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