BILL REQ. #:  H-4796.1 

READ FIRST TIME 02/07/06.   

     AN ACT Relating to a worker training business and occupation tax credit; amending RCW 82.04.4333; providing an effective date; and providing an expiration date.

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

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 the 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 one million dollars per calendar year. The department shall allow the use of the credits on a first-come, first-served basis.
     (5)(a) 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. 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.
     (b) To claim a credit under this chapter, a person must electronically file with the department all returns, forms, and other information the department requires in an electronic format as provided or approved by the department. Any return, form, or information required to be filed in an electronic format under this section is not filed until received by the department in an electronic format. As used in this section, "returns" has the same meaning as "return" in RCW 82.32.050.
     (((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) "Qualified employer" means an independently owned and operated business located in Washington with less than fifty employees worldwide.
     (b) "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, which is open to residents of the state, which neither restricts entry on racial or religious grounds, which provides programs beyond high school leading to at least the baccalaureate degree, and which 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 less than ten employees, training provided by the employer on premises the value of which shall be determined according to subsection (2) of this section.
     (7) The department of revenue, with the cooperation with the department of revenue, the state board for community and technical colleges, the work force training and education coordinating board, and the higher education coordinating board, shall report on the impact of subsection (1) of this section to the appropriate committees of the legislature by December 1, 2008, and every two years thereafter. The report must include:
     (a) The number of people receiving qualified worker training;
     (b) The average cost of the qualified worker training;
     (c) The cost of the program administration;
     (d) The type of qualified worker training received, including the average length of training;
     (e) The number of qualified employers utilizing the credit by firm size:
     (i) Under five employees;
     (ii) Five to ten employees;
     (iii) Eleven to twenty-five employees; and
     (iv) Twenty-six to forty-nine employees.
     (8) This section expires December 31, 2016.

NEW SECTION.  Sec. 2   This act takes effect January 1, 2007.