[atlas:bill]

AN ACT Relating to tax credits for the employment of persons with disabilities; adding a new section to chapter 82.04 RCW; creating a new section; providing an effective date; and declaring an emergency.

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:

(1) Subject to the limits and provisions of this section, a credit is authorized against the tax otherwise due under this chapter for the employment of eligible persons by persons engaged in activities taxed under this chapter.

(2)(a) Effective July 1, 2001, an annual tax credit of up to one thousand dollars may be claimed for a maximum of two tax years for each eligible person employed.

(b)(i) The tax credit for an eligible person who has been employed for one thousand five hundred hours or more during the tax year is one thousand dollars;

(ii) The tax credit for an eligible person employed for one thousand hours or more but less than one thousand five hundred hours during the tax year is seven hundred fifty dollars;

(iii) The tax credit for an eligible person employed for five hundred hours or more but less than one thousand hours during the tax year is five hundred dollars; and

(iv) The tax credit for an eligible person employed for one hundred hours or more but less than five hundred hours during the tax year is two hundred fifty dollars.

(3) For the purposes of this section:

(a) "Eligible person" means a person with a significant disability as determined by the division of vocational rehabilitation or the department of services for the blind.

(b) "Significant disability" means a severe physical or mental impairment that seriously limits one or more functional capacities such as, but not limited to, mobility, communication, self-care, self-direction, interpersonal skills, work tolerance, or work skills, in terms of an employment outcome, as determined by the division of vocational rehabilitation or the department of services for the blind.

(4) The department of services for the blind or the division of vocational rehabilitation shall provide determination of significant disability for purposes of the tax credit. An individual who is not a client or former client of the department of services for the blind or the division of vocational rehabilitation may request and receive determination of significant disability for purposes of the tax credit without applying to become a client or requesting any additional services.

(5) An employer becomes eligible to claim the tax credit by employing an individual who has been determined to have a significant disability by the department of services for the blind or by the division of vocational rehabilitation, when the individual's earnings from the employment are in compliance with all state and federal requirements.

(6) No application is necessary for the tax credit. The person must keep records necessary for the department to verify eligibility under this section. This information includes:

(a) Employment records for the previous three years;

(b) Information verifying that the employee is an eligible person as defined in subsection (3) of this section; and

(7) If at any time the department finds that a person is not eligible for tax credit under this section, the amount of taxes for which a credit has been used shall be immediately due. The department shall assess interest, but not penalties, on the credited taxes for which the person is not eligible. The interest shall be assessed at the rate provided for delinquent excise taxes under chapter 82.32 RCW, shall be assessed retroactively to the date the tax credit was taken, and shall accrue until the taxes for which a credit has been used are repaid.

NEW SECTION. Sec. 2. This act shall be known and cited as the José "Pepe" Lladró act.

NEW SECTION. Sec. 3. This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and takes effect July 1, 2001.