REPORT TITLE:
School-to-Work


DESCRIPTION:
Provides a two-tiered tax credit system to employers
participating in school-to-work programs.

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                        
THE SENATE                              S.B. NO.           81
TWENTIETH LEGISLATURE, 1999                                
STATE OF HAWAII                                            
                                                             
________________________________________________________________
________________________________________________________________


                   A  BILL  FOR  AN  ACT

RELATING TO SCHOOL-TO-WORK OPPORTUNITIES. 


BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF HAWAII:

 1      SECTION 1.  Chapter 235, Hawaii Revised Statutes, is amended
 
 2 by adding a new section to be appropriately designated and to
 
 3 read as follows:
 
 4      "§235-     Credit for employment of school-to-work
 
 5 opportunities referrals.  (a)  There shall be allowed to each
 
 6 taxpayer subject to the tax imposed by this chapter, a credit for
 
 7 employment of school-to-work opportunities referrals which shall
 
 8 be deductible from the taxpayer's net income tax liability, if
 
 9 any, imposed by this chapter for the taxable year in which the
 
10 credit is properly claimed.
 
11      (b)  The amount of the credit determined under this section
 
12 for the taxable year shall be:
 
13      (1)  Equal to fifty per cent of the student's wages for that
 
14           year if the hours worked by the participating school-
 
15           to-work opportunities student equals or exceeds one
 
16           hundred-sixty hours during the taxable year; or
 
17      (2)  Equal to $50 if the hours worked by the participating
 
18           school-to-work opportunities student equals twenty
 
19           hours or less during the taxable year.
 

 
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 1      (c)  For purposes of this section:
 
 2      "Hiring date" means the day the school-to-work opportunities
 
 3 referral is hired by the employer.
 
 4      "School-to-work opportunities referral" means any individual
 
 5 who is certified by the department of education as participating
 
 6 in the Hawaii school-to-work opportunities system.
 
 7      "Wages" has the meaning given to the term by section 3306(b)
 
 8 of the Internal Revenue Code (determined without regard to any
 
 9 dollar limitation contained in the Internal Revenue Code
 
10 section).
 
11      (d)  The following shall apply to certifications of school-
 
12 to-work opportunities referrals:
 
13      (1)  An individual shall not be treated as a school-to-work
 
14           opportunities referral unless, on or before the day on
 
15           which the individual begins work for the employer, the
 
16           employer:
 
17           (A)  Has received a certification from the department
 
18                of education that the individual is a qualified
 
19                school-to-work opportunities referral; or
 
20           (B)  Has requested in writing the certification from
 
21                the department of education that the individual is
 
22                a qualified school-to-work opportunities referral.
 
23           For purposes of the preceding sentence, if on or before
 

 
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 1           the day on which the individual begins work for the
 
 2           employer, the individual has received from the
 
 3           department of education a written preliminary
 
 4           determination that the individual is a school-to-work
 
 5           opportunities referral, then "the fifth day" shall be
 
 6           substituted for "the day" in the preceding sentence.
 
 7      (2)  If an individual has been certified as a school-to-work
 
 8           opportunities referral and the certification is
 
 9           incorrect for any reason, the certification shall be
 
10           revoked and wages paid by the employer after the date
 
11           on which notice of revocation is received by the
 
12           employer shall not be treated as wages that are
 
13           eligible for the tax credit authorized under this
 
14           section.
 
15      (3)  In any request for a certification of an individual as
 
16           school-to-work opportunities referral, the employer
 
17           shall certify that a good faith effort was made to
 
18           determine that the individual is a school-to-work
 
19           opportunities referral.
 
20      (e)  The following wages paid to school-to-work
 
21 opportunities referrals are ineligible to be claimed by the
 
22 employer for this credit:
 
23      (1)  No wages shall be taken into account under this section
 

 
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 1           with respect to a school-to-work opportunities referral
 
 2           who:
 
 3           (A)  Bears any of the relationships described in
 
 4                section 152(a)(1) to (8) of the Internal Revenue
 
 5                Code to the taxpayer, or, if the taxpayer is a
 
 6                corporation, to an individual who owns, directly
 
 7                or indirectly, more than fifty per cent in value
 
 8                of the outstanding stock of the corporation
 
 9                (determined with the application of section 267(c)
 
10                of the Internal Revenue Code);
 
11           (B)  If the taxpayer is an estate or trust, is a
 
12                grantor, beneficiary, or fiduciary of the estate
 
13                or trust, or is an individual who bears any of the
 
14                relationships described in section 152(a)(1) to
 
15                (8) of the Internal Revenue Code to a grantor,
 
16                beneficiary, or fiduciary of the estate or trust;
 
17                or
 
18           (C)  Is a dependent (described in section 152(a)(9) of
 
19                the Internal Revenue Code) of the taxpayer, or, if
 
20                the taxpayer is a corporation, of an individual
 
21                described in subparagraph (A), or, if the taxpayer
 
22                is an estate or trust, of a grantor, beneficiary,
 
23                or fiduciary of the estate or trust.
 

 
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 1      (2)  No wages shall be taken into account under this section
 
 2           with respect to any school-to-work opportunities
 
 3           referral if, prior to the hiring date of the
 
 4           individual, the individual had been employed by the
 
 5           employer at any time during which the individual was
 
 6           not a school-to-work opportunities referral.
 
 7      (f)  In the case of a successor employer referred to in
 
 8 section 3306(b)(1) of the Internal Revenue Code, the
 
 9 determination of the amount of the tax credit allowable under
 
10 this section with respect to wages paid by the successor employer
 
11 shall be made in the same manner as if the wages were paid by the
 
12 predecessor employer referred to in the section.
 
13      (g)  No credit shall be determined under this section with
 
14 respect to wages paid by an employer to a school-to-work
 
15 opportunities referral for services performed by the individual
 
16 for another person unless the amount reasonably expected to be
 
17 received by the employer for the services from the other person
 
18 exceeds the wages paid by the employer to the individual for
 
19 those services.
 
20      (h)  The credit allowed under this section shall be claimed
 
21 against net income tax liability for the taxable year.  A tax
 
22 credit under this section which exceeds the taxpayer's income tax
 
23 liability may be used as a credit against the taxpayer's income
 

 
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 1 tax liability in subsequent years until exhausted.
 
 2      (i)  All claims for tax credits under this section,
 
 3 including any amended claims, shall be filed on or before the end
 
 4 of the twelfth month following the close of the taxable year for
 
 5 which the credits may be claimed.  Failure to comply with the
 
 6 foregoing provision shall constitute a waiver of the right to
 
 7 claim the credit.
 
 8      (j)  No deduction shall be allowed for that portion of the
 
 9 wages or salaries paid or incurred for the taxable year that is
 
10 equal to the amount of the credit determined under this section.
 
11      (k)  The director of taxation may adopt rules under chapter
 
12 91 and forms necessary to carry out this section."
 
13      SECTION 2.  New statutory material is underscored.
 
14      SECTION 3.  This Act shall take effect upon its approval.
 
15 
 
16                           INTRODUCED BY:  _______________________