OLR Bill Analysis

sHB 5023 (as amended by House “A”)*

AN ACT CONCERNING ELIGIBILITY FOR THE APPRENTICESHIP TRAINING TAX CREDIT.

SUMMARY:

This bill extends to open (nonunion) shops the corporation tax credit for hiring construction trade apprentices that is now available only to businesses that sponsor a four-year apprenticeship program jointly with a union. It postpones awarding the credit until an apprentice completes a program that lasts at least four years.

Currently, tax credits are granted annually; under the bill they are granted in the year an apprentice completes the program and notice is given of that completion (presumably following the existing notice procedures). The bill bases the credit amount on the number of hours each apprentice in the program completes, rather than the number of hours all apprentices in the program work each year. As under current law, the credit is capped at 50% of apprentices' wages or a fixed amount. Under the bill, that amount is $ 4,000 over the first four years of the apprenticeship; under current law it is $ 1,000 per year. By law, a business's total annual credit cannot exceed its tax liability for the year.

Currently, to qualify for a credit an apprenticeship program must provide between 4,000 and 8,000 hours of training and be (1) administered according to a federal labor-relations law, (2) certified by the labor commissioner, and (3) registered with the State Apprenticeship Council. The bill requires programs to run at least four years and eliminates the reference to the federal law.

*House Amendment “A” postpones awarding the credit until an apprentice completes a program that lasts at least four years.

EFFECTIVE DATE: July 1, 2006

COMMITTEE ACTION

Higher Education and Employment Advancement Committee

Joint Favorable Substitute Change of Reference

Finance, Revenue and Bonding Committee

Joint Favorable