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PRINTER'S NO. 931
THE GENERAL ASSEMBLY OF PENNSYLVANIA
HOUSE BILL
No. 891
Session of
2025
INTRODUCED BY WEBSTER, MADDEN, SANCHEZ, KHAN, HILL-EVANS,
INGLIS, CERRATO, NEILSON AND MALAGARI, MARCH 13, 2025
REFERRED TO COMMITTEE ON LABOR AND INDUSTRY, MARCH 13, 2025
AN ACT
Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An
act relating to tax reform and State taxation by codifying
and enumerating certain subjects of taxation and imposing
taxes thereon; providing procedures for the payment,
collection, administration and enforcement thereof; providing
for tax credits in certain cases; conferring powers and
imposing duties upon the Department of Revenue, certain
employers, fiduciaries, individuals, persons, corporations
and other entities; prescribing crimes, offenses and
penalties," providing for Keystone State Apprenticeship Tax
Credit; establishing the Keystone State Apprenticeship Tax
Credit Program; and imposing duties on the Department of
Labor and Industry.
The General Assembly of the Commonwealth of Pennsylvania
hereby enacts as follows:
Section 1. The act of March 4, 1971 (P.L.6, No.2), known as
the Tax Reform Code of 1971, is amended by adding an article to
read:
ARTICLE XVIII-I
KEYSTONE STATE APPRENTICESHIP TAX CREDIT
Section 1801-I. Definitions.
The following words and phrases when used in this article
shall have the meanings given to them in this section unless the
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context clearly indicates otherwise:
"Certified employer." A qualified employer that has received
a final certificate of eligibility from the department after the
department has determined that the qualified employer has
fulfilled all eligibility criteria to participate in the
program. The final certificate of eligibility shall state the
actual amount of tax credit that a certified employer is
entitled to claim and the allocation year of the tax credit.
"Construction." The act of constructing, reconstructing,
altering, maintaining, moving, rehabilitating, repairing,
renovating, fabricating, servicing or demolishing a building,
structure, improvement or component, or an act relating to the
excavation of or other development or improvement to land.
"Department." The Department of Labor and Industry of the
Commonwealth.
"Disadvantaged youth." An individual who is:
(1) Between 16 and 24 years of age when the individual
begins an apprenticeship.
(2) Low-income or at-risk, as those terms are defined by
the department.
"Mentor." An individual who provides instruction, guidance
and support to the apprentice on a regular basis throughout the
apprentice's completion of the apprenticeship as the apprentice
seeks employment in the field or industry of the apprenticeship.
"Participating employer." A qualified employer that has
applied to participate in the program and received a preliminary
certificate of tax credit from the department. The preliminary
certificate shall state the maximum amount of the tax credit
that the employer may be able to claim if the applicant becomes
a certified employer.
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"Program." The Keystone State Apprenticeship Tax Credit
Program established under section 1802-I.
"Qualified apprentice." An individual employed by a
participating employer in a full-time position for at least six
months of a calendar year under a qualified apprenticeship
agreement with a qualified employer. An individual employed by a
qualified employer shall not be deemed a qualified apprentice if
the individual has not completed the apprenticeship training
program within one year of the expected date of completion of
the program.
"Qualified apprenticeship agreement." An apprenticeship
agreement that has been registered with and approved by the
department for a trade other than a construction trade.
"Qualified employer." An employer that participates in a
department-approved apprenticeship program.
"Secretary." The Secretary of Labor and Industry of the
Commonwealth.
Section 1802-I. Powers and duties of secretary.
(a) Establishment.--The Keystone State Apprenticeship Tax
Credit Program is established to provide tax incentives to
certified employers for employing qualified apprentices under a
qualified apprenticeship agreement registered with the
department under section 4 of the act of July 14, 1961 (P.L.604,
No.304), known as The Apprenticeship and Training Act.
(b) Allocation.--The secretary may allocate up to
$10,000,000 in tax credits annually beginning July 1, 2025, and
ending on July 1, 2030. Any unused annual allocation of tax
credits shall be made available in each of the subsequent years
before 2030.
(c) Guidelines and criteria.--
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(1) The secretary shall establish guidelines and
criteria that specify requirements for qualified employers to
participate in the program, including criteria for certifying
qualified apprentices.
(2) The secretary may give preference to qualified
employers that hire and train disadvantaged youth through
qualified apprenticeship agreements and qualified employers
that are engaged in demand occupations or industries or in
regional growth sectors, including those identified by the
department, such as clean energy, health care, technology,
including software engineering and web development, advanced
manufacturing and conservation.
(3) The secretary may give preference to employers that
employ apprentices in newly established apprenticeship
programs.
(4) The secretary may take the following factors into
consideration when evaluating whether to approve an
application in a year subsequent to the year in which a
qualified employer was determined to be a certified employer:
(i) The length of the qualified apprenticeship
agreement into which the certified employer has entered.
(ii) The number of apprentices who have graduated
from the apprenticeship program to which the qualified
apprentice employed by the certified employer belongs.
(iii) The number of apprentices in the
apprenticeship program who the qualified employer has
hired.
(iv) Other factors the secretary deems relevant.
Section 1803-I. Keystone State Apprenticeship Tax Credit.
(a) Eligibility.--
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(1) A certified employer shall be entitled to a tax
credit against income or franchise tax for each qualified
apprentice. The base tax credit allowed under the program
shall be computed as follows:
(i) Two thousand dollars for each first-year
apprentice.
(ii) Three thousand dollars for each second-year
apprentice.
(iii) Four thousand dollars for each third-year
apprentice.
(iv) Five thousand dollars for each fourth-year
apprentice.
(v) Six thousand dollars for each fifth-year
apprentice.
(2) The apprentice's status under paragraph (1) shall be
determined on the last day of the calendar year or, if the
apprentice is no longer employed by the participating
employer on the last day of the calendar year, on the last
day of the apprentice's employment with the participating
employer.
(b) Disadvantaged youth tax credit.--
(1) In lieu of the tax credit specified in subsection
(a), for each qualified apprentice who is considered a
disadvantaged youth for each tax year:
(i) Five thousand dollars for each first-year
apprentice.
(ii) Six thousand dollars for each second-year
apprentice.
(iii) Seven thousand dollars for each third-year,
fourth-year or fifth-year apprentice.
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(2) The qualified apprentice's status under paragraph
(1) shall be determined on the last day of the calendar year
or, if the qualified apprentice is no longer employed by the
participating employer on the last day of the calendar year,
on the last day of the apprentice's employment with the
participating employer. If a disadvantaged youth under 25
years of age begins an apprenticeship, a certified employer
shall be eligible to continue to receive the tax credit for
the disadvantaged youth under this subsection until that
apprentice completes the apprenticeship.
(c) Increase.--If an apprentice has been trained in the
apprentice's trade by a mentor for the entirety of the calendar
year, the base tax credit amounts described in subsection (a)
shall be increased by $500.
(d) Other tax credit.--A certified employer shall not be
allowed a tax credit under this article for an apprentice if the
apprentice is the basis for any other State tax credit.
Section 1804-I. Application and approval.
(a) Application.--To participate in the program, a qualified
employer must submit to the secretary an application in a form
prescribed by the secretary. As part of the application, a
qualified employer must:
(1) Agree to allow the Department of Revenue to share
the applicant's tax information with the department.
Information shared as a result of this agreement is exempt
from access under the act of February 14, 2008 (P.L.6, No.3),
known as the Right-to-Know Law.
(2) Allow the department and the department's agents
access to any and all books and records the department may
require to monitor compliance.
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(b) Approval.--After reviewing a qualified employer's
completed application and determining that the qualified
employer meets the eligibility conditions specified in this
article and any applicable regulations promulgated by the
secretary, the department may admit the applicant into the
program as a participating employer and provide the applicant
with a preliminary certificate of eligibility establishing the
qualified employer as a participating employer and stating the
maximum amount of tax credit for which the applicant is
eligible.
Section 1805-I. Final report.
To receive a final certificate of tax credit, the
participating employer must annually submit a final report to
the secretary in a form prescribed by the department. The report
must demonstrate that the applicant has satisfied all
eligibility requirements under this article and provided all the
information necessary for the secretary to compute an actual
amount of tax credit allowed for that calendar year,
notwithstanding the fact that a participating employer's taxable
year may be a fiscal year. The final certificate of eligibility
shall state the actual amount of tax credit that a certified
employer is entitled to claim and the allocation year of the tax
credit.
Section 1806-I. Certification of employer.
(a) Certification.--After review and approval of the final
report, the secretary shall certify the participating employer
as a certified employer and issue a final certificate of tax
credit. The certificate shall include the following information:
(1) The name and employer identification number of the
certified employer.
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(2) The actual amount of tax credit to which the
certified employer is entitled for that calendar year, which
actual amount cannot exceed the amount of tax credit listed
on the preliminary certificate but may be less than the
amount.
(3) The allocation year of the tax credit.
(4) Any other information deemed necessary by the
secretary.
(b) Taxable year.--If a certified employer's taxable year is
a fiscal year, the certified employer shall be entitled to claim
the tax credit on the return for the fiscal year that includes
the last day of the calendar year covered by the final
certificate of tax credit.
Section 1807-I. Annual report.
(a) Report.--The secretary shall annually publish a report
containing the following information:
(1) The names and addresses of certified employers
issued a final certificate of eligibility under this article.
(2) The work location of each apprentice generating a
tax credit.
(3) The amount of Keystone State Apprenticeship Tax
Credits allowed to the certified employer as specified on the
final certificate of eligibility.
(4) The number of each of the first-year apprentices,
second-year apprentices, third-year apprentices, fourth-year
apprentices and fifth-year apprentices and which individuals
are considered disadvantaged youth.
(b) Recommendations and publication.--The secretary shall
include in the report under subsection (a) the relevant
industries of certified employers and recommendations for
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legislative or other action to further the intent and purpose of
the program. The report shall be published by December 31 on the
department's publicly accessible Internet website.
(c) Promotion.--The secretary shall promote, publish and
disseminate information concerning the Keystone State
Apprenticeship Tax Credit and other available funding,
particularly targeting industries and fields of business not
currently taking advantage of apprenticeships.
Section 2. This act shall take effect in 60 days.
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