[atlas:bill]

AN ACT Relating to earned income training credits; adding new sections to chapter 50.12 RCW; adding a new section to chapter 82.04 RCW; and providing an expiration date.

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

NEW SECTION. Sec. 1. A new section is added to chapter 50.12 RCW to read as follows:

(1) The employment security department shall administer an earned income training credit program for persons either receiving an earned income tax credit from the federal government for the prior year or who are dislocated workers.

(a) The earned income training credit for persons receiving an earned income tax credit shall be for an amount equal to fifty percent of the earned income tax credit received, with a maximum of three thousand dollars. If training credits are not used by the person, then additional credits may be accumulated up to the maximum.

(b) A dislocated worker, as defined in RCW 50.04.075, is qualified to receive an earned income training credit in the amount of three hundred seventy-five dollars per quarter of full-time employment during the eight quarters before becoming a dislocated worker.

(2)(a) Credits under this section may be accumulated over time. Credits must be used within five years from the year in which they are received.

(b) Recipients must have a minimum of one thousand dollars in credits before the credits may be redeemed.

(3) Earned income training credits may be used for:

(a) Tuition at an institution of higher education as defined in RCW 28B.10.016, subject to available funding; or

(b) Employee training, either with a current or prospective employer.

(4) If training is provided under subsection (3)(b) of this section, there shall be a contract between the employer or prospective employer, the employee, and the employment security department. The employment security department shall adopt rules setting standards for defining the training, employment, and wage assumptions.

(5) An employer who accepts the credit on behalf of an employee or prospective employee for training may use the credit as a credit against taxes under chapter 82.04 RCW in accordance with section 2 of this act.

(6) Credits shall be available beginning January 1, 2000, for earned income tax credits received for federal income taxes filed for the 1999 tax year.

(7) Only persons who would qualify as resident students under RCW 28B.15.012 are eligible for the earned income training credit program.

NEW SECTION. Sec. 2. 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 sponsored job training services designed to enhance the job-related performance of employees. This credit is allowed up to the value of the earned income tax credits accepted on behalf of employees as provided in section 1(5) of this act.

(2) The value of the state-approved, job training services provided by the employer to the employee, without charge, shall be determined by the allocation of the cost method using generally accepted accounting standards.

(3) The department shall keep a running total of all credits granted during each calendar year, and shall disallow any credits that would cause the tabulation for any calendar year to exceed two million dollars.

(4) The credit allowed under this section may not exceed the cost to the employer of providing or sponsoring job training services determined under subsection (2) of this section.

(5) The department shall adopt rules and forms for the administration of this section.

NEW SECTION. Sec. 3. A new section is added to chapter 50.12 RCW to read as follows:

The earned income training credit reimbursement account is created in the custody of the state treasurer. Expenditures from the account may be used only for reimbursement to institutions of higher education for earned income training credits accepted by institutions of higher education. Only the commissioner of the employment security department or the commissioner's designee may authorize expenditures from the account. The account is subject to allotment procedures under chapter 43.88 RCW, but an appropriation is not required for expenditures.

NEW SECTION. Sec. 4. A new section is added to chapter 50.12 RCW to read as follows:

The employment security department shall report on the impact of sections 1 and 2 of this act to the appropriate committees of the legislature by December 1st of even-numbered years, including:

(1) The number of people receiving training;

(2) The cost of the training;

(3) The cost of program administration;

(4) For those persons whose credits were used for training at institutions of higher education:

(a) Their employment status; and

(b) The number of workers receiving tuition benefits by institution and general area of study;

(5) For those persons using the credit for employee training under section 1(3)(b) of this act, a report on:

(a) Their job and wage progression; and

(b) The number of workers receiving training by industry, size of firm, and occupation.

NEW SECTION. Sec. 5. This act expires June 30, 2009.