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<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2025-01-14</ns0:ActionDate>
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<ns0:ActionText>AMENDED_ASSEMBLY</ns0:ActionText>
<ns0:ActionDate>2025-03-24</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Assembly Member Alanis</ns0:AuthorText>
<ns0:Authors>
<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Alanis</ns0:Name>
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<ns0:Title>An act to add Article 7 (commencing with Section 3130) to Chapter 4 of Division 3 of, and to repeal Section 3133 of, the Labor Code, and to add and repeal Sections 17053.92 and 23684 of the Revenue and Taxation Code, relating to apprenticeships.</ns0:Title>
<ns0:RelatingClause>apprenticeships</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Quick-Service Restaurant Young Workforce Apprenticeship Program: tax credits.</ns0:Subject>
</ns0:GeneralSubject>
<ns0:DigestText>
<html:p>Existing law provides for the establishment of apprenticeship programs in various trades, to be approved by the Chief of the Division of Apprenticeship Standards within the Department of Industrial Relations in any trade in the state or in a city or trade area whenever the apprentice training needs justify the establishment. </html:p>
<html:p>This bill would require the division, upon appropriation by the Legislature, to establish and administer a Quick Service Restaurant Young Workforce Apprenticeship Program to provide grants, reimbursements, or other funding to apprenticeship programs for the support of quick-service restaurant youth apprenticeship
programs, as described.</html:p>
<html:p>The Personal Income Tax Law and the Corporation Tax Law authorize various credits against the taxes imposed by those laws.</html:p>
<html:p>This bill, for taxable years beginning on or after January 1, 2026, and before January 1, 2031, would allow a credit against those taxes in the amount of $1,000 for each registered apprentice employed for at least 6 months by a qualified taxpayer, as defined, not to exceed 100 registered apprentices per taxable year per qualified taxpayer.</html:p>
<html:p>Existing law requires any bill authorizing a new tax expenditure to contain,
among other things, specific goals, purposes, and objectives that the tax expenditure will achieve, detailed performance indicators, and data collection requirements. </html:p>
<html:p>This bill also would include additional information required for any bill authorizing a new tax expenditure. The bill would require the Franchise Tax Board to provide information to the Division of Apprenticeship Standards to complete a report relating to the tax credit that would be established by the bill. The bill would make any information shared by the Franchise Tax Board subject to limitations relating to the sharing of taxpayer information, the violation of which is a crime. By expanding the scope of a crime, this bill would impose a state-mandated local program.</html:p>
<html:p>The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.</html:p>
<html:p>This bill would provide that no reimbursement is required by this act for a specified reason.</html:p>
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<ns0:Bill id="bill">
<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
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Article 7 (commencing with Section 3130) is added to Chapter 4 of Division 3 of the
<ns0:DocName>Labor Code</ns0:DocName>
, to read:
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<ns0:Num>7.</ns0:Num>
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<ns0:LawHeadingText>Quick-Service Restaurant Young Workforce Apprenticeship Program</ns0:LawHeadingText>
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<ns0:LawSection id="id_A2C3174E-BF71-4A84-80B8-18590E0B4758">
<ns0:Num>3130.</ns0:Num>
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<ns0:Content>
<html:p>This article shall be known, and may be cited, as the Quick-Service Restaurant Young Workforce Apprenticeship Program.</html:p>
</ns0:Content>
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</ns0:LawSection>
<ns0:LawSection id="id_D0166671-44A1-4804-A614-8979DB91601B">
<ns0:Num>3131.</ns0:Num>
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<ns0:Content>
<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
Recruiting and retaining skilled employees can be challenging and costly for employers.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Apprenticeship programs can reduce the need for expensive recruitment programs by creating a flow of candidates who are already screened and trained.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
Apprentices who complete an apprenticeship program often feel a commitment to their work and loyalty to their employer.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
To assist quick-service restaurants in this state, a young workforce apprenticeship program should be created in this state to provide a pipeline
of potential workers.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
In order to create an incentive for employers in the quick-service restaurant industry, a tax credit is necessary to help offset some of the costs of employment, including a higher minimum wage than in most other industries.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Prioritizing policies that enhance affordability for businesses and residents ensures economic growth and job accessibility.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
A recognition that on April 1, 2024, the state mandated a 25-percent increase in the minimum wage for all quick-service restaurant employees while offering zero assistance to affected family-owned businesses in managing affordability for California residents.
</html:p>
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<ns0:LawSection id="id_3D7B6D4C-AE12-46AA-90AF-BA8969292610">
<ns0:Num>3132.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Division of Apprenticeship Standards shall, upon appropriation by the Legislature, establish and administer the Quick-Service Restaurant Young Workforce Apprenticeship Program to provide grants, reimbursements, or funding through other appropriate funding mechanisms to apprenticeship programs for the support of quick-service restaurant youth apprenticeship programs or for the training of qualified apprentices. Grants, reimbursements, or funding from other appropriate funding mechanisms pursuant to the Quick-Service Restaurant Young Workforce Apprenticeship Program shall be awarded using funding appropriated by the Legislature for this purpose.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For the purposes of this article, all of the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Certified Apprenticeship Program” means a structured training and education program in the fast food industry that is approved by the Division of Apprenticeship Standards.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Eligible entity” means an entity that has registered apprentices with the division, including, but not limited to, public educational institutions, public and private nonprofit organizations, local workforce development boards specified in Section 14200 of the Unemployment Insurance Code, labor organizations, as defined in Section 1117, private for-profit organizations, education and training providers, tribal organizations, faith-based organizations, community-based organizations, industry associations, and parties to a collective bargaining agreement.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
“Participating small franchisee employer” means a fast food restaurant operator which
owns fewer than 50 stores that elects to participate in the apprenticeship program and complies with the requirements of this article.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
“Public educational institutions” includes local educational agencies, community colleges, the University of California, and the California State University.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
“Qualified apprentice” means a fast food restaurant employee who is less than 22 years of age, with no previous fast food employment, and who is enrolled in an apprenticeship program certified pursuant to this act.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
A certified apprenticeship program or eligible entity may submit an application to the division to request funds under this act in a manner specified by the division.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
Funding provided to a certified apprenticeship program or eligible
entity can be passed on to whichever entity is performing eligible activities with the funding that are consistent with this act, provided that the entities are associated with an approved apprenticeship program.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Any entity receiving funding pursuant to this article is subject to evaluation by the division under Section 3073.1. If the entity is found to have violated the provisions of this act, those violations are deemed imputed to the associated apprenticeship program, and the division may take any appropriate action against that apprenticeship program.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
If a certified apprenticeship program or other entity is found to be using funding received pursuant to this article for purposes other than those for which the funds were granted, or is found to have obtained the funds improperly, then the program or other entity shall not be eligible to receive any funding pursuant to
this article and the division or entity authorized to provide funding shall cease providing funds.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
The division shall require that recipients of funding received pursuant to this article demonstrate a commitment to high road principles, as described in subdivision (s) of Section 14005 of the Unemployment Insurance Code, and shall evaluate the performance of recipients based on those principles.
</html:p>
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</ns0:LawSection>
<ns0:LawSection id="id_6EB90583-252F-48AD-925D-30FC218298AC">
<ns0:Num>3133.</ns0:Num>
<ns0:LawSectionVersion id="id_555FFC12-9AFF-4CFC-8C40-CD6CCAE71C6F">
<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
The Division of Apprenticeship Standards shall prepare reports on the apprenticeship income tax credits allowed under Sections 17053.92 and 23684 of the Revenue and Taxation Code. The reports shall be for each of the five calendar years beginning on January 1, 2026, and before January 1, 2031, and shall include, but not be limited to, all of the following information:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The number of companies or businesses taking advantage of the apprenticeship income tax credit.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The number of apprentices participating in the apprenticeship programs and the number of apprentices who completed an apprenticeship program which was the basis of the apprenticeship income tax credits
allowed under Sections 17053.92 and 23684 of the Revenue and Taxation Code.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The number of apprentice program graduates hired by the taxpayer after the apprenticeship training was completed for which the taxpayer was allowed a credit under Section 17053.92 or 23684 of the Revenue and Taxation Code for training that apprentice.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
Information on the employment status of individuals who have completed an apprenticeship to the extent the information is available.
</html:p>
<html:p>
(5)
<html:span class="EnSpace"/>
The fiscal impact of the apprenticeship income tax credits.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
Notwithstanding Section 19542 of the Revenue and Taxation Code, the Division of Apprenticeship Standards may request any information necessary from the Franchise Tax Board to complete the report required by this section. Any
information shared with the division shall be subject to the provisions of Section 19542 of the Revenue and Taxation Code.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The report required by subdivision (a) shall be submitted to the Assembly and Senate Rules Committees, on or before December 1 of the following calendar year, commencing December 1, 2027.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The report required by subdivision (a) shall be treated as an exception to Section 19542.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
This section shall remain operative only until December 1, 2031, and as of that date is repealed.
</html:p>
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<ns0:BillSection id="id_D06F9ECB-C23E-4C0A-8D49-8FBD9FA91A18">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 17053.92 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:LawSection id="id_C710D508-69BF-4546-911C-564175CA4005">
<ns0:Num>17053.92.</ns0:Num>
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<ns0:Content>
<html:p>
(a)
<html:span class="EnSpace"/>
For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed a credit against the “net tax,” as defined in Section 17039, in an amount equal to one thousand dollars ($1,000) for each registered apprentice continuously employed for at least six months by a qualified taxpayer in the taxable year, not to exceed 100 registered apprentices per taxable year per qualified taxpayer.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this Section, both of the following definitions shall apply:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
“Registered apprentice” means an individual who meets all of the following requirements:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
Is
between 16 and 22 years of age, inclusive, at the time of application into the program.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Is paid at least 85 percent of the state-mandated fast food minimum wage.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Meets one of the following requirements:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Has not obtained a high school diploma and is enrolled in high school or a general education degree (GED) preparation program.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Has obtained a high school diploma or passed the GED while participating in the apprenticeship.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
Is trained by the taxpayer through an apprenticeship program that meets all of the following requirements:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
The apprenticeship program is approved by the Chief of the Division of
Apprenticeship Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code and is also registered with the Office of Apprenticeship in the United States Department of Labor.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
The program is provided pursuant to an apprenticeship agreement as described in Section 3077 of the Labor Code.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
A minimum term of six months of part-time employment for the program.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
“Qualified taxpayer” means a participating small franchisee employer, as that term is defined in Section 3132 of the Labor Code.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
A credit shall only be allowed under this section for the taxable year if the taxpayer has received the certificate described in subparagraph (B) from the Division of
Apprenticeship Standards in the Department of Industrial Relations. A certificate is required for each taxable year. The taxpayer shall provide a copy of the certificate to the Franchise Tax Board upon request.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The Division of Apprenticeship Standards shall do all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Establish a procedure for qualified taxpayers, in the form and manner jointly prescribed by the Division of Apprenticeship Standards and the Franchise Tax Board, to apply and receive a certificate for purposes of this section.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Verify that the qualified taxpayer is training during the taxable year an individual that meets the requirements to be a registered apprentice.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Provide the qualified taxpayer with a certificate for the registered apprentice. The
certificate shall contain the name of the qualified taxpayer and the name of the apprentice, a brief description of the apprenticeship, the primary location of the apprenticeship, and any other information the Division of Apprenticeship Standards or the Franchise Tax Board requires.
</html:p>
<html:p>
(iv)
<html:span class="EnSpace"/>
Annually provide the Franchise Tax Board with a list of the names of the qualified taxpayers that received certificates and the names of the registered apprentices of the taxpayer. The list may also contain any other information from the certificates as required by the Franchise Tax Board.
</html:p>
<html:p>
(v)
<html:span class="EnSpace"/>
Inform the Franchise Tax Board if the Division of Apprenticeship Standards has knowledge that the training of a registered apprentice is terminated prior to the completion of the apprenticeship program after the taxpayer has received a certificate.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Division of Apprenticeship Standards may adopt rules and regulations as reasonably necessary to effectuate this subdivision, but shall consult with the Franchise Tax Board.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
In the case where the credit allowed by this section exceeds the “net tax,” the excess may be carried over to reduce the “net tax” in the following year, and succeeding three years, if necessary, until the credit is exhausted.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Except as provided in paragraph (2), if the training of a registered apprentice is terminated prior to the completion of the apprenticeship program, any unused carryover of the credit shall be canceled and any previously claimed credit that reduced net tax shall be recaptured by increasing the tax imposed by this part for the taxable year in which the training is terminated.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
Paragraph (1) shall not apply if the training of a registered apprentice was terminated due to any of the
following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The registered apprentice voluntarily leaves the apprenticeship program.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The registered apprentice, before the end of the completion of the apprenticeship program, becomes disabled and unable to perform the services of that program, unless that disability is removed before the close of the period of that program and the taxpayer fails to offer reinstatement to the program for that apprentice.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The training of a registered apprentice was terminated due to the apprentice’s misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The training of a registered apprentice was terminated due to a substantial reduction in the trade or business operations of the taxpayer.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
A deduction otherwise allowed under this part for any amount paid or incurred by the qualified taxpayer in training a registered apprentice as a trade or business expense shall be reduced by the amount of the credit allowed by this section.
</html:p>
<html:p>
(h)
<html:span class="EnSpace"/>
For purposes of Section 41, as it relates to the credit allowed pursuant to this section and Section 23684, the Legislature finds and declares as follows:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The specific goal of the credit is to provide financial incentives to quick-service restaurants that employ those individuals enrolled in youth workforce apprenticeship programs.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The performance indicators for the Legislature to use in determining if the credit achieves the stated goal shall be the number of taxpayers claiming the credit, the total
dollar value of credit claimed per taxpayer, and the number of employees enrolled in a youth workforce apprenticeship program.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
The reporting requirements of Section 3133 of the Labor Code shall be used to fulfill the reporting requirements of Section 41, as it relates to the credit allowed by this section and Section 23684.
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
This section shall remain operative only until December 1, 2031, and as of that date is repealed.
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<ns0:Num>SEC. 3.</ns0:Num>
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Section 23684 is added to the
<ns0:DocName>Revenue and Taxation Code</ns0:DocName>
, to read:
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<ns0:Num>23684.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
For each taxable year beginning on or after January 1, 2026, and before January 1, 2031, there shall be allowed a credit against the “tax,” as defined in Section 23036, in an amount equal to one thousand dollars ($1,000) for each registered apprentice continuously employed for at least six months by a qualified taxpayer in the taxable year, not to exceed 100 registered apprentices per taxable year per qualified taxpayer.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
For purposes of this section, both of the following definitions shall apply:
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<html:p>
(1)
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“Registered apprentice” means an individual who meets all of the following requirements:
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<html:p>
(A)
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Is between 16
and 22 years of age, inclusive, at the time of application into the program.
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<html:p>
(B)
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Is paid at least 85 percent of the state-mandated fast food minimum wage.
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<html:p>
(C)
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Meets one of the following requirements:
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<html:p>
(i)
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Has not obtained a high school diploma and is enrolled in high school or a general education degree (GED) preparation program.
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<html:p>
(ii)
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Has obtained a high school diploma or passed the GED while participating in the apprenticeship.
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<html:p>
(D)
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Is trained by the taxpayer through an apprenticeship program that meets all of the following requirements:
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<html:p>
(i)
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The apprenticeship program is approved by the Chief of the Division of Apprenticeship
Standards pursuant to Chapter 4 (commencing with Section 3070) of Division 3 of the Labor Code and is also registered with the Office of Apprenticeship in the United States Department of Labor.
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<html:p>
(ii)
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The program is provided pursuant to an apprenticeship agreement as described in Section 3077 of the Labor Code.
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<html:p>
(iii)
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A minimum term of six months of part-time employment for the program.
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<html:p>
(2)
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“Qualified taxpayer” means a participating small franchisee employer, as that term is defined in Section 3132 of the Labor Code.
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<html:p>
(c)
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(1)
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(A)
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A credit shall only be allowed under this section for the taxable year if the taxpayer has received the certificate described in subparagraph (B) from the Division of Apprenticeship
Standards in the Department of Industrial Relations. A certificate is required for each taxable year. The taxpayer shall provide a copy of the certificate to the Franchise Tax Board upon request.
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<html:p>
(B)
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The Division of Apprenticeship Standards shall do all of the following:
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<html:p>
(i)
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Establish a procedure for qualified taxpayers, in the form and manner jointly prescribed by the Division of Apprenticeship Standards and the Franchise Tax Board, to apply and receive a certificate for purposes of this section.
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<html:p>
(ii)
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Verify that the qualified taxpayer is training during the taxable year an individual that meets the requirements to be a registered apprentice.
</html:p>
<html:p>
(iii)
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Provide the qualified taxpayer with a certificate for the registered apprentice. The certificate shall
contain the name of the qualified taxpayer and the name of the apprentice, a brief description of the apprenticeship, the primary location of the apprenticeship, and any other information the Division of Apprenticeship Standards or the Franchise Tax Board requires.
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<html:p>
(iv)
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Annually provide the Franchise Tax Board with a list of the names of the qualified taxpayers that received certificates and the names of the registered apprentices of the taxpayer. The list may also contain any other information from the certificates as required by the Franchise Tax Board.
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<html:p>
(v)
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Inform the Franchise Tax Board if the Division of Apprenticeship Standards has knowledge that the training of a registered apprentice is terminated prior to the completion of the apprenticeship program after the taxpayer has received a certificate.
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<html:p>
(2)
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The
Division of Apprenticeship Standards may adopt rules and regulations as reasonably necessary to effectuate this subdivision, but shall consult with the Franchise Tax Board.
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<html:p>
(d)
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In the case where the credit allowed by this section exceeds the “tax,” the excess may be carried over to reduce the “tax” in the following year, and succeeding three years, if necessary, until the credit is exhausted.
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<html:p>
(e)
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(1)
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The Franchise Tax Board may prescribe rules, guidelines, procedures, or other guidance to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
</html:p>
<html:p>
(2)
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The Franchise Tax Board may prescribe any regulations necessary or appropriate to carry out the purposes of this section, including any regulations to prevent improper claims from being filed.
</html:p>
<html:p>
(f)
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(1)
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Except as provided in paragraph (2), if the training of a registered apprentice is terminated prior to the completion of the apprenticeship program, any unused carryover of the credit shall be canceled and any previously claimed credit that reduced tax shall be recaptured by increasing the tax imposed by this part for the taxable year in which the training is terminated.
</html:p>
<html:p>
(2)
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Paragraph (1) shall not apply if the training of a registered apprentice was terminated due to any of the
following:
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<html:p>
(A)
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The registered apprentice voluntarily leaves the apprenticeship program.
</html:p>
<html:p>
(B)
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The registered apprentice, before the end of the completion of the apprenticeship program, becomes disabled and unable to perform the services of that program, unless that disability is removed before the close of the period of that program and the taxpayer fails to offer reinstatement to the program for that apprentice.
</html:p>
<html:p>
(C)
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The training of a registered apprentice was terminated due to the apprentice’s misconduct, as defined in Sections 1256-30 to 1256-43, inclusive, of Title 22 of the California Code of Regulations.
</html:p>
<html:p>
(D)
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The training of a registered apprentice was terminated due to a substantial reduction in the trade or business operations of the taxpayer.
</html:p>
<html:p>
(g)
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A deduction otherwise allowed under this part for any amount paid or incurred by the qualified taxpayer in training a registered apprentice as a trade or business expense shall be reduced by the amount of the credit allowed by this section.
</html:p>
<html:p>
(h)
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This section shall remain operative only until December 1, 2031, and as of that date is repealed.
</html:p>
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<ns0:Num>SEC. 4.</ns0:Num>
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<html:p>
No reimbursement is required by this act pursuant to Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution because the only costs that may be incurred by a local agency or school district will be incurred because this act creates a new crime or infraction, eliminates a crime or infraction, or changes the penalty for a crime or infraction, within the meaning of Section 17556 of the Government Code, or changes the definition of a crime within the meaning of Section 6 of Article XIII
<html:span class="ThinSpace"/>
B of the California Constitution.
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