ARIZONA HOUSE OF REPRESENTATIVES

Fifty-fifth Legislature

Second Regular Session

House: ED DP 7-3-0-0

HB 2290: apprenticeship program; income tax subtraction

Sponsor: Representative Fillmore, LD 16

House Engrossed

Overview

Creates the Arizona Student Apprenticeship Program (Program) and an income tax subtraction for participating employers.

History

The Arizona Department of Education (ADE) is overseen by the Superintendent of Public Instruction and provides direct services (including funding, training and technical assistance) to the state's public schools, administers and distributes state and federal education monies to local education agencies and collects school and student data for Arizona's public schools (ADE).

The Arizona Apprenticeship Office, housed within the Arizona Department of Economic Security (DES), oversees the state's registered apprenticeships (proven models of apprenticeships that have been validated by the United States Department of Labor or a state apprenticeship agency) in accordance with federal law. Apprentices earn wages while receiving mandatory on-the-job training and related technical instruction and a skilled mentor is required to oversee and train the apprentice. Under this model, apprenticeship programs are sponsored by individual employers, employer associations or joint employer and labor groups (Arizona Apprenticeship Office). According to DES, there were more than 4,000 apprentices participating in over 200 apprenticeship programs in Arizona as of June 2021 (DES).

Provisions

1.   ☐ Prop 105 (45 votes) ☐ Prop 108 (40 votes) ☐ Emergency (40 votes) ☐ Fiscal NoteEstablishes the Program within ADE to provide job training and economic opportunity to Arizona high school students. (Sec. 1)

2.   Instructs ADE to develop application procedures, selection criteria and completion requirements. (Sec. 1)

3.   Specifies the Program is separate and apart from the United States Department of Labor-approved apprenticeship program. (Sec. 1)

4.   Grants any Arizona employer the ability to apply to participate in the Program. (Sec. 1)

5.   Mandates a participating employer:

a)   Provide each participant employee with job training;

b)   Provide flexible scheduling to each participant employee;

c)   Open a separate interest-bearing account on behalf of each participant employee;

d)   Deposit the portion of each participant employee's wages selected by the participant employee in the interest-bearing account;

e)   Deposit an equivalent amount of monies each time the employer deposits a portion of a participant employee's wages in the interest-bearing account;

f) Disburse the entire amount of monies in the interest-bearing account to the participant employee if the participant employee successfully completes Program requirements; and

g)   Disburse an amount of monies equivalent to the sum of the participant employee's wages deposited in the interest-bearing account if the participant employee does not successfully complete Program requirements. (Sec. 1)

6.   Mandates a participant employee designate a percentage of at least 10% of their wages to be deposited in the interest-bearing account. (Sec. 1)

7.   Stipulates that if a participant employee does not successfully complete Program requirements, an employer may retain the monies deposited in the interest-bearing account but must transmit any interest on those monies to the Treasurer for deposit in the state GF. (Sec. 1)

8.   Requires ADE to prepare and post a list on its website that includes all employers that have been accepted to participate in the Program. (Sec. 1)

9.   Stipulates a student is eligible to participate in the Program if the student:

a)   Is enrolled in an Arizona public high school;

b)   Applies for the Program by submitting an application prescribed by ADE to the public school at which they are enrolled;

c)   Submits proof with the application that they are projected to complete high school graduation requirements by the end of the 12th grade; and

d)   Submits proof that they have received an offer of employment from an employer on ADE's list. (Sec. 1)

10.  Prohibits a public school from approving a student's application if Program participation will interfere with the student's ability to complete high school graduation requirements. (Sec. 1)

11.  Allows, for the first taxable year in which a participating Program employer employs a participant employee who successfully completes the Program, an income tax subtraction for each participant employee who successfully completes the Program. (Sec. 1)

12.  Establishes an individual and corporate subtraction from Arizona gross income that is equivalent to the amount of monies an employer deposits in interest-bearing accounts and disburses to participant employees who successfully complete the Program. (Sec. 2, 3)

13.  Directs ADE to issue a certificate to the Program employer to provide to the Arizona Department of Revenue to verify the employer's participation in the Program and any participant employees' completion of the Program. (Sec. 1)

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17.                    HB 2290

18.  Initials CH Page 0 House Engrossed

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