Financial Incentives Expand Apprenticeship Programs
For income tax years commencing on or after January 1, 2025, but before January 1, 2035, section 1 of the act creates a refundable state income tax credit (tax credit) that an employer may claim if the employer employs an apprentice for at least 6 months during an income tax year and either has a registered apprenticeship program or is an employer-partner of a registered apprenticeship program. The amount of the tax credit is up to $6,300 for 6 months of employment plus up to $1,050 for each additional month of employment, for a maximum of up to $12,600 per apprentice per income tax year. An employer may not claim a credit for:
- More than 10 apprentices per income tax year;
- The same apprentice for more than 24 consecutive months; and
- An apprentice for months when the apprentice did not receive wages from the employer.
To claim a tax credit, an employer must submit an application for the reservation of the tax credit and an application to receive an income tax credit certificate to the state apprenticeship agency (SAA) in the department of labor and employment (department). The SAA shall review the applications for specified criteria to determine whether the employer qualifies for the tax credit and tax credit certificate. An employer issued a tax credit certificate must file the certificate with the employer's state income tax return.
The SAA is required to submit certain information and reports, as applicable, regarding the tax credit to the state auditor and the department of revenue. The SAA must also conduct outreach and provide technical assistance to small businesses concerning awareness of and application for the tax credit.
Section 2 ends the state income tax credit for qualified investments made in a qualified school-to-career program for income tax years after December 31, 2024.
Section 4 creates the scale-up grant program in the department to start new registered apprenticeship programs or expand existing programs in Colorado. The scale-up grant program awards grants from the money in the scale-up grant fund, which is created in the act. Eligible grant recipients include employers or entities that operate an apprenticeship program and that:
- Plan to develop and register a new registered apprenticeship program; or
- Currently offer a registered apprenticeship program and plan to expand it.
The act requires the department to collect specified data regarding the scale-up grant program and submit a report to specified committees of the general assembly.
Section 4 also creates the qualified apprenticeship intermediary grant program in the department to support entities that demonstrate expertise in connecting employers or apprenticeship program participants to registered apprenticeship programs or in convening stakeholders to develop registered apprenticeship programs. The SAA must post a list of the types of entities eligible to apply to the grant program on the SAA's website. The qualified apprenticeship intermediary grant program awards grants from the money in the qualified apprenticeship intermediary grant fund, which is created in the act. An eligible grant recipient must be a qualified apprenticeship intermediary.
The act requires the department to collect specified data regarding the qualified apprenticeship intermediary grant program and submit a report to specified committees of the general assembly.
On July 1, 2024, the state treasurer shall transfer from the general fund $2 million to the scale-up grant fund and $2 million to the qualified apprenticeship intermediary grant fund.
For the 2024-25 state fiscal year, the following amounts are appropriated to the department for use by the office of future of work to implement the act:
- $103,515 from the general fund;
- $666,666 from the scale-up grant fund; and
- $666,667 from the qualified apprenticeship intermediary grant fund.
APPROVED by Governor May 10, 2024
EFFECTIVE May 10, 2024
(Note: This summary applies to this bill as enacted.)