H-2219

AN ACT Relating to incentives for basic skills training; adding a new section to chapter 82.04 RCW; and adding a new section to chapter 28C.18 RCW.

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

NEW SECTION. Sec. 1. A new section is added to chapter 82.04 RCW to read as follows:

(1) There may be credited against the tax imposed by this chapter, the value of state-approved, employer-provided, or employer-sponsored basic skills training, subject to the eligibility standards and limitations set forth in this section.

(2) The credit allowed under this section is limited to an amount equal to fifty percent of the qualified cost of the basic skills training determined under subsection (4) of this section. The total credit allowed per employee shall not exceed two thousand two hundred dollars for any calendar year. The total credits allowed under this section for a business shall not exceed ten thousand dollars for any calendar year.

(3) The qualified cost of state-approved basic skills training provided by the business to the employee or a qualified training institution on behalf of the business to the employee, without charge, must be determined by the allocation of the cost method using generally accepted accounting standards.

(4) Before claiming the credit under this section, the business must submit an application for approval of the proposed basic skills training from the work force training and education coordinating board created under chapter 28C.18 RCW. In developing the approval criteria the work force training and education coordinating board shall consult with the office of adult literacy at the Washington state board for community and technical colleges. The employer's request for approval must include a description of the proposed basic skills training, how the proposed basic skills training will enhance the employee's job performance or increase their opportunity for advancement, and the cost of the proposed basic skills training.

(5) The department of revenue shall keep a running total of all credits granted under this section during each calendar year and shall disallow any credits that would cause the total credits for any calendar year to exceed five million dollars. A business whose credit is disallowed under this subsection may carry the credit forward and take the credit during the earliest calendar year or calendar years during which the total of all credits granted under this section does not exceed five million dollars. The department of revenue, in allowing the credit, shall give priority to a business whose credit has been previously disallowed under this subsection over businesses initially claiming the credit under this section.

(6) This section applies only to basic skills training for which an application is approved after June 30, 1997.

(7) As used in this section:

(a) "Basic skills training" means education or training in skills such as reading, writing, critical thinking, English as a second language, mathematics, and beginning computer literacy;

(b) "Business" means either a single taxpayer or consortium of two or more taxpayers subject to taxation under this chapter and that has less than fifty employees;

(c) "Qualified cost" means either: (i) Amounts paid directly to a qualified training institution to cover the cost of tuition and training materials for basic skills training; or (ii) the cost of basic skills training provided by an employer or a group of two or more employers to employees, without charge, under a signed agreement between the employer and the employee defining the goals and scope of the training; and

(d) "Qualified training institution" means a community college, technical college, joint apprenticeship and training committee, nonprofit community-based organization, or private vocational school as defined in RCW 28C.10.020, that is licensed by the work force training and education coordinating board.

NEW SECTION. Sec. 2. A new section is added to chapter 28C.18 RCW to read as follows:

The work force training and education coordinating board shall evaluate the results of worker training provided under section 1 of this act and report its findings to the appropriate policy and fiscal committees of the legislature by January 1, 1999, and every two years thereafter. The report shall include, but not be limited to, number of employers that used the tax credit, number of employees that were trained, type of training provided, and how the training enhanced the employers' work force. The department of revenue, the employment security department, the state board for community and technical colleges, and the joint apprenticeship and training committees that are party to contracts for training under section 1 of this act shall provide the work force training and education coordinating board with data required for the evaluation.