SHB 2565 -
By Representative Kilmer
Strike everything after the enacting clause and insert the following:
"Sec. 1 RCW 82.04.4333 and 1996 c 1 s 4 are each amended to read
as follows:
(1) ((There may be credited against the tax imposed by this
chapter, the value of state-approved, employer-provided or sponsored
job training services designed to enhance the job-related performance
of employees, for those businesses eligible for a tax deferral under
chapter 82.60 RCW.)) In computing the tax imposed under this chapter,
a credit is allowed for fifty percent of the value of qualified worker
training expenses incurred by a qualified employer.
(2) The value of the ((state-approved, job training services))
qualified worker training expenses provided by the qualified employer
to ((the)) a new or existing employee, without charge, shall be
determined by the allocation of the cost method using generally
accepted accounting standards.
(3) ((The credit allowed under this section shall be limited to an
amount equal to twenty percent of the value of the state-approved, job
training services determined under subsection (2) of this section.))
The total credits allowed under this section for a ((business))
qualified employer shall not exceed ((five)) the lesser of ten thousand
dollars per calendar year or the amount of tax otherwise due under this
chapter for the calendar year. Credits may not be carried over to
subsequent calendar years. No refunds may be granted for any unused
credits. Credits may not be approved on training expenses incurred
prior to January 1, 2007. Approved credits must be taken for taxes due
for the calendar year following the calendar year in which the
qualified expenses were incurred.
(4) The total credits allowed under this section for all qualified
employers shall not exceed two million dollars per calendar year for
credits taken for qualified worker training under subsection (6)(f)(i),
(ii), and (iii) of this section. The total credits allowed under this
section for all qualified employers shall not exceed one million
dollars per calendar year for credits taken for qualified worker
training under subsection (6)(f)(iv) of this section. The department
shall allow the use of the credits on a first-in-time basis.
(5) Prior to claiming the credit under this section, the
((business)) qualified employer must obtain approval of the proposed
((job training service)) worker training expenses from the ((employment
security department)) work force training and education coordinating
board. The employer's request for approval must include a description
of the proposed ((job)) worker training service, how the ((job)) worker
training will enhance the employee's performance, and the cost of the
proposed ((job)) worker training.
(((5) This section only applies to training in respect to eligible
business projects for which an application is approved on or after
January 1, 1996.)) (6) For the purposes of this section:
(a) "Manufacturing" has the meaning provided in RCW 82.04.120.
"Manufacturing" also includes computer programming, the production of
computer software, and other computer-related services, and the
activities performed by research and development laboratories and
commercial testing laboratories.
(b) "Pilot scale manufacturing" has the meaning provided in RCW
82.63.010.
(c) "Qualified employer" means an independently owned and operated
business located in Washington with less than fifty employees worldwide
that is engaged in a manufacturing, pilot scale manufacturing, or
qualified research and development operation.
(d) "Qualified research and development operation" has the meaning
provided in RCW 82.63.010.
(e) "Qualified worker training expenses" means the amount of
qualified worker training expenditures that exceed the lesser of: (i)
The employer's average annual amount of qualified worker training
expenditures for the previous five calendar years; or (ii) the
employer's annual amount of qualified worker training expenditures for
the previous year.
(f) "Qualified worker training" means instruction to enhance an
employee's job-related performance through: (i) A course or program at
an institution of higher education, as defined in RCW 28B.10.016, or a
private vocational school licensed under RCW 28C.10.060; (ii) a
private, nonprofit educational institution, the main campus of which is
permanently situated in the state, and that: (A) Is open to residents
of the state; (B) does not restrict entry on racial or religious
grounds; (C) provides programs beyond high school leading to at least
the baccalaureate degree; and (D) is accredited by the Northwest
association of schools and colleges or by an accrediting association
recognized by the higher education coordinating board; (iii) training
provided by Washington manufacturing services; or (iv) for employers
with more than two and less than twenty employees, training provided by
the employer on premises the value of which is determined according to
subsection (2) of this section.
(7) This section expires December 31, 2012.
NEW SECTION. Sec. 2 A new section is added to chapter 82.32 RCW
to read as follows:
(1) The legislature finds that accountability and effectiveness are
important aspects of setting tax policy. In order to make policy
choices regarding the best use of limited state resources, the
legislature needs information on how a tax incentive is used.
(2)(a) A person who claims the tax credit under RCW 82.04.4333
shall file a complete annual survey with the department. The survey is
due by March 31st following any year in which a person takes the credit
under RCW 82.04.4333. The department may extend the due date for
timely filing of annual surveys under this section as provided in RCW
82.32.590. The survey shall also include the following information for
employment positions in Washington:
(i) The number of total employment positions;
(ii) Full-time, part-time, and temporary employment positions as a
percent of total employment;
(iii) The number of employment positions according to the following
wage bands: Less than thirty thousand dollars; thirty thousand dollars
or greater, but less than sixty thousand dollars; and sixty thousand
dollars or greater. A wage band containing fewer than three
individuals may be combined with another wage band;
(iv) The number of employment positions that have employer-provided
medical, dental, and retirement benefits, by each of the wage bands;
(v) The number of people receiving qualified worker training;
(vi) The average cost of the qualified worker training;
(vii) The cost of the program administration; and
(viii) The type of qualified worker training received, including
the average length of training.
(b) As part of the annual survey, the department may request
additional information necessary to measure the results of, or
determine eligibility for, the tax credit in RCW 82.04.4333.
(c) All information collected under this section, except the amount
of the tax credit taken under RCW 82.04.4333 is deemed taxpayer
information under RCW 82.32.330. Information on the amount of the tax
credit is not subject to the confidentiality provisions of RCW
82.32.330 and may be disclosed to the public upon request, except as
provided in (d) of this subsection. If the amount of the tax credit as
reported on the survey is different than the amount actually reduced
based on the taxpayer's excise tax returns or otherwise allowed by the
department, the amount actually reduced may be disclosed.
(d) Persons for whom the actual amount of the tax credit is less
than ten thousand dollars during the period covered by the survey may
request the department to treat the amount of the tax reduction as
confidential under RCW 82.32.330.
(3) If a person fails to submit a complete annual survey under
subsection (2) of this section by the due date or any extension under
RCW 82.32.590, the department shall declare the amount of tax credit
taken under RCW 82.04.4333 for the period covered by the survey to be
immediately due and payable. The department shall assess interest, but
not penalties, on the taxes. Interest shall be assessed at the rate
provided for delinquent excise taxes under this chapter, retroactively
to the date the reduced taxes were due, and shall accrue until the
amount of the reduced taxes is repaid.
(4) The department shall use the information from the annual survey
required under subsection (2) of this section to prepare summary
descriptive statistics by category including the number of qualified
employers utilizing the credit by firm size:
(a) Under five employees;
(b) Five to ten employees;
(c) Eleven to twenty-five employees; and
(d) Twenty-six to forty-nine employees.
The department shall report these statistics to the legislature
each year by September 1st.
(5) By November 1, 2010, the fiscal committees of the house of
representatives and the senate, in consultation with the department,
shall report to the legislature on the effectiveness of the tax credit
provided in RCW 82.04.4333 in regard to keeping Washington competitive.
The report shall measure the effect of the tax credit provided in RCW
82.04.4333 on job retention, net jobs created for Washington residents,
company growth, diversification of the state's economy, cluster
dynamics, and other factors as the committees select. The report shall
include a discussion of principles to apply in evaluating whether the
legislature should extend the tax credit provided in RCW 82.04.4333.
Sec. 3 RCW 82.32.590 and 2005 c 514 s 1001 are each amended to
read as follows:
(1) If the department finds that the failure of a taxpayer to file
an annual survey under RCW 82.04.4452 or 82.04.4333 by the due date was
the result of circumstances beyond the control of the taxpayer, the
department shall extend the time for filing the survey. Such extension
shall be for a period of thirty days from the date the department
issues its written notification to the taxpayer that it qualifies for
an extension under this section. The department may grant additional
extensions as it deems proper.
(2) In making a determination whether the failure of a taxpayer to
file an annual survey by the due date was the result of circumstances
beyond the control of the taxpayer, the department shall be guided by
rules adopted by the department for the waiver or cancellation of
penalties when the underpayment or untimely payment of any tax was due
to circumstances beyond the control of the taxpayer.
NEW SECTION. Sec. 4 This act takes effect January 1, 2007."
Correct the title.