LEAP Act
- Sponsor
- Rep. Budzinski, Nikki [D-IL-13]
- Committees
- Oversight and Government Reform Committee (primary)
- Last action
- Feb 27, 2025
Bottom line
The LEAP Act aims to incentivize employers to expand their apprenticeship programs through a tax credit, while simultaneously seeking to reduce federal government printing expenditures and enhance publication transparency.
What it actually does
This bill establishes a new general business tax credit for employers who hire apprenticeship employees, specifically for those employees exceeding a certain baseline number. It also includes a separate section directing federal agencies to reduce government printing costs and increase transparency for publications.
Proponents argue
Supporters argue that this bill will bolster workforce development by encouraging businesses to invest in skilled labor through apprenticeships, addressing critical labor shortages and providing valuable career pathways for individuals. The printing cost reduction is seen as a common-sense measure to promote fiscal responsibility and modernize government operations.
Opponents contend
Critics might contend that the proposed tax credit amount may be insufficient to significantly alter employer hiring behavior, potentially leading to deadweight loss by subsidizing activities that would occur anyway. Some may also question the administrative feasibility or the actual scale of savings from the printing cost reductions.
The bill is concise and its core provisions are straightforward, making it accessible for an informed reader to evaluate within a reasonable timeframe.
Section 2(a), adding new section 45BB to the Internal Revenue Code
Establishment of Apprenticeship Credit
This provision creates a new general business tax credit of $1,500 for each 'apprenticeship employee' an employer hires during a taxable year that exceeds their 'applicable apprenticeship level.' The credit is limited to a maximum of two taxable years per individual apprenticeship employee.
Supporters argue
Supporters argue this credit directly incentivizes businesses to invest in skilled labor development, addressing workforce shortages and providing valuable career pathways, thereby strengthening the economy.
Critics contend
Critics might contend that the $1,500 credit is too small to significantly alter hiring behavior for many businesses, especially given the substantial costs of training, or that it could primarily reward companies that would have hired apprentices anyway.
Tradeoffs
The provision balances the desire to stimulate apprenticeship growth with concerns about the cost to federal revenue and the potential for deadweight loss if the incentive is not strong enough to drive new behavior.
Section 2(c) and (d), new section 45BB(c) and (d)
Defining Eligible Apprenticeships and Baseline
The bill defines an 'apprenticeship employee' as someone in an officially recognized apprenticeable occupation by the Department of Labor and enrolled in a 'registered apprenticeship program.' The credit is only for employees exceeding 80% of the average number of apprenticeship employees from the preceding three taxable years. New apprenticeship programs start with a baseline of zero.
Section 2(e), new section 45BB(e)
Special Rules for Construction Industry Apprenticeships
Employers in the construction sector (NAICS code beginning with 23) are excluded from the credit unless the individual is a 'pre-apprenticeship graduate' currently enrolled in an apprenticeship program, and the employer participates in or sponsors an apprenticeship program. The bill defines 'pre-apprenticeship graduate' and 'pre-apprenticeship program' with specific requirements.
Section 3
Limitation on Government Printing Costs
This section directs the Director of the Office of Management and Budget (OMB) to coordinate with federal agencies within 90 days to identify publications for digital-only availability, devise a 10-year strategy (FY2026-2035) to reduce overall government printing costs, establish government-wide employee printing guidelines, and require all public federal publications to list the issuing agency, total copies printed, collective cost, and publisher. Essential documents for social security recipients, Medicare beneficiaries, and those with limited internet access are exempted.
The definition of 'apprenticeship program' relies on a cross-reference to 'a registered apprenticeship program defined in section 3131(e)(3)(B)' of the Internal Revenue Code.
Section 2(c)(2)
Why it matters:This is standard legislative practice to avoid redundancy and ensure consistency with existing legal definitions, rather than an attempt to obscure.
Case for: Using an existing definition ensures consistency with established federal standards for apprenticeship programs, promoting quality and preventing the proliferation of unaccredited programs.
Case against: Reliance on external definitions can make the bill less self-contained and harder for a casual reader or small business owner to fully comprehend without additional research.
Estimated impact: Ensures that only programs meeting rigorous federal standards are eligible for the credit, impacting all potential beneficiaries.
The credit is only allowed for apprenticeship employees that exceed '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.'
Section 2(d)(1)
Why it matters:This is a technical detail necessary for the calculation of the credit, rather than an attempt to hide its impact.
Case for: This baseline calculation ensures that the credit primarily incentivizes *new* apprenticeship growth rather than simply subsidizing existing programs, maximizing the impact of federal funds.
Case against: The calculation can be complex for employers, particularly those with fluctuating apprenticeship numbers, and may be perceived as unfair by businesses that maintain consistent, high levels of apprenticeships but don't significantly grow them.
Estimated impact: Significantly impacts the number of apprentices for which an employer can claim the credit, focusing the incentive on expansion.
No credit is allowed for individuals employed by an employer in any sector described in the North American Industry Classification System (NAICS) code beginning with 23 (Construction) unless specific conditions related to pre-apprenticeship graduates and employer participation are met.
Section 2(e)(1)
Why it matters:This is a targeted policy choice for a specific industry, which is often placed in technical subsections of tax law rather than the main operative language.
Case for: This provision aims to ensure that construction apprenticeships are high-quality and leverage pre-apprenticeship programs, potentially addressing specific industry challenges or promoting structured pathways.
Case against: Critics might argue this adds undue complexity and administrative burden for construction employers, potentially making it harder for them to access the credit compared to other industries.
Estimated impact: Significantly alters the eligibility criteria for a major industry, potentially shaping how construction companies approach apprenticeship programs.