H.R. 3871

[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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