SB 295

This bill would establish the Alabama Industry Recognized and Registered Apprenticeship Program Act

This bill would create the Alabama Office of Apprenticeship to register registered apprenticeship programs and to certify industry recognized apprenticeship programs in the state in lieu of the federal office of apprenticeship that currently administers state registered apprenticeship programs

This bill would authorize the Alabama Office of Apprenticeship to provide a federally recognized state apprenticeship completion credential for registered and industry recognized apprenticeships registered or certified by the Alabama Office of Apprenticeship

This bill would also increase the per capita apprenticeship tax credit from $1,000 to $1,250; increase the aggregate apprenticeship tax credit from $3,000,000 to $7,500,000; provide a $500 per capita incentive tax credit for hiring in school youth apprentices; and extend the apprenticeship tax credit through 2025

To establish the Alabama Industry Recognized and Registered Apprenticeship Program Act; to establish the Alabama Office of Apprenticeship to register and certify registered and industry recognized apprenticeship programs; to develop the Alabama Registered and Industry Recognized Apprenticeship Program; to provide incentives to employers who hire apprentices; to offer a nationally recognized state apprenticeship credential; and to amend Sections 40-18-422, 40-18-423, and 40-18-424 of the Code of Alabama 1975, relating to the Apprenticeship Tax Credit Act of 2016; to increase the per capita apprenticeship tax credit from $1,000 to $1,250, increase the aggregate apprenticeship tax credit from $3,000,000 to $7,500,000, provide a $500 per capita incentive tax credit for hiring in school youth apprentices; and to extend the apprenticeship tax credit through 2025.

Section 1

Sections 1 to 6, inclusive, shall be known and may be cited as the Alabama Industry Recognized and Registered Apprenticeship Program Act.

Section 2

For the purposes of Sections 1 to 6, inclusive, the following terms shall have the following meanings: (1) APPRENTICE. A worker who is at least 16 years of age, except where a higher minimum age standard is otherwise fixed by law, who is employed to learn an apprenticeable occupation as provided in 29 CFR 29.4. (2) APPRENTICESHIP AGREEMENT. A written agreement between an apprentice and either the apprenticeship program sponsor, or an apprenticeship committee acting as agent for the apprenticeship program sponsor or sponsors, which contains the terms and conditions of the employment and training of the apprentice in conformance with 29 CFR 29 and Section 40-18-421, Code of Alabama 1975. (3) APPRENTICESHIP PROGRAM. A plan containing all terms and conditions for the qualification, recruitment, selection, employment, and training of apprentices, as required under the federal guidelines in CFR Title 29, Subtitle A, parts 29 and 30, U.S.C. §50, for apprenticeship programs certified by the Alabama Office of Apprenticeship, and the rules adopted by the Alabama Office of Apprenticeship, including such matters as the requirement for a written apprenticeship agreement. (4) CANCELLATION. The termination of the registration or approval status of an apprenticeship program at the request of the sponsor, or termination of an apprenticeship agreement at the request of the apprentice. (5) CERTIFICATION or CERTIFICATE. The written approval by the Alabama Office of Apprenticeship of a set of apprenticeship standards or of an individual for employment as an apprentice or probationary apprentice in a registered apprenticeship program or proof that an apprentice has successfully met the requirements to receive an interim credential. (6) CERTIFIED INDUSTRY RECOGNIZED APPRENTICESHIP PROGRAM. An apprenticeship program certified by the Alabama Office of Apprenticeship that includes a paid work component and an educational or instructional component wherein an individual obtains workplace knowledge and skills, developed or delivered by third parties, including trade and industry groups, companies, nonprofit organizations, educational institutions, unions, and joint labor management organizations. (7) DEREGISTRATION. The termination of the registration or approval status of an apprenticeship program upon written request of the sponsor or upon cause by the Alabama Office of Apprenticeship instituting formal deregistration proceedings. (8) ELIGIBLE EMPLOYER. The same meaning as provided in Section 40-18-421, Code of Alabama 1975. (9) EMPLOYER. Any person or organization employing an apprentice, whether or not the person or organization is a party to an apprenticeship agreement with the apprentice. (10) FEDERAL PURPOSES. Any action related to a federal contract, grant, agreement, or arrangement dealing with an apprenticeship. The term includes any federal financial or other assistance, benefit, privilege, contribution, allowance, exemption, preference, or right pertaining to an apprenticeship. (11) GOVERNOR. The chief executive of this state. (12) IN SCHOOL YOUTH. A youth described in Section 129(a)(1)(C) of the federal Workforce Innovation and Opportunity Act. (13) ON-THE-JOB TRAINING. Training by an employer that is provided to a paid participant while engaged in productive work in a job that provides knowledge or skills essential to the full and adequate performance of the job; is made available through a program that provides reimbursement to the employer of up to 50 percent of the wage rate of the participant, except as provided in Section 134(c)(3)(H) of the federal Workforce Innovation and Opportunity Act, for the extraordinary costs of providing the training and additional supervision related to the training; and is limited in duration as appropriate to the occupation for which the participant is being trained, taking into account the content of the training, the prior work experience of the participant, and the service strategy of the participant, as appropriate. (14) REGISTERED APPRENTICESHIP. A formal, on-the-job training program registered by the Alabama Office of Apprenticeship that includes all of the following: a. Employer involvement. b. On-the-job training. c. Related technical instruction. d. Paid work experience. e. A portable, nationally recognized industry credential. (15) REGISTERED PREAPPRENTICESHIP. A program or set of strategies, registered by the Alabama Office of Apprenticeship, including basic skills training, academic skills remediation, or introduction to the industry, designed to prepare individuals for entry into an apprenticeship program. (16) REGISTERED YOUTH APPRENTICESHIP. A program that is designed specifically for individuals aged 16 to 18, inclusive, registered by the Alabama Office of Apprenticeship, and is connected to an adult apprenticeship. (17) REGISTRATION AGENCY. The agency that has responsibility for registering apprenticeship programs and apprentices, providing technical assistance, and conducting review for compliance with existing state law and the state plan for equal employment opportunities. (18) REQUIRED TECHNICAL INSTRUCTION. An organized and systematic form of instruction designed to provide the apprentice with knowledge of the theoretical and technical subjects related to the occupation of the apprentice. The instruction may be given in a classroom, through occupational or industrial courses, or by correspondence courses of equivalent value, electronic media, or other forms of self-study for registered and industry recognized apprenticeship programs certified by the Alabama Office of Apprenticeship. The sponsor shall be responsible for the administration and supervision of related and supplemental instruction for apprentices and coordination of the instruction with job experience. (19) SPONSOR. Any person, association, committee, or organization operating preapprenticeships, youth registered apprenticeships, youth industry recognized apprenticeships, registered apprenticeships, and industry recognized apprenticeships and in whose name the program is, or will be, registered or approved by the Alabama Office of Apprenticeship. (20) STATE APPRENTICESHIP AGENCY. The Alabama Office of Apprenticeship. (21) STATE APPRENTICESHIP INTERMEDIARY. The Alabama Community College System. (22) VETERAN. The meaning given the term in Section 101 of Title 38, United States Code. (23) WORK BASED LEARNING. Sustained interactions with industry or community professionals in real workplace settings, to the extent practicable, or simulated environments at an educational institution that foster in-depth, first-hand engagement with the tasks required of a given career field, that are aligned to curriculum and instruction.

Section 3

(a) There is established the Alabama Office of Apprenticeship as a part of the Workforce Development Division of the Department of Commerce, in accordance with 29 U.S.C. 50, 29 CFR 29 and 30, and Article 20, commencing with Section 40-18-420, of Chapter 18, Title 40, Code of Alabama 1975, the Apprenticeship Tax Credit Act of 2016. The Alabama Office of Apprenticeship is established for all of the following purposes: (1) To exercise nonexclusive authority to determine whether an apprenticeship program conforms to the regulations published in 29 CFR 29 and 30. (2) To set forth labor standards necessary to safeguard the welfare of apprentices. (3) To establish policies and procedures for the registration and deregistration of preapprenticeships, youth registered apprenticeships, registered apprenticeships, and the certification of youth industry recognized apprenticeships and industry recognized apprenticeships in the state. (4) To serve as the registration agency for registered preapprenticeships, registered youth apprenticeships, certified youth industry recognized apprenticeships, registered apprenticeships, and certified industry recognized apprenticeships in the state. (5) To resolve disputes arising between the parties involved in an apprenticeship agreement registered or certified by the Alabama Office of Apprenticeship. (b) The Alabama Office of Apprenticeship shall be maintained under the direction of the Deputy Secretary of the Workforce Development Division of the Department of Commerce. The deputy secretary, with the advice and consent of the Alabama Apprenticeship Council created pursuant to Section 5, may appoint a director for the Alabama Office of Apprenticeship, who shall serve at the pleasure of the deputy secretary, shall manage the Alabama Office of Apprenticeship, and shall perform such duties as necessary to effectuate the intent of Sections 1 to 6, inclusive. (c) The deputy secretary, no later than June 30, 2019, shall submit to the United States Secretary of Labor and the Administrator of the national Office of Apprenticeship, in accordance with 29 CFR 29.13(a), an application to recognize the Alabama Office of Apprenticeship as a state apprenticeship agency that shall comply with 29 CFR 29.13(a)-(c). The application for recognition as a state apprentice agency, submitted by the deputy secretary, shall include all of the following elements: (1) A description of policies and operating procedures that depart from, or impose requirements in addition to, 29 CFR 29. (2) A state plan for equal employment opportunity in apprenticeship that conforms to the requirements published in FR 30. (3) A description of the basic standards, criteria, and requirements for program registration, certification, and approval. (4) A demonstration of the linkages and coordination with the economic development and publicly funded workforce investment system of the state. (5) A description of how the Alabama Office of Apprenticeship will utilize the Alabama Apprenticeship Council. (6) A description of respective powers of the Alabama Office of Apprenticeship and the Alabama Apprenticeship Council. (7) A description of the required contents of apprenticeship agreements, in conformity with 29 CFR 29.7. (8) A plan to ensure that the registration or certification of apprenticeship programs occurs only in apprenticeable occupations, as provided in 29 CFR 29.4, including occupations in high growth and high demand industries, including a description of how the Alabama Office of Apprenticeship will expand apprenticeship opportunities in apprenticeable occupations listed on the regional and statewide list of in-demand career pathways. (9) A plan to accord reciprocal approval, for federal purposes, to apprentices, apprenticeship programs, and standards that are registered in other states by the national Office of Apprenticeship or a registration agency, if such reciprocity is requested by the apprenticeship program sponsor. Program sponsors seeking reciprocal approval shall meet wage and hour provisions and apprentice ratio standards of this state. (10) A plan providing for the cancellation or deregulation, or both, of programs, for temporary suspension, cancellation, decertification, or deregistration, or any of these, of apprenticeship agreements.

Section 4

(a) The Alabama Office of Apprenticeship, with the advice and consent of the Alabama Apprenticeship Council, shall develop a nationally recognized state apprenticeship completion credential, as described in 29 CFR 29.5, for completing a registered or industry recognized apprenticeship program registered or certified with the Alabama Office of Apprenticeship. (b) The Alabama Office of Apprenticeship may certify industry recognized apprenticeships as eligible training providers for the purpose of the federal Workforce Innovation and Opportunity Act, P.L. 113-128, and may deliver services to registered apprenticeship participants with qualifying training accounts under Title I of the federal Workforce Innovation and Opportunity Act, P.L. 113-128, through the eligible training provider list of each regional workforce development board. (c) The Alabama Office of Apprenticeship, with the advice and consent of the Alabama Office of Apprenticeship and pursuant to the Alabama Administrative Procedure Act, may adopt rules as necessary to effectuate the intent of Sections to 6, inclusive, and those rules shall conform to the published apprenticeship guidelines in 29 CFR 20 and 30. (d) The Alabama Office of Apprenticeship, with the advice and consent of the Alabama Apprenticeship Council and the program sponsor, may approve apprenticeship programs that are mandated by state or federal law as a result of the apprenticeship sponsor receiving funds or resources from the state, or funds or resources from the federal government, which require the creation of an apprenticeship program in accordance with a federal grant administered by the state, including contracts, grants, loans, tax abatements or exemptions, land transfers, land disposition and development agreements, tax increment financing, or any combination thereof. (e) The Alabama Office of Apprenticeship shall establish competency based apprenticeship frameworks based on the regional and statewide compendia of valuable credentials created by the Alabama Workforce Council Committee on Credentialing and Career Pathways. The Alabama Office of Apprenticeship shall establish competency based apprenticeship frameworks for each occupation listed on a regional and statewide list of in-demand career pathways. (f) The Alabama Office of Apprenticeship, in consultation with the Governor's Office of Education and Workforce Transformation, the P20W Council, the Alabama Workforce Council Committee on Credentialing and Career Pathways, the State Department of Education, the Alabama Community College System, the Alabama Workforce Council, the regional workforce councils, the State Workforce Development Board, and the local workforce development boards shall develop the Alabama Industry Recognized and Registered Apprenticeship (AIRRAP) model that shall be aligned to the regional and statewide lists of in-demand career pathways, to the regional and statewide compendia of valuable credentials, and to the two-pronged career pathways model created by the Alabama Workforce Council Committee on Credentialing and Career Pathways. The AIRRAP model shall conform to all of the following parameters: (1) Beginning in 9th grade, students may participate in preapprenticeship programs aligned to career pathways and credentials designated as valuable by the state compendium of valuable credentials. During 10th, 11th, and 12th grade, students may participate in youth registered apprenticeships and industry recognized apprenticeship programs aligned to career pathways and credentials designated as valuable by the state compendium of valuable credentials. Students participating in youth apprenticeships may also participate in dual enrollment courses at a community college. The State Department of Education and the Alabama Community College System shall collaborate to streamline articulation agreements among career pathways participating in the AIRRAP model to ensure a seamless transition between high school and community college. AIRRAP model graduates may earn a high school diploma, an associate degree, industry recognized credentials, and an apprenticeship credential at the time of high school graduation. (2) The Alabama Office of Apprenticeship and the Alabama Community College System shall promote work based learning for individuals who are coenrolled in adult basic education programs and postsecondary career and technical education programs to ensure that individuals who are disengaged from the workforce are able to gain access to education and training programs, with multiple points of entry and exit, with a focus on targeting the underemployed, historically underrepresented subgroups, the formerly incarcerated, out-of-school youth, recipients of temporary assistance for needy families, supplemental security income, or supplemental nutritional assistance programs, the long-term unemployed, those recovering from substance abuse, veterans, displaced homemakers, and other special populations and subgroups. The Alabama Office of Apprenticeship shall promote the use of the federal workforce opportunity tax credit to hire eligible AIRRAP model participants. The Alabama Office of Apprenticeship shall establish an awards and recognition program for employers who hire in school youth and adult AIRRAP model participants.

Section 5

(a) The Alabama Apprenticeship Council, which shall be composed of 10 ex officio members and nine appointed members, representing employer and employee organizations, who are familiar with apprenticeable occupations, is established. The membership of the council shall consist of the following ex officio members, or their designees: (1) The Governor. (2) The Lieutenant Governor. (3) The President Pro Tempore of the Senate. (4) The Speaker of the House of Representatives. (5) The Secretary of Commerce. (6) The Secretary of Labor. (7) The Chancellor of the Alabama Community College System. (8) The Alabama State Superintendent of Education. (9) The Chair of the Alabama State Workforce Development Board. (10) The Executive Director of the Alabama Commission on Higher Education. (11) Nine members appointed by the Governor, and confirmed by the Senate, for a renewable term of service. The Governor shall assure that the membership of the council is inclusive and reflects the racial, gender, geographic, urban, rural, and economic diversity of the state. The members of the council appointed pursuant to this subdivision shall satisfy all of the following qualifications: a. Three members shall be representatives of employer organizations. b. Three members shall be public representatives who are members of employee or employer organizations. c. Three members shall be representatives of employee organizations. (b) The initial term of office of the nine members appointed to the council by the Governor shall be designated at the time of initial appointment by the Governor as follows: (1) Three members, consisting of one member appointed pursuant to each of paragraphs a., b., and c. of subdivision (11) of subsection (a), shall be appointed for an initial term of one year. Successor members shall be appointed for terms of three years. (2) Three members, consisting of one member appointed pursuant to each of paragraphs a., b., and c. of subdivision (11) of subsection (a), shall be appointed for an initial term of two years. Successor members shall be appointed for terms of three years. (3) Three members, consisting of one member appointed pursuant to each of paragraphs a., b., and c. of subdivision (11) of subsection (a), shall be appointed for an initial term of three years. Successor members shall be appointed for terms of three years. (c) Vacancies shall be filled by appointment of the Governor. The person appointed to fill a vacancy shall possess the same qualifications as the original appointment and shall hold office for the unexpired term and until his or her successor is appointed. (d) The Alabama Apprenticeship Council shall serve in an advisory capacity to the Alabama Office of Apprenticeship for all of the following functions: (1) The approval of apprenticeship standards satisfying the requirements published in 29 CFR 29. (2) Ensuring compliance of equal employment opportunity in apprenticeship, as defined in 29 CFR 30. (3) Resolving disputes arising between the parties to an apprenticeship agreement. (4) Providing recommendations to deregister, suspend, or cancel apprenticeship programs that are not compliant with state and federal apprenticeship regulations, as published in 29 CFR 29 and Article 20, commencing with Section 40-18-420, of Chapter 18, Title 40, Code of Alabama 1975, the Apprenticeship Tax Credit Act of 2016. (5) Providing community outreach and education on the benefits of apprenticeship. (6) Assisting in the formulation of policies that concede the effective administration of apprenticeship programs.

Section 6

(a) Nothing in Sections 1 to 6, inclusive, of this act shall require nonregistered preapprenticeship, youth apprenticeship, and industry recognized apprenticeship sponsors, including state agencies, colleges, and universities, and business and industry sponsors, to certify or register those programs with the Alabama Office of Apprenticeship. (b) Nothing in Sections 1 to 6, inclusive, of this act shall be interpreted as a mandate to encumber funds, appropriated for other purposes to a state agency, college, or university, or any other entity receiving state or federal funds, to support apprenticeship activities. (c) The Alabama Office of Apprenticeship shall provide the Alabama State Apprenticeship Intermediary the option to provide the required technical instruction and on-the-job training for apprenticeship programs registered or certified by the Alabama Office of Apprenticeship. The Alabama Office of Apprenticeship shall select an alternative provider of required technical instruction and on-the-job training when the Alabama Apprenticeship Intermediary declines the option to provide those services.

Section 7

Sections 40-18-422, 40-18-423, and 40-18-424 of the Code of Alabama 1975, are amended to read as follows:

§40-18-422.

(a) An For tax years beginning on or after January 1, 2017, through the tax year beginning January 1, 2019, an Alabama income tax credit is hereby established allowed for eligible employers that employ an apprentice for at least seven full months of the prior taxable year. The credit shall equal up to one thousand dollars ($1,000) for each apprentice employed, not to exceed five apprentices employed. The Department of Revenue, in consultation with the Workforce Development Division of the Department of Commerce, shall establish a scale reflecting ranges of amounts of money an employer has invested in an eligible apprentice and a corresponding tax credit amount and shall award the tax credit in accordance with this scale following confirmation from the Workforce Development Division that the apprentice for whom the credit is claimed is in compliance with all federal and state requirements for the apprenticeship program. The credit shall not be available for an individual apprentice for more than four taxable years.

(b) For tax years beginning on or after January 1, 2020, eligible employers that employ an apprentice for at least seven full months of the prior taxable year shall receive a credit equal to one thousand two hundred fifty dollars ($1,250) for each apprentice employed, not to exceed pprentices employed. The Department of Revenue, in consultation with the Workforce Development Division of the Department of Commerce and the Alabama Office of Apprenticeship, shall establish a scale reflecting ranges of amounts of money an employer has invested in an eligible apprentice and a corresponding tax credit amount and shall award the tax credit in accordance with this scale following confirmation from the Workforce Development Division and the Alabama Office of Apprenticeship that the apprentice for whom the credit is claimed is in compliance with all federal and state requirements for the apprenticeship program. The credit shall not be available for an individual apprentice for more than four taxable years.

(c) For each credit claimed for each qualified apprentice under subsection (b) associated with an apprentice enrolled in a secondary or postsecondary career and technical education program, who is under the age of 18 at the time the credit is claimed, and who is participating in a youth registered or industry recognized apprenticeship program registered with the Alabama Office of Apprenticeship and funded through either the Carl D. Perkins Career and Technical Education Act of 2006, P.L. 109-270, as revised by the Strengthening Career and Technical Education for the 21st Century Act, P.L. 115-224, adult basic education and literacy programs funded under Title II of the Workforce Innovation and Opportunity Act, P.L. 113-128, or public workforce programs funded under Title I and Title III of the Workforce Innovation and Opportunity Act, P.L. 113-128, may qualify for an additional tax credit, not to exceed five hundred dollars ($500) to offset the costs associated with hiring each apprentice who is under the age of 18, not to exceed the aggregate cap of 10 apprentices hired, as provided in subsection (b). An eligible employer under this subsection may claim the additional tax credit described in this subsection after employing an in school youth apprentice, who satisfies the specifications provided in this subsection, for 90 days.

(b)(d) The credit shall be allowed against the tax imposed by Chapter 16 or Chapter 18 of this title. This tax credit shall not be allowed to decrease a taxpayer's tax liability to less than zero. The credit is not refundable or transferable. The credit shall be available, on a pro rata basis, to the owners of qualified employers that are entities taxed under subchapters S or K of the Internal Revenue Code or limited liability companies or professional corporations authorized to do business in this state. An employer applying for a tax credit must apply each year to receive the credit for the preceding calendar year.

(c)(e) The cumulative amount of tax credits issued pursuant to this article shall not exceed three million dollars ($3,000,000) seven million five hundred thousand dollars ($7,500,000) annually. The Department of Revenue shall ensure that this cap is not exceeded, shall prescribe the various methods by which these credits are to be issued, and shall develop procedures to notify taxpayers at such points in time when the tax credit caps in this subsection have been reached for the applicable tax credit year.

(d)(f) If an employer employs an apprentice for less than the full preceding calendar year, but for at least 210 days during the full preceding calendar year, then the employer may apply for the full value of the credit on a pro rata monthly basis beginning on the first day of the first full month of apprenticeship.

(e)(g) The Department of Revenue shall prescribe a form to claim this credit that provides information to the department sufficient for the proper administration of the credit.

(f)(h) The participation of an employee with an apprenticeship program under this article and registration with the Alabama Office of Apprenticeship of the Employment and Training Administration of the United States Department of Labor shall not constitute union affiliation, unless the employee expressly elects to affiliate with a union.

§40-18-423.

(a) The Alabama Office of Apprenticeship, under the direction of the Workforce Development Division of the Department of Commerce, in coordination with the consultation of the Board of Trustees of the Alabama Community College System or its designee, may adopt any rules necessary to establish standards for participation and eligibility and to implement and administer this article. The division Alabama Office of Apprenticeship shall consult with the Department of Revenue to coordinate implementation and administration of this article.

(b) The division Alabama Office of Apprenticeship shall provide an annual report to the Chair of the House Ways and Means Education Committee and the Chair of the Senate Finance and Taxation Education Committee to account for the effectiveness of the apprenticeship program under this article.

§40-18-424.

The tax credit credits allowed under this article shall be effective January 1, 2017, for the 2017 taxable year and shall continue through the 2021 2025 tax year, unless extended by act of the Legislature."

Section 8

This act shall become effective on the first day of the third month following its passage and approval by the Governor, or its otherwise becoming law.