Credit for employees participating in qualified apprenticeship programs

(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: 45BB. Employees participating in qualified apprenticeship programs (a) In general For purposes of section 38, the apprenticeship credit determined under this section for the taxable year is an amount equal to $1,500 for each of the apprenticeship employees of the employer that exceeds the applicable apprenticeship level (as determined under subsection (d)) during such taxable year. (b) Limitation on number of years with respect to which credit may be taken into account The apprenticeship credit shall not be allowed for more than 2 taxable years with respect to any apprenticeship employee. (c) Apprenticeship employee For purposes of this section— (1) In general The term apprenticeship employee means any employee who is— (A) employed by the employer in an officially recognized apprenticeable occupation, as determined by the Office of Apprenticeship of the Employment and Training Administration of the Department of Labor, and (B) currently enrolled in an apprenticeship program. (2) Apprenticeship program The term apprenticeship program means a registered apprenticeship program defined in section 3131(e)(3)(B). (d) Applicable apprenticeship level (1) In general For purposes of this section, the applicable apprenticeship level shall be equal to the amount equal to 80 percent of the average number of such apprenticeship employees of the employer for the 3 taxable years preceding the taxable year for which the credit is being determined, rounded to the next lower whole number. (2) First year of new apprenticeship programs In the case of an employer which did not have any apprenticeship employees during any taxable year in the 3 taxable years preceding the taxable year for which the credit is being determined, the applicable apprenticeship level shall be equal to zero. (e) Exclusion for certain industries (1) In general No credit may be allowed under this section with respect to an individual employed by an employer in any sector described in the North American Industry Classification System code beginning with 23 unless— (A) such individual is a pre-apprenticeship graduate currently enrolled in an apprenticeship program, and (B) such employer participates in or sponsors an apprenticeship program. (2) Pre-apprenticeship graduate For purposes of this subsection, the term pre-apprenticeship graduate means any individual who has completed a pre-apprenticeship program. (3) Pre-apprenticeship program For purposes of this subsection, the term pre-apprenticeship program means a program that— (A) is designed to prepare participants to enter an apprenticeship program, (B) is carried out by a sponsor that has a documented partnership with 1 or more sponsors of apprenticeship programs, and (C) includes each of the following: (i) Training (including a curriculum for the training) and theoretical education for participants that— (I) is aligned with industry standards related to an apprenticeship program and reviewed and approved annually by sponsors of the apprenticeship program within the documented partnership that will prepare participants by teaching the skills and competencies needed to enter 1 or more apprenticeship programs, and (II) does not displace a paid employee. (ii) A formal agreement with a sponsor of an apprenticeship program that will facilitate or expedite entry of pre-apprenticeship graduates into the apprenticeship program, provided that a place in the apprenticeship program is available and that the pre-apprenticeship graduate meets the qualifications of such program. (f) Coordination with other credits The amount of credit otherwise allowable under sections 45A, 51(a), and 1396(a) with respect to any employee shall be reduced by the credit allowed by this section with respect to such employee. (g) Certain rules To apply Rules similar to the rules of subsections (i)(1) and (k) of section 51 shall apply for purposes of this section.. (b) Credit made part of general business credit Subsection (b) of section 38 of such Code is amended by striking the period at the end of paragraph (40) and inserting a comma, 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 credit determined under section 45BB(a).. (c) Denial of double benefit Subsection (a) of section 280C of such Code is amended by inserting 45BB(a), after 45S(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. Employees participating in qualified apprenticeship programs.. (e) Effective date The amendments made by this section shall apply to individuals commencing apprenticeship programs after the date of the enactment of this Act.