S-3878.2  _______________________________________________

                         SENATE BILL 6137

          _______________________________________________

State of Washington      54th Legislature     1996 Regular Session

By Senators Kohl, Long, Hargrove, Pelz, Thibaudeau, Rasmussen, Spanel, Snyder, Fraser, Wojahn, Heavey, Bauer, Quigley and McAuliffe

Read first time 01/08/96.  Referred to Committee on Human Services & Corrections.

Providing tax credits as an incentive for employer-sponsored child care benefits.

    AN ACT Relating to economic incentives for employer-sponsored child care benefits; adding a new section to chapter 82.04 RCW; creating a new section; 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 state's children, parents, and employers would all benefit by the increased availability of affordable, high-quality, child care services throughout the state.  The legislature finds that many employers are inhibited in their ability to hire and retain quality workers who have children in their home due to the high cost of child care.  This impact is especially great on small and medium-sized businesses for which it is not feasible, nor affordable, to provide on-site child care facilities.  The legislature further finds that an increase in affordable, high-quality child care will result in healthier and safer environments for children, an increase in children's opportunities for greater educational growth and development, and a more stable workplace and increased employee productivity.

    Based on these findings the legislature intends to modify the state's public policy toward child care by providing economic incentives to employers in order to:

    (1) Assist their employees in obtaining affordable, high-quality child care services;

    (2) Promote the growth and development of employment opportunities;

    (3) Increase the number of people who are able to leave public assistance programs;

    (4) Provide greater access to healthy and safe environments for children whose parents are employed; and

    (5) Ensure greater opportunities for educational growth of our children.

    The economic incentives to employers shall include tax credits for on-site child care facilities and for child-care vouchers issued for their employees' children.

NEW SECTION. Sec. 2.  A new section is added to chapter 82.04 RCW to read as follows:

    In computing the tax imposed under this chapter, a credit shall be granted against the amount of the tax otherwise due under this chapter as follows:  Equal to twenty-five percent of the amounts expended for capital and operating expenditures made in providing child care in an on-site facility for employees; and equal to fifty percent of the amounts expended for the purchase of child-care services for employees from other child-care providers.

    This section shall not apply to expenditures:  (1) That are reimbursed by the employee or any third party; (2) for services provided out-of-state; or (3) that are made under a salary reduction plan pursuant to the internal revenue code, 26 U.S.C. Sec. 125.

    The department shall adopt rules to administer this section.

NEW SECTION. Sec. 3.  This act shall take effect January 1, 1997.

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