September 22, 2018

HB 16-1301: Providing Tax Credit to Colorado Businesses that Offer High-Quality Apprenticeships for Top Jobs

On February 26, 2016, Rep. Alec Garnett and Sen. Mark Scheffel introduced HB 16-1301Concerning an Income Tax Credit for Colorado Businesses that Offer High-quality Apprenticeships for Top Jobs. The bill was assigned to the House Finance Committee, where it was amended and referred to Appropriations. The bill passed out of the Appropriations Committee with amendments and was again amended on Second Reading in the House.

This bill provides an income tax credit to qualified Colorado businesses that meet certain criteria and retain pre-apprentices or apprentices. The tax credit is administered by the Colorado Department of Labor and Employment (referred to herein as “Department”). The intended purpose of the tax credit is to offset a small portion of the cost to the business to create experiential learning opportunities for the state’s youth.

On or before August 15, 2016, and on or before July 1, 2017-2019, the Work Force Development Council shall publish on its website, and send to the Department, a list of top jobs with the greatest regional and state demand.

To be eligible for the tax credit, a taxpayer must be a (1) business in the state that offers top jobs, and a business that: (2) offers a pre-apprenticeship or apprenticeship program; (3) is aligned with a postsecondary education or employment opportunity; (4) employs a sufficient number of program case managers; (5) provides students with training or course work that is designed to prepare the students for the pre-apprenticeship or apprenticeship; (6) implements adequate safety and supervisory safeguards for the participating students; and (7) retains at least one pre-apprentice or apprentice.

To be eligible for the tax credit, a construction industry taxpayer must be a (1) construction industry business in the state that offers top jobs, and the construction business must have at least one of the following employees during the year for which the tax credit is sought: (2-A) an employee who graduated from a construction industry pre-apprenticeship program and who has been accepted into a apprenticeship program; or (2-B) an employee who is a registered apprentice enrolled in a apprenticeship program.

The Department shall promulgate rules for the issuance of the credit certificates. The Department shall review each tax credit application. If the taxpayer receives conditional approval, the taxpayer shall submit to the Department a request for the issuance of a credit certificate. If the Department determines the taxpayer is qualified, the Department, in its discretion, may issue a tax credit certificate for each pre-apprentice (not to exceed $2,500 per pre-apprentice) or apprentice (not to exceed $5,000 per apprentice) retained, totally up to one million dollars per income tax year. The credit certificate must be submitted by the qualified taxpayer to the Department of Revenue. The Department shall disclose in an annual report to the General Assembly and Department of Revenue the certificates issued in the previous year.

Max Montag is a 2016 J.D. Candidate at the University of Denver Sturm College of Law.