HOUSE BILL REPORT

SSB 6548

BYSenate Committee on Economic Development and Labor (originally sponsored by Senators Lee, Warnke, Smitherman, Rasmussen and Fleming; by request of Employment Security Department)

Authorizing fees for administration of the federal targeted jobs tax credit program.

House Committe on Commerce & Labor

Majority Report:  Do pass. (10)

      Signed by Representatives Wang, Chair; Cole, Vice Chair; Fisher, Jones, R. King, O'Brien, Patrick, Sanders, Sayan and Walker.

House Staff:Chris Cordes (786-7117)

Rereferred House Committee on Ways & Means/Appropriations

Majority Report:  Do pass.  (15)

      Signed by Representatives Locke, Chair; Belcher, Braddock, Brekke, Brough, Butterfield, Grant, Grimm, Holland, McLean, Sayan, H. Sommers, Spanel, Wang, and B.  Williams. 

House Staff:      Sandi Gray (786-7136)

AS PASSED HOUSE MARCH 6, 1988

BACKGROUND:

Since 1978, under the federal Targeted Jobs Tax Credit program, employers have been allowed to take a federal income tax credit for hiring certain hard-to-employ and disadvantaged persons.  In the last seven years, the Employment Security Department estimates that 78,000 job seekers in Washington have been assisted in finding employment through the TJTC program and that Washington employers have received $250 million in tax credits.

Congress, in 1986, reauthorized the TJTC program but did not provide funding for the administrative costs associated with the program.  Although the 1988 federal appropriations bill in the U.S. House of Representatives includes funding for TJTC administrative costs, the Senate version of the appropriations bill does not.

SUMMARY:

The legislature recognizes the interest of the state in receiving the benefits of the federal Targeted Jobs Tax Credit program.

A program is established to fund the administration of the federal Targeted Jobs Tax Credit program through fees charged to employers using the service.  Any federal funding for program administration will be used to reduce or eliminate the fees.  Fees collected will be deposited in a special account in the unemployment compensation administration fund.

An appropriation of $1,706,089 is made from the unemployment compensation administration fund to the Employment Security Department to fund the administrative costs of providing services under the federal Targeted Jobs Tax Credit program.

Any part of the act found to be in conflict with federal law is declared inoperative. 

CHANGES PROPOSED BY COMMITTEE ON WAYS & MEANS/APPROPRIATIONS:  None.

Appropriation:    $1,706,089 to the Employment Security Department from the unemployment compensation administration fund.

Fiscal Note:      Requested February 8, 1988.

Effective Date:The act contains an emergency clause and takes effect March 1, 1988.

House Committee ‑ Testified For:    (Commerce & Labor)  Graeme Sackrison, Employment Security Department;  and Vincent Roda, Washington State Hospital Association. 

(Ways & Means/Appropriations)  Graeme Sackrison, Employment Security Department.

House Committee - Testified Against:      (Commerce & Labor)  None Presented. 

(Ways & Means/Appropriations)  None Presented.

House Committee - Testimony For:    (Commerce & Labor)  The federal targeted jobs tax credit program has benefited many Washington employers since its enactment.  To continue administering the program, the Employment Security Department must be provided funding for the administrative costs. 

(Ways & Means/Appropriations)  Same as in Committee on Commerce & Labor.

House Committee - Testimony Against:      (Commerce & Labor)  None Presented.

(Ways & Means/Appropriations)  None Presented.