified 
 under subsection
            (d) (1)
        (B) for which 
 apprenticeship tax credit eligibility 
 certificates may be issued.
 ``
            (ii) Directing the issuance of such 
 certificates to focus on apprenticeship 
 employees who are recently separated veterans, 
 members of the National Guard or Reserve 
 Component of the Armed Forces, or military 
 spouses.
 ``
        (B) Determination of certificates issued.--
 ``
            (i) Use of take-up rate.--If the annual 
 report under paragraph

    (2)
        (A)
            (ii) has been 
 issued for the preceding calendar years, the 
 number of certificates issued under this 
 paragraph shall be determined by adjusting the 
 proportional allocation under paragraph

    (4)
            (C) 
            (ii) 
            (I) based on the take-up rate 
 reported under paragraph

    (2)
        (A)
            (ii) for such 
 year, to ensure that the estimated credit 
 amount resulting from such issuance does not 
 exceed the remaining balance under this 
 section.
 ``

    (4) Reallocation of under-allocated credits.--
 ``
        (A) In general.--The Secretary may identify, as 
 part of the annual report required under paragraph

    (2)
        (A) , any under-allocated portion of any 
 apprenticeship infrastructure tax credits or other 
 `labor related' tax credits for a prior taxable year.
 ``
        (B) Under-allocated credits.--For purposes of 
 this paragraph, the term `under-allocated credits' 
 means the difference between the estimated credit 
 amounts associated with credits determined under this 
 section for the preceding calendar year (as reported 
 under paragraph

    (2)
        (B) ) and the actual amount of 
 credits claimed by any taxable entity (as reported 
 under paragraph

    (2)
        (A) ), to the extent such difference 
 reflects credits that remain available within the 
 volume cap under paragraph

    (1) .
 ``
            (C) Additional allocation by secretary of 
 labor.--
 ``
            (i) In general.--Upon notification from 
 the Secretary of under-allocated credits 
 identified under subparagraph
        (A) , the 
 Secretary of Labor may provide for additional 
 allocation of such credits by issuing 
 additional apprenticeship tax credit 
 eligibility certificates for the succeeding 
 calendar year, subject to the limitations of 
 clause
            (ii) .
 ``
            (ii) Limitations.--The limitations of 
 this clause are as follows:
 ``
            (I) In general.--If the annual 
 report under paragraph

    (2)
        (A)
            (ii) has 
 been issued for the preceding calendar 
 year, the number of certificates issued 
 under this paragraph shall be equal to 
 the total number of certificates issued 
 in the preceding calendar year, as 
 reported under paragraph

    (2)
        (A)
            (ii) , 
 adjusted by the take-up rate for such 
 year, to ensure that the estimated 
 credit amount resulting from such 
 issuance does not exceed the remaining 
 balance under this section.
 ``
            (II) No annual report.--If the 
 annual report under paragraph

    (2)
        (A)
            (ii) has not been issued for the 
 preceding calendar year, the number of 
 certificates issued under this 
 paragraph shall be equal to the total 
 number of certificates issued in the 
 preceding calendar year increased by 30 
 percent.
 ``
            (III) Limitation.--The issuance 
 of additional certificates under this 
 paragraph shall not cause the aggregate 
 volume cap under paragraph

    (1) to be 
 exceeded.
 ``
            (D) Reporting.--The Secretary of Labor shall 
 include in the annual report required under paragraph

    (2)
        (B) a summary of any additional allocations made 
 under this paragraph, including the number of 
 additional certificates issued, the estimated amount of 
 credits associated with such certificates, the actual 
 amount of credits determined under this section for the 
 preceding calendar year (as reported by the Secretary 
 under paragraph

    (2)
        (A) ), and the occupations targeted 
 by the additional allocations.
 ``

    (g) Regulations.--The Secretary shall prescribe such rules as may 
be necessary or appropriate to carry out the purposes of this section, 
including guidance for verifying the status of--
 ``

    (1) individuals as recently separated veterans, Members 
 of the National Guard or Reserve Component of the Armed Forces, 
 or military spouses,
 ``

    (2) qualified registered apprenticeship programs,
 ``

    (3) apprenticeship employers and apprenticeship 
 employees, and
 ``

    (4) apprenticeship employees, including that such 
 employees are reported via Form W-2, not a 1099 contractor, 
 based on Internal Revenue Service standards.''.

    (b) Denial of Double Benefit.--

Section 280C

    (a) of such Code is 
amended by inserting ``45BB

    (a) ,'' after ``45S

    (a) ,''.
            (c) Credit Made Part of General Business Credit.--

Section 38

    (b) of 
such Code is amended by striking ``plus'' at the end of paragraph

    (40) , 
by striking the period at the end of paragraph

    (41) and inserting ``, 
plus'', and by adding at the end the following new paragraph:
 ``

    (42) the apprenticeship tax credit determined under 
 

section 45BB

    (a) .''.
            (d) 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. Apprenticeship tax credit for employers.''.

    (e) Effective Date.--The amendments made by this section shall 
apply to taxable years beginning after December 31, 2025.
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