Bill Text: NJ S3061 | 2018-2019 | Regular Session | Amended


Bill Title: Provides corporation business tax and gross income tax credits for businesses that participate in DOL registered apprenticeship programs; establishes grant program for tax-exempt organizations participating in DOL registered apprenticeship programs.

Spectrum: Partisan Bill (Democrat 4-0)

Status: (Engrossed) 2019-02-07 - Received in the Assembly, Referred to Assembly Labor Committee [S3061 Detail]

Download: New_Jersey-2018-S3061-Amended.html

[First Reprint]

SENATE, No. 3061

STATE OF NEW JERSEY

218th LEGISLATURE

 

INTRODUCED OCTOBER 15, 2018

 


 

Sponsored by:

Senator  M. TERESA RUIZ

District 29 (Essex)

Senator  LINDA R. GREENSTEIN

District 14 (Mercer and Middlesex)

 

 

 

 

SYNOPSIS

     Provides corporation business tax and gross income tax credits for businesses that participate in DOL registered apprenticeship programs; establishes grant program for tax-exempt organizations participating in DOL registered apprenticeship programs.

 

CURRENT VERSION OF TEXT

     As reported by the Senate Labor Committee on December 3, 2018, with amendments.

 


An Act providing corporation business tax and gross income tax credits for businesses that participate in federally-recognized apprenticeship programs, establishing an Apprenticeship Start-Up Grant Program, supplementing P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 54A of the New Jersey Statutes, and amending and supplementing P.L.1992, c.43.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1.    (New section) a.  A taxpayer, upon approval of an application to the department and the director, shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5): (1) in amount not to exceed $5,000 of qualified start-up costs of the taxpayer during a privilege period commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by a taxpayer or group of taxpayers; or (2) in an amount not to exceed $10,000 of the qualified start-up costs incurred by the taxpayer during a privilege period commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by a taxpayer or group of taxpayers that provides greater opportunities for workers in key industries. 

     b.    No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the privilege period for which a tax credit pursuant to this section is allowed.  The order of priority of the application of the tax credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, shall be as prescribed by the director.  The amount of the credit applied pursuant to this section against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).

     c.     The value of tax credits approved by the department and the director pursuant to subsection a. of this section and pursuant to subsection a. of section 2 of this section shall not exceed a cumulative total of $1,000,000 in fiscal year 2020, and in each fiscal year thereafter, to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative total amount of tax credits allowed to taxpayer for privilege periods or taxable years commencing during a single fiscal year under subsection a. of this section and subsection a. of section 2 of P.L.    c.   (C.       ) (pending before the Legislature as this bill) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit for that reason shall be allowed, in the order in which they have submitted an application, the amount of tax credit on the first day of the next succeeding fiscal year in which tax credits under subsection a. of this section and subsection a. of section 2 of P.L.    , c.   (C.      ) (pending before the Legislature as this bill) are not in excess of the amount of credits available.

     d.    A taxpayer shall submit to the department and the director a report to verify the qualified start-up costs incurred by the taxpayer associated with the initial year of participation in an apprenticeship program.  The report shall include such information as shall be determined necessary by the department and the director to substantiate the qualified start-up costs incurred by the taxpayer. 

     e.     As used in this section:

     "Apprenticeship program" means a registered program providing to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticable trade, and: (1) registered by the Office of Apprenticeship of the U.S. Department of Labor and meeting the standards established by the office, or (2) registered by a State apprenticeship agency recognized by the office.

     "Department" means the Department of Labor and Workforce Development.

     "Key industry" means an industry that makes or could make an important contribution to the economy of the State, which may include, but not be limited to, advanced manufacturing, construction, healthcare, logistics, pharmaceuticals, transportation, tourism, and renewable energy, as defined by the Department of Labor and Workforce Development in accordance with regulations adopted pursuant to P.L    , c.   (C.       ) (pending before the Legislature as this bill).

     "Qualified start-up costs" means the ordinary and necessary costs to 1[equip a building for ordinary business functions] start an apprenticeship program in that industry and occupation, including the salary costs of employees working on the program1 and1, if applicable, the1 non-recurring costs of fixed telecommunication furnishings and office equipment.

 

     2.    (New section) a.  A taxpayer, upon approval of an application to the department and the director, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.: (1) in an amount not to exceed $5,000 of the qualified start-up costs incurred by the taxpayer, during a taxable year commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by a taxpayer or group of taxpayers, or (2) in an amount not to exceed $10,000 of the qualified start-up costs incurred by the taxpayer, during a taxable year commencing on or after July 1, 2019, and associated with the initial year of participation in an apprenticeship program established by a taxpayer or group of taxpayers that provides greater opportunities for workers in key industries. 

     b.    No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the taxable year, for which a tax credit authorized pursuant to this section is allowed.  The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director.  The amount of the credit applied against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 shall not reduce a taxpayer's tax liability to an amount less than zero.

     c.     (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to distributive share of entity income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.

     (2)   A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income, shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.

     d.    The value of tax credits approved by the department and the director pursuant to subsection a. of this section and pursuant to subsection a. of section 1 of shall not exceed a cumulative total of $1,000,000 in fiscal year 2020 and in each fiscal year thereafter to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative total amount of tax credits allowed to taxpayers for taxable years or privilege periods commencing during a single fiscal year under subsection a. of this section and subsection a. of section of 1 P.L.    c.   (C.       ) (pending before the Legislature as this bill) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit for that reason shall be allowed, in the order in which they have submitted an application, the amount of tax credit on the on the first day of the next succeeding fiscal year in which tax credits under subsection a. of this section and subsection a. of section 1 of P.L.    , c.   (C.      ) (pending before the Legislature as this bill) are not in excess of the amount of credits available.

     e.     A taxpayer shall submit to the department and the director a report to verify the qualified start-up costs incurred by the taxpayer associated with the initial year of participation in an apprenticeship program.  The report shall include such information as shall be determined necessary by the department and the director to substantiate the qualified start-up costs incurred by the taxpayer.

     f.     As used in this section: 

     "Apprenticeship program" means a registered program providing to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticable trade, and: (1) registered by the Office of Apprenticeship of the U.S. Department of Labor and meeting the standards established by the office, or (2) registered by a State apprenticeship agency recognized by the office.

     "Department" means the Department of Labor and Workforce Development"

     "Key industry" means an industry that makes or could make an important contribution to the economy of the State, which may include, but not be limited to, advanced manufacturing, construction, healthcare, logistics, pharmaceuticals, transportation, tourism, and renewable energy, as defined by the Department of Labor and Workforce Development in accordance with regulations adopted pursuant to P.L    , c.   (C.       ) (pending before the Legislature as this bill).

     "Qualified start-up costs" means the ordinary and necessary costs to 1[equip a building for ordinary business functions] start an apprenticeship program in that industry and occupation, including the salary costs of employees working on the program1 and 1if applicable, the1 non-recurring costs of fixed telecommunication furnishings and office equipment.

 

     3.    (New section) a.  There is created in the Office of Customized Training in the Department of Labor and Workforce Development the Apprentice Start-Up Grant Program.  The purpose of the program is to provide an incentive for eligible organizations to support the development and expansion of apprenticeship programs which will provide additional opportunities for New Jersey's workforce to access careers in high-skill, high-wage occupations.

     b.    An eligible organization may apply for a grant in an amount not to exceed $5,000 to offset the qualified start-up costs associated with the initial year of participation in an apprenticeship program or for a grant in an amount not to exceed $10,000 to offset the qualified start-up costs associated with the initial year of participation in an apprenticeship program that provides greater opportunities for workers in key industries.

     c.     An eligible organization shall demonstrate to the commissioner that it has 1[enrolled in] participated in the establishment or operation of1 an apprenticeship program within the 12-month period before applying for a grant.  An eligible organization shall submit an application in such form as shall be required by the commissioner.  The application shall require, at a minimum, an eligible organization to submit to the department a report to verify the qualified start-up costs incurred by an eligible organization associated with the initial year of participation in an apprenticeship program.  The report shall include such information as shall be determined necessary by the department to substantiate the qualified start-up costs incurred by and eligible organization.

     d.    As used in this section:

     "Apprenticeship program" means a registered program providing to each trainee combined classroom and on-the-job training under the direct and close supervision of a highly skilled worker in an occupation recognized as an apprenticable trade, and: (1) registered by the Office of Apprenticeship of the U.S. Department of Labor and meeting the standards established by the office, or (2) registered by a State apprenticeship agency recognized by the office.

     "Eligible organization" means a labor union or an organization exempt from taxation pursuant to section 501(c)3 of the federal Internal Revenue Code, (26 U.S.C. s.501(c)(3)).

     "Key industry" means an industry that makes or could make an important contribution to the economy of the State, which may include, but not be limited to advanced manufacturing, construction, healthcare, logistics, pharmaceuticals, transportation, tourism, and renewable energy defined by the department in accordance with regulations adopted pursuant to P.L    , c.   (C.       ) (pending before the Legislature as this bill).

     "Qualified start-up costs" means the ordinary and necessary costs to 1[equip a building for ordinary business functions] start an apprenticeship program in that industry and occupation, including the salary costs of employees working on the program and, if applicable, the1, non-recurring costs of fixed telecommunication furnishings and office equipment1[, and costs associated with negotiations between an eligible organization and an employer that result in the establishment of an apprenticeship program]1.

 

     4.    Section 9 of P.L.1992, c.43 (C.34:15D-9) is amended to read as follows:

     9.    a.   A restricted, nonlapsing, revolving Workforce Development Partnership Fund, to be managed and invested by the State Treasurer, is hereby established to: provide employment and training services to qualified displaced, disadvantaged and employed workers by means of training grants or customized training services; provide for the other costs indicated in subsection a. of section 4 of P.L.1992, c.43 (C.34:15D-4); provide for the New Jersey Innovation and Research Fellowship Program as provided for in section 3 of P.L.2015, c.235 (C.34:15D-26); and facilitate the provision of education and training to youth by means of grants provided by the Youth Transitions to Work Partnership pursuant to the provisions of P.L.1993, c.268 (C.34:15E-1 et al.). All appropriations to the fund, all interest accumulated on balances in the fund and all cash received for the fund from any other source shall be used solely for the purposes specifically delineated by this act.

     b.    During any fiscal year beginning after June 30, 2001, of the total revenues dedicated to the program during any one fiscal year: 25% shall be deposited in an account of the Workforce Development Partnership Fund reserved to provide employment and training services for qualified displaced workers, and during any fiscal year beginning after June 30, 2018, 0.5% of the revenues shall be deposited in an account of the Workforce Development Partnership Fund reserved for and appropriated to the Department of Labor and Workforce Development Fund for the Apprenticeship Start-Up Grant Program created pursuant to section 3 of P.L.    , c.   (C.       ) (pending before the Legislature as this bill); 6% shall be deposited in an account of the Workforce Development Partnership Fund reserved to provide employment and training services for qualified disadvantaged workers; 42% shall be deposited in an account of the Workforce Development Partnership Fund reserved for and appropriated to the Office of Customized Training; 3% shall be deposited in an account of the Workforce Development Partnership Fund reserved for occupational safety and health training; 5% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the Youth Transitions to Work Partnership created pursuant to P.L.1993, c.268 (C.34:15E-1 et seq.); 3% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the New Jersey Innovation and Research Fellowship Program established pursuant to section 3 of P.L.2015, c.235 (C.34:15D-26); 10% shall be deposited in an account of the Workforce Development Partnership Fund reserved for administrative costs as defined in section 3 of P.L.1992, c.43 (C.34:15D-3); 0.5% shall be deposited in an account of the Workforce Development Partnership Fund reserved for the State Employment and Training Commission to design criteria and conduct an annual evaluation of the program; and [5.5%] 5% shall be deposited in an account of the Workforce Development Partnership Fund to be used, at the discretion of the commissioner, for any of the purposes indicated in subsection a. of section 4 of P.L.1992, c.43 (C.34:15D-4).

     c.     Beginning January 1, 1995, through June 30, 2002, the balance in the fund as of the previous December 31, as determined in accordance with generally accepted accounting principles, shall not exceed 1.5 times the amount of contributions deposited for the calendar year then ended. If the balance exceeds this amount, the excess shall be deposited into the unemployment compensation fund within seven business days of the date that the determination is made.

     d.    Beginning July 1, 2002, and for any subsequent fiscal year, if the unexpended cash balance in any of the accounts indicated in subsection b. of this section, less any amount awarded in grants but not yet disbursed from the account, is determined to exceed 20% of the amount of contributions collected for deposit in the account pursuant to this subsection during the fiscal year then ended, the excess shall be regarded as an unemployment compensation contribution and deposited into the unemployment compensation fund within seven business days of the date that the determination is made.

(cf: P.L.2015, c.235, s.2)

 

     5.    The Director of the Division of Taxation in the Department of the Treasury shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate sections 1 and 2 of this act.

 

     6.    The Commissioner of Labor and Workforce Development shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.) to effectuate section 3 of this act.

 

     7.    This act shall take effect immediately, and sections 1 and 2 shall apply to taxable years beginning on or after the January 1 next following the date of enactment.

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