The Washington Customized Employment Training Program (Program) was created in 2006 to fund workforce training in a manner that reduces up-front training costs to employers locating or expanding in the state. The State Board for Community and Technical Colleges (SBCTC) administers the Program. The SBCTC awards training allowances to eligible employers who contract with qualified community and technical colleges or private vocational schools to provide customized training to individuals. Preference is given to businesses with fewer than 50 employees, and to training that leads to transferable skills that are interchangeable among different jobs, employers, or workplaces.
Once training is complete, the business must repay costs to the Employment Training Finance Account created for the Program. The first payment is equal to 25 percent of the full cost of the training and is due upon the completion of training. The remaining 75 percent is spread over the next 18 months. As each payment is made, the business may take a state business and occupation (B&O) tax credit equal to 50 percent of the payment. The total tax credit is equal to 50 percent of the full cost of the training. Businesses may carry forward unused credits. Credits may not be taken after July 1, 2021.
The expiration date for use of the Program B&O tax credit is extended from July 1, 2021, to July 1, 2026.
By December 31, 2024, the SBCTC is required to report to the higher education committees of the Legislature on:
The Legislature states its objective to aid in the recruiting, retaining, and expanding of existing small businesses by extending the expiration of the Program tax credit.
A tax preference performance statement is included.
The substitute bill adds the Legislature's objective in extending the Program and adds a tax preference performance statement.
(In support) Washington colleges and institutes offer training programs that give businesses, including manufacturing businesses, help with training. There is new urgency in workforce training due to Coronavirus Disease 2019 regarding families and the need to have jobs that will sustain them for a career. The bill pushes out the tax credit expiration. Businesses use this Program to gain skills in partnership with community and technical colleges. The training offered through the Program can include basic education, language skills, assessments, and can cover the costs of equipment and supplies. The Joint Legislative Audit and Review Committee (JLARC) noted that the Program is not meeting the goal of attracting new businesses, but it is meeting the goal of supporting existing businesses. The Program should be continued, and more data gathered. Through the Program, employees can also receive training that helps them in their current jobs. With the tax credit expiring soon, it has been challenging for businesses to take advantage of the tax credits within the time period remaining. If the tax credit is extended, more businesses will be able to take advantage. The bill is supported by the community and technical colleges. The Program narrows skills gaps and addresses worker shortage needs for a robust economy. Since the Program began, Washington businesses have turned to the Program for affordable training. The Program helps employers stay competitive in the marketplace, and training has led to certificates and licenses for employees. The Program provides a resource that allows small businesses to conduct training even when they don't have the upfront costs. Training takes place all over the state, including rural areas. The bill is supported by both business and labor workers. The JLARC was firmly in support of continuing the Program to increase skills. Training is expensive, and the Program helps bridge the gap.
(Opposed) None.
The second substitute bill provides that bill becomes effective July 1, 2021.
(In support) The Washington Customized Training Program gives businesses in the state an advantage and this tax incentive should be extended to continue to support that program. The program is a flexible workforce training opportunity for businesses and results in increased profitability for business and enhanced affordability for workers. Workers at all levels will need to upgrade their skills in the future. Workforce training will be particularly important in rebuilding the economy after the pandemic. Although the Joint Legislative Audit and Review Committee noted that the incentive is not meeting its original goal of attracting new businesses, it does meet an important need for businesses in the state. This bill changes the objective of the incentive to better meet the current needs of businesses in the state. Many stakeholder groups support this bill, including both labor and business groups. Due to the impending expiration date, businesses are apprehensive to use this program.
(Opposed) None.