H-1319.1  _______________________________________________

                          HOUSE BILL 1747

          _______________________________________________

State of Washington      55th Legislature     1997 Regular Session

By Representatives Morris, Van Luven, Kastama, Veloria, Sheldon, Benson, Butler, DeBolt, Dunshee, Conway, Alexander, Quall, Wolfe, Keiser, Hatfield, Doumit, Kessler, Thompson, Scott, Mason, Wood, Blalock, O'Brien, Constantine, Costa, Gombosky, Dunn, Tokuda, Murray, Ogden, Cody and Lantz

Read first time 02/07/97.  Referred to Committee on Trade & Economic Development.

Providing tax credits for employer-provided child care benefits.

    AN ACT Relating to small business stability by providing tax credits for employer-provided child care benefits; adding a new section to chapter 82.04 RCW; and creating a new section.

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

NEW SECTION. Sec. 1.  The legislature finds that existing or new small businesses' stability is threatened because of a shortage of affordable licensed early learning and child care.  The legislature further finds that small business has a greater challenge in providing higher wages that make early learning and child care affordable.  The legislature further finds that small business assistance with quality child care provides advantages for the small business employee through access to higher-quality, more stable child care and parental choice and to the employer through lower absenteeism, lower job turnover, and more productivity.

    It is the intent of the legislature to provide tax credits to small businesses, located in distressed areas, that provide employee child care benefits to their employees.

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

    (1) There may be deducted against the tax imposed by this chapter, the value of state-approved, employer-provided child care benefits to employees, for a small business that is located within an eligible area.

    (2) The credit allowed under this section is equal to fifty percent of the state-approved, employer-provided child care benefits to the employee.  The total credits allowed to all small businesses claiming tax credits under this section may not exceed one million dollars per fiscal year.

    (3) Before claiming the credit under this section, the business must obtain approval of the proposed child care benefit from the department of social and health services.  The employer's request for approval must include a description of the child care benefit provided to the employee and the cost of the proposed child care benefit to the employer and employee, if applicable.

    (4) As used in this section:

    (a) "Child care benefit" means:

    (i) An employer-provided voucher that can be used to pay part or all of the cost of day care or before-and-after-school care in a state-approved and licensed facility; or

    (ii) The cost of construction of an employer-provided day care or before-and-after-school care facility; or (iii) the cost of operation and maintenance of an employer-provided day care or before-and-after-school care facility;

    (b) "Eligible area" has the same meaning as in RCW 82.62.010; and

    (c) "Small business" means an entity subject to taxation under this chapter and that has less than fifty full-time employees.  The term "small business" also includes a consortium of two or more small businesses.

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