Joint Legislative Audit and Review Committee staff told the House Finance Committee that the business-and-occupation tax credit for customized workforce training met the legislature’s statutory completion-and-repayment threshold and therefore warrants extension, but program use and credit claims have declined significantly.

JLARC reported the credit pays 50% of a business’s cost for training provided or contracted through the State Board for Community and Technical Colleges’ customized training program. The preference was scheduled to expire July 1, 2026; JLARC observed that beneficiary savings in the current biennium were about $34,000 and that use of the credit declined about 86% from its peak while program participation dropped about 76%.

Why it matters: The legislature’s stated renewal condition was that at least 75% of businesses complete training and repay loans. JLARC found that between 2018 and 2023, 27 businesses used the program (31 trainings), 24 of the loans had been repaid and the remaining 7 were in active repayment — satisfying the statutory threshold.

Details and recommendations

- Program structure: The state board administers a revolving loan fund (about $330,000 at its peak). Businesses repay 25% on completion and the remaining 75% over 18 months; the Department of Revenue issues a credit worth 50% of each payment and the credit may be carried forward until used.
- Geographic concentration: Four colleges performed 81% of trainings; 85% of businesses using the program were in King, Pierce, Snohomish and Thurston counties; nearly 80% of businesses were manufacturers.
- JLARC recommendations: (1) extend the preference because it met the statutory threshold, and (2) have the state board explore methods to broaden program use across counties and industries and report progress to relevant committees. The Citizen Commission suggested adding funds to the revolving loan fund to support expansion; the State Board concurred and is exploring broadening use.

Ending

JLARC recommended extending the expiration date and actions to increase take-up; the committee raised no substantive objections during the hearing.