H-1960              _______________________________________________

                                          SUBSTITUTE HOUSE BILL NO. 1143

                        _______________________________________________

State of Washington                               51st Legislature                              1989 Regular Session

By House Committee on Trade & Economic Development (originally sponsored by Representatives Heavey, Brough, O'Brien, K. Wilson, Sayan, May, Dorn, D. Sommers, Jacobsen, Ferguson, Crane, Kremen, Todd, Jones, Vekich, Rasmussen, Brekke, Anderson, Scott, Miller, Cantwell, Wineberry, Bristow, Winsley, Inslee, Patrick, Jesernig, P. King, G. Fisher, Doty, Valle, Dellwo, Wang, R. Fisher, Van Luven, Beck, H. Myers, Locke, Phillips, Cole, Spanel, Rector, Cooper, Tate and Ebersole)

Read first time 2/24/89 and referred to Committee on Revenue.

AN ACT Relating to business tax credits for companies that assist in the provision of child care; adding new sections to chapter 82.04 RCW; providing an effective date; and declaring an emergency.

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

NEW SECTION. Sec. 1.     (1) The legislature finds that there is a shortage of available quality child care because of the growing number of working persons who need child care assistance.  This causes problems for the families and for economic development generally.  Child care provided by employers or assisted by employers has advantages for both the employer and the employee and his or her family.  The advantages for the employer include lower absenteeism, lower job turnover, and a more productive employee.  The advantages for the employee include accessibility to the child by a parent during the workday, coordination of the child care center with the employee's work hours, and a higher assurance of quality care for the child.

          (2) The legislature also finds that employer-provided or employer-assisted child care provides significant public benefits by contributing to a more stable and productive workforce, to quality care for children, and to a more stable family.  Property owners who provide facilities for companies can also make a significant contribution by providing child care assistance.

NEW SECTION. Sec. 2.     (1) In computing the tax owed under this chapter, a company may deduct from the tax due money spent or space provided for child care or assisting off-site child care programs.  A deduction from the tax due is also referred to as a credit in this act.

          (2) For on-site child care space provided by a single company, the available credit is three dollars per square foot, per year for space provided exclusively for child care.  An additional one dollar per square foot, per year may be credited for each of the following provided by each child care facility:  (a) A quality outside play area, (b) sick leave, vacation, and health benefits for employees of the child care facility, (c) care for handicapped children, and (d) after one year of operation, accreditation by the national association of the education of young people.

          (3) For centrally located on-site or off-site child care space that is provided jointly by two or more companies, the available credit is based on the criteria in subsection (1) of this section but is prorated between the companies providing the child care.

          (4) For assisting off-site child care that does not fall under subsection (2) or (3) of this section, such as subsidizing local child care centers, establishing or subsidizing a local family child care home network, or otherwise working with community organizations to provide child care services, the available credit is up to twenty-five percent of the amount expended.

          (5) The credits under sections 1 through 5 of this act are per child care facility or program established or assisted by a company.  A company may take credits for one or more child care facilities or programs.

NEW SECTION. Sec. 3.     (1) The credits available under section 2 of this act are available only if the child care provided meets all the state and local requirements regarding the provision of child care, including licensing and operating the child care facility.

          (2) The child care facility may, when space is available, provide care for the children of persons not employed by the company requesting the credit under section 2 of this act.  However, the company's involvement in child care shall be generally proportionate to the expected needs of the employees, or in the case of a property owner, to the expected needs of employees of companies located on the property.

          (3) Credits under section 2 of this act are not available when any space provided for child care is not donated.

          (4) Credits under section 2 of this act shall be limited to a maximum of three hundred square feet per full-time child.  The number of full-time children shall be certified by the company as of December 1st of each year.  For the purposes of this subsection, "full-time child" is a child that receives child care for an average of at least six hours per day.

NEW SECTION. Sec. 4.     The department of social and health services and the department of revenue shall work together to promulgate rules deemed necessary by the departments to carry out sections 1 through 5 of this act, including rules for applying for the credits allowed under this act and for prioritizing credits on the basis of need and the greatest public benefit when the limits established under section 5 of this act may be exceeded.  These departments shall report to the house of representatives trade and economic development committee and the senate commerce and labor committee in writing on sections 1 through 5 of this act in December 1991, and shall include any recommendations the departments may have.

NEW SECTION. Sec. 5.     Credits available to employers under sections 1 through 5 of this act are limited to one hundred thousand dollars in 1989, two hundred thousand dollars in 1990, three hundred thousand dollars in 1991, and four hundred thousand dollars each year thereafter.

NEW SECTION. Sec. 6.     Sections 1 through 5 of this act are each added to chapter 82.04 RCW.

NEW SECTION. Sec. 7.     This act is necessary for the immediate preservation of the public peace, health, or safety, or support of the state government and its existing public institutions, and shall take effect July 1, 1989.