EXPLANATION: CAPITALS INDICATE MATTER ADDE D TO EXISTING LAW .
[Brackets] indicate matter deleted from existing law.
*hb1047*
HOUSE BILL 1047
Q3 5lr3121
CF SB 325
By: Delegates Wu, Spiegel, and Woorman
Introduced and read first time: February 5, 2025
Assigned to: Ways and Means
A BILL ENTITLED
AN ACT concerning 1
Income Tax – Credit for Employers of Eligible Apprentices – Alterations 2
FOR the purpose of altering the definition of “eligible apprentice” for purposes of a certain 3
credit against the State income tax for the employment of certain eligible apprentices 4
by repealing a certain wage requirement; extending for a certain number of years 5
the termination of the credit; and generally relating to an income tax credit for 6
employers of eligible apprentices. 7
BY repealing and reenacting, with amendments, 8
Article – Tax – General 9
Section 10–742 10
Annotated Code of Maryland 11
(2022 Replacement Volume and 2024 Supplement) 12
BY repealing and reenacting, with amendments, 13
Chapter 149 of the Acts of the General Assembly of 2017, as amended by Chapter 14
643 of the Acts of the General Assembly of 2020 15
Section 9 16
SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF MARYLAND, 17
That the Laws of Maryland read as follows: 18
Article – Tax – General 19
10–742. 20
(a) (1) In this section the following words have the meanings indicated. 21
(2) “Department” means the Maryland Department of Labor. 22
(3) “Eligible apprentice” means an individual who: 23 2 HOUSE BILL 1047
(i) is enrolled in an apprenticeship training program that: 1
1. is registered with the Maryland Apprenticeship and 2
Training Council in accordance with § 11–405 of the Labor and Employment Article; 3
2. provides highly supervised training skills through a 4
certified Apprenticeship Training Program, for classroom credit offered at community 5
colleges, universities, high schools, vocational training centers, or directly through certified 6
Apprenticeship Training Centers registered with the State; 7
3. meets Maryland Apprenticeship and Training Council 8
requirements for Youth Apprenticeships and Registered Apprenticeships, as applicable; 9
and 10
4. complies with 29 C.F.R. § 29.5(b)(7); AND 11
(ii) 1. has been employed by the taxpayer for at least 450 hours 12
of the taxable year through a youth apprenticeship program; or 13
2. for an individual other than an individual described under 14
item 1 of this item, has been employed by the taxpayer for at least 7 full months of the 15
taxable year[; and 16
(iii) if the individual is in an employee classification for which there 17
is a prevailing wage rate, receives an apprenticeship wage that is at least 50% of the 18
prevailing wage]. 19
(4) “Fund” means the Apprenticeship Tax Credit Reserve Fund established 20
under subsection (e) of this section. 21
(b) Subject to the limitations of this section, a taxpayer may claim a credit against 22
the State income tax in an amount equal to the amount stated in the tax credit certificate 23
issued under subsection (c) of this section for the first year of employment of an eligible 24
apprentice. 25
(c) (1) A taxpayer may submit an application to the Department for a tax 26
credit certificate. 27
(2) The application shall be in the form and contain the information that 28
the Department requires, including proof of: 29
(i) the enrollment of each eligible apprentice in a registered 30
apprenticeship program; and 31
(ii) the duration of each eligible apprentice’s employment by the 32
taxpayer. 33 HOUSE BILL 1047 3
(3) Subject to paragraph (4) of this subsection, the Department shall issue 1
a tax credit certificate to the taxpayer in the amount of: 2
(i) except as provided in item (ii) of this paragraph, $1,000 for each 3
eligible apprentice; or 4
(ii) with respect to the first five eligible apprentices for whom the 5
taxpayer claims the credit under this section: 6
1. $1,000 for each eligible apprentice if the eligible 7
apprentice is employed through a youth apprenticeship program; and 8
2. $3,000 for each eligible apprentice who is not an eligible 9
apprentice described under item 1 of this item. 10
(4) The Department may not certify more than $15,000 of tax credits in the 11
taxable year for any taxpayer. 12
(5) The Department shall: 13
(i) approve all applications that qualify for a tax credit certificate 14
under this subsection on a first–come, first–served basis; and 15
(ii) notify a taxpayer within 45 days of receipt of the taxpayer’s 16
application of its approval or denial. 17
(6) For each taxable year, the total amount of tax credit certificates that 18
may be issued by the Department under this section may not exceed the total funds 19
available in the Fund for that year. 20
(d) (1) The total amount of the credit allowed under this section for any taxable 21
year may not exceed the State income tax for that taxable year, calculated before the 22
application of the credits under this section and §§ 10–701 and 10–701.1 of this subtitle, 23
but after the application of other credits allowable under this subtitle. 24
(2) If the credit otherwise allowable under this section exceeds the limit 25
under paragraph (1) of this subsection, a taxpayer may apply the excess as a credit against 26
the State income tax for succeeding taxable years until the full amount of the excess is 27
used. 28
(e) (1) There is an Apprenticeship Tax Credit Reserve Fund. 29
(2) The Department shall administer the Fund. 30
(3) The purpose of the Fund is to offset the revenue reduction to the 31
General Fund of the State as a result of the tax credits authorized under this section. 32 4 HOUSE BILL 1047
(4) The Fund is a special continuing, nonlapsing fund that is not subject to 1
§ 7–302 of the State Finance and Procurement Article. 2
(5) The State Treasurer shall hold the Fund separately, and the 3
Comptroller shall account for the Fund. 4
(6) The Fund consists of: 5
(i) money appropriated in the State budget to the Fund; and 6
(ii) any other money from any other source accepted for the benefit 7
of the Fund. 8
(7) The money in the Fund shall be invested and reinvested by the State 9
Treasurer, and interest and earnings shall be credited to the General Fund of the State. 10
(8) For each fiscal year, the Governor shall include in the budget bill an 11
appropriation to the Fund. 12
(9) Notwithstanding the provisions of § 7–213 of the State Finance and 13
Procurement Article, the Governor may not reduce an appropriation to the Fund in the 14
State budget as approved by the General Assembly. 15
(10) (i) Except as otherwise provided in this paragraph, money credited 16
or appropriated to the Fund shall remain in the Fund. 17
(ii) 1. Within 15 days after the end of each calendar quarter, the 18
Department shall notify the Comptroller as to each tax credit certificate issued during the 19
quarter. 20
2. On notification that a tax credit certificate has been issued 21
by the Department, the Comptroller shall transfer an amount equal to the credit amount 22
stated in the tax credit certificate from the Fund to the General Fund of the State. 23
(f) The Department shall adopt regulations to: 24
(1) implement the provisions of this section; and 25
(2) specify criteria and procedures for application for, approval of, and 26
monitoring continuing eligibility for the tax credit under this section. 27
SECTION 2. AND BE IT FURTHER ENACTED, That the Laws of Maryland read 28
as follows: 29
Chapter 149 of the Acts of 2017, as amended by Chapter 643 of the Acts of 2020 30
HOUSE BILL 1047 5
SECTION 9. AND BE IT FURTHER ENACTED, That Section 2 of this Act shall take 1
effect July 1, 2017, and shall be applicable to all taxable years beginning after December 2
31, 2016, but before January 1, [2025] 2031. It shall remain effective for a period of [8] 14 3
years and, at the end of June 30, [2025] 2031, with no further action required by the 4
General Assembly, Section 2 of this Act shall be abrogated and of no further force and effect. 5
SECTION 3. AND BE IT FURTHER ENACTED, That Section 1 of this Act sha ll be 6
applicable to all taxable years beginning after December 31, 2024. 7
SECTION 4. AND BE IT FURTHER ENACTED, That this Act shall take effect June 8
1, 2025. 9