2SSB 6326

SENATE BILL REPORT
2SSB 6326

Title: An act relating to providing a source of funding for customized work force training.

Brief Description: Providing a source of funding for customized work force training.

Sponsors: Senate Committee on Ways & Means (originally sponsored by Senators Shin, Rasmussen, Pflug, Doumit, Rockefeller, Weinstein, Pridemore, Hewitt, Jacobsen, Thibaudeau, Swecker, Sheldon, Oke, Keiser, Kohl-Welles, Franklin, Kline and Berkey).

Committee Activity: International Trade & Economic Development: 1/19/06, 1/24/06 [DPS].

Majority Report: That Substitute Senate Bill No. 6326 be substituted therefor, and the substitute bill do pass.Signed by Senators Shin, Chair; Sheldon, Vice Chair; Pflug, Ranking Minority Member; Doumit, Eide, Roach and Zarelli.

Majority Report: That Second Substitute Senate Bill No. 6326 be substituted therefor, and the second substitute bill do pass.Signed by Senators Prentice, Chair; Fraser, Vice Chair, Capital Budget Chair; Doumit, Vice Chair, Operating Budget; Zarelli, Ranking Minority Member; Brandland, Fairley, Kohl-Welles, Parlette, Pridemore, Rasmussen, Regala, Roach, Rockefeller, Schoesler and Thibaudeau.

Background: The Washington Competitiveness Council has recommended the acceleration of worker training in high-demand fields for new workers, incumbent workers, and displaced workers. The council advocates an increase in capacity to provide customized training for business recruitment or expansion. The state's Job Skills Program is a customized training program that matches employer investments in on-the-job training but it is among the smallest customized training programs in the nation.

Summary of Bill: The Washington Customized Employment Workforce Training program is created for employers locating or expanding in the state. The State Board for Community and Technical Colleges (SBCTC) is to administer the program. Training allowances are awarded to employers who have entered into training agreements with colleges in the state.

Five million dollars is provided to the newly created Employment Training Finance Account for the SBCTC to provide training allowances. At the completion of training, employers are required to pay one quarter of the cost of the training. The additional three quarters of the cost are to be paid back over 18 months. A business and occupation tax credit is provided to employers for half of the amount that they pay for the employee training.

Employers are to increase their employment in the state by an amount equal to at least 75 percent of the trainees in their training program.

Appropriation: Five million dollars to the Employment Training Finance Account.

Effective Date: Ninety days after adjournment of session in which bill is passed.

Testimony For (International Trade & Economic Development): This bill is needed to attract businesses to the state. Workforce training is the top priority for economic development because we cannot be competitive otherwise. This has many benefits to employers, workers, and communities. The community colleges are ready to go on this. WEDFA has strong underwriting standards and is financially sound.

Testimony Other (International Trade & Economic Development): The employer must ensure that the workforce will be expanded by 75 percent of those trained, but simply increasing productivity is also a worthy goal, as is retaining jobs.

Who Testified (International Trade & Economic Development): PRO: Jack Ohara, Edmonds Community College; Jonathan Hayes, WEDFA; Ron Newbry, WA Economic Development Assn.; John Vicklund, WA Manufacturing Services; Gena Wikstrom, WA Fed. of Private Career Colleges; Carolyn Cummin, State Board for Community and Technical Colleges; Rick Slunaker, AGC.

OTHER: Rick Slunaker, AGC.

Testimony For (Ways & Means): This will be an effective tool for new companies moving into the state as they need qualified employees. Academic institutions are very much in favor, as well as AWB. This is a win-win situation to bring qualified employees and businesses to the state. This is a critical tool to link education and economic development. Right now, all we have is the job skills program for customized training, and it is not enough, as there is a large unmet training gap. This will increase company productivity and reduce turnover. Many states use multiple customized training programs. Our number one priority this year is workforce development. We need to make sure we have a skilled workforce. Other states do much more than we do. This will help the economic development community attract new business.

Who Testified (Ways & Means): PRO: Senator Paul Shin; Carolyn Cummins, SBCTC; Ron Newbry, Washington Economic Development Association.

House Amendment(s): The House amendment provides that the program give preference to employers with less than 50 employees. It also provides that a participating employer who takes the tax credit must file a survey with the Department of Revenue with employment information and requires that the Department of Revenue report to the Legislature in December 2011 regarding job creation and related information. The program expires on July 1, 2012, rather than 2016, and the appropriation is removed from the bill