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SB-1211 Income taxes: credits: apprenticeships.(2017-2018)

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Date Published: 05/16/2018 09:00 PM
SB1211:v97#DOCUMENT

Amended  IN  Senate  May 16, 2018
Amended  IN  Senate  May 01, 2018

CALIFORNIA LEGISLATURE— 2017–2018 REGULAR SESSION

Senate Bill No. 1211


Introduced by Senator Anderson

February 15, 2018


An act to add and repeal Sections 17053.40 and 23640 of the Revenue and Taxation Code, relating to taxation, to take effect immediately, tax levy.


LEGISLATIVE COUNSEL'S DIGEST


SB 1211, as amended, Anderson. 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, 2019, and before January 1, 2024, would allow a credit against the taxes imposed under those tax laws in an amount equal to 50% of wages paid by the taxpayer to a registered apprentice during the taxable year or $2,500, whichever is less, year, not to exceed $2,500, for each registered apprentice trained by the taxpayer in that the taxable year. The bill would limit the aggregate amount of credits that may be allocated and certified pursuant to those provisions to $10,000,000 per fiscal year for income tax credits and $10,000,000 per fiscal year for corporate tax credits. The bill would require the Division of Apprenticeship Standards to perform certain duties in order to allocate and certify these credits.
This bill would take effect immediately as a tax levy.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 17053.40 is added to the Revenue and Taxation Code, to read:

17053.40.
 (a) (1) For each taxable year beginning on or after January 1, 2019, and before January 1, 2024, there shall be allowed as a credit against the “net tax,” as defined in Section 17039, to a taxpayer in an amount equal to 50 percent of wages paid by the taxpayer to a registered apprentice during the taxable year or year, not to exceed two thousand five hundred dollars ($2,500), whichever is less, for each registered apprentice trained by the taxpayer in that the taxable year. A taxpayer shall not be allowed a credit under this section for more than 10 registered apprentices per taxable year.
(2) The aggregate amount of credits that may be allocated and certified pursuant to this section shall not exceed ten million dollars ($10,000,000) in any fiscal year.
(b) For purposes of this section, all of the following shall apply:
(1) “Registered apprentice” means an individual who meets all of the following requirements:
(A) Has entered into an apprenticeship agreement with the taxpayer as described in Section 3077 of the Labor Code.
(B) Is trained by the taxpayer through a qualified apprenticeship program.
(2) “Qualified apprenticeship program” means an apprenticeship program that meets all of the following requirements:
(A) Is approved by the Chief of the Division of Apprenticeship Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code.
(B) Requires at least 4,000 hours, but not more than 8,000 hours, of apprenticeship training to occur during a term that is no more than three years.
(C) Satisfactory completion provides recognition of the registered apprentice as a qualified professional, technical, craft, or trade worker.
(3) “Wages” means any payments or remuneration made to a registered apprentice for services performed by the registered apprentice.
(c) (1) (A) A credit shall only be allowed under this section for the taxable year if the taxpayer has received the certificate described in subparagraph (B) from the Division of Apprenticeship Standards in the Department of Industrial Relations. A taxpayer shall obtain a certificate for each taxable year that the credit is claimed. The taxpayer shall provide a copy of the certificate to the Franchise Tax Board upon request.
(B) The Division of Apprenticeship Standards shall do all of the following:
(i) On a first-come-first-served basis, allocate and certify tax credits to taxpayers under this section.
(ii) 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 this section.
(iii) Verify that the taxpayer is training during the taxable year an individual who meets the requirements to be a registered apprentice as described in subdivision (b).
(iv) Provide the taxpayer with a certificate for each registered apprentice trained by the taxpayer in that taxable year. The certificate shall contain the name of the taxpayer and the name of the apprentice, a brief description of the apprenticeship, the primary location of the apprenticeship, and any other information the Division of Apprenticeship Standards or the Franchise Tax Board deems relevant.
(v) Annually provide the Franchise Tax Board with a list of the names of the taxpayers that received certificates and the names of the registered apprentices of the taxpayer. The list may also contain any other information from the certificates.
(vi) Inform the Franchise Tax Board if the Division of Apprenticeship Standards has knowledge that the training of a registered apprentice is terminated before prior to the completion of the apprenticeship program after the taxpayer has received a certificate.
(2) The Division of Apprenticeship Standards may adopt rules and regulations as reasonably necessary to effectuate this subdivision, but shall consult with the Franchise Tax Board.
(d) In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding four years, if necessary, until the credit is exhausted.
(e) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures adopt regulations as necessary or appropriate to carry out the purposes of this section, except as otherwise specified in subdivision (c).
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board.
(f) (1) Except as provided in paragraph (2), if the training of a registered apprentice is terminated before prior to the completion of the apprenticeship program, any unused carryover of the credit shall be canceled and any previously claimed credit that reduced net tax shall be recaptured by increasing the tax imposed by this part for the taxable year in which the training is terminated.
(2) Paragraph (1) shall not apply if the training of a registered apprentice was terminated due to any of the following:
(A) The registered apprentice voluntarily leaves the apprenticeship program.
(B) The registered apprentice, before the end of the completion of the apprenticeship program described in paragraph (2) of subdivision (b), becomes disabled and unable to perform the services of that program, unless that disability is removed before the close of the period of that program and the taxpayer fails to offer reinstatement to the program for that apprentice.
(C) The training of a registered apprentice was terminated due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that apprentice.
(D) The training of a registered apprentice was terminated due to a substantial reduction in the trade or business operations of the taxpayer.
(g) A deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer in training a registered apprentice as a trade or business expense shall be reduced by the amount of the credit allowed by this section.
(h) Section 41 does not apply to the credit allowed by this section.
(i) This section shall remain in effect only until December 1, 2024, and as of that date is repealed.

SEC. 2.

 Section 23640 is added to the Revenue and Taxation Code, to read:

23640.
 (a) (1) For each taxable year beginning on or after January 1, 2019, and before January 1, 2024, there shall be allowed as a credit against the “tax,” as defined in Section 23036, to a taxpayer in an amount equal to 50 percent of wages paid by the taxpayer to a registered apprentice during the taxable year or year, not to exceed two thousand five hundred dollars ($2,500), whichever is less, for each registered apprentice trained by the taxpayer in the taxable year. A taxpayer shall not be allowed a credit under this section for more than 10 registered apprentices per taxable year.
(2) The aggregate amount of credits that may be allocated and certified pursuant to this section shall not exceed ten million dollars ($10,000,000) in any fiscal year.
(b) For purposes of this section, all of the following shall apply:
(1) “Registered apprentice” means an individual who meets all of the following requirements:
(A) Has entered into an apprenticeship agreement with the taxpayer as described in Section 3077 of the Labor Code.
(B) Is trained by the taxpayer through a qualified apprenticeship program.
(2) “Qualified apprenticeship program” means an apprenticeship program that meets all of the following requirements:
(A) Is approved by the Chief of the Division of Apprenticeship Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code.
(B) Requires at least 4,000 hours, but not more than 8,000 hours, of apprenticeship training to occur during a term that is no more than three years.
(C) Satisfactory completion provides recognition of the registered apprentice as a qualified professional, technical, craft, or trade worker.
(3) “Wages” means any payments or remuneration made to a registered apprentice for services performed by the registered apprentice.
(c) (1) (A) A credit shall only be allowed under this section for the taxable year if the taxpayer has received the certificate described in subparagraph (B) from the Division of Apprenticeship Standards in the Department of Industrial Relations. A taxpayer shall obtain a certificate for each taxable year that the credit is claimed. The taxpayer shall provide a copy of the certificate to the Franchise Tax Board upon request.
(B) The Division of Apprenticeship Standards shall do all of the following:
(i) On a first-come-first-served basis, allocate and certify tax credits to taxpayers under this section.
(ii) 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 this section.
(iii) Verify that the taxpayer is training during the taxable year an individual who meets the requirements to be a registered apprentice as described in subdivision (b).
(iv) Provide the taxpayer with a certificate for each registered apprentice trained by the taxpayer in that taxable year. The certificate shall contain the name of the taxpayer and the name of the apprentice, a brief description of the apprenticeship, the primary location of the apprenticeship, and any other information the Division of Apprenticeship Standards or the Franchise Tax Board deems relevant.
(v) Annually provide the Franchise Tax Board with a list of the names of the taxpayers that received certificates and the names of the registered apprentices of the taxpayer. The list may also contain any other information from the certificates.
(vi) Inform the Franchise Tax Board if the Division of Apprenticeship Standards has knowledge that the training of a registered apprentice is terminated prior to the completion of the apprenticeship program after the taxpayer has received a certificate.
(2) The Division of Apprenticeship Standards may adopt rules and regulations as reasonably necessary to effectuate this subdivision, but shall consult with the Franchise Tax Board.
(d) In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding four years, if necessary, until the credit is exhausted.
(e) (1) The Franchise Tax Board may prescribe rules, guidelines, or procedures adopt regulations as necessary or appropriate to carry out the purposes of this section, except as otherwise specified in subdivision (c).
(2) Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any standard, criterion, procedure, determination, rule, notice, or guideline established or issued by the Franchise Tax Board.
(f) (1) Except as provided in paragraph (2), if the training of a registered apprentice is terminated prior to the completion of the apprenticeship program, any unused carryover of the credit shall be canceled and any previously claimed credit that reduced net tax shall be recaptured by increasing the tax imposed by this part for the taxable year in which the training is terminated.
(2) Paragraph (1) shall not apply if the training of a registered apprentice was terminated due to any of the following:
(A) The registered apprentice voluntarily leaves the apprenticeship program.
(B) The registered apprentice, before the end of the completion of the apprenticeship program described in paragraph (2) of subdivision (b), becomes disabled and unable to perform the services of that program, unless that disability is removed before the close of the period of that program and the taxpayer fails to offer reinstatement to the program for that apprentice.
(C) The training of a registered apprentice was terminated due to the misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations, of that apprentice.
(D) The training of a registered apprentice was terminated due to a substantial reduction in the trade or business operations of the taxpayer.
(g) A deduction otherwise allowed under this part for any amount paid or incurred by the taxpayer in training a registered apprentice as a trade or business expense shall be reduced by the amount of the credit allowed by this section.
(h) Section 41 does not apply to the credit allowed by this section.
(i) This section shall remain in effect only until December 1, 2024, and as of that date is repealed.

SEC. 3.

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