6326-S2 AMH CHAB ENSL 045

2SSB 6326 - H AMD 1129

By Representative Chandler

FAILED 3/4/2006

   Strike everything after the enacting clause and insert the following:

   "NEW SECTION. Sec. 1. A new section is added to chapter 28B.50 RCW to read as follows:

   The legislature finds that the provision of customized training is critical to attracting and retaining businesses, and that the growth of many businesses is limited by an unmet need for customized training. The legislature also finds that work force training not only helps business, it also improves the quality of life for workers and communities. Because of the statewide public benefit to be gained from instituting a customized training program, the legislature intends to promote work force training in a manner that reduces the costs of training to new and expanding firms.

   NEW SECTION. Sec. 2. A new section is added to chapter 28B.50 RCW to read as follows: 

   (1) The board shall assist in matching participating employers with qualified training institutions for purposes of providing customized training.

   (2) For purposes of sections 2 and 3 of this act, qualified training institutions may enter into agreements with four-year institutions of higher education, as defined in RCW 28B.10.016, in accordance with the interlocal cooperation act, chapter 39.34 RCW.
   (3) The board may adopt rules to implement this section.

   NEW SECTION. Sec. 3. A new section is added to chapter 82.04 RCW to read as follows:

   (1) A participating employer may take a credit against the tax imposed by this chapter if the number of employees a participating employer has in the state during the calendar year following the completion of the customized training program equals the number of employees the participating employer had in the state in the calendar year preceding the start of the customized training program plus at least seventy-five percent of the number of trainees.
   (2) The credit under this section is equal to twenty percent of the amount of customized training costs, up to a maximum of two hundred thousand dollars per employer per calendar year.

   (3)(a) The credit may not be used to train workers who have been hired as a result of a strike or lockout.

   (b) A credit may not be claimed under this section with respect to the value of job training services for which credit is claimed under RCW 82.04.4333.

   (4) Credits are available on a first in-time basis. The department shall disallow any credits, or portion thereof, that would cause the total amount of credits claimed under this section during any calendar year to exceed one million dollars. If this limitation is reached, the department shall notify the board, the work force training and education coordinating board, and the higher education coordinating board that the annual statewide limit has been met. In addition, the department shall provide written notice to any person who has claimed tax credits in excess of the one million dollar limitation in this subsection. The notice shall indicate the amount of tax due and shall provide that the tax be paid within thirty days from the date of such notice. The department shall not assess penalties and interest as provided in chapter 82.32 RCW on the amount due in the initial notice if the amount due is paid by the due date specified in the notice, or any extension thereof.

   (5) Any amount of tax credit otherwise allowable under this section not claimed by the person in any calendar year may be carried over and claimed against the person's tax liability until used.

   NEW SECTION. Sec. 4. A new section is added to chapter 82.04 RCW to read as follows:

   The definitions in this section apply to sections 2 and 3 of this act unless the context clearly requires otherwise.
  (1) "Board" means the state board for community and technical colleges.

   (2)"Participating employer" means a private employer that undertakes a training program with a qualified training institution under section 2 of this act.
   (3) "Qualified training institution" means a public community or technical college or a private vocational school licensed by either the work force training and education coordinating board or the higher education coordinating board.

   (4) "Customized training costs" means the direct costs experienced under a contract with a qualified training institution for formal technical or skill training, including basic skills. "Customized training costs" includes amounts in the contract for costs of instruction, materials, equipment, rental of class space, marketing, and overhead. "Customized training costs" does not include employee tuition reimbursements.

   NEW SECTION. Sec. 5. A new section is added to chapter 82.32 RCW to read as follows:

    (1) The department shall study the tax credit authorized in section 3 of this act. The department shall submit a report to the finance committee of the house of representatives and the ways and means committee of the senate by December 1, 2015. The report shall measure the effect of the credit on job creation, job retention, company growth, the movement of firms or the consolidation of firms' operations into the state, and such other factors as the department selects.

   Sec. 6. 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.

   (2) The value of the state-approved, job training services provided by the employer to the 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 shall not exceed five thousand dollars per calendar year.

   (4) Prior to claiming the credit under this section, the business must obtain approval of the proposed job training service from the employment security department. The employer's request for approval must include a description of the proposed job training service, how the job training will enhance the employee's performance, and the cost of the proposed job 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) A credit may not be claimed under this section with respect to the amount of customized training costs for which credit is claimed under section 3 of this act.

   NEW SECTION. Sec. 7. Section 3 of this act takes effect July 1, 2006.

   NEW SECTION. Sec. 8. Section 3 of this act expires July 1, 2016."

   Correct the title.

EFFECT:

•   Removes the provisions of the bill that created a revolving loan program for purposes of providing customized employment training. Removes the $5 million appropriation from the GFS. Eliminates the creation of an account to receive and expend loan proceeds.

•   Replaces the loan program with a tax credit under which participating employers may receive a B&O tax credit of 20% of customized training costs, up to a maximum of $200,000 per employer per calendar year, subject to certain criteria regarding the number of employees employed by the employer.

•   Limits the amount of tax credit that may be claimed to $1.0 million annually.

•   Disallows credit under the program if credit is claimed for the same training services under the existing B&O jobs training credit, and vice versa.

•   Directs the SBCTC to assist in matching employers to training programs.

•   Requires the Department of Revenue to report to the Legislature in December 2015 regarding job creation and related information.

•   The tax credit expires July 1, 2016.