It is enacted by the General Assembly as follows:

SECTION 1. Title 42 of the General Laws entitled "State Affairs and Government" is hereby amended by adding thereto the following chapter:

{ADD 42-64.6-1. Short title. -- ADD} {ADD This chapter shall be known and may be cited as the Rhode Island Jobs Training Act. ADD}

{ADD 42-64.6-2. Jobs training tax credit. -- ADD} {ADD A qualifying employer shall be allowed a credit against the tax imposed by chapters 11, 13, (except for section 44-13-13), 14, 17 and 30 of title 44 in the manner set forth in this chapter for the qualifying expenses of offering training and/or retraining to qualifying employees. ADD}

{ADD 42-64.6-3. Definitions. -- ADD} {ADD As used in this chapter unless the context clearly requires otherwise, the following words and phrases shall have the following meanings:

"Election" means the election to be filed by a qualifying employer with the Human Resource Investment Council.

"Qualifying employer" means any employer who files an election with the Human Resource Investment Council in such manner as may be provided by the Human Resource Investment Council to be covered by the provisions set forth in this chapter but shall not include any physicians or any employer whose principal business is providing legal, accounting, engineering, architectural, or other similar professional services. The election shall set forth such information as the Human Resource Investment Council shall require describing the program for training and/or retraining employees, the duration of the program, an estimate and description of the amounts to be spent to implement the program, the nature of the program to be provided to employees, an estimate of the number of the employees who shall be covered by the program and the relationship, if any, of the employer to the party or parties offering such program and the agreement of the employer to provide such additional information following the date of such election as shall be requested by the Human Resource Investment Council.

"Qualifying expenses" means those reasonable expenses (less any federal, state or local grants or other payments received by the employer to provide such training or retraining) incurred by an employer following the date of such employer's election to be covered by the provisions of this chapter, that are directly attributable to providing training and/or retraining to qualifying employees that shall improve the skills required of such employees. Such expenses shall include all reasonable amounts paid by the employer to public or private degree granting educational institutions or directly to instructors to provide such training and/or retraining and any other reasonable direct cash expenses incurred by the employer to provide such training and/or retraining. The training and/or retraining, however, shall be provided solely at one (1) or more locations in this state unless the employer shall establish that the training and/or retraining was not available at any location in this state or that it could be obtained at another location at a lower price. The maximum amount per employee on which the credit shall be based is five thousand dollars ($5,000) in any three (3) year period.

"Qualifying employee" means an individual (other than an employee who would be treated as a "highly compensated employee" under 26 U.S.C. section 414(q) or any physician or veterinarian) employed by the employer who works a minimum of thirty (30) hours per week within the state and earns or shall earn immediately following the completion of the training and/or retraining program no less than one hundred and fifty percent (150%) of the hourly minimum wage prescribed by Rhode Island law. ADD}

{ADD 42-64.6-4. Determination of credit. -- ADD} {ADD The credit provided in this chapter shall be equal to twenty-five percent (25%) of the qualifying expenses incurred in 1996 and fifty percent (50%) of the qualifying expenses incurred after 1996 to provide training and/or retraining for a qualifying employee, of which fifty percent (50%) of the credit shall be allowed in the taxable year in which the expense is paid and the balance of the credit shall be allowed in the following taxable year. The credit allowed pursuant to the provisions of this chapter that is attributable to the cost of providing training and/or retraining to a qualifying employee shall be recaptured if the employee involuntarily other than as a result of death or disability no longer qualifies as a qualifying employee of the employer at any time during the eighteen (18) month period following the employee's completion of the program. ADD}

{ADD 42.64.6-5. Deduction. -- ADD} {ADD A qualifying employer shall be denied a deduction for any expenses used to determine a credit which was allowed under this chapter. If the credit is subsequently recaptured or if the expenses attributable to the program exceed the amount on which the credit is allowed, a deduction shall be allowed in the taxable year in which such expense is recaptured, or paid or incurred. ADD}

{ADD 42-64.6-6. Wage. -- ADD} {ADD To the extent the wages and other benefits paid or provided to a qualifying employee while that employee is enrolled in a program covered by this chapter, are attributable to the time the employee spent participating in the program, the qualifying expenses of the employer attributable to the employee shall include the portion (but not in excess of one thousand dollars ($1,000)) of the wages and other benefits paid or provided to the employee that are directly attributable to the time spent by the employee participating in the program. ADD}

{ADD 42-64.6-7 Limitation. -- ADD} {ADD The credit allowed pursuant to this chapter shall not reduce the liability of the employer for the tax imposed by chapters 11, 13, 14, 17 and 30 of title 44 in any year below the minimum tax where a minimum tax is provided under this title. ADD}

{ADD 42-64.6-8. Annual reporting requirement. -- ADD} {ADD The Human Resource Investment Council shall annually prepare a report utilizing the information received in this act and other appropriate sources describing and evaluating the impact, if any, of this act on the state's economic resources and the number and type of qualifying employees being trained or retrained as a result of this chapter. ADD}

SECTION 2. This act shall take effect upon passage.