BILL REQ. #:  S-4057.1 

READ FIRST TIME 01/31/14.   

     AN ACT Relating to establishing a tax credit for employers participating in the apprenticeship program; adding new sections to chapter 82.04 RCW; adding a new section to chapter 28C.18 RCW; and providing an effective date.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   A new section is added to chapter 82.04 RCW to read as follows:
     This section is the tax preference performance statement for the tax preference contained in section 2 of this act. This performance statement is only intended to be used for subsequent evaluation of the tax preference. It is not intended to create a private right of action by any party or be used to determine eligibility for preferential tax treatment.
     (1) The legislature categorizes this tax preference as one intended to create or retain jobs, and to provide an incentive to employers to increase the number and type of apprenticeship participants and programs, as indicated in RCW 82.32.808(2) (c) and (f).
     (2) It is the legislature's specific public policy objective to increase the number and types of apprenticeship participants and programs in Washington state. It is the legislature's intent to offer a business and occupation tax credit for employers that increase participation in and expand the number and types of apprenticeship programs, thereby inducing some businesses to hire more apprentices than they might otherwise, thereby meeting the demand for employers of skilled workers, and increasing the number of skilled jobs in Washington state.
     (3) If a review finds that the number of new apprenticeship participants and programs increase by five percent over the baseline, then the legislature intends for the legislative auditor to recommend extending the expiration date of the tax preference.
     (4) In order to obtain the data necessary to perform the review in subsection (3) of this section, the joint legislative audit and review committee should refer to the department of labor and industries apprenticeship program and the United States department of labor registered apprenticeship national results.
     (5) The legislature finds that the registered apprenticeship program provides a cost-effective method for employers to obtain skilled workers and for employees to receive valuable training and credentials. The legislature further finds that apprenticeship programs are concentrated in the building trades industry, and providing incentives to expand the apprenticeship program to additional sectors where there are not sufficient skilled workers would retain and create skilled jobs and benefit the economy.

NEW SECTION.  Sec. 2   A new section is added to chapter 82.04 RCW to read as follows:
     (1) In computing the tax imposed under this chapter, a person is allowed a credit as provided in this section. The credit is based on new apprenticeship positions created by employers participating in the Washington apprenticeship program approved by the apprenticeship council created in RCW 49.04.010. The credit is earned for the calendar year in which actual wages are paid for each new apprenticeship position. The credit is calculated as follows:
     (a) The lesser of one thousand dollars or fifty percent of the actual wages and benefits paid for each new apprenticeship position established in an existing, approved apprenticeship program, if the apprentice is a veteran, the lesser of two thousand dollars or fifty percent of the actual wages and benefits paid;
     (b) The lesser of two thousand dollars or fifty percent of the actual wages and benefits paid for each new apprenticeship position established in a new apprenticeship program, if the apprentice is a veteran, the lesser of three thousand dollars or fifty percent of the actual wages and benefits paid; or
     (c) The lesser of three thousand dollars or fifty percent of the actual wages and benefits paid for each new apprenticeship position established in a new apprenticeship program where the workforce training and education coordinating board has identified a gap in the supply of skilled workers, including but not limited to the aerospace industry, manufacturing industry, and medical industry, if the apprentice is a veteran, the lesser of four thousand dollars or fifty percent of the actual wages and benefits paid.
     (2) The credit may be used against any tax due under this chapter, and may be carried over until used, up to four tax years after the tax year during which the credit was earned. No refunds may be granted for credits under this section.
     (3) Credits earned under this section may be claimed only on returns filed electronically with the department using the department's online tax filing service or other method of electronic reporting as the department may authorize. The taxpayer must keep records necessary for the department to determine eligibility under this section including copies of military service records and records establishing the veteran's status when hired by the taxpayer.
     (4) The definitions in this subsection apply throughout this section unless the context clearly requires otherwise.
     (a) "New apprenticeship position" means an additional person participating in an approved apprenticeship program that is in addition to the number of apprenticeship positions filled by an employer prior to July 30, 2014. A new apprenticeship position created after August 1, 2014, remains annually eligible for a tax credit under subsection (1) of this section if the apprenticeship position is in addition to the number of apprenticeship positions established by the employer before August 1, 2014.
     (b) "New apprenticeship program" means an apprenticeship program that did not exist before August 1, 2014, that is approved by the apprenticeship council created in RCW 49.04.010.
     (c) "Veteran" means every person who has received an honorable discharge or received a discharge for medical reasons with an honorable record or is currently serving honorably, and who has served as a member in any branch of the armed forces of the United States, including the national guard and armed forces reserves.
     (5) If at any time the department finds that a person is not eligible for a tax credit under this section, the amount of taxes for which a credit has been used are immediately due. The department must assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest must be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, must be assessed retroactively to the date the tax credit was taken, and must accrue until the taxes for which a credit has been used are repaid.

NEW SECTION.  Sec. 3   A new section is added to chapter 28C.18 RCW to read as follows:
     The board must annually identify and report to the department of revenue the approved apprenticeship programs that qualify for a tax credit under section 2(1)(c) of this act.

NEW SECTION.  Sec. 4   This act takes effect August 1, 2014.