,i #aafth ,,congress #ast ,session ,h4 ,r4 #agci ,,in ,,the ,,house ,,of ,,representatives ,march #ac1 #bjai ,mr4 ,smucker 7for himself1 ,mr4 ,mooney of ,west ,virginia1 ,ms4 ,stefanik1 ,mr4 ,budd1 ,mr4 ,gaetz1 ,mr4 ,collins of ,new ,york1 ,mrs4 ,lesko1 and ,mr4 ,kustoff of ,tennessee7 introduced the following bill2 which was referred to the ,committee on ,ways and ,means ,a ,,bill ,to amend the ,internal ,revenue ,code of #aihf to allow a credit against tax for charitable donations to nonprofit organizations providing workforce training and education scholarships to qualified elementary and secondary students4 #a4 ,short title ,this ,act may be cited as the ,,usa ,workforce ,tax ,credit ,act4 #b4 ,tax credit for contributions to workforce development and apprenticeship training organizations 7a7 ,credit for individuals 7#a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf is amended by inserting after section #be;,d the following new section3 #be;,e4 ,qualified ,workforce ,development and ,apprenticeship ,training ,programs 7a7 ,allowance of credit ,in the case of an individual1 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 year4 7b7 ,dollar limitations 7#a7 ,income limitation ,the amount allowed as a credit under subsection 7a7 with respect to any taxpayer shall not exceed #be percent of the tax liability of the taxpayer with a maximum value of #bej1jjj4 7#b7 ,reduction based on state credit ,the amount allowed as a credit under subsection 7a7 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 year4 7c7 ,qualified contributions2 other definitions ,for purposes of this section-- 7#a7 ,qualified contribution ,the term qualified contribution means a charitable contribution 7as defined by section #agj7;c77 to a workforce development or apprenticeship training organization4 7#b7 ,workforce development or apprenticeship training organization ,the term workforce development or apprenticeship training organization means any organization-- 7,a7 which-- 7i7 is described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 and 7ii7 is not a private foundation1 7,b7 whose exclusive purpose is to provide workforce development and apprenticeship training to eligible participants1 including-- 7i7 community colleges1 7ii7 workforce training programs1 as defined by ,state workforce agencies1 7iii7 organizations that provide career and technical education1 7iv7 organizations that provide training or apprenticeships operated by a collective bargaining organization1 7v7 community organizations that provide full certified training1 and 7vi7 private schools that confer diplomas1 degrees1 or certify completion of certain grades1 7,c7 that is in compliance with all applicable ,state laws1 including laws relating to unlawful discrimination1 health and safety requirements1 and criminal background checks of employees1 and 7,d7 which meets the requirements of subsection 7d74 7#c7 ,eligible participants ,the term eligible participant means an individual who is enrolled in a workforce development and apprenticeship training organization1 as described in paragraph 7#b77;,b74 7d7 ,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 section4 7e7 ,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 year4 7f7 ,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 #e of the ,,usa ,workforce ,tax ,credit ,act4 4 7#b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by inserting after the item relating to section #be;,d the following new item3 ,sec4 #be;,e4 ,qualified ,workforce ,development and ,apprenticeship ,training ,programs4 4 7b7 ,credit for corporations 7#a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new section3 #de,t4 ,contributions to workforce development or apprenticeship training organizations 7a7 ,general rule ,for purposes of section #ch1 in the case of a corporation1 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 year4 7b7 ,limitation 7#a7 ,income limitation ,the amount of the credit determined under this section for any taxable year shall not exceed the lesser of-- 7,a7 #be percent of the tax liability of the taxpayer for the taxable year1 and 7,b7 #bej1jjj4 7#b7 ,reduction based on state credit ,the amount allowed as a credit under subsection 7a7 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 year4 7#c7 ,qualified contributions ,for purposes of this section1 the term qualified contribution has the meaning given such term under section #be;,e4 7c7 ,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 section4 7d7 ,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 year4 7e7 ,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 #e of the ,,usa ,workforce ,tax ,credit ,act4 4 7#b7 ,conforming amendments ,section #ch7;b7 of such ,code is amended by striking plus at the end of paragraph 7#ca71 by striking the period and inserting 1 plus at the end of paragraph 7#cb71 and by adding at the end the following new paragraph3 7#cc7 the workforce development or apprenticeship training credit determined under section #de,t7a74 4 7#c7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code is amended by adding at the end the following new item3 ,sec4 #de,t4 ,contributions to workforce development or apprenticeship training organizations4 4 #c4 ,tax credit for contributions to scholarship granting organizations 7a7 ,credit for individuals 7#a7 ,in general ,subpart ,a of part ,,iv of subchapter ,a of chapter #a of the ,internal ,revenue ,code of #aihf1 as amended by this ,act1 is amended by inserting after section #be;,e the following new section3 #be;,f4 ,qualified elementary and secondary education scholarships 7a7 ,allowance of credit ,in the case of an individual1 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 taxable year4 7b7 ,dollar limitations 7#a7 ,income limitation ,the amount allowed as a credit under subsection 7a7 with respect to any taxpayer shall not exceed the lesser of-- 7,a7 #be percent of the tax liability of the taxpayer1 and 7,b7 #bej1jjj4 7#b7 ,reduction based on state credit ,the amount allowed as a credit under subsection 7a7 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 year4 7c7 ,qualified contributions2 other definitions ,for purposes of this section-- 7#a7 ,qualified contribution ,the term qualified contribution means a charitable contribution 7as defined by section #agj7;c77 to a scholarship granting organization4 7#b7 ,scholarship granting organization ,the term scholarship granting organization means any organization-- 7,a7 which-- 7i7 is described in section #eja7;c77#c7 and exempt from tax under section #eja7;a71 and 7ii7 is not a private foundation1 7,b7 whose exclusive purpose is to provide scholarships for tuition for qualified elementary and secondary education expenses of eligible students1 and 7,c7 which meets the requirements of subsection 7d74 7d7 ,requirements for scholarship granting organizations 7#a7 ,in general ,an organization meets the requirements of this subsection if-- 7,a7 such organization provides scholarships to-- 7i7 more than #a student1 and 7ii7 different students attending more than #a school1 7,b7 such organization does not provide scholarships for any expenses other than qualified elementary and secondary education expenses1 7,c7 such organization provides a scholarship to eligible students with a priority for students awarded a scholarship the previous school year1 7,d7 such organization does not earmark or set aside contributions for scholarships on behalf of any particular student1 7,e7 such organization takes appropriate steps to verify the annual household income and family size of eligible students to whom it awards scholarships1 and limits them to a member of a household with a total annual household income1 which does not exceed #bjj percent of the median gross income1 as determined by the ,secretary of ,housing and ,urban ,development1 for the purposes of the low-income housing credit under section #db1 7,f7 such organization obtains from an independent certified public accountant annual financial and compliance audits and submits such audits to the ,secretary1 7,g7 no officer or board member of such organization has been convicted of a felony1 and 7,h7 such organization requires any eligible student who receives a scholarship to permit such organization to share assessment information and other data regarding the student for the purpose of providing reports described in subsection 7e71 and such other information as necessary for the purposes of reporting on the academic achievement of eligible students receiving a scholarship from such organization4 7#b7 ,independent certified public accountant ,for purposes of paragraph 7#a77;,f71 the term independent certified public accountant means1 with respect to an organization1 a certified public accountant who is not a related person 7within the meaning of section #dfe7;b77#c77;,c77 with respect to such organization or any employee of such organization4 7e7 ,eligible school reporting requirement 7#a7 ,in general ,the reports described in this subsection include-- 7,a7 a report to the parents on the student's academic achievement1 and 7,b7 a report to each qualified scholarship granting organization that provides scholarships to students at the school1 that includes the test results1 in the aggregate and disaggregated by race or ethnicity and grade level1 of the students receiving such scholarships who are in grades #c through #ab on a grade-appropriate nationally norm-referenced standardized test4 7#b7 ,no personally identifiable information ,in preparing and submitting the report described in paragraph 7#a77;,b71 a school shall not include any personally identifiable information regarding a student4 7f7 ,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 section4 7g7 ,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 year4 7h7 ,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 #e of the ,,usa ,workforce ,tax ,credit ,act4 4 7#b7 ,clerical amendment ,the table of sections for subpart ,a of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by this ,act1 is amended by inserting after the item relating to section #be;,e the following new item3 ,sec4 #be;,f4 ,qualified elementary and secondary education scholarships4 4 7b7 ,credit for corporations 7#a7 ,in general ,subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by this ,act1 is amended by adding after section #de,t the following3 #de,u4 ,contributions to scholarship granting organizations 7a7 ,general rule ,for purposes of section #ch1 in the case of a corporation1 the education scholarship credit determined under this section for the taxable year is the aggregate amount of qualified contributions for the taxable year4 7b7 ,limitation 7#a7 ,income limitation ,the amount of the credit determined under this section for any taxable year shall not exceed the lesser of-- 7,a7 #be percent of the tax liability of the taxpayer for the taxable year1 and 7,b7 #bej1jjj4 7#b7 ,reduction based on state credit ,the amount allowed as a credit under subsection 7a7 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 year4 7c7 ,qualified contributions ,for purposes of this section1 the term qualified contribution has the meaning given such term under section #be;,f4 7d7 ,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 section4 7e7 ,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 year4 7f7 ,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 #e of the ,,usa ,workforce ,tax ,credit ,act4 4 7#b7 ,conforming amendments ,section #ch7;b7 of such ,code1 as amended by this ,act1 is amended by striking plus at the end of paragraph 7#cb71 by striking the period and inserting 1 plus at the end of paragraph 7#cc71 and by adding at the end the following new paragraph3 7#cd7 the education scholarship credit determined under section #de,u7a74 4 7#c7 ,clerical amendment ,the table of sections for subpart ,d of part ,,iv of subchapter ,a of chapter #a of such ,code1 as amended by this ,act1 is amended by adding at the end the following new item3 ,sec4 #de,u4 ,contributions to scholarship granting organizations4 4 7c7 ,excise tax on failure of scholarship granting organizations ,to make distributions 7#a7 ,in general ,chapter #db of such ,code is amended by adding at the end the following new subchapter3 ,i ,organizations ,providing ,workforce ,development1 ,apprenticeship ,training1 or ,scholarships ,sec4 #difi4 ,tax on failure to distribute receipts4 #difi4 ,tax on failure to distribute receipts 7a7 ,tax imposed ,there is hereby imposed a tax on the failure of a workforce development or apprenticeship training organization 7as defined in section #be;,e7 or a scholarship granting organization 7as defined in section #be;,f7 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 year4 7b7 ,amount of tax ,the tax imposed by subsection 7a7 with respect to a taxable year shall be equal to #ae percent of the greater of-- 7#a7 the required distribution amount with respect to the taxable year1 or 7#b7 the amount of receipts of the qualified scholarship granting organization for each taxable year which are distributed before the distribution deadline with respect to such receipts4 7c7 ,definitions ,for purposes of this section-- 7#a7 ,required distribution amount 7,a7 ,in general ,the required distribution amount with respect to a taxable year is the amount equal to #ajj percent of the total receipts of the scholarship granting organization for such taxable year-- 7i7 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 7,c71 and 7ii7 increased by the amount of the carryover under subparagraph 7,c7 from the preceding taxable year4 7,b7 ,administrative expenses ,for purposes of this paragraph1 not more than #aj percent of total receipts of a qualified workforce development organization1 apprenticeship training organization or scholarship granting organization for a taxable year may be used for administrative purposes4 7,c7 ,carryover 7i7 ,qualified scholarship granting organization ,receipts of a qualified scholarship granting organization for a taxable year that are not awarded scholarships for the taxable year or retained for administrative purposes for the taxable year shall be carried to the succeeding taxable year4 ,the amount carried to a taxable year under the preceding sentence shall not exceed #ae percent of total receipts of the qualified scholarship granting organization for the taxable year4 7ii7 ,qualified workforce development or apprenticeship training organization ,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 year4 ,the amount carried to the taxable year under the preceding sentence shall not exceed #ae percent of total receipts of the qualified workforce development or apprenticeship training organization for the taxable year4 7#b7 ,distributions ,the term distribution includes amounts which are formally committed but not distributed4 ,a formal commitment described in the preceding sentence may include contributions set aside for eligible students or participants for more than one year4 7#c7 ,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 organization4 7d7 ,reasonable cause exception ,the tax imposed by subsection 7a7 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 cause4 4 7#b7 ,abatement of tax 7,a7 ,general rule ,subsection 7b7 of section #difb of such ,code is amended by striking or ,g and inserting ,g1 or ,i4 7,b7 ,first tier tax ,subsection 7a7 of section #difc of such ,code is amended by inserting #difi1 after #difg14 7,c7 ,taxable event ,subsection 7c7 of section #difc of such ,code is amended by inserting #difi1 after #difg14 7#c7 ,correction period ,subparagraph 7,a7 of section #difc7;e77#b7 of such ,code is amended by inserting or #difi after #didb4 7#d7 ,clerical amendment ,the table of subchapters for chapter #db of such ,code is amended by adding at the end the following new item3 ,subchapter ,i4 ,organizations ,providing ,workforce ,development1 ,apprenticeship ,training1 or ,scholarships 4 #d4 ,organizational autonomy ,a participating eligible organization or entity under the programs established pursuant to the ,,usa ,workforce ,tax ,credit ,act are autonomous and not agents of the ,state or ,federal ,government and therefore-- 7#a7 a ,federal or ,state agency may not in any way regulate the program of a participating entity that accepts a contribution or a scholarship under this ,act2 7#b7 the provision of tax credits under this ,act does not expand the regulatory authority of the ,federal ,government1 the ,state1 its officers1 or any school district to impose any additional regulation of an entity beyond those necessary to enforce the requirements of this ,act2 and 7#c7 participating eligible entities shall be given the maximum freedom to provide for the needs of their participants without government control4 #e4 ,volume cap 7a7 ,amount ,the volume cap amount available for tax credits for purposes of this ,act shall be #b1jjj1jjj1jjj annually1 beginning for taxable years beginning in #bjbj and for each succeeding calendar year thereafter4 7b7 ,application for credits ,the ,secretary shall develop a system to track and make available information in real time1 regarding availability of tax credits to donors which will be available on a first-come1 first-serve basis4 7c7 ,distribution ,fifty percent of the annual amount made available shall be allotted by the ,secretary for donations to workforce development and apprenticeship training organizations and #ej percent for donations to scholarship granting organizations4 #f4 ,effective date ,the amendments made by this ,act shall apply to taxable years beginning after ,december #ca1 #bjai4