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STATE OF OKLAHOMA
1st Session of the 58th Legislature (2021)
HOUSE BILL 1586 By: Dollens
AS INTRODUCED
An Act relating to revenue and taxation; defining
terms; authorizing income tax credit for certain
apprentice positions; specifying amou nt of tax
credit; imposing limitations on number of apprentices
with respect to claim of credits; prohibiting use of
credit to reduce tax liability to less than
designated amount; prohibiting carryover; providing
for termination of tax credit; imposing cap on tax
credits based on certain computation; providing for
usage of credits based on cap limitation provisions;
providing for effect of tax credit with respect to
certain statutory requirement; authorizing Governor 's
Council for Workforce and Economic Dev elopment to
adopt rules; providing for participation by Oklahoma
Department of Career and Technology Education;
requiring consultation with Oklahoma Tax Commission;
requiring annual report; prescribing due date for
report; providing for codification; and p roviding an
effective date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.501 of Title 68, unless
there is created a duplication in numbering, reads as follows:
A. As used in this section:
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1. "Apprentice" means a worker at least sixteen (16) years of
age, except where a higher minimum age standard is otherwise fixed
by law, who is employed to learn an apprenticeable oc cupation as
provided in 29 C.F.R., Section 29.4. The term includes a person who
is compensated by a third party but whose apprenticeable work occurs
under the supervision of an eligible employer;
2. "Apprenticeable agreement " means a written agreement,
complying with 29 C.F.R., Section 29.2, between an apprentice and
either the apprentice 's program sponsor, or an apprenticeship
committee acting as agent for the program sponsor, which contains
the terms and conditions of the employment and training of the
apprentice;
3. "Council" means the Governor's Council for Workforce and
Economic Development; and
4. "Eligible employer" means a taxpayer who employs an
apprentice pursuant to an apprentice agreement registered with the
Office of Apprenticeship of the E mployment and Training
Administration of the United States Department of Labor.
B. For taxable years beginning on or after Jan uary 1, 2022, and
ending not later than December 31, 2026 , there shall be allowed as a
credit against the tax imposed pursuant to Section 2355 of Title 68
of the Oklahoma Statutes in the amount of One Thousand Dollars
($1,000.00) for each qualified apprentice employed by an eligible
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employer for a period of at least seven (7) months during the
preceding calendar year.
C. Any eligible employer who enters into an apprenticeship
agreement must ensure compliance with any applicable Oklahoma state
law in regards to that industry or trade, including demonstrating
compliance for each qualified apprentice, to qualify for this
credit.
D. No employer shall be able to claim the credit authorized by
this section for more than ten apprentices for the duration of the
five (5) taxable years for which the credit is available.
E. The credit authorized by the provisions of this section
shall not be used to reduce the tax liability of th e taxpayer to
less than zero.
F. The credit authorized by the provisions of this section may
not be carried over from one taxable year to any other taxable year.
G. The provisions of this section shall cease to have the force
and effect of law on January 1, 2027 .
H. The total amount of credits authorized by this section used
to offset tax shall be adjusted annually to limit the annual amount
of credits to Three Million Dollars ($3,000,000.00). The Oklahoma
Tax Commission shall annually calculate and publish a percentage by
which the credits authorized by this section shall be reduced so the
total amount of credits used to offset tax does not exceed Three
Million Dollars ($3,000,000.00) per year. The formula to be us ed
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for the percentage adjustment shall be Three Million Dollars
($3,000,000.00) divided by the credits used to offset tax in the
second preceding year.
I. Pursuant to subsection H of this section, in the event the
total tax credits authorized by this sect ion exceed Three Million
Dollars ($3,000,000.00) in any calendar year, the Tax Commission
shall permit any excess over Three Million Dollars ($3,000,000.00)
but shall factor such excess into the percentage adjustment formula
for subsequent years.
J. The tax credit authorized by the provisions of this section
fulfills the requirements of Section 46A of Title 62 of the Oklahoma
Statutes because it is based on employment of persons who might not
otherwise be employed or who, although employed, would not have the
same skill level for the job position without the tax credit
authorized pursuant to the provisions of this section.
SECTION 2. NEW LAW A new section of law to be codified
in the Oklahoma Statutes as Section 2357.502 of Title 68, unless
there is created a duplication in numbering, reads as follows:
A. The Governor's Council for Workforce and Economic
Development, in coordination with the Oklahoma Department of
Commerce, may adopt any rules necessary to establish standards for
participation and eligibility and to implement and administer the
tax credit program authorized by Section 1 of this act. The Council
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shall consult with the Oklahoma Tax Commission to coordinate
implementation and administration of this act.
B. The Council shall provide an annual report to the Chair of
the Appropriations and Budget Committee of the Oklahoma House of
Representatives and the Chair of the Finance Committee of the
Oklahoma State Senate to account for the effectiveness of the
apprenticeship progr am under this act not later than January 31 of
each year with respect to program activities and program performance
with respect to the preceding calendar year.
SECTION 3. This act shall become effective November 1, 2021 .
58-1-5705 AQH 12/16/20