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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, 200712, 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