California Legislature—2015–16 Regular Session

Assembly BillNo. 151


Introduced by Assembly Member Rodriguez

January 15, 2015


An act to add and repeal Section 3073.7 of the Labor Code, and to add and repeal Sections 17053.10, 19560.3, and 23667 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.

LEGISLATIVE COUNSEL’S DIGEST

AB 151, as introduced, Rodriguez. Income taxes: credits: apprenticeships.

The Personal Income Tax Law and the Corporation Tax Law allow various credits against the taxes imposed by those laws. Existing law provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment.

This bill, for taxable years beginning on or after January 1, 2017, and before January 1, 2021, would allow a credit against the taxes imposed under those tax laws in an amount equal to $2,000 for each registered apprentice, as defined, trained by the taxpayer in the taxable year. This bill would require the Division of Apprenticeship Standards in the Department of Industrial Relations, among other things, to establish a procedure for taxpayers, in the form and manner jointly prescribed by the Division of Apprenticeship Standards and the Franchise Tax Board, to apply and receive a certificate for purposes of the credit. This bill would also require the Division of Apprenticeship Standards to prepare reports for each of the 5 calendar years beginning on January 1, 2018, and before January 1, 2023, containing specified information relating to the credits, to be submitted to the Assembly and Senate Appropriations Committees, the Assembly Revenue and Taxation Committee, and the Senate Governance and Finance Committee on or before March 1 of the following calendar year, commencing March 1, 2019.

This bill would take effect immediately as a tax levy.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1

SECTION 1.  

Section 3073.7 is added to the Labor Code, to
2read:

3

3073.7.  

(a) The Division of Apprenticeship Standards shall
4prepare reports on the apprenticeship income tax credits allowed
5under Sections 17053.10 and 23667 of the Revenue and Taxation
6Code. The reports shall be for each of the five calendar years
7beginning on January 1, 2018, and before January 1, 2023, and
8shall include, but not be limited to, the following information:

9(1) The number of companies or businesses taking advantage
10of the apprenticeship income tax credit.

11(2) The number of apprentices participating in the apprenticeship
12programs and the number of apprentices who completed an
13apprenticeship program which was the basis of the apprenticeship
14income tax credits allowed under Sections 17053.10 and 23667
15of the Revenue and Taxation Code.

16(3) The number of apprentices that were hired by the taxpayer
17after the apprenticeship training was completed for which the
18taxpayer was allowed a credit under Sections 17053.10 and 23667
19of the Revenue and Taxation Code for training that apprentice.

20(4) Information on the employment status of individuals who
21have completed an apprenticeship to the extent the information is
22available.

23(5) The fiscal impact of the apprenticeship income tax credits.

24(b) This report shall be submitted to the Assembly and Senate
25Appropriations Committees, the Assembly Revenue and Taxation
26Committee, and the Senate Governance and Finance Committee
27on or before March 1 of the following calendar year, commencing
28 March 1, 2019.

P3    1(c) This section shall be repealed on January 1, 2024.

2

SEC. 2.  

Section 17053.10 is added to the Revenue and Taxation
3Code
, to read:

4

17053.10.  

(a) For each taxable year beginning on or after
5January 1, 2017, and before January 1, 2021, there shall be allowed
6as a credit against the “net tax,” as defined in Section 17039, in
7an amount equal to two thousand dollars ($2,000) for each
8registered apprentice trained by the taxpayer in the taxable year.

9(b) For purposes of this section, “registered apprentice” means
10an individual who meets all of the following requirements:

11(1) Is 16 years of age or older at the time of application into the
12program.

13(2) Meets one of the following requirements:

14(A) Has not obtained a high school diploma and is enrolled in
15high school or a General Education Development test preparation
16program.

17(B) Has obtained a high school diploma or General Education
18Development credential while participating in the apprenticeship.

19(3) Is trained by the taxpayer through an apprenticeship program
20that meets all of the following requirements:

21(A) The apprenticeship program is approved by the Chief of
22the Division of Apprenticeship Standards pursuant to Chapter 4
23(commencing with Section 3070) of Division 3 of the Labor Code
24and is also registered with the Office of Apprenticeship at the
25United States Department of Labor.

26(B) The program is provided pursuant to an apprenticeship
27agreement as described in Section 3077 of the Labor Code.

28(C) The minimum term in hours for the program is 4,000 hours.

29(c) (1) (A) A credit shall only be allowed under this section
30for the taxable year if the taxpayer has received the certificate
31described in subparagraph (B) from the Division of Apprenticeship
32Standards in the Department of Industrial Relations. A certificate
33is required for each taxable year. The taxpayer shall provide a copy
34of the certificate to the Franchise Tax Board upon request.

35(B) The Division of Apprenticeship Standards shall do all of
36the following:

37(i) Establish a procedure for taxpayers, in the form and manner
38jointly prescribed by the Division of Apprenticeship Standards
39and the Franchise Tax Board, to apply and receive a certificate for
40purposes of this section.

P4    1(ii) Verify that the taxpayer is training during the taxable year
2an individual that meets the requirements to be a registered
3apprentice as described in subdivision (b).

4(iii) Provide the taxpayer with a certificate for the registered
5apprentice. The certificate shall contain the name of the taxpayer
6and the name of the apprentice, a brief description of the
7apprenticeship, the primary location of the apprenticeship, and any
8other information the Division of Apprenticeship Standards or the
9Franchise Tax Board deems relevant.

10(iv) Annually provide the Franchise Tax Board with a list of
11the names of the taxpayers that received certificates and the names
12of the registered apprentices of the taxpayer. The list may also
13contain any other information from the certificates.

14(v) Inform the Franchise Tax Board if the Division of
15Apprenticeship Standards has knowledge that the training of a
16registered apprentice is terminated prior to the completion of the
17apprenticeship program after the taxpayer has received a certificate.

18(2)  The Division of Apprenticeship Standards may adopt rules
19and regulations as reasonably necessary to effectuate this
20subdivision, but shall consult with the Franchise Tax Board.

21(d) In the case where the credit allowed by this section exceeds
22the “net tax,” the excess may be carried over to reduce the “net
23tax” in the following year, and succeeding four years, if necessary,
24until the credit is exhausted.

25(e) The Franchise Tax Board may prescribe rules, guidelines,
26 or procedures necessary or appropriate to carry out the purposes
27of this section, except as otherwise specified in subdivision (c).

28(f) (1) Except as provided in paragraph (2), if the training of a
29registered apprentice is terminated prior to the completion of the
30apprenticeship program, any unused carryover of the credit shall
31be canceled and any previously claimed credit that reduced net tax
32shall be recaptured by increasing the tax imposed by this part for
33the taxable year in which the training is terminated.

34(2) Paragraph (1) shall not apply if the training of a registered
35apprentice was terminated due to any of the following:

36(A) The registered apprentice voluntarily leaves the
37apprenticeship program.

38(B) The registered apprentice, before the end of the completion
39of the apprenticeship program described in paragraph (3) of
40subdivision (b), becomes disabled and unable to perform the
P5    1services of that program, unless that disability is removed before
2the close of the period of that program and the taxpayer fails to
3offer reinstatement to the program for that apprentice.

4(C) The training of a registered apprentice was terminated due
5to the misconduct, as defined in Sections 1256-30 to 1256-43,
6inclusive, of Title 22 of the California Code of Regulations, of that
7apprentice.

8(D) The training of a registered apprentice was terminated due
9to a substantial reduction in the trade or business operations of the
10taxpayer.

11(g) A deduction otherwise allowed under this part for any
12amount paid or incurred by the qualified taxpayer in training a
13 registered apprentice as a trade or business expense shall be
14reduced by the amount of the credit allowed by this section.

15(h) This section shall remain in effect only until December 1,
162021, and as of that date is repealed.

17

SEC. 3.  

Section 19560.3 is added to the Revenue and Taxation
18Code
, to read:

19

19560.3.  

(a) The Franchise Tax Board shall provide the
20Division of Apprenticeship Standards in the Department of
21Industrial Relations with any information necessary to prepare the
22report required pursuant to Section 3073.7 of the Labor Code.

23(b) This section shall be repealed on January 1, 2024.

24

SEC. 4.  

Section 23667 is added to the Revenue and Taxation
25Code
, to read:

26

23667.  

(a) For each taxable year beginning on or after January
271, 2017, and before January 1, 2021, there shall be allowed as a
28credit against the “tax,” as defined in Section 23036, in an amount
29equal to two thousand dollars ($2,000) for each registered
30apprentice trained by the taxpayer in the taxable year.

31(b) For purposes of this section, “registered apprentice” means
32an individual who meets all of the following requirements:

33(1) Is 16 years of age or older at the time of application into the
34program.

35(2) Meets one of the following requirements:

36(A) Has not obtained a high school diploma and is enrolled in
37high school or a General Education Development test preparation
38program.

39(B) Has obtained a high school diploma or General Education
40Development credential while participating in the apprenticeship.

P6    1(3) Is trained by the taxpayer through an apprenticeship program
2that meets all of the following requirements:

3(A) The apprenticeship program is approved by the Chief of
4the Division of Apprenticeship Standards pursuant to Chapter 4
5(commencing with Section 3070) of Division 3 of the Labor Code
6and is also registered with the Office of Apprenticeship at the
7United States Department of Labor.

8(B) The program is provided pursuant to an apprenticeship
9agreement as described in Section 3077 of the Labor Code.

10(C) The minimum term in hours for the program is 4,000 hours.

11(c) (1) (A) A credit shall only be allowed under this section
12for the taxable year if the taxpayer has received the certificate
13described in subparagraph (B) from the Division of Apprenticeship
14Standards in the Department of Industrial Relations. A certificate
15is required for each taxable year. The taxpayer shall provide a copy
16of the certificate to the Franchise Tax Board upon request.

17(B) The Division of Apprenticeship Standards shall do all of
18the following:

19(i) Establish a procedure for taxpayers, in the form and manner
20jointly prescribed by the Division of Apprenticeship Standards
21and the Franchise Tax Board, to apply and receive a certificate for
22 purposes of this section.

23(ii) Verify that the taxpayer is training during the taxable year
24an individual that meets the requirements to be a registered
25apprentice as described in subdivision (b).

26(iii) Provide the taxpayer with a certificate for the registered
27apprentice. The certificate shall contain the name of the taxpayer
28and the name of the apprentice, a brief description of the
29apprenticeship, the primary location of the apprenticeship, and any
30other information the Division of Apprenticeship Standards or the
31Franchise Tax Board deems relevant.

32(iv) Annually provide the Franchise Tax Board with a list of
33the names of the taxpayers that received certificates and the names
34of the registered apprentices of the taxpayer. The list may also
35contain any other information from the certificates.

36(v) Inform the Franchise Tax Board if the Division of
37Apprenticeship Standards has knowledge that the training of a
38registered apprentice is terminated prior to the completion of the
39apprenticeship program after the taxpayer has received a certificate.

P7    1(2)  The Division of Apprenticeship Standards may adopt rules
2and regulations as reasonably necessary to effectuate this
3subdivision, but shall consult with the Franchise Tax Board.

4(d) In the case where the credit allowed by this section exceeds
5the “tax,” the excess may be carried over to reduce the “net tax”
6in the following year, and succeeding four years, if necessary, until
7the credit is exhausted.

8(e) The Franchise Tax Board may prescribe rules, guidelines,
9or procedures necessary or appropriate to carry out the purposes
10of this section, except as otherwise specified in subdivision (c).

11(f) (1) Except as provided in paragraph (2), if the training of a
12registered apprentice is terminated prior to the completion of the
13apprenticeship program, any unused carryover of the credit shall
14be canceled and any previously claimed credit that reduced tax
15shall be recaptured by increasing the tax imposed by this part for
16the taxable year in which the training is terminated.

17(2) Paragraph (1) shall not apply if the training of a registered
18apprentice was terminated due to any of the following:

19(A) The registered apprentice voluntarily leaves the
20apprenticeship program.

21(B) The registered apprentice, before the end of the completion
22of the apprenticeship program described in paragraph (3) of
23subdivision (b), becomes disabled and unable to perform the
24services of that program, unless that disability is removed before
25the close of the period of that program and the taxpayer fails to
26offer reinstatement to the program for that apprentice.

27(C) The training of a registered apprentice was terminated due
28to the misconduct, as defined in Sections 1256-30 to 1256-43,
29inclusive, of Title 22 of the California Code of Regulations, of that
30apprentice.

31(D) The training of a registered apprentice was terminated due
32to a substantial reduction in the trade or business operations of the
33taxpayer.

34(g) A deduction otherwise allowed under this part for any
35amount paid or incurred by the qualified taxpayer in training a
36registered apprentice as a trade or business expense shall be
37reduced by the amount of the credit allowed by this section.

38(h) This section shall remain in effect only until December 1,
392021, and as of that date is repealed.

P8    1

SEC. 5.  

This act provides for a tax levy within the meaning
2of Article IV of the Constitution and shall go into immediate effect.



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