Existing law creates the California Apprenticeship Council, appointed by the Governor, in the Division of Apprenticeship Standards and requires the council to issue rules and regulations that, among other things, establish standards for minimum wages, maximum hours, and working conditions for apprentice agreements in the building and construction trades and for firefighter occupations, as prescribed.

The Personal Income Tax Law imposes a tax on the entire taxable income of a resident taxpayer and on taxable income of nonresidents derived from sources within the state. Existing law requires every taxpayer subject to tax under that law to file a return with the Franchise Tax Board, stating specifically the items of gross income from all sources and the deductions and credits allowable, as provided. Existing law makes the unauthorized disclosure of taxpayer information a misdemeanor.

This bill would require the Franchise Tax Board to provide an option include a checkbox on individual income tax returns for taxable years beginning on or after January 1, 2025, for taxpayers to check a box providing the taxpayers consent to have their information shared authorize the Franchise Tax Board to share their full name and mailing address with the Division of Apprenticeship Standards Standards, pursuant to an information sharing agreement or data interface, for the purpose of receiving individual outreach information regarding apprenticeship programs in California. The bill would require the Franchise Tax Board, no later than November 1, 2026, and annually thereafter, to provide specified information to the division. the state. The bill would require the division, upon appropriation by the Legislature, to annually conduct outreach and enrollment efforts to individuals whose information is shared pursuant to the provisions of this bill. The bill would provide that the unauthorized disclosure of taxpayer information by the division is a misdemeanor. By expanding the scope of a crime, the bill would impose a state-mandated local program.

The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement.

This bill would provide that no reimbursement is required by this act for a specified reason.

Existing law creates the California Apprenticeship Council, appointed by the Governor, in the Division of Apprenticeship Standards and requires the council to issue rules and regulations that, among other things, establish standards for minimum wages, maximum hours, and working conditions for apprentice agreements in the building and construction trades and for firefighter occupations, as prescribed.

This bill would express the intent of the Legislature to enact legislation that would relate to expanding the uptake and awareness of Californias apprenticeship programs through state income tax returns by incorporating a checkbox option for filers to indicate interest in learning more about the states apprenticeship programs. require the Franchise Tax Board to provide an option on individual income tax returns for taxable years beginning on or after January 1, 2025, for taxpayers to check a box providing the taxpayers consent to have their information shared with the Division of Apprenticeship Standards for the purpose of receiving individual outreach information regarding apprenticeship programs in California. The bill would require the Franchise Tax Board, no later than November 1, 2026, and annually thereafter, to provide specified information to the division. The bill would provide that the unauthorized disclosure of taxpayer information by the division is a misdemeanor. By expanding the scope of a crime, the bill would impose a state-mandated local program.

Existing law creates the California Apprenticeship Council, appointed by the Governor, in the Division of Apprenticeship Standards and requires the council to issue rules and regulations that, among other things, establish standards for minimum wages, maximum hours, and working conditions for apprentice agreements in the building and construction trades and for firefighter occupations, as prescribed.

This bill would express the intent of the Legislature to enact legislation that would relate to expanding the uptake and awareness of Californias apprenticeship programs through state income tax returns by incorporating a checkbox option for filers to indicate interest in learning more about the states apprenticeship programs.

Date of Hearing: May 8, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 2769

Author:(Ortega) – As Amended Ver:April 15, 2024

Urgency: No State Mandated Local Program: Yes Reimbursable: No

SUMMARY:

This bill requires the Franchise Tax Board (FTB) to include a checkbox on the personal income tax (PIT) return authorizing the FTB to share a taxpayer’s name and address with the Division of Apprenticeship Standards (DAS) for apprenticeship program outreach.

Specifically, this bill:

1. Requires, for taxable years beginning on or after January 1, 2025, the FTB to include a checkbox on the PIT return to authorize the FTB to share the taxpayer’s full name and mailing address with DAS, pursuant to an information sharing agreement or data interface, for the purpose of receiving individual outreach information regarding apprenticeship programs. The FTB must determine the specific language used on the PIT return in consultation with DAS.
2. Requires, upon appropriation, DAS to annually conduct outreach and enrollment efforts to individuals who check the box on the PIT return.
3. Specifies, pursuant to existing law, that unauthorized disclosure of taxpayer information by DAS is a misdemeanor.

FISCAL EFFECT:

1. Costs of an unknown, but potentially significant, amount to the FTB to revise the relevant tax return forms, consult with DAS on language for the forms, and share information with DAS (General Fund (GF)). Although the FTB had previously stated there would be space on the 2025 PIT return for additional items, other legislation has since been enacted adding more information to the return. It is unclear whether adding the information specified by this bill would require a new page be added to the return.
2. Likely absorbable costs to DAS to consult with the FTB on PIT return language.
3. GF cost pressures of an unknown, but potentially significant amount, to appropriate funding to DAS to conduct outreach and enrollment efforts. The author is not pursuing an appropriation for this purpose through the 2024-25 state budget process. The type of outreach conducted and associated DAS staff workload or contact costs would depend on the amount appropriated for this purpose.

According to the Legislative Analyst’s Office, the GF faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According to the author:

Governor Newsom’s ambitious goal to reach 500,000 registered apprentices in California by 2029 is admirable and achievable. But we need to use all the tools at our disposal to make this happen, which includes creative strategies to boost participation. AB 2769 will use an already-vetted, cost-effective practice of including a box on the Franchise Tax form that Californians can check to receive more information about state apprenticeships and their benefits.

This bill is supported by various labor organizations and the California Workforce Association.

1. Tax Return Information. Federal and state laws maintain the confidentiality of taxpayer return information and prohibit the use of such data for purposes other than administration of tax laws, unless expressly permitted in statute. Accordingly, FTB is authorized to collect and share taxpayer information with various government agencies to assist in program administration, such as providing voter registration information to the Secretary of State, furnishing a list of resident state tax filers to the jury commissioner of each county for the selection of jurors, and facilitating individual requests for healthcare coverage information by the California Health Benefit Exchange. Last year, AB 1268 (Irwin), Chapter 573, Statutes of 2023, requires, beginning with the 2025 tax year, the FTB to include checkboxes on the PIT return allowing a taxpayer to provide written consent for Donate Life California to enroll the taxpayer in the organization’s organ and tissue donor registry.

This bill requires FTB to collect information from taxpayers wishing to receive information about apprenticeship programs and share the information with DAS, which must conduct outreach efforts upon appropriation. The Governor’s proposed 2024-25 budget includes a delay of $40 million GF for the Apprenticeship Innovation Fund to 2025-26 and 2026-27 and a delay of $25 million GF for the California Youth Apprenticeship Program to 2025-26. Additionally, while there are countless worthy causes that would benefit from an information check box on the PIT return, space on the return forms is limited and adding even more non-tax-related queries to the PIT return may have the opposite effect and desensitize taxpayers to such communications.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 22, 2024

ASSEMBLY COMMITTEE ON REVENUE AND TAXATION

Jacqui Irwin, Chair

ABPCA Bill Id:AB 2769 (

Author:Ortega) – As Amended Ver:April 15, 2024

Majority vote. Fiscal committee.

SUBJECT: Apprenticeships: income tax returns

SUMMARY: Requires the Franchise Tax Board (FTB) to include a checkbox on resident income tax returns for purposes of allowing taxpayers to receive individual outreach information regarding apprenticeship programs, as specified. Specifically, this bill:

1. Requires, for taxable years beginning on or after January 1, 2025, the FTB to include a checkbox on resident income tax returns that allows taxpayers to consent to the FTB sharing their information with the Division of Apprenticeship Standards (Division) for the purpose of receiving individual outreach information regarding apprenticeship programs in the state.
2. Requires that the specific language used on the return be developed by the FTB in consultation with the Division.
3. Provides that the information from a taxpayer's return that can be shared with the Division, upon receiving authorization via the checkbox on the return, is the taxpayer's full name and mailing address. In the case of a joint return, the authorization provided by checking the box applies to both individuals filing the joint return.
4. Requires the FTB to disclose this information to the Division via information sharing agreements or data interfaces.
5. Provides that the unauthorized disclosure of taxpayer information by the Division is a misdemeanor, pursuant to Revenue and Taxation Code (R&TC) Section 19542.
   
6. Requires the Division, upon appropriation by the Legislature, to annually conduct outreach and enrollment efforts for apprenticeship programs to individuals who have authorized FTB to share their information with the Division.

EXISTING LAW:

1. Requires the FTB to make available to taxpayers tax forms that are as simple as possible for taxpayers to prepare. These forms must be designed to provide for taxpayers to copy figures from, or attach a copy of, their federal return or portions thereof, or both, and to make any necessary adjustments. (R&TC Section 19582.)
2. Provides that, except as otherwise provided, it is a misdemeanor for the FTB, or any member thereof, or any deputy, agent, clerk, or other officer or employee of the state, including its political subdivisions, or a jury commissioner, or any former officer or employee or other individual, who in the course of their employment or duty has or had access to returns, reports, or documents required to be filed, to disclose or make known in any manner information as to the amount of income or any particulars, including the business affairs of a corporation, set forth or disclosed therein. (R&TC Section 19542.)
3. Requires the FTB to include a voter registration card with the Personal Income Tax filing forms that are mailed annually to California taxpayers. (R&TC Section 19584.)
4. Requires, beginning with the 2023 taxable year, the FTB to include a checkbox on the individual income tax return form for a taxpayer to indicate that they are interested in no-cost or low-cost health care coverage and authorizes FTB to share this information with the California Health Benefit Exchange. (R&TC Section 18543.)
5. Requires, beginning with the 2025 taxable year, the FTB to include a checkbox on the individual income tax return form for a taxpayer to provide written consent for the FTB to share their information with Donate Life California for purposes of enrolling in the organ and tissue donor registry. (R&TC Section 18544.)

FISCAL EFFECT: The FTB estimates that this bill would not impact state income or franchise tax revenue.

COMMENTS:

1. The author has provided the following statement in support of this bill:

Apprenticeships are and should be a main component of any plan to strengthen California’s economy, as well as providing well-paying stable jobs to California families. Governor Newsom’s ambitious goal to reach 500,000 registered apprentices in California by 2029 is admirable and achievable. But we need to use all the tools at our disposal to make this happen, which includes creative strategies to boost participation. AB 2769 will use an already-vetted, cost-effective practice of including a box on the Franchise Tax form that Californians can check to receive more information about state apprenticeships and their benefits. This bill will go a long way in increasing participation in apprenticeships and provide a pathway for low-income Californians to economic stability.

1. In support of this bill, the California Labor Federation notes, in part:

Apprenticeships offer a vital pathway to economic empowerment, providing sustainable employment and financial stability through the 'earn while you learn' model. With a 90% employment rate post-program completion and higher starting salaries compared to non-degree entrants to the workforce, apprenticeships are a positive alternative to traditional education. Increased outreach efforts for apprenticeships create opportunities for young people, individuals of color, and working-class communities. By broadening information about apprenticeship opportunities for individuals from diverse backgrounds, the state makes quality jobs with good wages accessible.

1. Committee Staff Comments:
   1. What does this bill do? This bill seeks to increase awareness of apprenticeship programs in California by requiring the FTB to provide a checkbox on the income tax return form that will allow taxpayers to consent to receive information regarding apprenticeship programs. Accordingly, this bill requires, subject to an appropriation by the Legislature, the Division to annually conduct outreach and enrollment efforts to those individuals who have opted in by checking the box on their tax return form. Presumably, because this bill limits the information that can be shared to the taxpayer's name a mailing address, this outreach will consist of sending printed materials through the mail.
      
   2. California's workforce and apprenticeship goals: As alluded to by the author, Governor Newsom has set a goal for California to reach 500,000 registered apprentices by 2029. In April of 2024, according to the Division's Registration Dashboard, there were 92,856 registered apprentices in the state:

Source: California Department of Industrial Relations, Division of Apprenticeship Standards.

As the above dashboard demonstrates, the majority of individuals currently registered to participate in an apprenticeship identify as Hispanic. Additionally, men vastly outnumber women and non-binary individuals among registered apprentices, constituting over 90% of those enrolled. The industries with the greatest number of registered apprentices are firefighting, carpentry, electrical, and general construction.

• 1. Recent investments in apprenticeship opportunities: The 2022-23 Budget Act established the Apprenticeship Innovation Fund, which allocated $175 million over three years to invest in and expand non-traditional apprenticeships (outside of construction and fire) to meet employer needs in apprenticeship curricula. The California Opportunity Youth Apprenticeship (COYA) Grant, also established as part of the 2022-23 Budget Act, seeks to develop and test innovative practices to increase the participation of opportunity youth in pre-apprenticeship and apprenticeship programs, and to demonstrate the impact of apprenticeship on employment and earnings outcomes for opportunity youth. Additionally, the California Apprenticeship Initiative is a more than $90 million grant opportunity offered by the California Community Colleges Chancellor’s Office to support the creation of new apprenticeships and pre-apprenticeship training programs, using grants and technical assistance.
     
  2. Using information on tax returns for non-tax purposes: The information contained on taxpayer returns is confidential and both state and federal law prohibit the use of this kind of data for purposes other than the administration of tax laws unless expressly provided in statute. Improper disclosure of federal tax information is punishable as a felony, and improper disclosure of state tax information is punishable as a misdemeanor. Accordingly, appropriate safeguards must be in place to ensure the security of taxpayer data. The FTB currently collects and shares information with departments to assist with program administration, such as providing voter registration information to the Secretary of State and facilitating individual requests for health care coverage information from the California Health Benefit Exchange. Another recent example of taxpayer information being used to further public policy objectives outside of the administration of tax law is the use of tax returns to expand opportunities to enroll one's self in the Donate Life Organ and Tissue Donor Registry [AB 1268 (Irwin), Chapter 573, Statutes of 2023].
  3. Prior legislation:
     1. AB 1268 (Irwin), Chapter 573, Statutes of 2023, requires, for taxable years beginning January 1, 2025, the FTB to include checkboxes on the resident income tax return allowing a taxpayer to provide written consent for Donate Life California to enroll the taxpayer in the organization’s organ and tissue donor registry.
     2. SB 697 (Hertzberg), Chapter 170, Statutes of 2022, required the FTB to include, on or after January 1, 2023, a checkbox for a taxpayer to indicate on their individual income tax return that they are interested in no-cost or low-cost health care coverage and authorizes FTB to share information from their tax return with Covered California.

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County and Municipal Employees (AFSCME CA)
California Labor Federation, AFL-CIO
California Nurses Association
California State Association of Electrical Workers
California State Pipe Trades Council
California Workforce Association
International Union of Operating Engineers, Cal-Nevada Conference
Western States Council Sheet Metal, Air, Rail and Transportation

Opposition

None on file

Analysis Prepared by: Wesley Whitaker / REV. & TAX. / (916) 319-2098