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H0405.......................................by COMMERCE AND HUMAN RESOURCES WORKFORCE DEVELOPMENT TRAINING TAX - Amends existing law to extend the sunset date on the Workforce Development Training Fund Training Tax for an additional five years - from January 1, 2007, to January 1, 2012. 01/18 House intro - 1st rdg - to printing 01/19 Rpt prt - to Com/HuRes 01/25 Rpt out - rec d/p - to 2nd rdg 01/26 2nd rdg - to 3rd rdg 01/30 3rd rdg - PASSED - 66-0-4 AYES -- Anderson, Andrus, Barraclough, Barrett, Bastian, Bayer, Bell, Bilbao, Black, Block, Boe, Bolz, Brackett, Bradford, Cannon, Chadderdon, Clark, Collins, Crow, Denney, Ellsworth, Eskridge, Field(18), Field(23), Garrett, Hart, Harwood, Henbest(Bock), Henderson, Jaquet, Kemp, Lake, LeFavour, Loertscher, Martinez, Mathews, McGeachin, McKague, Miller, Mitchell, Moyle, Nielsen, Nonini, Pasley-Stuart, Pence, Raybould, Ring, Ringo, Roberts, Rusche, Rydalch, Sali, Sayler, Shepherd(2), Shepherd(8), Shirley, Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Stevenson, Trail, Wills, Wood, Mr. Speaker NAYS -- None Absent and excused -- Bedke, Deal, Edmunson, Schaefer Floor Sponsor - Pasley-Stuart Title apvd - to Senate 01/31 Senate intro - 1st rdg - to Com/HuRes 02/03 Rpt out - rec d/p - to 2nd rdg 02/06 2nd rdg - to 3rd rdg 02/10 3rd rdg - PASSED - 34-0-1 AYES -- Andreason, Brandt, Broadsword, Bunderson, Burkett, Burtenshaw, Cameron, Coiner, Compton, Corder, Darrington, Davis, Fulcher, Gannon, Geddes, Goedde, Hill, Jorgenson, Kelly, Keough, Langhorst, Little, Lodge, Malepeai, Marley, McGee, Pearce, Richardson, Schroeder, Stegner, Stennett, Sweet, Werk, Williams NAYS -- None Absent and excused -- McKenzie Floor Sponsor - Goedde Title apvd - to House 02/13 To enrol 02/14 Rpt enrol - Sp signed 02/15 Pres signed 02/16 To Governor 02/17 Governor signed Session Law Chapter 13 Effective: 07/01/06; 1/1/12 Sunset Clause
]]]] LEGISLATURE OF THE STATE OF IDAHO ]]]] Fifty-eighth Legislature Second Regular Session - 2006 IN THE HOUSE OF REPRESENTATIVES HOUSE BILL NO. 405 BY COMMERCE AND HUMAN RESOURCES COMMITTEE 1 AN ACT 2 RELATING TO THE WORKFORCE DEVELOPMENT TRAINING FUND; AMENDING SECTION 3 72-1347B, IDAHO CODE, TO EXTEND THE SUNSET DATE ON THE TRAINING TAX FOR 4 FIVE YEARS. 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. In any month when the unencumbered balance in 18 the training fund exceeds six million dollars ($6,000,000), the excess amount 19 over six million dollars ($6,000,000) shall be transferred to the employment 20 security reserve fund, section 72-1347A, Idaho Code. For the purposes of this 21 subsection (1), the unencumbered balance in the training fund is the balance 22 in such fund reduced by the sum of: 23 (a) The amounts that have been obligated pursuant to fully-executed 24 workforce development training fund contracts; 25 (b) The amounts that have been obligated pursuant to letters of intent 26 for proposed job training projects; and 27 (c) Any administrative costs related to the training fund that are due 28 and payable. 29 (2) All moneys in the training fund are perpetually appropriated to the 30 director for expenditure in accordance with the provisions of this section. 31 The purpose of the training fund is to provide or expand training and retrain- 32 ing opportunities in an expeditious manner that would not otherwise exist for 33 Idaho's workforce. The training fund is intended to supplement, but not to 34 supplant or compete with, money available through existing training programs. 35 The moneys in the training fund shall be used for the following purposes: 36 (a) To provide training for skills necessary for specific economic oppor- 37 tunities and industrial expansion initiatives; 38 (b) To provide training to upgrade the skills of currently employed work- 39 ers at risk of being permanently laid off; 40 (c) For refunds of training taxes erroneously collected and deposited in 41 the workforce training fund; 42 (d) For all administrative expenses incurred by the department associated 43 with the collection of the training tax and any other administrative 2 1 expenses associated with the training fund. 2 (3) Expenditures from the training fund for purposes authorized in para- 3 graphs (a) and (b) of subsection (2) of this section shall be approved by the 4 director in consultation with the office of the governor, based on proce- 5 dures, criteria and performance measures established by the council appointed 6 pursuant to section 72-1336, Idaho Code. The activities funded by the train- 7 ing fund will be coordinated with similar activities funded by the state divi- 8 sion of professional-technical education. Expenditures from the training fund 9 for purposes authorized in paragraphs (c) and (d) of subsection (2) of this 10 section shall be approved by the director. The director shall pay all approved 11 expenditures as long as the training fund has a positive balance. The council 12 shall report annually to the governor and the joint finance-appropriations 13 committee the commitments and expenditures made from the training fund in the 14 preceding fiscal year and the results of the activities funded by the training 15 fund. 16 (4) A training tax is hereby imposed on all covered employers required to 17 pay contributions pursuant to section 72-1350, Idaho Code, with the exception 18 of deficit employers who have been assigned a taxable wage rate from rate 19 class six pursuant to section 72-1350, Idaho Code. The training tax rate shall 20 be equal to three percent (3%) of the taxable wage rate then in effect for 21 each eligible, standard-rated and deficit employer. The training tax shall be 22 due and payable at the same time and in the same manner as contributions. This 23 subsection is repealed effective January 1, 200 712, unless, prior to that 24 date, the Idaho legislature approves the continuation of this subsection by 25 repeal of this sunset clause. 26 (5) The provisions of this chapter which apply to the payment and collec- 27 tion of contributions also apply to the payment and collection of the training 28 tax, including the same calculations, assessments, method of payment, penal- 29 ties, interest, costs, liens, injunctive relief, collection procedures and 30 refund procedures. In the administration of the provisions of this section, 31 the director is granted all rights, authority, and prerogatives granted under 32 the provisions of this chapter. Moneys collected from an employer delinquent 33 in paying contributions, reserve taxes and the training tax shall first be 34 applied to any penalty and interest imposed pursuant to the provisions of this 35 chapter and shall then be applied pro rata to delinquent contributions to the 36 employment security fund, section 72-1346, Idaho Code, delinquent reserve 37 taxes to the reserve fund, section 72-1347A, Idaho Code, and delinquent train- 38 ing taxes to the training fund. Any interest and penalties collected pursuant 39 to this subsection shall be paid into the state employment security adminis- 40 trative and reimbursement fund, section 72-1348, Idaho Code, and any interest 41 or penalties refunded under this subsection shall be paid out of that same 42 fund. Training taxes paid pursuant to this section shall not be credited to 43 the employer's experience rating account and may not be deducted by any 44 employer from the wages of individuals in its employ. All training taxes shall 45 be deposited in the clearing account of the employment security fund, section 46 72-1346, Idaho Code, for clearance only and shall not become part of such 47 fund. After clearance, the moneys shall be deposited in the training fund 48 established in subsection (1) of this section. 49 (6) Administrative costs related to the training fund shall be paid from 50 the training fund in accordance with subsection (3) of this section.
STATEMENT OF PURPOSE RS 15455 This legislation will extend the sunset clause on the Workforce Development Training Fund (WDTF) tax an additional five years to January 1, 2012. Without this amendment, the WDTF tax will be repealed effective January 1, 2007. The WDTF was created in 1996 and was reauthorized in 2001 as a recruiting tool to attract new businesses to Idaho and to help Idaho businesses expand. The Fund is used to finance training of employee skills necessary for specific economic opportunities and industrial expansion initiatives and for upgrading skills of employed workers at risk of being permanently laid off. The Fund is administered by the Department of Commerce and Labor. The revenue for the Fund is generated by decreasing the amount of unemployment insurance taxes experience-rated employers must pay by 3% and imposing a 3% training tax. FISCAL NOTE There is no negative impact on the State General Fund. If the WDTF tax is not renewed, Idaho will lose a major economic development tool for creating new jobs. Since its inception, the WDTF has helped create almost 17,000 new jobs by providing grants to train employees for these new positions. 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 Fund. Over time, the 3% reduction in unemployment insurance taxes could result in an increase in overall unemployment insurance tax rates. However, some revenue models show that the increase in unemployment insurance tax receipts from the increased economic development activity more than compensate for the negative impact of the 3% unemployment insurance tax offset. CONTACT Name: Bob Fick Agency: Commerce and Labor, Dept. of Phone: 409-9818 STATEMENT OF PURPOSE/FISCAL NOTE H 405