House File 2387 - Introduced HOUSE FILE BY DANDEKAR, STRUYK, and HUSER Passed House, Date Passed Senate, Date Vote: Ayes Nays Vote: Ayes Nays Approved A BILL FOR 1 An Act creating an apprenticeship program and providing for tax 2 credits. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 6303YH 81 5 tm/cf/24 PAG LIN 1 1 Section 1. NEW SECTION. 84A.11 APPRENTICESHIP PROGRAM. 1 2 1. For purposes of this section, unless the context 1 3 otherwise requires: 1 4 a. "Apprenticeship" means a training program conducted by 1 5 an employer pursuant to which an employee receives instruction 1 6 and on=the=job training leading to qualification as a skilled 1 7 journeyman. 1 8 b. "Department" means the department of workforce 1 9 development created in section 84A.1. 1 10 2. The department shall establish and administer an 1 11 apprenticeship program for purposes of increasing 1 12 apprenticeships in the manufacturing trades, private sector 1 13 service occupations, and construction trades. An employer may 1 14 apply to the department for approval of an apprenticeship 1 15 under the program. In order to receive approval for an 1 16 apprenticeship, an employer must submit an application for an 1 17 apprenticeship in one of the trades identified by the 1 18 department as provided for in subsection 3. In approving an 1 19 apprenticeship, the department shall designate the length of 1 20 time for which the apprenticeship is approved for purposes of 1 21 claiming the tax credit under subsection 4, which shall not 1 22 exceed five years. An employer receiving approval from the 1 23 department for an apprenticeship is eligible for the tax 1 24 credit in subsection 4. The department of workforce 1 25 development shall provide the department of revenue with 1 26 immediate notice regarding each approved apprenticeship under 1 27 the program and the approved terms of the apprenticeship. 1 28 3. By July 15, 2007, the department shall identify five 1 29 manufacturing trades, five private sector service trades, and 1 30 five construction trades eligible for participation in the 1 31 apprenticeship program. 1 32 4. For tax years beginning on or after January 1, 2006, an 1 33 employer may claim a tax credit against the taxes imposed in 1 34 chapter 422, divisions II, III, and V, and in chapter 432, and 1 35 against the moneys and credits tax imposed in section 533.24, 2 1 equal to five percent of the gross annual wage paid to a 2 2 person employed as an apprentice pursuant to an apprenticeship 2 3 approved by the department under subsection 2 during the tax 2 4 year in which the tax credit is claimed. An individual may 2 5 claim a tax credit under this paragraph of a partnership, 2 6 limited liability company, S corporation, estate, or trust 2 7 electing to have income taxed directly to the individual. The 2 8 amount claimed by the individual shall be based upon the pro 2 9 rata share of the individual's earnings from the partnership, 2 10 limited liability company, S corporation, estate, or trust. 2 11 Any tax credit in excess of the taxpayer's liability for the 2 12 tax year may be credited to the tax liability for the 2 13 following five years or until depleted, whichever is earlier. 2 14 5. By January 15 of each year, the department shall submit 2 15 a written report to the general assembly and the governor 2 16 certifying the number of apprentices in each of the trades 2 17 identified by the department pursuant to subsection 3 during 2 18 the previous calendar year. 2 19 6. If the number of apprentices certified in the written 2 20 report required pursuant to subsection 5 by January 15, 2010, 2 21 is an increase of less than forty percent over the number of 2 22 apprentices certified in the written report required pursuant 2 23 to subsection 5 by January 15, 2008, this section shall be 2 24 repealed. 2 25 Sec. 2. REPORT TO THE CODE EDITOR. The department of 2 26 workforce development shall notify the Code editor by January 2 27 15, 2010, regarding the requirements of section 84A.11, 2 28 subsection 6. 2 29 EXPLANATION 2 30 This bill creates an apprenticeship program and provides 2 31 for tax credits. 2 32 The bill requires the department of workforce development 2 33 to establish and administer an apprenticeship program for 2 34 purposes of increasing apprenticeships in the manufacturing 2 35 trades, private sector service occupations, and construction 3 1 trades. The bill provides that an employer may apply to the 3 2 department for approval of an apprenticeship under the program 3 3 and that the application must be for an apprenticeship in one 3 4 of the trades identified by the department. The bill provides 3 5 that an employer receiving approval from the department for an 3 6 apprenticeship is eligible for a tax credit. 3 7 The bill provides that for tax years beginning on or after 3 8 January 1, 2006, an employer may claim a tax credit against 3 9 individual and corporate tax liabilities, franchise tax 3 10 liabilities for financial institutions, insurance premium tax 3 11 liabilities, and moneys and credits tax liabilities. The tax 3 12 credit is equal to 5 percent of the gross annual wage paid to 3 13 a person employed as an apprentice approved by the department 3 14 during the tax year in which the tax credit is claimed. The 3 15 bill allows any tax credit in excess of the taxpayer's 3 16 liability for a tax year to be credited to the tax liability 3 17 for the following five years or until depleted, whichever is 3 18 earlier. 3 19 By January 15 of each year, the bill requires the 3 20 department to submit a written report to the general assembly 3 21 and the governor certifying the number of apprentices in each 3 22 of the trades identified by the department during the previous 3 23 calendar year. The bill provides that if the number of 3 24 apprentices certified in the written report required by 3 25 January 15, 2010, is an increase of less than 40 percent over 3 26 the number of apprentices certified in the written report 3 27 required by January 15, 2008, the bill shall be repealed. 3 28 LSB 6303YH 81 3 29 tm:nh/cf/24