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