2763 [atlas:request]

AN ACT Relating to business and occupation tax credits for investment in training; adding a new section to chapter 82.04 RCW; creating new sections; and providing an effective date.

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

NEW SECTION. Sec. 1. The legislature finds that the health, safety, and welfare of the people of the state of Washington are heavily dependent upon the continued encouragement, development, and expansion of opportunities for family wage employment in the state's manufacturing industries.

The legislature further finds that manufacturers have difficulty recruiting and retaining employees with sufficient skills to perform family wage jobs adequately.

The goal of this act is to give employers incentives to provide educational opportunities to enhance the skills of manufacturing employees.

The legislature intends to achieve this goal through the provision of tax incentives in the form of tax credits for employers who pay community colleges, technical colleges, or private vocational schools to provide adult basic skills and literacy education and occupational education to their employees.

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 tax due under this chapter of an amount equal to seventy-five percent of the payment made to a qualified training institution for qualified costs of qualified training for a qualified employee of the person, subject to the eligibility standards and limitations set forth in this section.

(2) A person is eligible for the credit and the department shall approve the credit only if:

(a) The person initiates operation of a new manufacturing facility which includes an investment in machinery and equipment;

(b) The person's investment in machinery and equipment at an existing manufacturing facility during the calendar year in which the application is made is equal to or greater than ten percent of the value of products manufactured at the facility in the immediately preceding year; or

(c) The person's average employment positions at an existing manufacturing facility will be at least ten percent greater in the year for which credit is being sought than the person's average employment positions at the facility in the immediately preceding year.

(3) The credit in respect to any qualified employee shall not exceed two thousand two hundred fifty dollars, and a person is not eligible for a credit in excess of two hundred fifty thousand dollars for any calendar year.

(4) A person shall apply for the credit to the department on forms and in such a manner as the department may require by rule before payment to a qualified training institution of qualified costs for which the credit is claimed. The department shall approve or deny the application within sixty days.

(5) The person shall take the credit against taxes due for the same calendar year in which the credit is approved by the department and shall claim the credit by the due date of the last tax return for the calendar year in which the credit is approved by the department, except that, if the amount of the credit exceeds the amount of tax due under this chapter such that the person is unable to claim the full amount of the credit in the calendar year in which the credit is approved by the department, the person shall claim the balance of the credit remaining against taxes due for the earliest tax reporting period or periods during which the person has sufficient taxes due under this chapter to take the remaining balance of the credit.

(6) The department shall keep a running total of all credits granted under this section during each calendar year and shall disallow any credits that would cause the total credits for any calendar year to exceed ten million dollars. Any person whose credit is disallowed under this subsection is entitled to carry the credit forward and take the credit during the earliest calendar year or calendar years during which the total of all credits granted under this section does not exceed ten million dollars. The department, in allowing the credit, shall give priority to a person whose credit has been previously disallowed under this subsection over persons initially claiming the credit under this section.

(7) A person claiming the credit shall agree to supply the department with information necessary to measure the results of the tax credit program.

(8) For purposes of this section:

(a) "Employment position" means a permanent full-time position in a manufacturing facility filled by a qualified employee during the entire year;

(b) "Machinery and equipment" means machinery and equipment that qualifies for exemption under RCW 82.08.02565 or 82.12.02565;

(c) "Manufacturing facility" means a business location in this state at which a person engages in activities taxable under this chapter that constitute "to manufacture" as defined in RCW 82.04.120;

(d) "Qualified costs" means amounts paid directly to a qualified training institution to cover the cost of tuition and training materials for qualified training;

(e) "Qualified employee" means a full-time employee whose primary duties include activities which constitute "to manufacture" as defined in RCW 82.04.120;

(f) "Qualified training" means adult basic skills and literacy education, and occupational education as defined in RCW 28B.50.030(7), provided to a qualified employee under a written agreement with the employer; and

(g) "Qualified training institution" means a community college, technical college, or private vocational school as defined in RCW 28C.10.020(7) that is licensed by the work force training and education coordinating board, located in this state.

(9) A credit shall not be allowed for payments to a qualified training institution after December 31, 2005.

NEW SECTION. Sec. 3. The work force training and education coordinating board shall, if funds are made available for that purpose, evaluate the results of training under this act and report its findings to the appropriate policy and fiscal committees of the legislature by January 1, 1999. The report shall include, but need not be limited to, the employment and earnings of trainees. The department of revenue, the employment security department, the state board for community and technical colleges, and any private vocational schools that are party to contracts for training under this act shall provide the work force training and education coordinating board with data required for the evaluation.

NEW SECTION. Sec. 4. This act shall take effect July 1, 1996.