AB 1569, as amended, 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, 2016, and before January 1, 2020, 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, 2017, and before January 1, 2022, 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, 2018.
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:
Section 3073.7 is added to the Labor Code, to
2read:
(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, 2017, and before January 1, 2022, 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
P3 1Committee, and the Senate Governance and Finance Committee
2on or before March 1 of the following calendar year, commencing
3March 1, 2018.
4(c) This section shall be repealed on January 1, 2023.
Section 17053.10 is added to the Revenue and Taxation
6Code, to read:
(a) For each taxable year beginning on or after
8January 1, 2016, and before January 1, 2020, there shall be allowed
9as a credit against the “net tax,” as defined in Section 17039, in
10an amount equal to two thousand dollars ($2,000) for each
11registered apprentice trained by the taxpayer in the taxable year.
12(b) For purposes of this section, “registered apprentice” means
13an individual who meets all of the following requirements:
14(1) Is 16 years of age or older at the time of application into the
15program.
16(2) Has not obtained a high school diploma, and is enrolled in
17high school or a General Education Development test preparation
18program, or is currently enrolled for the duration of the program
19and remains enrolled and completes the program while participating
20in the apprenticeship.
21(2) Meets one of the following requirements:
end insertbegin insert
22(A) Has not obtained a high school diploma and is enrolled in
23high school or a General Education Development test preparation
24program.
25(B) Has obtained a high school diploma or General Education
26Development credential while participating in the apprenticeship.
27(3) Is trained by the taxpayer through an apprenticeship program
28that meets all of the following requirements:
29(A) The apprenticeship program is approved by the Chief of
30the Division of Apprenticeship Standards pursuant to Chapter 4
31(commencing with Section 3070) of Division 3 of the Labor Code
32
and is also registered with the Office of Apprenticeship at the
33United States Department of Labor.
34(B) The program is provided pursuant to an apprenticeship
35agreement as described in Section 3077 of the Labor Code.
36(C) The minimum term in hours for the program is 4,000 hours.
37(c) (1) (A) A credit shall only be allowed under this section
38for the taxable year if the taxpayer has received the certificate
39described in subparagraph (B) from the Division of Apprenticeship
40Standards in the Department of Industrial Relations. A certificate
P4 1is required for each taxable year. The taxpayer shall provide a copy
2of the certificate to the Franchise Tax Board upon request.
3(B) The Division of Apprenticeship Standards shall do all of
4the following:
5(i) Establish a procedure for taxpayers, in the form and manner
6jointly prescribed by the Division of Apprenticeship Standards
7and the Franchise Tax Board, to apply and receive a certificate for
8purposes of this section.
9(ii) Verify that the taxpayer is training during the taxable year
10an individual that meets the requirements to be a registered
11apprentice as described in subdivision (b).
12(iii) Provide the taxpayer with a certificate for the registered
13apprentice. The certificate shall contain the name of the taxpayer
14and the name of the apprentice, a brief description of the
15apprenticeship,
the primary location of the apprenticeship, and any
16other information the Division of Apprenticeship Standards or the
17Franchise Tax Board deems relevant.
18(iv) Annually provide the Franchise Tax Board with a list of
19the names of the taxpayers that received certificates and the names
20of the registered apprentices of the taxpayer. The list may also
21contain any other information from the certificates.
22(v) Inform the Franchise Tax Board if the Division of
23Apprenticeship Standards has knowledge that the training of a
24registered apprentice is terminated prior to the completion of the
25apprenticeship program after the taxpayer has received a certificate.
26(2) The Division of Apprenticeship Standards may adopt
rules
27and regulations as reasonably necessary to effectuate this
28subdivision, but shall consult with the Franchise Tax Board.
29(d) In the case where the credit allowed by this section exceeds
30the “net tax,” the excess may be carried over to reduce the “net
31tax” in the following year, and succeeding four years, if necessary,
32until the credit is exhausted.
33(e) The Franchise Tax Board may prescribe rules, guidelines,
34or procedures necessary or appropriate to carry out the purposes
35of this section, except as otherwise specified in subdivision (c).
36(f) (1) Except as provided in paragraph (2), if the training of a
37registered apprentice is terminated prior to the completion of the
38apprenticeship program, any
unused carryover of the credit shall
39be canceled and any previously claimed credit that reduced net tax
P5 1shall be recaptured by increasing the tax imposed by this part for
2the taxable year in which the training is terminated.
3(2) Paragraph (1) shall not apply if the training of a registered
4apprentice was terminated due to any of the following:
5(A) The registered apprentice voluntarily leaves the
6apprenticeship program.
7(B) The registered apprentice, before the end of the completion
8of the apprenticeship program described in paragraph (3) of
9subdivision (b), becomes disabled and unable to perform the
10services of that program, unless that disability is removed before
11the close of the period of that program and the taxpayer
fails to
12offer reinstatement to the program for that apprentice.
13(C) The training of a registered apprentice was terminated due
14to the misconduct, as defined in Sections 1256-30 to 1256-43,
15inclusive, of Title 22 of the California Code of Regulations, of that
16apprentice.
17(D) The training of a registered apprentice was terminated due
18to a substantial reduction in the trade or business operations of the
19taxpayer.
20(g) A deduction otherwise allowed under this part for any
21amount paid or incurred by the qualified taxpayer in training a
22registered apprentice as a trade or business expense shall be
23reduced by the amount of the credit allowed by this section.
24(g)
end delete
25begin insert(h)end insert This section shall remain in effect only until December 1,
262020, and as of that date is repealed.
Section 19560.3 is added to the Revenue and Taxation
28Code, to read:
begin insert(a)end insertbegin insert end insert The Franchise Tax Board shall provide the
30Division of Apprenticeship Standards in the Department of
31Industrial Relations with any information necessary to prepare the
32report required pursuant to Section 3073.7 of the Labor Code.
33(b) This section shall be repealed on January 1, 2023.
end insertSection 23667 is added to the Revenue and Taxation
35Code, to read:
(a) For each taxable year beginning on or after January
371, 2016, and before January 1, 2020, there shall be allowed as a
38credit against the “tax,” as defined in Section 23036, in an amount
39equal to two thousand dollars ($2,000) for each registered
40apprentice trained by the taxpayer in the taxable year.
P6 1(b) For purposes of this section, “registered apprentice” means
2an individual who meets all of the following requirements:
3(1) Is 16 years of age or older at the time of application into the
4program.
5(2) Has not obtained a high school diploma, and is enrolled in
6high school or a General Education Development test preparation
7program, or is currently enrolled for the duration of the program
8and remains enrolled and completes the program while participating
9in the apprenticeship.
10(2) Meets one of the following requirements:
end insertbegin insert
11(A) Has not obtained a high school diploma and is enrolled in
12high school or a General Education Development test preparation
13program.
14(B) Has obtained a high school diploma or General Education
15Development credential while participating in the apprenticeship.
16(3) Is trained by the taxpayer through an apprenticeship program
17that meets all of the following requirements:
18(A) The apprenticeship program is approved by the Chief of
19the Division of Apprenticeship Standards pursuant to Chapter 4
20(commencing with Section 3070) of Division 3 of the Labor Code
21and is also registered with the Office of Apprenticeship at the
22United States Department of Labor.
23(B) The program is provided pursuant to an apprenticeship
24agreement as described in Section 3077 of the Labor Code.
25(C) The minimum term in hours for the program is 4,000 hours.
26(c) (1) (A) A credit shall only be allowed under this section
27for the taxable year if the taxpayer has received the certificate
28described in subparagraph (B) from the Division of Apprenticeship
29Standards in the Department of Industrial Relations. A certificate
30is required for each taxable year. The taxpayer shall provide a copy
31of the certificate to the Franchise Tax Board upon request.
32(B) The Division of Apprenticeship Standards shall do all of
33the
following:
34(i) Establish a procedure for taxpayers, in the form and manner
35jointly prescribed by the Division of Apprenticeship Standards
36and the Franchise Tax Board, to apply and receive a certificate for
37purposes of this section.
38(ii) Verify that the taxpayer is training during the taxable year
39an individual that meets the requirements to be a registered
40apprentice as described in subdivision (b).
P7 1(iii) Provide the taxpayer with a certificate for the registered
2apprentice. The certificate shall contain the name of the taxpayer
3and the name of the apprentice, a brief description of the
4apprenticeship, the primary location of the apprenticeship, and any
5other information the Division of Apprenticeship Standards or
the
6Franchise Tax Board deems relevant.
7(iv) Annually provide the Franchise Tax Board with a list of
8the names of the taxpayers that received certificates and the names
9of the registered apprentices of the taxpayer. The list may also
10contain any other information from the certificates.
11(v) Inform the Franchise Tax Board if the Division of
12Apprenticeship Standards has knowledge that the training of a
13registered apprentice is terminated prior to the completion of the
14apprenticeship program after the taxpayer has received a certificate.
15(2) The Division of Apprenticeship Standards may adopt rules
16and regulations as reasonably necessary to effectuate this
17subdivision, but shall consult with the Franchise
Tax Board.
18(d) In the case where the credit allowed by this section exceeds
19the “tax,” the excess may be carried over to reduce the “net tax”
20in the following year, and succeeding four years, if necessary, until
21the credit is exhausted.
22(e) The Franchise Tax Board may prescribe rules, guidelines,
23or procedures necessary or appropriate to carry out the purposes
24of this section, except as otherwise specified in subdivision (c).
25(f) (1) Except as provided in paragraph (2), if the training of a
26registered apprentice is terminated prior to the completion of the
27apprenticeship program, any unused carryover of the credit shall
28be canceled and any previously claimed credit that reduced tax
29shall be recaptured
by increasing the tax imposed by this part for
30the taxable year in which the training is terminated.
31(2) Paragraph (1) shall not apply if the training of a registered
32apprentice was terminated due to any of the following:
33(A) The registered apprentice voluntarily leaves the
34apprenticeship program.
35(B) The registered apprentice, before the end of the completion
36of the apprenticeship program described in paragraph (3) of
37subdivision (b), becomes disabled and unable to perform the
38services of that program, unless that disability is removed before
39the close of the period of that program and the taxpayer fails to
40offer reinstatement to the program for that apprentice.
P8 1(C) The training of a registered apprentice was terminated due
2to the misconduct, as defined in Sections 1256-30 to 1256-43,
3inclusive, of Title 22 of the California Code of Regulations, of that
4apprentice.
5(D) The training of a registered apprentice was terminated due
6to a substantial reduction in the trade or business operations of the
7taxpayer.
8(g) A deduction otherwise allowed under this part for any
9amount paid or incurred by the qualified taxpayer in training a
10registered apprentice as a trade or business expense shall be
11reduced by the amount of the credit allowed by this section.
12(g)
end delete
13begin insert(h)end insert This section shall remain in effect only until December 1,
142020, and as of that date is repealed.
This act provides for a tax levy within the meaning of
16Article IV of the Constitution and shall go into immediate effect.
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