Senate File 344 - Introduced SENATE FILE 344 BY COMMITTEE ON ECONOMIC GROWTH (SUCCESSOR TO SF 108) A BILL FOR An Act creating an apprenticeship training tax credit available 1 against the individual and corporate income tax and 2 including applicability provisions. 3 BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF IOWA: 4 TLSB 1649SV (2) 86 ad/sc

S.F. 344 Section 1. NEW SECTION . 422.10A Apprenticeship training 1 tax credit. 2 1. For purposes of this section, unless the context 3 otherwise requires: 4 a. “Apprentice” means an Iowa resident who is at least 5 sixteen years of age, except where a higher minimum age is 6 required by law, who is employed in an occupation approved for 7 apprenticeship by the United States department of labor, office 8 of apprenticeship, and is registered with the United States 9 department of labor, office of apprenticeship. 10 b. “Apprenticeship program” means a program registered 11 with the United States department of labor, office of 12 apprenticeship, which includes terms and conditions for the 13 qualification, recruitment, selection, employment, and training 14 of apprentices, including the requirement for a written 15 apprenticeship agreement. 16 2. a. An apprenticeship training tax credit shall be 17 allowed against the taxes imposed in this division and division 18 III, for a portion of the taxpayer’s costs, as described 19 in subsection 3, in providing wages to apprentices in the 20 construction trade training under an apprenticeship program. 21 b. An individual may claim a tax credit under this 22 subsection of a partnership, limited liability company, 23 S corporation, estate, or trust electing to have income 24 taxed directly to the individual. The amount claimed by the 25 individual shall be based upon the pro rata share of the 26 individual’s earnings from the partnership, limited liability 27 company, S corporation, estate, or trust. 28 c. Any credit in excess of the taxpayer’s liability for the 29 tax year is not refundable and shall not be credited to the tax 30 liability for any following year or carried back to a tax year 31 prior to the tax year in which the taxpayer claims the credit. 32 d. A tax credit issued pursuant to this section is not 33 transferable to any other taxpayer. 34 3. a. To be eligible for the tax credit, the taxpayer shall 35 -1- LSB 1649SV (2) 86 ad/sc 1/ 3

S.F. 344 be the employer of an apprentice working in the construction 1 trade and employed at an Iowa worksite. 2 b. The tax credit shall be two dollars per hour multiplied 3 by the total number of hours worked during the tax year by an 4 apprentice working for a taxpayer described in paragraph “a” . 5 The amount of tax credit in any year received by a taxpayer for 6 each apprentice may not exceed two thousand dollars or fifty 7 percent of the wages the apprentice earned, whichever is less. 8 4. To claim an apprenticeship training tax credit under 9 this section, a taxpayer must include verification of the 10 taxpayer’s eligibility for the credit, including evidence 11 of the apprentice’s residence, on a form prescribed by the 12 department and included with the taxpayer’s tax return. 13 5. The director of revenue shall adopt rules pursuant to 14 chapter 17A to administer this section. 15 Sec. 2. Section 422.33, Code 2015, is amended by adding the 16 following new subsection: 17 NEW SUBSECTION . 31. The taxes imposed under this division 18 shall be reduced by an apprenticeship training tax credit 19 allowed under section 422.10A. 20 Sec. 3. APPLICABILITY. This Act applies to tax years 21 beginning on or after January 1, 2016, for wages paid on or 22 after that date to apprentices hired on or after July 1, 2015. 23 EXPLANATION 24 The inclusion of this explanation does not constitute agreement with 25 the explanation’s substance by the members of the general assembly. 26 This bill creates an apprenticeship training tax credit 27 available against the individual and corporate income tax for 28 wages paid by employers to apprentices in the construction 29 trade who are training under an apprenticeship program at an 30 Iowa worksite. 31 The amount of the credit is equal to $2 per hour multiplied 32 by the total number of hours that an apprentice worked during 33 the tax year. The bill limits the amount of the tax credit 34 in any year received by a taxpayer for each apprentice to a 35 -2- LSB 1649SV (2) 86 ad/sc 2/ 3

S.F. 344 maximum of $2,000 or 50 percent of the wages the apprentice 1 earned, whichever is less. 2 The bill requires the taxpayer to be the employer of an 3 apprentice working in the construction trade and employed at an 4 Iowa worksite. The bill requires the apprentice to be an Iowa 5 resident, registered with the United States department of labor 6 office of apprenticeship, working in the construction trade, 7 and training under an apprenticeship program. 8 The tax credit is not refundable, and a tax credit shall not 9 be carried forward or carried back to a tax year prior to the 10 tax year in which the taxpayer first receives the tax credit. 11 The tax credit is not transferable. 12 To claim an apprenticeship training tax credit, the taxpayer 13 must include verification of the taxpayer’s eligibility for the 14 credit, including evidence of the apprentice’s residence, with 15 the taxpayer’s tax return. 16 The bill applies to tax years beginning on or after January 17 1, 2016, for wages paid on or after that date to apprentices 18 hired on or after July 1, 2015. 19 -3- LSB 1649SV (2) 86 ad/sc 3/ 3