Commerce Committee

JOINT FAVORABLE REPORT

Bill No.:

SB-1079

Title:

AN ACT INCREASING THE MANUFACTURING APPRENTICESHIP TAX CREDIT.

Vote Date:

3/26/2013

Vote Action:

Joint Favorable Substitute Change of Reference to Finance, Revenue and Bonding

PH Date:

3/12/2013

File No.:

SPONSORS OF BILL:

Commerce

REASONS FOR BILL:

Summary

The bill increases the maximum corporation business credit for hiring manufacturing apprentices

Under current law, the maximum annual credit is $4,800 or 50% of the actual wages paid, whichever is less

Businesses calculate the actual credit amount by multiplying the total number of apprentice hours worked by $4 per hour, subject to the above cap, for:

n the first half of a two-year term apprenticeship or

n the first three-quarters of a four-year apprenticeship

The bill increases the maximum annual credit from $4,800 to $7,500 or 50% wages paid, whichever is less

It also increases the dollar amount for calculating the actual credit amount from $4 to $6.

Consequently, the actual credit equals $6 per hour multiplied by the total apprentice hours worked, subject to the bill's cap for:

n the first half of a two-year term apprenticeship or

n the first three-quarters of a four-year apprenticeship

EFFECTIVE DATE: July 1, 2013

Substitute (LCO 4835)

The substitute reduces the extent to which the bill raises the cap. The underlying bill raised the per dollar amount for calculating the credit from $4 to $8 and the annual cap from $4,800 to $8,000

RESPONSE FROM ADMINISTRATION/AGENCY:

None

NATURE AND SOURCES OF SUPPORT:

Andy Markowski, Connecticut State Director, National Federation of Independent Business (NFIB)

Mr. Markowski is in full support of this bill stating “this is a common-sense adjustment to reflect increasing wages and employer costs over time.” He offers an amendment to the bill on behalf of NFIB so that such a tax credit is allowed to be taken by small businesses that operate as “pass through” entities. Many small business owners run their businesses as “pass through” entities (S corporations) and these tax credits for apprenticeship training should be available to all corporate entities, not limited to a select few.

Eric Gjede, Assistant Counsel, Connecticut Business & Industry Association (CBIA)

Mr. Gjede is in full support of this bill because “it increases the manufacturing apprenticeship tax credit to reflect the high cost of training apprentices in the manufacturing trades and the importance of manufacturing to the state's economy.” Mr. Gjede goes on to state “increasing this tax credit will help manufacturers expand apprenticeship programs, which in turn, will provide more apprentices with skills critical to the future of manufacturing in Connecticut.”

NATURE AND SOURCES OF OPPOSITION:

None

Reported by: Christopher Catsam

Date: March 27, 2013