S-4569

AN ACT Relating to economic development by improving the skills and productivity of Washington workers; amending RCW 28C.04.420; adding new sections to chapter 28C.18 RCW; adding a new section to chapter 82.04 RCW; adding a new section to chapter 82.16 RCW; providing an effective date; 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 28C.18 RCW to read as follows:

The board shall create a skills gap program for the purpose of promoting economic development in Washington state by providing grants to increase the skills and productivity of Washington workers. The program shall be used to create partnerships with business, labor, and the work force employment and training system to close the skills gap in Washington state. The grants shall be awarded to local work force development councils to:

(1) Create partnerships with businesses, labor organizations, and industry associations that share common occupations for the purpose of determining their current and future employment and training needs;

(2) Bring together community colleges and other employment and training providers to develop the programs that meet the employment and training needs defined by the above industry partnerships;

(3) Expand the use of skills standards and customized training designed to meet the specific needs of business;

(4) Upgrade the skills of existing workers; and

(5) Support increased use of on-the-job learning strategies among small and medium-sized enterprises and gain experience in establishing on-the-job training programs for various sizes of businesses.

NEW SECTION. Sec. 2. A new section is added to chapter 82.04 RCW to read as follows:

(1) A person whose application has been approved by the department under this section may take a credit against the tax imposed by this chapter, subject to the limitations in this section.

(2)(a) The credit under this section is equal to fifty percent of work force training payments. A person may not receive credit for work force training payments over five thousand dollars per employee per calendar year. A person is not eligible to receive a total credit in excess of one hundred thousand dollars for each calendar year.

(b) As a precondition to approval by the department under subsection (4) of this section, the person must have entered into a training contract with a public or private accredited training institution. The work force training and education coordinating board shall provide a list of accredited institutions to interested persons and to the department. Both the board, and the accredited institutions included on the list shall actively seek participation by employers employing fifty or fewer employees, and shall assist those firms in establishing training programs that are eligible for training credits provided by this act.

(3) For the purposes of this section:

(a) "Employer" means the same as "person" as defined in RCW 82.04.030; and

(b) "Work force training payments" means the direct payments for employees in job classes covered by the federal fair labor standards act and made under a contract with a public or private accredited training institution for technical or skill training, including basic skills. The term includes amounts in the contract for instruction, materials, equipment, rental of class space, marketing, and overhead. "Work force training payments" do not include employee tuition reimbursements, unless the tuition reimbursement is specifically included in a contract under subsection (2)(b) of this section.

(4) Application for credits under this section shall be made to the department in a form and manner prescribed by the department. The application shall include an affidavit form regarding the person's compliance with this section. The department shall approve or deny an application for credits using the criteria under this section. The department shall require the person receiving approval to keep any records necessary for the department to verify eligibility under this section. A person shall apply for the credit after making a payment. Tax credit applications shall not be approved for work force training payments that occurred before the effective date of this act.

(5) Employers participating in the partnerships receiving grants under section 1 of this act may apply for the tax credit after the grant is awarded. These employers shall have priority in receipt of the tax credit. Any funds remaining after those tax credits are granted shall be available to other employers on a first-come basis, with priority based on the date and time the application is received by the department. The total amount of credits granted under this section and section 3 of this act shall be no more than one million dollars each fiscal year. If the amount submitted for a credit will cause the cap to be exceeded, the department shall give a partial approval of the application, equal to the amount of remaining credit available for the fiscal year.

(6) If an employer has tax credits in excess of the amount of tax that would otherwise be due under this chapter, they may carry forward the tax credit for up to five years. Refunds shall not be given in place of credits.

(7) If a person has used a payment to obtain a credit against tax due under chapter 82.16 RCW, the person may not use the same payment credit for tax due under this chapter.

(8) A person who takes credits under RCW 82.04.4333 may not take a credit under this section for the same training.

NEW SECTION. Sec. 3. A new section is added to chapter 82.16 RCW to read as follows:

The tax credit program under section 2 of this act is available to persons for taxes due under this chapter. If a person has used a payment to obtain a credit against taxes due under chapter 82.04 RCW, the person may not use the same payment for tax due under this chapter. A person who takes credits under RCW 82.04.4333 may not take a credit under this section for the same training.

NEW SECTION. Sec. 4. A new section is added to chapter 28C.18 RCW to read as follows:

The board shall review the impact of tax credits provided under sections 2 and 3 of this act by September 1, 2002, and report to the legislature as to its effectiveness in expanding the amount of incumbent worker training in Washington state.

Sec. 5. RCW 28C.04.420 and 1999 c 121 s 3 are each amended to read as follows:

The college board may, subject to appropriation from the legislature or from funds made available from any other public or private source and pursuant to rules adopted by the college board with the advice of the work force training customer advisory committee established in RCW 28C.04.390, provide job skills grants to educational institutions. The job skills grants shall be used exclusively for programs which are consistent with the job skills program. The college board shall work in collaboration with the work force training customer advisory committee established in RCW 28C.04.390 to assure that:

(1) The program is within the scope of the job skills program under this chapter and may reasonably be expected to succeed and thereby increase employment within the state;

(2) Provision has been made to use any available alternative funding from local, state, and federal sources;

(3) The job skills grant will only be used to cover the costs associated with the program;

(4) The program will not unnecessarily duplicate existing programs and could not be provided by another educational institution more effectively or efficiently;

(5) The program involves an area of skills training and education for which there is a demonstrable need;

(6) The applicant has made provisions for the use of existing federal and state resources for student financial assistance;

(7) The job skills grant is essential to the success of the program as the resources of the applicant are inadequate to attract the technical assistance and financial support necessary for the program from business and industry;

(8) The program represents a collaborative partnership between business, industry, labor, educational institutions, and other partners, as appropriate;

(9) The commitment of financial support from business and industry shall be equal to or greater than the amount of the requested job skills grant;

(10) Binding commitments have been made to the commission by the applicant for adequate reporting of information and data regarding the program to the commission, particularly information concerning the recruitment and employment of trainees and students, and including a requirement for an annual or other periodic audit of the books of the applicant directly related to the program, and for such control on the part of the commission as it considers prudent over the management of the program, so as to protect the use of public funds, including, in the discretion of the commission and without limitation, right of access to financial and other records of the applicant directly related to the programs; and

(11) A provision has been made by the applicant to work, in cooperation with the employment security department, to identify and screen potential trainees, and that provision has been made by the applicant for the participation as trainees of low-income persons including temporary assistance for needy families recipients, dislocated workers, and persons from minority and economically disadvantaged groups to participate in the program.

Beginning October 1, 1999, and every two years thereafter, the college board shall provide the legislature and the governor with a report describing the activities and outcomes of the state job skills program.

In administering the job skills grants, the college board shall solicit the involvement of businesses employing current or recent WorkFirst participants. The college board shall, in conjunction with local educational institutions, provide information about the operation and benefits of the job skills program to these employers and encourage their participation.

NEW SECTION. Sec. 6. This act takes effect July 1, 2000.

NEW SECTION. Sec. 7. Sections 1 through 4 of this act expire June 30, 2003.