2001 Legislation
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SENATE BILL NO. 1018 – Workforce Dvlp Training Tax, extend


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S1018.......................................by COMMERCE AND HUMAN RESOURCES
WORKFORCE DEVELOPMENT TRAINING TAX - Amends existing law relating to
employment security law to extend the effective date of the Workforce
Development Training Tax to January 1, 2007.
01/17    Senate intro - 1st rdg - to printing
01/18    Rpt prt - to Com/HuRes
01/19    Rpt out - rec d/p - to 2nd rdg
01/22    2nd rdg - to 3rd rdg
01/25    3rd rdg - PASSED - 31-0-4
      AYES -- Boatright, Brandt, Bunderson, Burtenshaw, Cameron, Danielson,
      Darrington, Davis, Deide, Dunklin, Frasure, Goedde, Hawkins, Ingram,
      Keough, King-Barrutia, Lee, Lodge, Noh, Richardson, Riggs, Risch,
      Sandy, Schroeder, Sorensen, Stegner, Stennett, Thorne, Wheeler,
      Whitworth, Williams
      NAYS -- None
      Absent and excused -- Andreason, Branch, Geddes, Ipsen
    Floor Sponsor - Goedde
    Title apvd - to House
01/26    House intro - 1st rdg - to Comm/HuRes
02/06    Rpt out - rec d/p - to 2nd rdg
02/07    2nd rdg - to 3rd rdg
02/12    3rd rdg - PASSED - 61-1-8
      AYES -- Barraclough, Bedke, Bell, Bieter, Boe, Bolz, Bradford,
      Bruneel, Campbell, Chase, Clark, Collins, Deal, Denney, Ellis,
      Ellsworth, Eskridge, Field(13), Field(20), Gagner, Hadley, Hammond,
      Harwood, Henbest, Higgins, Hornbeck, Jaquet, Jones, Kendell, Kunz,
      Lake, Langford, Loertscher, Mader, Marley, McKague, Meyer,
      Montgomery, Mortensen, Moss, Moyle, Pearce, Pomeroy, Raybould,
      Ridinger, Roberts, Robison, Sali, Schaefer, Sellman, Shepherd, Smith,
      Smylie, Stevenson, Stone, Swan, Tilman, Trail, Wheeler, Young, Mr.
      NAYS -- Wood
      Absent and excused -- Barrett, Black, Callister, Crow Cuddy, Gould,
      Kellogg, Pischner
    Floor Sponsor -- Trail
    Title apvd - to Senate
02/13    To enrol
02/14    Rpt enrol - Pres signed
02/15    Sp signed
02/16    To Governor
02/21    Governor signed
         Session Law Chapter 19
         Effective: 07/01/01

Bill Text

  ||||              LEGISLATURE OF THE STATE OF IDAHO             ||||
 Fifty-sixth Legislature                  First Regular Session - 2001
                                       IN THE SENATE
                                    SENATE BILL NO. 1018
  1                                        AN ACT
  5    Be It Enacted by the Legislature of the State of Idaho:
  6        SECTION 1.  That Section 72-1347B, Idaho Code, be, and the same is  hereby
  7    amended to read as follows:
  8        72-1347B.  WORKFORCE  DEVELOPMENT  TRAINING FUND. (1) There is established
  9    in the state treasury a special trust fund, separate and apart from all  other
 10    public  funds of this state, to be known as the workforce development training
 11    fund, hereinafter "training fund."  Except as provided  herein,  all  proceeds
 12    from  the training tax defined in subsection (4) of this section shall be paid
 13    into the training fund. The state treasurer shall  be  the  custodian  of  the
 14    training  fund and shall invest said moneys in accordance with law. Any inter-
 15    est earned on the moneys in the training fund shall be deposited in the train-
 16    ing fund. Moneys in the training fund shall be disbursed  in  accordance  with
 17    the directions of the director.
 18        (2)  All  moneys  in the training fund are perpetually appropriated to the
 19    director for expenditure in accordance with the provisions  of  this  section.
 20    The purpose of the training fund is to provide or expand training and retrain-
 21    ing  opportunities in an expeditious manner that would not otherwise exist for
 22    Idaho's workforce. The training fund is intended to  supplement,  but  not  to
 23    supplant  or compete with, money available through existing training programs.
 24    The moneys in the training fund shall be used for the following purposes:
 25        (a)  To provide training for skills necessary for specific economic oppor-
 26        tunities and industrial expansion initiatives;
 27        (b)  To provide training to upgrade the skills of currently employed work-
 28        ers at risk of being permanently laid off;
 29        (c)  For refunds of training taxes erroneously collected and deposited  in
 30        the workforce training fund;
 31        (d)  For all administrative expenses incurred by the department associated
 32        with  the  collection  of  the  training  tax and any other administrative
 33        expenses associated with the training fund.
 34        (3)  Expenditures from the training fund for purposes authorized in  para-
 35    graphs  (a) and (b) of subsection (2) of this section shall be approved by the
 36    director and the director of the department of commerce based  on  procedures,
 37    criteria  and performance measures established by the council appointed pursu-
 38    ant to section 72-1336, Idaho Code. The activities funded by the training fund
 39    will be coordinated with similar activities funded by the  state  division  of
 40    professional-technical education. Expenditures from the training fund for pur-
 41    poses  authorized  in paragraphs (c) and (d) of subsection (2) of this section
 42    shall be approved by the director. The director shall pay all approved  expen-
 43    ditures as long as the training fund has a positive balance. The council shall
  1    report annually to the governor and the joint finance-appropriations committee
  2    the  commitments and expenditures made from the training fund in the preceding
  3    fiscal year and the results of the activities funded by the training fund.
  4        (4)  A training tax is hereby imposed on all covered employers required to
  5    pay contributions pursuant to section 72-1350, Idaho Code, with the  exception
  6    of  deficit  employers  who  have  been assigned a taxable wage rate from rate
  7    class six pursuant to section 72-1350, Idaho Code. The training tax rate shall
  8    be equal to three percent (3%) of the taxable wage rate  then  in  effect  for
  9    each  eligible, standard-rated and deficit employer. The training tax shall be
 10    due and payable at the same time and in the same manner as contributions. This
 11    subsection is repealed effective January 1, 20027, unless, prior to that date,
 12    the Idaho legislature approves the continuation of this subsection  by  repeal
 13    of this sunset clause.
 14        (5)  The provisions of this chapter which apply to the payment and collec-
 15    tion of contributions also apply to the payment and collection of the training
 16    tax,  including  the same calculations, assessments, method of payment, penal-
 17    ties, interest, costs, liens, injunctive  relief,  collection  procedures  and
 18    refund  procedures.  In  the administration of the provisions of this section,
 19    the director is granted all rights, authority, and prerogatives granted  under
 20    the  provisions  of this chapter. Moneys collected from an employer delinquent
 21    in paying contributions, reserve taxes  and  the training tax shall  first  be
 22    applied to any penalty and interest imposed pursuant to the provisions of this
 23    chapter  and shall then be applied pro rata to delinquent contributions to the
 24    employment security fund, section  72-1346,  Idaho  Code,  delinquent  reserve
 25    taxes to the reserve fund, section 72-1347A, Idaho Code, and delinquent train-
 26    ing  taxes to the training fund. Any interest and penalties collected pursuant
 27    to this subsection shall be paid into the state employment  security  adminis-
 28    trative  and reimbursement fund, section 72-1348, Idaho Code, and any interest
 29    or penalties refunded under this subsection shall be paid  out  of  that  same
 30    fund.  Training  taxes  paid pursuant to this section shall not be credited to
 31    the employer's experience rating account  and  may  not  be  deducted  by  any
 32    employer from the wages of individuals in its employ. All training taxes shall
 33    be  deposited in the clearing account of the employment security fund, section
 34    72-1346, Idaho Code, for clearance only and shall  not  become  part  of  such
 35    fund.  After  clearance,  the  moneys  shall be deposited in the training fund
 36    established in subsection (1) of this section.
 37        (6)  Administrative costs related to the training fund shall be paid  from
 38    the training fund in accordance with subsection (3) of this section.

Statement of Purpose / Fiscal Impact

                       STATEMENT OF PURPOSE
                            RS 10498
This legislation would extend the sunset clause on the Workforce
Development Training Fund (WDTF) to January 1, 2007. The WDTF will
sunset January 1, 2002 if this legislation is not enacted. The WDTF
was an outgrowth of former Governor Batt's 1995 Economic Stimulus
Committee's recommendation to develop a state job- training program
as an economic development tool. The 1996 Idaho Legislature passed
HB 660 and the WDTF was established effective July 1, 1996. The
revenues for the WDTF are generated by decreasing the amount of
unemployment insurance taxes employers must pay by 3% and imposing
a 3% training tax. No general fund tax revenues are used. The WDTF
has received over $14 million to date. The two primary objectives
of the WDTF are to provide funding for companies to train new
employees and to provide training to upgrade the skills of current
workers who are at risk of being permanently laid off. This
legislation extends the sunset clause, rather than repealing it, so
the Legislature can review the WDTF and its impact on Idaho's
economy in another five (5) years.

                         FISCAL  IMPACT
If the WDTF is not renewed, Idaho will lose a major economic
development tool for attracting new jobs to the State. Since its
inception, the WDTF has helped create almost 7,000 new jobs by
providing grants to train employees for these new positions. Over
time, the 3% reduction in unemployment insurance taxes could result
in an increase in overall unemployment insurance tax rates.
However, the income taxes and unemployment insurance taxes paid on
the salaries of these new workers have contributed significantly to
the State's General Fund and to the Unemployment Insurance Trust

Name:     Dwight Johnson, Department of Labor
Phone:    334-6402

Statement of Purpose/Fiscal Note                         S101