BILL REQ. #:  S-3418.2 

Read first time 01/16/14.   Referred to Committee on Trade & Economic Development.

     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 participating in the apprenticeship program, 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) A person is allowed a credit against the tax due under this chapter as provided in this section. In computing the tax imposed under this chapter, an annual credit is allowed for employers participating in the Washington apprenticeship program approved by the apprenticeship council created in RCW 49.04.010. The credit applies to new apprenticeship positions in the following amounts:
     (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;
     (b) The lesser of two thousand dollars or fifty percent of the actual wages paid for each new apprenticeship position established in a new apprenticeship program;
     (c) The lesser of three thousand dollars or fifty percent of the actual wages 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; or
     (d) The lesser of four thousand dollars or fifty percent of the actual wages paid for each new apprenticeship position where the apprentice is a veteran.
     (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. 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.

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.