Skilled Workforce Act

Bill Number

S. 2664

Origin Chamber

Senate

Congress

119th Congress, Session 1

Policy Area

Labor and Employment

Status

Introduced

Latest Action

2025-08-01: Read twice and referred to the Committee on Finance.

Last Updated

2025-09-19T15:00:53Z

AI-Generated Summary

Purpose

The Skilled Workforce Act (S. 2664) aims to encourage investments in workforce training by creating a new federal tax credit. This credit incentivizes upgrades to educational and training facilities to address shortages of skilled workers in key U.S. industries, such as advanced manufacturing, clean energy, construction, and transportation. The goal is to build stronger pipelines for high-quality jobs and skills-based education, particularly in public institutions serving underserved communities.

Key Provisions

• Tax Credit Structure: Provides a 30% credit on qualified investments in eligible property placed in service after the bill's enactment. The credit applies to the basis (original cost) of property used in certified qualifying workforce training projects.
• Eligible Taxpayers: Any U.S. taxpayer, excluding "foreign entities of concern" (e.g., certain foreign governments or companies deemed a national security risk, as defined in existing law).
• Qualifying Workforce Training Projects: Projects certified by the Secretary of the Treasury (in consultation with the Secretary of Commerce) that expand or enhance training at eligible institutions to meet workforce needs in targeted sectors, including:
• Advanced, high-tech, semiconductor, and industrial manufacturing.
• Advanced energy (e.g., hydrogen, nuclear, solar).
• Construction.
• Transportation (e.g., aviation, aerospace, airports, advanced air mobility).
• Eligible Institutions: Public entities focused on vocational or skills training, such as:
• Public secondary schools (grades 9-12).
• Area career and technical education schools.
• Postsecondary vocational institutions.
• Community colleges (including Tribal colleges awarding mostly associate degrees).
• State-operated workforce development programs.
• Consortia of the above.
• Eligible Property: Tangible items (e.g., equipment, buildings) or intangible assets (e.g., digital learning platforms) essential for construction, renovation, or upgrades to institution facilities. Property must be depreciable (eligible for tax deductions over time) and integral to training programs.
• Program Administration:
• Establishes a certification program within 180 days of enactment, with applications accepted over 4 years.
• Total credit allocations capped at $500 million, with at least $100 million reserved for projects involving disadvantaged schools (e.g., Title I schools, rural schools, or those funded by the Bureau of Indian Education).
• Selection based on factors like alignment with state/regional workforce needs, job creation potential, financial sustainability, and support services (e.g., accommodations for students).
• Certified projects must be placed in service within 3 years; unused allocations can be redistributed.
• Additional Features:
• Allows elective payment (direct cash refund from the government) or transfer of the credit to another taxpayer.
• Prevents double benefits: No charitable deductions or other tax credits for the same investment.
• Funding and Timeline: Authorizes necessary appropriations for the Treasury and Commerce Departments. Applies to taxable years beginning after enactment (expected around August 2025).

Significant Changes to Existing Law

• Adds a new Section 48F to the Internal Revenue Code (IRC), modeled after investment tax credits like those for clean energy (Section 48E) or advanced manufacturing (Section 48C). This integrates it into the general business credit framework under Section 46.
• Amends IRC Sections 49, 50, 6417, and 6418 to include this credit in basis reduction rules, elective payments, and transferability options, ensuring consistency with other incentives.
• Introduces certification and allocation limits not present in prior workforce-related tax provisions, emphasizing national security by excluding foreign entities of concern.
• No changes to overall tax rates or deductions, but creates a targeted $500 million pool for workforce-focused investments, distinct from broader education funding laws like the Carl D. Perkins Career and Technical Education Act.

Potential Impacts

• Government Agencies: The Treasury Department and IRS will handle certifications, audits, and credit claims, increasing administrative workload and costs (offset by appropriations). The Commerce Department provides input on industry needs, potentially straining resources during the 4-year application window.
• Citizens and Workers: Could improve access to skills training in high-demand fields, leading to better job opportunities, higher wages, and reduced skills gaps, especially in underserved areas like rural or low-income schools. Benefits may reach students, recent graduates, and displaced workers through expanded programs.
• Educational Institutions: Provides funding for facility upgrades (e.g., labs, digital tools), enabling more hands-on training without relying solely on state budgets, though competition for the limited credit pool may favor larger or better-prepared applicants.
• Industries and Economy: Boosts domestic capabilities in strategic sectors, potentially increasing U.S. competitiveness in manufacturing and energy. Excluding foreign entities could limit international partnerships but enhance supply chain security.
• International Relations: The ban on foreign entities of concern may strain ties with countries like China, aligning with U.S. policies on national security but possibly deterring global investments in U.S. training projects.

Main Stakeholders Affected

• Educational and Training Providers: Public secondary schools, vocational institutions, community colleges (including Tribal ones), and workforce programs, which gain resources for expansion but must compete for certification.
• Investors and Businesses: Taxpayers (e.g., companies or philanthropists) funding projects, who benefit from the 30% credit, elective payments, or transfers to offset costs.
• Students and Workers: Individuals in or entering the workforce, particularly in targeted industries, who access improved training and job pipelines; priority for disadvantaged groups (e.g., low-income or rural students).
• Government Entities: U.S. Treasury, IRS, and Commerce Department for administration; state and local education agencies for project support.
• Industries: Sectors like semiconductors, clean energy, construction, and aerospace, which gain a more skilled labor pool to address shortages.

Notable Legal, Constitutional, or Political Implications

• Legal: Introduces certification requirements that could lead to disputes over eligibility or allocations, with potential for IRS audits on qualified investments. The 3-year "placed in service" deadline adds enforcement mechanisms similar to other tax credits, reducing abuse but increasing compliance burdens.
• Constitutional: Aligns with Congress's taxing and spending powers under Article I, promoting general welfare through education and economic development. No apparent First Amendment or equal protection issues, though the focus on public institutions may indirectly favor them over private ones.
• Political: Supports bipartisan goals of workforce development and domestic industry growth (e.g., echoing the CHIPS and Science Act), but the cap and exclusions could spark debates on equity (e.g., insufficient funds for all needy schools) or protectionism. As an introduced bill (August 2025), its passage depends on Finance Committee approval amid budget priorities.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Sen. Ossoff, Jon [D-GA]

Recent Actions

• 2025-08-01: Read twice and referred to the Committee on Finance.
• 2025-08-01: Introduced in Senate

Bill Versions

• Skilled Workforce Act — issued 2025-08-01 — PDF (12 pages)